CreditPulse — Coverage. Analysis. Perspective.

KV Pharmaceutical Collapse Underscores Industry Risks

June 30, 2010 

The recent trouble at KV Pharmaceutical Company, a specialty drug company near St. Louis, Missouri, illustrates the high costs and risks associated with the industry and the importance of internal controls.

On July 29, 2008, agents from the U.S. Food and Drug Administration (FDA), the body that regulates the pharmaceutical industry, seized $24.2 million worth of unapproved drugs from KV Pharmaceutical Company, a $578 million specialty drug maker located in Bridgeton, Missouri. Since then, the NYSE-listed company has been in turmoil with CEOs and CFOs coming and going

Economic Profile: ArcelorMittal

March 16, 2010 

The 2009 financial results for ArcelorMittal, the world's largest steel manufacturer with operations and customers in 177 countries, illustrate the true depths of the global recession, according to the company's recently released annual filing.  Global GDP declined 2.0 percent. 

The 2009 sales for ArcelorMittal, the world's largest steel company based in Luxembourg, plummeted to $65.1 billion from $124.9 billion in 2008, a drop of 48 percent, according to the company's financial results released last month in the company's annual report.  Get the details in this article.

Software Industry: Compare & Contrast

Dec. 31, 2009 

Adobe Systems, Inc., based in San Jose, California, has the highest credit standards of the 122 publicly-traded software technology companies in the Credit Standards Index (CSI) with a CSI score of of 1.40.  CDC Corp. (shown in photo), based in Hong Kong, is last with a CSI score of 4.30.

Adobe Systems, Inc. leads all software technology companies in credit standards for the second consecutive year further illustrating the close correlation between credit standards and profitability.  Adobe's net profit was 24.4 percent, the tenth highest in the industry.

Utilities Industry: Compare & Contrast

Nov. 12, 2009

NRG Energy, Inc., based in Princeton, New Jersey, has the highest credit standards of all publicly-traded utilities with  a CSI score of 2.40.  Constellation Energy Group, Inc, based in Baltimore, Maryland, is last with a CSI score of 4.70 on a scale of 1 to 5. 

In January of 2008, Constellation Energy's stock was trading at almost $100 per share, current ratio was at 1.35, well over the industry benchmark of 1.10, and operating cash flow was running at 4.4% of revenue.  Less than a year later, the $20 billion utility had to be rescued by Warren Buffett. 

CSI No. 1: First Solar, Inc.

Oct. 7, 2009

First Solar, Inc., a semiconductor company that manufactures solar modules, has the highest credit standards among 2,117 publicly-traded companies, according to the latest information from the Credit Standards Index (CSI) published annually by CreditPulse.  The 2007 edition is now available. 

As the world's energy demands grow, power companies continue to pursue alternative energy sources that are clean, reliable, resourceful and, renewable, if possible.  Solar power is one renewable energy source that may be gaining in prominence, as evidenced by the company that sits atop the CSI. 

Hybrid Auto Parts Maker Struggles To Stay Afloat

May 21, 2009 (First in a multi-part series on solvency) 

Like many in the auto parts industry, California-basd Quantum Fuel Systems Technologies Worldwide is nervous about recent events in the U.S. auto industry.  But unlike others, Quantum lacks established markets for its futuristic products and has never earned a profit.  A secret lender?

Quantum Fuel Systems Technologies Worldwide, Inc., a $26 million alternative fuel cell manufacturer based in Irvine, California, has struggled with profitability and cash flow since going public in 2002.  Since 2005, Quantum has averaged $18.3 million in losses annually from continuing operations.

CSI No. 1: QUALCOMM, Inc.

QUALCOMM, Inc. of San Diego, California has the highest credit standards among publicly traded companies, according to CSI data, while generating record revenues, earnings and operating cash flows.  How do they do it? Read the exclusive question and answer segment with the finance department of QUALCOMM, INC., a $7.5 billion global communications equipment company. 

In the past decade, the world has witnessed a revolution in wireless communications driven by the miniaturization and enhanced capabilites of integrated circuits. One of the companies at the forefront of this revolution, and perhaps best positioned for its future, is QUALCOMM, Inc. in San Diego, California.

Tessera Technologies and Symyx Technologies Set the Pace for Credit Standards, Performance

Intellectual property, small customer base and overall size are three of the remarkably similar characteristics for the 2nd and 3rd ranked CSI companies.

Aside from their industries, the two companies ranked 2nd and 3rd in the 2005 edition of the Credit Standards Index (CSI) are almost identical. Both are research-driven and technology-oriented. Both possess numerous patents in their respective fields. Both have small customer bases. Both are headquartered in California. And finally, both are similar in size with only $13.4 million in revenue separating them as of 2005.

Credit Department Keeps Customer In Focus at IPSCO Inc.

Steel products manufacturer attributes customer focus, staff professionalism and management support to industry-leading credit and collections performance.

When discussing the importance of trust and accountability - two hallmarks of customer relations - Robert Eisner, the assistant treasurer of IPSCO Inc., prefers to use the backdrop of a January day in Regina, Saskatchewan to drive home the point. "In Regina, where our winters can get as low as 40 degrees below zero if you tell someone that you will pick them up at a certain time and place it is important to be there, and not one minute late."