Project Scrips May 2014 Gross Profit
Post# of 7769
Posted On: 05/05/2014 9:39:07 AM
Greetings fellow SCRC investors! With today's fantastic news of $958,234 in April revenues from the specialty pharmacy business, I have no choice but to revise my ScripsAmerica projections for May. Considering the pharmacy's April revenues were 94% higher than the March $494,000 revenues, I believe it is reasonable to assume the pharmacy's May revenues will increase to at least $1,100,000 (a mere 15% increase over April's revenues). In my opinion, my $1.1 million projection will result in about $470K in GROSS PROFIT to ScripsAmerica.
Despite the baseless acquisitions on the other board that I am intentionally posting exaggerated numbers, my Main Ave projections of $750,000 for May were impressively eclipsed by the pharmacy's April revenues. Indeed, April's pharmacy revenues actually beat my May revenue projections by about $208,000 (about 28% higher than my "intentional manipulation"
. Who is doing the manipulation here?
ScripsAmerica has at least seven potential revenue streams (excluding the DOD revs). At least three of these revenue streams will be generating revenues in May -- Main Ave Pharmacy, WholesaleRx, and RapiMeds Hong Kong. Below are my projected May revenues and gross profits to SCRC for each:
1. Main Ave Pharmacy - $470,750 gross profit to SCRC, which I calculated as follows:
Step One: Main Ave projected May 2014 revenues of $1,100,000 Xs 97% = $1,067,000. Despite arguments to the contrary, Scrips is contractually entitled to 97% of the Main Ave Pharmacy revenues, from which all of the pharmacy's expenses, including Implex's monthly draw, are deducted. So, basically, the amount paid to Scrips is gross profit, which will be added to the company's gross profit from WRx, PIMD, the DOD contract, and RapiMeds. If anyone has a different understanding of the agreement, please tell me where I am wrong.
Step Two: $1,067,000 Xs 50% = $533,500. My projected 50% haircut is intended to account for my estimated 20% sales commissions based on industry norms and 30% for all Main Ave expenses identified in the "Business Management Agreement". I understand that it in the compounding pharmacy industry, the profit margins are "extremely favorable" per the core's research and the company's Q&A. So profit margin that I have assumed here is reasonably attainable.
Step Three: $533,500 - $62,750 = $470,750 gross profit projection to ScripsAmerica. For this last step, I further reduced the margin in Step Two to account for the monthly draw to Implex pursuant to the agreement. I added the approximate $47,000 fees disclosed in agreement to $15,750, which is $30 times my assumed 525 prescriptions in May (agreement also calls for $30 per script to Implex). Interestingly, this monthly draw is actually scheduled to decrease with time and as the total number of prescriptions continue to increase. I will provide more details on this in a future post.
2. WholesaleRx - $400,000 ($56,000 gross profit to ScripsAmerica - 70% gross margin, 20% of gross margin to SCRC -- This is based on prior filings.)
3. PIMD - $0 (unfortunately, it is earning $0 per the 10K; hopefully, the company can get moving with this in June as stated in the 10K.)
4. RapiMed Hong Kong -$200,000 ($200,000 to SCRC, assumes no more orders in May; I will assume 30% profit margin, so $60,000 to the bottom line as gross profit. This is another revenue stream that has been slower to develop than initially anticipated. Perhaps it will ignite soon.)
5. RapiMed Mainland China - $0 (product approval possibly as early as June, same comments as Hong Kong)
6. RapiMed Canada - $0 (no updates, probably nothing until the second half of 2014)
7. RapiMed US - $0
An eighth potential revenue stream is the Global Pharma Hub, but I'll ignore that one as well.
So excluding the DOD and Global Pharma Hub revenues, I am projecting that SCRC's gross profit in May will be $586,750. I'll further increase my SG&A assumption to $250,000, which translates to about $336,750 in before tax, NET PROFIT. Assuming no further increases, my net profit/earnings estimate from May 2014 through April 2015 would equate to $4,041,000. I will further assume the total shares outstanding increases to 200,000,000 by April 30, 2015, so eps of $0.02. Assuming, a PE of 20 (which is uber conservative for such explosive growth), May's earnings would support a pps of at least $0.40. As I have said in the past, however, I do not expect the status quo. I expect much more growth. This company is just getting started.
Indeed, I believe May will be the tip of the iceberg as Scrips continues to grow and fill in all seven of its potential revenue streams (again, excluding the DOD and Global Pharma Hub). For example, if Scrips grew only the Main Ave Pharmacy monthly revenues to $2,000,000 based on over 1,500 scripts (as the Atlanta compounding pharmacy monthly revenues that Guts discovered a few weeks ago), SCRC's gross profit over the next 12 months would reach about $12 million. With this kind of rapid growth, SCRC's price will hit sustainable prices above $1 in the next 12 to 18 months.
My fellow SCRC investors, in my humble opinion, once Scrips gets moving along with PIMD or RapiMeds or both as it continues accelerating its specialty pharmacy profits, the stock price will go parabolic.
