Repro-Med Systems (OOTC:REPR) ($0.27) – ThisGeoBargain on the radar REPR engages in the design, manufacture, and marketing of proprietary medical devices primarily for emergency medical applications and ambulatory infusion therapy worldwide.   Reported Q2 2014 results.

  • REPR reported $2.5 million and $5.1 million for the three and six month periods ended August 31, 2014, 24.7% and 32.4% more than the comparable periods in 2013.
  • The company reported net income of $203,000 and $361,000 for the three and six months ended August 31, 2014, more than double the profits recorded in the comparable periods in fiscal 2014.

Growth Driven by Sales of Main Products

The steady growth in revenue is being driven by sales of the FREEDOM60® Syringe Infusion System and RMS High-Floâ„¢ Subcutaneous Safety Needle Sets in both domestic and international markets.  The following chart reflects the steady growth of revenues by quarter:

As revenues have grown REPR is taking more to the bottom line.  The company reported net income of $203,000 and $361,000 for the three and six months ended August 31, 2014, more than double the profits recorded in the comparable periods in fiscal 2014.  As revenues continue to increase we expect profits to follow at an increasing rate as incremental revenues drive proportionally more profit because a greater share of gross profits makes it to the bottom line.

One noteworthy item in REPR’s balance sheet is that inventory increased from around $1 million to $1.4 million during the three months ended August 31.  We have to assume that is in anticipation of increased sales.  Supporting this view is that during the last six months the company invested heavily in facility upgrades including a second cleanroom, new production equipment and patent protection for products in development.

We maintain our optimistic view and anticipate continued strong growth for REPR’s flagship products FREEDOM60 and related needle sets.  The ongoing shift to more homecare will provide a strong tailwind for REPR as management is focused on and has in fact bet the company on that market.  We believe management has rightly anticipated the inevitable shift to more in home care and self-administered medical solutions putting REPR’s products in the right place at the right time.