Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Gary Giblen – Goldsmith & Harris.
Gary Giblen – Goldsmith & Harris
I have several questions about the product lines that go to nursing homes and dialysis patients, cariatric surgical centers etc; is there much of a range in gross margins on the various products you are selling now?
Alan Levy
Not private label but the proprietary products.
Frank Newman
There is not a huge range, no. The best way I can describe it is that they are all within a fairly tied range. The highest gross margin products are those that tend to be the more unique and complex products and the simpler ones tend to be lower gross margin, but it’s not the kind of a thing that would have a material impact on our reported gross margins Gary.
Gary Giblen – Goldsmith & Harris
Okay, the impact of the expanded sales organization will first start to be quite visible in the next quarter you report and over the next 12 months; can you discuss those plans, pipeline issues etc, which could possibly maintain a high growth rate beyond this twelve month outlook?
Frank Newman
Beyond the next twelve months?
Gary Giblen – Goldsmith & Harris
Yes, in other words, it seems to me as your penetration of the nursing home market increases then you have to look elsewhere for a rapid growth and I wondered if there was a pipeline of opportunities that would maintain that or should we look at a slowing of growth rate in the clinic market if you want to label it that way after the next twelve months?
Frank Newman
First of all you got the -- let me couch this by saying we have not completed plans in any detail for the period of time that you are talking about Gary, but to a certain extent the law of large numbers will begin to impact our rates of growth on the existing products, so I think it would be reasonable to assume that over time the percentage increase in sales will decline; however, the nominal increase in sales -- yes we are still a long way from what we would consider to be maximum penetration.
The other element that we will contribute to sales obviously is new product development, so UTI-Stat is completely new revenue, not dependent or not cannibalistic with regard to existing revenues, so the extent that those kinds of product extensions can be introduced and that would also support longer term growth and of course as a company that’s part of the role that we expect retail sales to play also and I think going back two or three years we have stated that eventually retail sales would become more important as a contributor to positive results in exactly the way that you’re talking. So as to the extent of whether it’s the law of large numbers or eventual, approaching of saturation of the retail market stands as a substantial potential offset to that.
- To read the full transcript on Seeking Alpha, click here »
