Shares of Repro Med (OOTC:REPR) are little changed following the company’s 2016 second quarter results. We view this as an encouraging sign that the market may finally be ready to shrug off the lingering issue of the FDA Warning letter that we opined upon since April of 2016. While we would not be surprised if shares of REPR methodically declined in price over the next several weeks and into the next earnings report, we believe (as in other patient speculative investments) that once the “hair” of the current situation is flambeed to ash, we will have a clean slate from which to move forward. In a scenario where shares fall back even more from their recent high of $0.59 attained before the FDA issue surfaced, we will potentially view this as an opportunity to add shares.
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9/26/2016 – Watching Repro Med (REPR) to possibly add long shares
ReproMed announced second quarter 2017 results as follows:
- Sales of $3.15 million vs $3.16 million in the prior year period
- Non-GAAP net income of $117,197 vs $483,352 in the prior year period
Quotes from management on business outlook:
“Our strong organic growth both domestically and internationally in the quarter as well as new customer wins, which we expect will continue to add to our results going forward, were masked by the non-recurring contribution from a large clinical trial last year.
Over the past year, the Company has invested in its sales and management teams, which positions us for anticipated growth over the next several quarters. Furthermore, as part of our sales and marketing initiatives, we recently attended the IgNS 2016 5th National Conference in Miami, Florida and received great feedback from nurse practitioners and healthcare professionals who use our system with their patients,” commented Andy Sealfon, CEO of RMS.
Quotes from management regarding FDA warning letter:
“RMS is engaged in dialogue towards a resolution of the FDA Warning Letter. The Company has established a positive collaboration with the FDA and looks forward to a favorable and swift resolution. We are encouraged by the results of an ISO audit made in April by international standards leader BSI, which confirmed excellent compliance in RMS’s quality management systems, and required minimal follow-up prior to next year’s audit. RMS devices are both safe and effective for use by patients worldwide, and remain available in all markets.”
On top of management’s encouraging comments about the FDA warning letter, we think it’s great that the company has been able to maintain the ~$3 million revenue level along with profitability during this FDA inspection process which we believe has likely been impacting sales in the short term. We assume that their confidence level of a resolution is high or there would probably have been an absence of comments. However, we would not be surprised if impatient investors moved on to other investments, but as we said, REPR is a stock we will continue to give the benefit of the doubt and in which we will possibly build more of a position on any weakness.
See our past coverage on the whole FDA saga as it pertains to Repro Med as well as continued stock purchases by Director Joseph Manko of Horton Capital Management here.