TS03 Inc Trust Units TSTIF

RE:RE:This may be the beginning...

[Drrwong]

Thank you Jason for your post.

I have no sources into the Quebec plant, but I KNOW there is no cuts to the 5 sales and 4 clinical persons within the organization.  

While I feel for the people who might be let go, it shouldn't be a huge surprise as RR did say in the Q3 conference call that they will be shifting resources from production to commercial activities.  

Assuming both Jason's source and bossu's car count is correct, we are seeing a 20-25% reduction in staff at the Quebec plant.  We know the plant can make 200 units per year, so we are now at 150-160 per year.  We might be doing more VP4 upgrades there also now, so let's say new unit production is now at 130-150 per year.

We have over 230 units (including the 50 units shipped in Q4 minus the 20 expected installations) in inventory between Getinge and TSO3 at the end of 3Q17.  I believe a sterilizer business will need 1.5-2 quarters of inventory in the channel as a steady state.  So if we add the 130-150 of new production into existing inventory, we will have 350+ VP4s for 2018.  If you buy my assumption on inventory needs, then the two companies are expecting 200-250 end customer orders this year?

There are some good silver linings to this development, if it is indeed true:
-  Still significant new VP4 production ongoing, which signals to me TSO3 expects Getinge to stick around.  I don't think TSO3 needs 230 existing inventory (as they will have to buy back all units from Getinge) + 150 new units for their 5 sales people for 2018
-  If some lab people were let go also, then it tells us most of the work for the FDA is completed.  So it could signal the two remaining FDA questions are getting close to be addressed