New York, NY / ACCESSWIRE / December 8, 2014 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has issued a quarterly update note on OxySure Systems, Inc. (OTCQB: OXYS) for its financial results for the quarter ended September 30, 2014.
The update note is available here: OXYS 3Q14 Update Note. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will also be available on these platforms. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
OxySure provides short duration / emergency medical oxygen and respiratory solutions for mass market use. Using patented technology that combines two dry, inert powders to create medical oxygen, the company manufactures and markets the OxySure Model 615, a portable emergency oxygen system that has been approved by the FDA for sale over the counter without a prescription.
Highlights from the quarter are as follows:
- 3Q14 reported revenues were $818k, up 50% compared to 3Q13 and up 21% sequentially from 2Q14. 3Q14 revenues came in below our estimate of $1.0mn
- Gross profit margin (GPM) was 61% for 3Q14, down 18 percentage points from 79% in 3Q13. 9M14 GPM was 75% compared to 57% in 9M13.
- Operating loss for 3Q14 came in at $389k compared to an operating loss of $44k in 3Q13.
- Net loss for 3Q14 was $462k or $0.02 per share, compared to a net loss of $83k or $0.003 per share in 3Q13.
In addition, the note highlighted the following:
Revenues up 50% YoY
The company reported a 50% YoY increase in revenues to $818k for 3Q2014 and a 47% YoY increase to $1.9mn for 9M14. The increase in revenues is primarily attributable to an increase in U.S. product sales and product sales related to military markets. Gross margin was 60.7%, in line with the company’s historical margin performance. Operating loss widened to $389k in 3Q14 from $44k in 3Q13, due primarily to higher expenses related to sales and marketing (up 161% to $203k), G & A expenses (up 98% to $527k) and R&D (up 16% to $156k). Short term debt reduced 25% to $435k during the quarter, primarily attributable to capital lease payments.
Positioning as medical platform company
As discussed in our earlier note, OXYS has positioned itself as a platform company for additional product and market expansion, particularly after the merger with Estill. With resuscitation and thermal management divisions on the platform post the merger, the company’s preliminary care areas for expansion include respiratory, diagnostics and wound care. We believe that sales and marketing synergies from the merger would be critical for successful transformation of OXYS into a fully integrated medical device company. We note that both OXYS Model and Estill’s Thermal Angel are complementary (serve emergency conditions) and could reap significant marketing synergies-Thermal Angel could gain traction with OXYS’s existing network of ~50 U.S. distributors, while Model 615 could see traction with Estill’s strong existing relationships within the military.
Revenues to exceed $10mn in 2015E: The combined entity is expected to generate initial annual revenues in excess of $10mn with ~$2-3mn annually in combined synergies, resulting in improved cash flows and stronger balance sheet.
Raising price target of $2.30
We are revising our estimates and raising the target price from $1.27 to $2.30, which represents 164% upside from the recent price of $0.87 per share. We believe the recent merger with Estill positions OXYS as an emerging medical device leader with strong roots in the emergency medical space.
Please review important disclosures on our website at www.seethruequity.com.
About OxySure System, Inc.
OxySure Systems, Inc. (OXYS) is a medical technology company that focuses on the design, manufacture and distribution of specialty respiratory and medical solutions. The company pioneered a safe and easy to use solution to produce medically pure (USP) oxygen from inert powders. The company owns numerous issued patents and patents pending on this technology which makes the provision of emergency oxygen safer, more accessible and easier to use than traditional oxygen provision systems. OxySure's products improve access to emergency oxygen that affects the survival, recovery and safety of individuals in several areas of need: (1) Public and private places and settings where medical emergencies can occur; (2) Individuals at risk for cardiac, respiratory or general medical distress needing immediate help prior to emergency medical care arrival; and (3) Those requiring immediate protection and escape from exposure situations or oxygen-deficient situations in industrial, mining, military, or other "Immediately Dangerous to Life or Health" (IDLH) environments. www.OxySure.com.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
[email protected]
SOURCE: SeeThruEquity