Posts Tagged ‘Gen-Probe prognosis’

February 22nd, 2010

Investigating The Prognosis At Gen-Probe Inc.- Mostly Steady, Few Hiccups.


On February 18th Gen-Probe announced its Q4 earnings. As expected, everything was smooth sailing-Product Sales for full year 2009, up 13% and an increase in profits for Q4 that was announced very handsomely in most major publications. See here and here.


Sweeping aside most of these obvious goodies in the announced financial results, there were a few items that stood out when I looked….not too many but still a few that have gone unnoticed in most of the analyses put out by other publications.


1. Short Term Borrowings of $240,841,000 for year ended 12/31/2009 as against zero for the previous year.


2. This is also going to mean an increase in the corresponding interest expense for 2009 as compared to 2008 and also going into 2010 expect to see an increase.


3. ‘Other Long Lerm Liabilities’ have also jumped by $11,021,000. Looking forward to seeing their detailed 10k to understand this one better.


4. According to Gen-Probe’s consolidated statements of cash flow, ‘Cash paid for interest’ has soared from $3,000 in 2008 to $19,55,000 for 2009.


5. Free cash flow for full year 2009 has declined by about 19% to $112 million. Gen-Probe attributes this to some non-recurring items (successful patent infringement lawsuit and collaborative research revenue ) in 2008.


Now onto Gen-Probe’s governance behavior.


Under InvesGuard’s data model, Gen-probe presents few deficiencies in its corporate governance guidelines that results in a few over extended directors. ‘Board Independence’ also needs a little housekeeping.


Under its Internal Control Environment, Gen-Probe scores low on its Audit Committee effectiveness as well as its Audit Committee report quality. InvesGuard has also noted a couple of potential ‘Conflict of Interest’ issues.


More disclosures on its social and environmental front would be welcome particularly any steps it takes to make its products accessible to developing countries or not for profit charitable organizations. Other social environmental data is also not forthcoming and has lead to an overall low score.


More details on InvesGuard’s scores are available only to subscribers. If you would like to buy InvesGuard’s report for Gen-Probe please email with ‘Genprobe’ in the subject.


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