Wow Bsav ~ SCRC 2014 and 2015
Question from Tim
BSAV - How did you come up with forecasted revenues of $14M-$15M in 2014? Do you have any links to back it up? Thanks.
response from BSAV!!!
Tim - Great question. My apologies for the late response. My day job interfered with my ability to give you an adequate response. I have no links or studies to provide. Instead, you can repeat my DD by reviewing past PRs on Scrips increasing WRx revenues and the detailed Q&A and then ask asking company one simple question. With that information at hand, you will have to indulge me with one or two conservative assumptions.
Part One - Based on what the company has announced, we can assume WRx monthly revenues based on the current status quo will settle in between $175K and $200K. We also know that the company is currently ramping up to a network of 700 independent operators in a world of about 22,500 operators.
Part Two - Question to the company is what is the current status quo? In other words, what resources is the company using to reach out to those 700 operators and whether the class 2 license is in place yet? I invite you to call Bob Schneiderman to hear the answer first-hand, but I will tell you what I have learned is that these revenues are being generated by only ONE sales rep and that we are making these revenues without the benefit of the class 2 license (remember that the class 2 license allows the company to sell and distribute controlled substances, a high profit margin business ).
Part Three - BSAV's secret sauce (my conservative assumptions). I assume that Scrips will hire more sales reps and have at least 5 reps by the end of June 2014. I will also assume that both PIMD and WRx will have their class 2 licenses by that time. And my last assumptions are that each sale rep will reach peak sales of 1.5 times my "Part One" revenues ranges with the added class 2 licenses. Adding the class 2 license capabilities will not only expand us to controlled substances, but it will provide additional leverage to sell and distribute an even wider range of products. So, I believe my multiplier is conservative.
Part Four - Application of BSAV's secret sauce to the reported facts. By my calculations, each of the sales reps will generate monthly revenues between $262K and $300K. And assuming 5 sales reps, my monthly revs projection is between $1.31M and $1.5M beginning July 2014. I took the low end of this range for 2H 2014 to project about $8M in revs. I anticipate revs between $2M and $4M in 1H 2014. So, excluding the compounding pharmacies business to which the company referred in the Q&A, my conservative estimate for the WRx and PIMD business for 2014 is $10M - about $0.60 contribution toward the pps. (Compounding pharmacies would be $5M or more - contributing another $0.30 to the pps.)
Glimpse into 2015 -- If Scrips doubled the sales reps to 10 in 2015 and acquired one or more PIMD-type business to soak up more annual allotments for controlled substances to account for the added sales force , the low end of the monthly revs would be about $2.62M -- about $31M annually (again, this excludes compounding pharmacies). In my rough estimate, $31M in 2015 revs would contribute between $1.12 and $1.49 to the pps.
All of this is why I continuously believe the pharmaceutical supply management and distribution business is low risk, but has the potential for a moderate to high reward. Very few people understand this company, which is sad, as it takes only a few hours to really understand what Bob and his team are building here. This company is significantly undervalued, and this is why I added more shares this week and why I continue to recommend this stock to all of my friends.
By my last count, Team BSAV is at about 4.4M shares (which includes Tink's 415K shares - great buying Tink!).
GLTA
Question from Tim
BSAV - How did you come up with forecasted revenues of $14M-$15M in 2014? Do you have any links to back it up? Thanks.
response from BSAV!!!
Tim - Great question. My apologies for the late response. My day job interfered with my ability to give you an adequate response. I have no links or studies to provide. Instead, you can repeat my DD by reviewing past PRs on Scrips increasing WRx revenues and the detailed Q&A and then ask asking company one simple question. With that information at hand, you will have to indulge me with one or two conservative assumptions.
Part One - Based on what the company has announced, we can assume WRx monthly revenues based on the current status quo will settle in between $175K and $200K. We also know that the company is currently ramping up to a network of 700 independent operators in a world of about 22,500 operators.
Part Two - Question to the company is what is the current status quo? In other words, what resources is the company using to reach out to those 700 operators and whether the class 2 license is in place yet? I invite you to call Bob Schneiderman to hear the answer first-hand, but I will tell you what I have learned is that these revenues are being generated by only ONE sales rep and that we are making these revenues without the benefit of the class 2 license (remember that the class 2 license allows the company to sell and distribute controlled substances, a high profit margin business ).
Part Three - BSAV's secret sauce (my conservative assumptions). I assume that Scrips will hire more sales reps and have at least 5 reps by the end of June 2014. I will also assume that both PIMD and WRx will have their class 2 licenses by that time. And my last assumptions are that each sale rep will reach peak sales of 1.5 times my "Part One" revenues ranges with the added class 2 licenses. Adding the class 2 license capabilities will not only expand us to controlled substances, but it will provide additional leverage to sell and distribute an even wider range of products. So, I believe my multiplier is conservative.
Part Four - Application of BSAV's secret sauce to the reported facts. By my calculations, each of the sales reps will generate monthly revenues between $262K and $300K. And assuming 5 sales reps, my monthly revs projection is between $1.31M and $1.5M beginning July 2014. I took the low end of this range for 2H 2014 to project about $8M in revs. I anticipate revs between $2M and $4M in 1H 2014. So, excluding the compounding pharmacies business to which the company referred in the Q&A, my conservative estimate for the WRx and PIMD business for 2014 is $10M - about $0.60 contribution toward the pps. (Compounding pharmacies would be $5M or more - contributing another $0.30 to the pps.)
Glimpse into 2015 -- If Scrips doubled the sales reps to 10 in 2015 and acquired one or more PIMD-type business to soak up more annual allotments for controlled substances to account for the added sales force , the low end of the monthly revs would be about $2.62M -- about $31M annually (again, this excludes compounding pharmacies). In my rough estimate, $31M in 2015 revs would contribute between $1.12 and $1.49 to the pps.
All of this is why I continuously believe the pharmaceutical supply management and distribution business is low risk, but has the potential for a moderate to high reward. Very few people understand this company, which is sad, as it takes only a few hours to really understand what Bob and his team are building here. This company is significantly undervalued, and this is why I added more shares this week and why I continue to recommend this stock to all of my friends.
By my last count, Team BSAV is at about 4.4M shares (which includes Tink's 415K shares - great buying Tink!).
GLTA
