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No. of Recommendations: 2
foolforgems,

I'm a KG stock holder and though I like the company, they've got issues which hasn't been satisfactorily addressed for the past couple of quarters.

Number (1) concern is the increasing levels of inventories, which is far outpacing sales by at least a factor of 2. I'm not surprised it's affecting their two largest gross margin revenue earners Altace and Levoxyl. I don't believe management hasn't adequately address this in the 3Q 2003 conference call.

Number (2) is the slowing in growth of the top line. King needs another blockbuster drug like Altace to excite investors. They're spending big on the R&D and the results (if any) wont be seen for a years. In the meantime, KG has a whole bunch of branded products doing less than $20 million in annual sales. What's better - 5 products that sell of $100 million or one? From a sales prespective, I'd hazard to say one.

Number (3) is the Benevolent Fund run by the executive management of KG. I don't know what others think but I'm a little uneasy on a public company donating its products to a private charity organisation run by the executive management of KG - without approval from the shareholders.

Those are my current thoughts for the moment and I'll await results from the 10Q before commenting any further.

Best of luck to all.

Steveting
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