Spectral Medical Inc T.EDT

Quote from the Baxter Webcast QA

[gebremeskel]

I wanted to ask about the kidney care separation. I think it was new that you added "early 2025" so I wanted to ask about that. And has your thinking changed at all on spin versus sell and I also noticed an impairment charge on that business, so, what should we read into that impairment charge this quarter?

 

From a timing perspective we're continuing to make progress and continuing to move forward on a dual path to ensure that we're ready for both a sale and spin process. We're obviously doing that in a way that's going to maximize our shareholder value - for all of our stakeholders and we continue to make solid progress is what I would say. I think the timing difference ... I just look at it as we have continued to evolve the process and move it forward ... again we're in a good place from the perspective of both, but the timing has shifted a little bit as we continue to move through the year and our plan is to still continue to get it done by the end of 2024 but it could move into the early part of 2025 which is why we put the guidance out that we did.

From a goodwill perspective, the way I would take that is we have had a process where we actually have had bidders put a value into what the goodwill is. As we assess that relative to the value on the books there's a negative impact there from a goodwill perspective. I would say this, in the event that there was a sale moving forward we would be recognizing a gain on that sales so there's a little bit of a timing issue from that perspective. But it's just part of the normal process to reassess our goodwill now that we have an actual market value for that and that's where that came from. 

[BlueJays9293]

Thanks for finding that Geb.  My read on that, is that they are in the stage where hard numbers are being exchanged and Carlyle Group is of course being shrewd with the amount they are offering Baxter.  CG knows Baxter desperately needs the money and so they are driving a very hard bargain.  Baxter's only counter to that is to pretend like they can still go the Spinco route, but

[mercedesman]

I agree it's a whopper of an impairment charge, but on margin the market liked Baxter's numbers overall and they exceeded adjusted earnings target, with a slightly more rosey outlook for the full year. The market obviously has discounted the impairment charge - which is a non cash charge.  But I agree that CG is somewhat in the drivers seat wrt buyout of Vantive negotiations

[BlueJays9293]

But when you unburden yourself from all that is past, and all that is the future. Aren't you just still left with burden that must be unburdened? because of the burden?? as Carmela would say, khackle...

[gebremeskel]

Thanks for the illuminating posts BlueJays9293 and mercedesman.

[Spamme54321]

Yeah thanks BJ and MM for providing us basically word salad with nothing of substance. The only answer I want is - When is the buyout or the 6x share rocket, promised to us?

[BlueJays9293]

"The 64k question is what value does CG put on PMX distribution rights - I.e. discounted future cash flows from sales of PMX starting in 2025 or 2026?" Exactly MM, how do you put a value on something without even knowing atleast the rough mortality benefit from the crude data?  And the only way to get a glimpse at those would be to sign an NDA with Spectral.  And the only way

[mercedesman]

My suspicion is that "anyone with access to data" can ascertain with statistical certainty that the Tigris Trial will " confirm" what it sought to prove, even at 125 patients.  The math guys at PE need only make a few assumptions: - final MB which will impact the assumed final price per filter  -target market size  -ultimate market penetration for PMX

[BlueJays9293]

Fyi, it's a whopper of an impaiment charge at $430 million.  From Baxter's recent 10-Q, page #10, Goodwill Impairment In March 2024, we announced that we had been in recent discussions with select private equity investors to explore a potential sale of our Kidney Care business in lieu of the previously announced proposed spinoff of that business. While we have not finalized our