If you’ve been watching shares of Progressive Care Inc. (OTCMKTS:RXMD) lately, then you have noticed some new life to the chart in recent action. As it turns out, the rally was a run into the company’s Q3 earnings report, which was a revelation.
“Q3 set new records across basically all metrics,” commented S. Parikh Mars, Progressive Care CEO. “We saw accelerating growth in sales and prescriptions while continuing our strong multi-quarter trends of falling costs and expanding gross margins. Beyond the numbers, we are seeing a major positive impact from our recent Family Physicians Rx acquisition, and the Company is firing on all cylinders post-integration. Ultimately, this creates a very favorable backdrop for continued aggressive expansion in the months and quarters ahead as we prepare to launch several powerful new initiatives in Q4 and 2020.”
Pick Up Your Pencils
It was a breakout quarter. And even more importantly, it was driven by trends that have been in place in recent quarters, but simply accelerated in Q3, including a significant expansion in margins on accelerating sequential growth in sales and prescriptions filled.
Q3 Gross Margins expanded to 24.4% (versus Q2 22.7%, Q1 19.8%)
Gross Profit up 128% year-over-year to $2.47 million
Prescriptions Filled up 52% to 323k for nine months ended Sep. 30 (vs 2018 comparable period)
Prescriptions Filled up 70% to 136k in Q3, on quarterly year-over-year basis
Cash level up 774% year-to-date to $759,016
Accounts Receivable up 96% year-to-date to $2,372,177
In other words, the company is doing more business and doing it increasingly efficiently every passing month. Call us crazy, but a little digging into the data suggests that we are probably already looking at a company that is profitable on an operating basis, and will report EBITDA profitability in its Q4 data.
However, even with all of this really positive stuff, the most exciting part of the story right now is the hints: here comes proprietary CBD products, here comes a disruptive telehealth segment, and here comes talk of an uplist onto the Nasdaq or NYSE.
That means more scalability in the model. Instead of being a local FL pharmacy, this is national brand servicing the needs of kids in Kansas and California, doing exponentially more business, and scaling up at a fraction of current costs beyond fixed investments.
And because of all the cash flowing in the door, terms of capital will be stronger and we will likely see more high-ROI investments, more M&A, more expansion.
Looking to the Future
This is still a stock that the crowd hasn’t found at all. Perhaps that will start today. But new investors have a chance at a rapidly growing company that is trading at 0.4x forward sales. Which is an absurd value. It doesn’t look like this is going anywhere but higher, with eye-popping future catalysts sitting around every corner.
“Get ready for a transformation,” continued Mars. “We are extremely excited about the opportunity to monetize telemedicine in a manner that will truly change the game as it is currently played. We look forward to introducing current and prospective shareholders to this vision in the months ahead. 2019 has been a breakout year. But the core message that we have right now for our shareholders is this: expect a transformative evolutionary leap to a vastly more scalable, diversified, and higher margin Progressive Care in 2020 and beyond.”
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