First off, let's get #'s right. Last Q sales was $1,076,368. Not $900K as you so eloquently downgraded.
Now let's be reminded of what we were told back in November...
Q1 2018 Operational Highlights
-Recognized $1.1 million in total net revenues for the first quarter of fiscal 2018, representing a 54% increase over Q1 fiscal 2017
-Listed the Company’s common shares on the NASDAQ Capital Market, on which trading of shares under the ticker symbol “AYTU” began October 20, 2017
-Increased Natesto prescription demand to 2,036 total prescriptions, representing a 411% increase over Q1 fiscal 2017
-Increased shipped Natesto factory sales units to over 7,000, representing an increase of more than 85% over the previous quarter
-Increased the number of Natesto prescribers across the U.S. to 991, which represented a 21% increase over the previous quarter
-Increased the number of MiOXSYS System placements globally to 96 since Q1 fiscal 2017, and placed 29 instruments in six countries through the -Company’s distribution partners
-Initiated commercial integration of the women’s sexual wellness product line, Fiera, and the launch of the Company’s first international distribution agreement in Japan
We also know from filings that GROSS SALES were $2,243,000, an increase of 142% over the year ago period. The company has discount coupons out there for Natesto and refills, so they are NETTING 48% of sales which the CEO says will quickly move back towards 100% going forward.
So, it is natural to assume we are working off of a $2.2 million sales base for last quarter going forward.
Important to note, THERE ARE TWO ITEMS the market is totally missing on this stock AND CRUCIAL to the upside potential for this stock.
1. THE TOTAL COST of ALL Aytu products sold in the past quarter was $287K. That means the company is boasting an UNHEARD OF 87% GROSS MARGIN on gross sales and 73% on NET SALES!
But what's even more special? On November 29, the company placed an order for Natesto with Acerus for $1.6 million. THAT IS MORE THAN THE ENTIRE AMOUNT OF NATESTO SOLD TO DATE FOR AYTU!
And assuming the same GROSS SALES margin as this previous quarter, the company purchased product leading to $12.3 million in gross sales of Natesto and $5.92 million in net sales if they follow the same identical discounting as last quarter.
2. Total assets for Aytu are $21.2 million. Natesto accounts for $9 million of the company's assets. The market cap of the company presently stands at $12.19 million.
This means AYTU is currently trading at 60% of asset value. THIS IS COMPLETELY UNHEARD OF! Pick one. Any one of the big drug companies. Bristol Myers has assets of $34 billion and trades at THREE TIMES ASSET VALUE at $102 billion market cap. Sanofi has assets of $28 billion and trades at a market cap of $108 billion...or FOUR TIMES ASSET VALUE!
So which one is it? Should AYTU be trading at 3X asset value like BMY, or $63 mil market cap, which would make it $12.87 per share. Or should it be 4X assets like SNY and an $84 mil market cap, which would make it $17.16/share?
Which one? And in either case, given the above mentioned sales run alone on Natesto, AYTU would be trading just over 3X sales which is the same as BMY and SNY.
But hey, I'm a reasonable person. Let's assume AYTU management purchased a 6 month supply of Natesto. This indicates they expect to sell ON A FULLY DISCOUNTED/COUPON BASIS $3 million of Natesto IN EACH of the next two quarters. Add to that $750K per quarter for MIOXsys as was guided by the CEO.
So, we are at $3.75 million in revenues for each of the next 2 quarters compared to sales of $1.076 million this past quarter, and total sales of $794K in Q2 of 2017.
This represents a 248% increase in sales over last quarter to be reported the 2nd week of February, and a 372% increase in sales over the year ago period.
Feel free to add whatever you like for Fiera. It's all good.