OPRX: Distributions, Revenue Jump. Positive Income, Cash Flow.

Zacks Small Cap Research

By Brian Marckx, CFA

Q2 2013 Results:
Big Jump In Distributions and Revenue. Positive Income and Cash Flow…

OptimizeRx (OPRX) filed their Q2 10-Q on August 12th.  Q2 revenue came in at $1.1 million, as expected following the company's pre-announcement in mid-July.  Both revenue and net income set all-time records, as did the number of coupon distributions in a single quarter.

Q2 revenue and net income of $1.1 million and $355k were both well ahead of our (prior to the pre-announcement) estimates of $768k and $22k.  Actual coupon distributions in the quarter of 266k (~247k of which were paid distributions) were also materially better than our 228k estimate.  EPS came in at $0.01 versus our $0.00 estimate.

Revenue continues to ramp nicely on strong growth in coupon distributions and expansion of OPRX's distribution platform.  Revenue in Q2 and in the first half of 2013 increased on a yoy basis of 114% (from $515k in Q2 2012) and 110% (from $845k in 1H 2012) and has grown sequentially in five of the last seven quarters (with the two exceptions being contractions of less than 11%).  As we noted in our prior update, while we still think that there may be some short-term variability, depending on timing/terms/length of couponing programs by OPRX's various pharma partners, the early numbers are very encouraging and continue to suggest that revenue could begin to ramp fairly substantially over the near-to-mid term.  Q3 also appears to be off to a strong start - management noted on the call that they had just over 100k distributions in July.  Importantly, the vast majority (90%+) of total revenue is coming from distributions (as opposed to set-up fees) - which will be the driver of revenue long term.  Q2 numbers are also highlighting the leverage and scalability in the business model as OPRX kept operating expenses about flat (actually fell slightly) from Q1 while revenue jumped about 65% over the same period.

Along with consistent revenue growth and increasing distribution numbers, OPRX is also now generating positive cash flow - which we view as one of Holy Grails of building tangible value.  Cash from operations in Q2 and 1H 2013 were $100k and $107k.  Ex-changes in working capital these were $385k and $328k, respectively.

Along with increasing the number of drugs promoted and expanding relationships with existing and new pharma partners, OPRX has other irons in the fire which could spark additional revenue growth.  The PDR relationship is expected to come online in Q4 and progress through integration into 2014 - this could increase their physician base (currently at about 100k) by more than 40k and the HealthTronics channel just came online and is expected to add over 2k physicians and bring on key urology drugs including Viagra as well as expand promotion for existing drugs including Cialis and VESIcare.  On the Q2 call management also alluded to other revenue generating opportunities including expanding their product offerings which can be accessed through their installed base and other potential collaborations with their pharma partners - this could even potentially include investments in OPRX - which we think could be particularly compelling.  Management expects to be able to talk more about this in the near future.  We have yet to model these potential ancillary contributions - which could provide some upside to our numbers.

We are maintaining our Outperform rating and $3.50/share price target.

A copy of the full research report can be downloaded here >> 
 OptimizeRx Report

Please visit 
SCR.Zacks.com for additional information on our research and coverage universe, and Subscribe to receive our articles and reports emailed directly to you each morning.
 

 


 

Rates

View Comments (0)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Tired of Living Paycheck to Paycheck?

    New website reveals how to save $1,000's when you're living paycheck to paycheck. See exactly how.

    AdChoices Media ForceSponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • Best Womens Wrinkle Creams 2014

    Mom reveals simple wrinkle solution that has researchers very excited. Try this free solution today to look and feel years younger.

    AdChoicesBellaLabs.comSponsored
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • Mortgage Rates Hit 3.00% APR (5/1 ARM)

    $225,000 for $949/month. No points. No obligation. Get multiple mortgage offers in minutes. Can't hurt to look. Rate quotes are Free!

    AdChoicesLendingTreeSponsored
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com
  • Anyone With $40 Could Become A Millionaire

    1 simple Warren Buffett quote explains the key investing strategy that could create unimaginable long term wealth for you and your family.

    AdChoicesThe Motley FoolSponsored
  • Boeing may have outfoxed Musk, but it could have bigger problems

    Elon Musk is arguably one of the greatest entrepreneurial minds of the 21st Century, but he was outsized an old school aerospace giant. Boeing won the bulk of NASA’s contract for a space taxi.  One of the other companies vying for the deal is SpaceX, the company headed by Tesla’s Musk, will get a…

    Talking Numbers