REDONDO BEACH, CA / ACCESSWIRE / February 25, 2016 / OxySure Therapeutics Inc. (OTCQB: OXYS) has grown its revenue for an impressive 15 consecutive quarters. While several analysts have taken note, setting price targets ranging from $1.90 to $2.30 per share, the stock has traded largely under-the-radar at just $0.17 per share.
The company trades at just 1.8x trailing 12-month revenue and 2.7x book value. By comparison, Cardica, Inc. (NASDAQ: CRDC), a larger company but one that has similar revenues in the medical equipment manufacturer space, trades at 82.5x trailing 12-month revenue and 10.5x book value.
In this article, we'll take a look at some of the company's recent progress and where it may be headed over the coming years.
Paving the Way
OxySure doubled its production capacity in early February in order to address its rapidly increasing backlog of orders. During the third quarter of 2015, the company's net receivables jumped to $1,234,000 from $1,159,000 during the second quarter and $878,000 during the first quarter. These net receivables have been growing at a 10.3% compounded growth rate over the past four quarters and appear positioned to continue growing ahead.
"Through recent investments in infrastructure and additional manufacturing staff, we were able to reduce our current backlog from two months to one month," said OxySure Production Manager Richard Bryant in a February 10th press release. "We plan to further add additional production capacity by adding some anticipating process changes, as well as further acquisitions of equipment and additional manufacturing staff."
These investments have been supported through the City of Frisco's Economic Development Corporation and Sinacola Commercial – its landlord. This year, the company received the fifth of five incentives from the city designed to boost capital investment and job growth. These incentives helped management build up a multi-million dollar company that employs a growing number of people in the emergency medical industry.
Focus on Profits
OxySure's revenues jumped nearly 40% during the third quarter of 2015, putting it on track for a $5 million run-rate moving into the new year. According to Julian T. Ross, Chairman and CEO, this run rate will accelerate to $10 million in 2016 and facilitate a breakeven on a cash flow basis.
On the product level, the company's growing client base is having a positive effect on its revenue mix. One-time unit sales may provide a nice boost to total revenue, but recurring revenue from the sale of replacement cartridges provider higher margins. In addition, the company's efforts to cross-sell products manufactured by other companies could have a similar impact on margins and bolster overall profitability over the long-term.
In early February, the company signed a supply agreement with ORS Nasco to offer complementary products to its institutional customers seeking a single source for their medical emergency preparedness. These products include first aid supplies, respiratory products, heat stress protection, eye protection, and many other product lines. Through this agreement, there are ample opportunities for revenue and margin expansion.
Looking Ahead
OxySure has made significant progress in building up its revenue over the past several years, but recent developments could accelerate this growth over the coming quarters. Investors in small-cap biotech stocks, like Allied Healthcare Products Inc. (NASDAQ: AHPI) and Akers Bioscience Inc. (NASDAQ: AKER), may want to take a look at the company given these recent developments.
For more information, visit the company's website at www.oxysure.com.
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SOURCE: Emerging Growth LLC