This year is quickly shaping up to be an exciting year for the Scrips shareholders. The current share price is miles away from accurately reflecting the value of SCRC's vastly improved fundamentals and its true potential.
Good luck!
Bsav88atty (p.s. I did not get paid to write this message, nor have I been paid to post any message at any time on any board.
Despite the baseless acquisitions on the other board that I am intentionally posting exaggerated numbers, my Main Ave projections of $750,000 for May were impressively eclipsed by the pharmacy's April revenues. Indeed, April's pharmacy revenues actually beat my May revenue projections by about $208,000 (about 28% higher than my "intentional manipulation"
. Who is doing the manipulation here? ScripsAmerica has at least seven potential revenue streams (excluding the DOD revs). At least three of these revenue streams will be generating revenues in May -- Main Ave Pharmacy, WholesaleRx, and RapiMeds Hong Kong. Below are my projected May revenues and gross profits to SCRC for each:
1. Main Ave Pharmacy - $470,750 gross profit to SCRC, which I calculated as follows:
Step One: Main Ave projected May 2014 revenues of $1,100,000 Xs 97% = $1,067,000. Despite arguments to the contrary, Scrips is contractually entitled to 97% of the Main Ave Pharmacy revenues, from which all of the pharmacy's expenses, including Implex's monthly draw, are deducted. So, basically, the amount paid to Scrips is gross profit, which will be added to the company's gross profit from WRx, PIMD, the DOD contract, and RapiMeds. If anyone has a different understanding of the agreement, please tell me where I am wrong.
Step Two: $1,067,000 Xs 50% = $533,500. My projected 50% haircut is intended to account for my estimated 20% sales commissions based on industry norms and 30% for all Main Ave expenses identified in the "Business Management Agreement". I understand that it in the compounding pharmacy industry, the profit margins are "extremely favorable" per the core's research and the company's Q&A. So profit margin that I have assumed here is reasonably attainable.
Step Three: $533,500 - $62,750 = $470,750 gross profit projection to ScripsAmerica. For this last step, I further reduced the margin in Step Two to account for the monthly draw to Implex pursuant to the agreement. I added the approximate $47,000 fees disclosed in agreement to $15,750, which is $30 times my assumed 525 prescriptions in May (agreement also calls for $30 per script to Implex). Interestingly, this monthly draw is actually scheduled to decrease with time and as the total number of prescriptions continue to increase. I will provide more details on this in a future post.
2. WholesaleRx - $400,000 ($56,000 gross profit to ScripsAmerica - 70% gross margin, 20% of gross margin to SCRC -- This is based on prior filings.)
3. PIMD - $0 (unfortunately, it is earning $0 per the 10K; hopefully, the company can get moving with this in June as stated in the 10K.)
4. RapiMed Hong Kong -$200,000 ($200,000 to SCRC, assumes no more orders in May; I will assume 30% profit margin, so $60,000 to the bottom line as gross profit. This is another revenue stream that has been slower to develop than initially anticipated. Perhaps it will ignite soon.)
5. RapiMed Mainland China - $0 (product approval possibly as early as June, same comments as Hong Kong)
6. RapiMed Canada - $0 (no updates, probably nothing until the second half of 2014)
7. RapiMed US - $0
An eighth potential revenue stream is the Global Pharma Hub, but I'll ignore that one as well.
So excluding the DOD and Global Pharma Hub revenues, I am projecting that SCRC's gross profit in May will be $586,750. I'll further increase my SG&A assumption to $250,000, which translates to about $336,750 in before tax, NET PROFIT. Assuming no further increases, my net profit/earnings estimate from May 2014 through April 2015 would equate to $4,041,000. I will further assume the total shares outstanding increases to 200,000,000 by April 30, 2015, so eps of $0.02. Assuming, a PE of 20 (which is uber conservative for such explosive growth), May's earnings would support a pps of at least $0.40. As I have said in the past, however, I do not expect the status quo. I expect much more growth. This company is just getting started.
Indeed, I believe May will be the tip of the iceberg as Scrips continues to grow and fill in all seven of its potential revenue streams (again, excluding the DOD and Global Pharma Hub). For example, if Scrips grew only the Main Ave Pharmacy monthly revenues to $2,000,000 based on over 1,500 scripts (as the Atlanta compounding pharmacy monthly revenues that Guts discovered a few weeks ago), SCRC's gross profit over the next 12 months would reach about $12 million. With this kind of rapid growth, SCRC's price will hit sustainable prices above $1 in the next 12 to 18 months.
My fellow SCRC investors, in my humble opinion, once Scrips gets moving along with PIMD or RapiMeds or both as it continues accelerating its specialty pharmacy profits, the stock price will go parabolic.
This year is quickly shaping up to be an exciting year for the Scrips shareholders. The current share price is miles away from accurately reflecting the value of SCRC's vastly improved fundamentals and its true potential.
Good luck!
Bsav88atty (p.s. I did not get paid to write this message, nor have I been paid to post any message at any time on any board.
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