GEO Investing

repro-med buildingGeoInvesting has been covering Repro-Med Systems (OOTC:REPR) for several years and in mid 2014, we explained that the company’s history of growing revenues would eventually garner investor attention.

Yesterday, the stock’s price matched its 52-week high, which also happens to be the highest price that has been attained in the last 15 years.  We are maintaining REPR as a tier one Pink Sheet stock as the company continues to show its dedication to maintaining a level of profitability that has put the company in the black on a trailing 12 month basis.

Repro-Med Preliminary Q3 2016 Results

Repro-Med recently reported preliminary Q3 2016 results:

  • Sales of $3.14 million vs. $2.65 million in the prior year quarter
  • Gross margin improved in fiscal Q3 to 67% from 60% in the same quarter last year, and from 63% in fiscal Q2.
  • Q3 net income was $168,000, an improvement of 81% compared with the same period last year.

Management commented on the homecare infusion sector growth and what REPR’s newest board member brings to the table:

“We continue to see growth in all sectors of the homecare infusion market both domestically and internationally,” commented Andy Sealfon, President and CEO of the company. “I am also very excited about our newest board member, Cyril N. Narishkin and have appointed him as Interim Chief Operating Office to support our expanded management team and accelerate our growth opportunities. Cyril brings a wealth of experience consulting with companies of all sizes, and will also be instrumental in assisting the Company on its lean initiatives and growth plans,” Mr. Sealfon added.

It appears the company’s revenue growth has reached a new foundation, having posted over $3 million for 3 of the last 4 quarters. We’re preparing an EV/sales analysis of the new numbers because the company is tough to value on an earnings basis.

As we said in our article published in October 2014:

…we are more inclined to value REPR on an EV/S basis. We think that EPS and EBITDA growth could be lumpy as the company increases its marketing efforts, but this not an issue when companies generate consistent and predictable revenues streams. The EPS and EBTIDA “light switch” can be turned on once the company has achieved a desired level of revenue.

Since our report, the company has grown revenue on a YOY basis for four out of five quarters. One of two things probably has to happen to catapult the company higher:

  1. The company needs to see more revenue fall to the bottom line
  2. The company needs to find new indications for its product

We encourage that you follow our coverage of REPR as the company builds momentum into the end of its fiscal year.  Our members will be the first to get updates on our findings and analyses.

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