By Grant Zeng, CFA We Expect Continued Revenue Growth In The Remainder of 2014 and Beyond
On August 14, 2014, Pressure BioSciences (PBIO) reported strong financials for the second quarter ended June 30, 2014.
Product and services revenue for 2Q14 was $307,464, compared to $196,522 for the same period in 2013, an increase of 56.5%.
Sales of consumables were $48,417 for 2Q14, compared to $26,034 for the same period in 2013, an increase of 86%.
No grant revenue for the second quarter of 2014 compared to $161,214 for the comparable period in 2013.
Total revenue for 2Q14 was $307,464, compared to $357,736 for the same period in 2013, a 14% decrease. This decrease was due solely to the loss of $161,214 in grant revenue in the second quarter of 2014, offset almost entirely by a 56% increase in products and services revenue.
Operating loss for 2Q14 was $846,757, compared to $858,026 for the same period in 2013.
Loss per common share was $0.05 for the second quarter of 2014 compared to $0.10 for the same period in 2013.
Revenue from the sale of products and services was $711,611 for the six months ended June 30, 2014 compared to $418,092 for the same period in 2013, a 70% increase.
Sales of consumables were $103,029 for the six months ended June 30, 2014 compared to $53,258 for the same period in 2013, a 93% increase.
Grant revenue for the six month period ended June 30, 2014 was $0 compared to $310,382 for the same period in 2013.
Total revenue for the six months ended June 30, 2014 was $711,611 compared to $728,474 for the same period in 2013, a 2% decrease. This decrease was due solely to the loss of $310,382 in grant revenue in the six month period ended June 30, 2014, offset almost entirely by a 70% increase in products and services revenue, as stated.
Operating loss for the six months ended June 30, 2014 was $1,629,123 compared to $1,583,049 for the same period in 2013. This small increase in operating loss was attributable solely to the 100% loss in grant revenue in the first six months of 2014.
Loss per common share was $0.30 for the six months ended June 30, 2014 compared to $0.22 for the same six-month period of 2013.
As of June 30, 2014, PBIO held cash of $9,369.
This is another strong quarter for PBIO. Product and service revenue increased 56.6% year over year.
We are especially impressed by the strong sales of consumables in 2Q14. Sales of consumables in 2Q14 were $48,417, compared to $26,034 for 2Q13, an increase of 86%. As we stated in our previous report, this is important for the long term revenue growth. As we discussed before, consumables are recurring revenue, which should increase when more and more instruments are installed. This revenue may account for a large portion of total revenue in the future.
Although total revenue was down for the three months ended June 30, 2014, attributable solely to the loss in grant revenue, the company was able to offset the lost margin through continued increases in products and services revenue and strict control of operating costs.
PBIO has set a series of goals for the second half of 2014, which include:
· Continue to increase products and services revenue over 2013 levels;
· Be in a position to decide on the possible spin-off of selective PCT applications into new, stand-alone businesses designed to generate a revenue stream and favorable visibility for PBIO;
· Secure a strategic marketing and distribution partner for the new Barozyme HT48 high throughput system;
· Complete the manufacture of 25 Barozyme HT48 and HUB880 instruments and ready them for sale;
· Develop and implement a successful marketing campaign for the recently released, patent-pending micro-Pestle that has the potential to significantly add to products revenue during the second half of 2014;
· Continue the company’s measureable progress in developing a sound financial roadmap for future growth;
Based on these efforts and the strong financial performance for 1H14, as well as the two new products launch and continued marketing efforts by management, we estimate that revenue will continue to grow in the remainder of 2014.
Specifically, we model product sales will reach $1.61 million in fiscal 2014, an increase of 54% over $1.05 million product sales for fiscal 2013.
We think revenue ramp in 2015 will be driven by sales from both existing and new products (instruments and consumables), from the Company’s expanding distribution network, and from grants currently being reviewed.
PBIO launched the new High Throughput (HT) PCT-based Platform in June, which will help foster discussions with large, multi-national sales, marketing, and distribution partners. Management indicated that these discussions will lead to at least one major strategic partnership before years' end.
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We Expect Continued Revenue Growth In The Remainder of 2014 and Beyond