Mon. Jan 20th, 2020

News Alerts: Repro Med Systems,

17 min read

Repro Med Systems, Inc. dba KORU Medical Systems (NASDAQ: KRMD) (the “Company”) recently stated fiscal results for the 3rd-quarter (“Q3 2k19”) finished September 30, 2k19.

Q3 2k19 Overview

Net sales rose 45.50 percent to $6.60M in Q3 2k19 from $4.50M in Q3 2k18. Growth was driven mainly by the Company’s continued success in expanding its presence in the Primary Immune Deficiency Disease (“PIDD”) and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”) markets, in addition to large orders from a domestic distributor, a new customer in Europe, and clinical trials. We cannot predict whether such large distributor orders or volume generally will continue in the future.

Gross profit in Q3 2k19 rose to $4.40M, or 66.20 percent of net sales, from $2.90M, or 63.60 percent of net sales, in Q3 2k18. Higher gross profit and gross margin were mainly driven by raised net sales and price inclines.

Total operating costs for Q3 2k19 rose to $3.60M from $2.40M in Q3 2k18. Selling, general & administrative (“SG&A”) costs were $2.40M, or 36.90 percent of net sales, contrast to $1.90M, or 42.20 percent of net sales in Q3 2k18. Litigation costs raised to $0.90M from $0.30M in Q3 2k18. The Company received its 2nd-successive favourable judgment in the litigation with EMED Technologies Corp. on August 30, 2k19. KORU Medical Systems has filed motions for reimbursement of court costs and attorneys’ fees subsequent to the receipt of both judgements.

Net income for Q3 2k19 rose to $0.70M, or $0.020 for each diluted share, from net income of $0.40M, or $0.010 for each diluted share, in Q3 2k18.

Q3 2k19 Adjusted EBITDA rose to $2.10M, or 31.50 percent of net sales, from Adjusted EBITDA of $1.10M, or 24.30 percent of net sales, in Q3 2k18. Adjusted EBITDA excludes from net income: tax cost, depreciation and amortization, interest income, operating costs associated with the company’s organizational changes before March 31, 2k19, litigation costs, and stock option cost.

Cash and equivalents as of September 30, 2k19 was $5.10M. Cash flow of $1.40M for the 1st-9.0-months of 2k19 included a $2.10M incline in accounts receivable reflecting a change in payment terms by a large distributor of our products from net 30 days to net 60 days, in addition to a $0.60M incline in inventory to commensurate with sales growth. These inclines were partially offset by $1.50M in proceeds realized from the maturation of a Certificate of Deposit in Q2 2k19 and $0.50M associated with the exercise of warrants and options during the duration.

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