Previewing the fiscal 2006 earnings report for ThermoGenesis (NASDAQ:KOOL) last week, I argued that the medical equipment maker's biggest asset is its bank account. At its present cash-burn rate of $5 million per annum, the firm has nearly eight years in which to reverse its negative free cash flow and start making some profits before it will require additional capital.

Based on Thursday's news, it looks like ThermoGenesis may need that time.

ThermoGenesis managed to "miss its numbers" for both revenue and profits last week, reporting just $3.6 million in sales and a $0.03-per-share loss for the quarter, and $12 million in sales and a $0.12-per-share loss for the year. Which was quite a trick, because if you read through the company's earnings release, the impression given is that this was quite a good year for ThermoGenesis, in which it inked deals with everyone from Biomet (NASDAQ:BMET) to Medtronic (NYSE:MDT) to globe-straddling conglomerate General Electric (NYSE:GE) itself.

In fact, it was a good year for ThermoGenesis, whatever you might think of Wall Street estimates, for precisely the reason cited above: cash. In fiscal 2006, ThermoGenesis reduced its cash outflow by more than half. The $3.6 million in negative free cash flow that it reported (note that you'll have to dig up the 10-K filing to see this, because the firm failed to include a cash flow statement in its earnings report) is the least amount of cash ThermoGenesis has burned in any year since 1996. If the company can just manage to keep its cash flow negativity to that level or better in the future, ThermoGenesis now looks capable of living another 10 years -- two more than seemed likely just last week.

Unfortunately, CEO Philip Coelho put that modest goal in doubt when he advised that: ".we will restructure our operations, including enhancing our manufacturing, marketing, scientific affairs and engineering capabilities, as well as expanding the executive management team." Which suggests that ThermoGenesis intends to spend a fair amount of cash on capital investments and new hires next year, accelerating its cash burn.

ThermoGenesis argues that the additional expenditures are necessary "to provide maximum focus on the execution of our revenue goals." I can agree with that. By my calculations, the firm needs to more than double its revenues in order to become GAAP profitable. Unfortunately, at the compound annual revenue growth rate of 5.8% that it has posted over the last three years, it will take 12 years to double ThermoGenesis's revenues -- longer than its cash will last, even before increasing expenditures. In future quarters, investors in this company need to demand that management create growth rates that far exceed the anticipated growth in operating costs. Failing that, even ThermoGenesis's current cash hoard won't save those investors from additional dilution.

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Fool contributor Rich Smith does not own shares of any company named above.