GAAP Earnings Horrific, But Still Bleeding Cash GAAP earnings were horrific and attributable almost entirely to write downs to the book value of drugs in their NA segmant and partly to wrtiedowns to drugs in their international segment. That said, if you look at cash on hand as at September 30, 2016 and cash on hand as at Dec 31, 2016, the company appears not to be burning cash from operations.
S 30 cash on hand: $162MM
Net Proceeds from Financing in Q4: $330MM
First Cinven Earn Out Payment in Q4: $92MM
$162 +$330-$92=$400
The company reported cash on hand as at December 31, 2016 of $398 meaning their business was pretty much cash flow neutral after paying all expenses, interest and taxes. After paying the second Cinven payment on February 1, 2017, they should still have just over $300MM in cash.
I'm not saying this business is in great shape, but they still have plenty of time to turn this around. I wish I had never invested in this company under Thompson's leadership. He was incompetent and potentially intentionally misleading or just plain stupid, but I think the company is in much better hands now with the exception of Kupinsky who needs to resign so that we no longer have any significant ties to the old managment team. His selling a huge block of his own shares a few months ago should have immediately been followed by his resignation. If he doesn't believe in the company, why should investors? Move on Kupinsky and let people who know how to turn companies around do their job!