ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

with a run rate of $60,000,000 on compounding alone and let us say the company earns .08 for the year is it unreasonable to think this company should not trade at least 10 to 15 times earnings which takes us to .80 to $1.20 a share.

Are we just pulling random numbers out of our arses now??? What’s next? The sp is going to hit $4/share imminently!!! Oh wait, JOSEPH ZAMPETTI and the CORE PIPE-holders actually did pump that already, LOL…

SCRC reported recognized revenues of $12.5M during Q3. Based on this revenue number, the fully-diluted EPS was less than a penny/share (approx .009). And yes, we have to use the fully-diluted share count now because SCRC is now profitable and all those common stock equivalents that were previously benign and near-worthless now have a high probability of being converted into common shares.

To get to a $60M annual run rate for revenues, SCRC needs to increase its quarterly reported revenues by 20% over this $12.5M that was reported in Q3, as an extra 20% gets the quarterly number to $15M, which annualized gets us to this $60M target. Based on OCT and NOV reported numbers for approved orders, we have accomplished this and are appearing to settle in nicely at $60M.

So, assuming that all other expenses remain consistent w/what we experienced in Q3, this 20% bump in revenues should roughly flow down to contribute a similar 20% bump in earnings, and by extension, EPS. So bumping the .009 EPS up by 20% brings the quarterly EPS to .011/share. Annualized, this .011/share per quarter becomes .044/year.

To get to .08/year as JOSEPH ZAMPETTI and his fellow criminal CORE PIPE-holders are hyping, SCRC would need to almost double their annual run rate from $60M to $120M in revenues.

Whether the Street believes that SCRC deserves an earnings multiple is unpredictable, and if so, how much it will be is equally unpredictable. If SCRC can demonstrate a steady and continuous revenue and earnings stream that can be shown to be recurring for many more years into the future, then IMO SCRC should warrant an earnings multiple of some kind. But if and when the Street decides to agree with this, assuming the annual revenue run rate remains close to $60M, then it will be based upon a multiple of an annualized .044 EPS and NOT a .08 EPS.


That all being said, the two quickest paths to increasing EPS would be:

(1)
Seeing material results from the second pharmacist that was PR’d as having been hired for Main Ave. DEC approved orders will tell us whether this second pharmacist is yielding the additional order processing capacity that will enable Main Ave to ultimately have the capacity to hit $10M/month (logic being that if 1 pharmacist handled $5M/month, then 2 pharmacists should be able to handle $10M/month, no?).

However, if DEC approved orders continues to flatline @ approx $230k/day, then this will tell us that the problem is no longer a bottleneck/backlog at the pharmacy, but rather an issue with the salesforce generating new sales.

(2)
Get selling expenses back under control. Going from 45% in Q2 to 65% in Q3 (a 50% jump from one quarter to the next) translates to a 20% hit on earnings as this represents $12M in earnings (i.e. shareholder equity) going down the drain. And if you don't think that is significant, this by itself translates to .07/share. At a 10x-15x multiple, this extra and unnecessary selling expense by itself will cost shareholders between .70 and 1.05 in sp appreciation.

This is an area that all shareholders should scrutinize closely as 65% is way above industry norms.

Keep in mind that for the just concluded Q3, SCRC reported earnings of $1.5M. If selling expenses had stayed constant at 45% as it was in Q2, Q3 earnings would have been $4M, a 167% increase over the $1.5M that was reported. That is a quarterly EPS of .024 and an annualized EPS of .096 WITHOUT ANY MULTIPLE. So think about that when JOSEPH ZAMPETTI and the other criminal CORE PIPE-holders are telling you that you should be grateful and thrilled that selling expenses shot up to 65%...


There is a 3rd path, but it is more speculative at this point because, unlike the first two paths outlined above, there is no current baseline to use as a benchmark for forecasting purposes. But this 3rd path involves seeing significant activity w/United Apothecary and Jungle Jim’s. Why these two? Because they are 100% pure profit revenue streams as all SCRC does is basically refer compounding Rx’s from non-NJ states to these pharmacy partners and then SCRC gets a commission. No COGS to worry about, unlike PIMD, which thus far, is still operating at a loss according to the latest 10Q.

Finally, I am optimistic that Main Ave should at a minimum stay flat relative to NOV when DEC approved orders are announced. Because due to the shortened month (only 30 days to start with, 5 Sundays instead of 4, and 2 holidays), NOV only had 23 business days for Main Ave. DEC is slated to have 26 business days, so simply maintaining the ~$230k/day rate should get Main Ave to within a hair of $6M in approved orders for DEC. And this is w/o factoring in any impact of the 2nd pharmacist.

If the 2nd pharmacist can start off by contributing just 20% of what already exists, then that is another $1M. If UA/JJ can contribute $1M, then that is potentially a reasonably attainable $8M related to compounding for DEC. Should be interesting to see what DEC numbers are -- hopefully, SCRC will PR the UA/JJ numbers along with the Main Ave numbers...