It was a very positive call, in my opinion.
The Allscripts tech issue is already resolved and distribution is expanding with the transition from opt-in to opt-out. It's hard to quantify the Q1 impact but it was clearly significant.
Novartis (second largest customer?) paused distributions January to April. The study/audit they commissioned proved SampleMD's ROI, causing Novartis not only to resume distributions (perhaps at increasing levels?) but also highlight these results at the CBInet conference. The Q1 impact was around $300k.
I think it's abundantly clear that Q1 revenues would have reached $2M without these two issues.
Management reiterated a target of doubling distributions in 2014 (implying 2.4M). Also targeting 1M/quarter by year-end. I agree with you that their citing of competitive reasons for the lack of Q1 disclosure if rather confusing, though this may be related to the LDM settlement terms. However, with the Q1 top-line being nearly exclusively distributions, it's rather easy to calculate at the 2013 rate of roughly $4.00 - $4.50/distribution.
Other positive items from the call and Q:
- Operating expenses ex-LDM and stock comp were just 650k
- More pharma wins (Baush & Lomb and AstraZeneca)
- More EHR integrations (eHealthLine and Quest), with target to double network by year-end
- Consulting revenues expected to ramp in balance of 2014
- Harrell & Lester both offered color around recent stock sales
- Experienced CFO hired at reasonable salary and bonus
- Uplisting considered within next year (not really news, but nice to know it's on their radar as fundamentals allow)
I wouldn't be surprised to see some continued selling pressure from the one-time revenue and expense impacts in Q1. I was happy to pick up more shares at $1.60 today. By year-end we should be at an annual run-rate of $16M revenue (distributions only), or $8M after revenue share (40%) and LDM (10%). Even if cash opex increases significantly to $3.5M, you have an adjusted EBIT run-rate of $4.5M. Consider growth and 14M in NOLs in assigning your target EBIT multiple, but I find the risk/reward very compelling here.
