ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

SCRC has historically PR'd Main Ave numbers between the 1st-6th days of the month. In addition, SCRC has historically PR'd the numbers in the early part of the week... ...so, if history holds to form, then the PR re: APR numbers should come either tomorrow or WED at the latest.

And, right on cue, SCRC PR's the APR approved orders... ...$3.5M.

Considering the loss of CVS/Caremark on 3/13/15 and w/MAR approved orders being only $1.45M, $3.5M is indeed a very welcome sight for sore eyes.

Typically, when a number increases by well over 100% like this, it seems that there may be 1 of 3 (or maybe a combination of) possible causes:

(1)
Main Ave and CVS/Caremark resolved some or all of their differences and a new agreement was executed. However, it would seem that if something of this magnitude occurred, SCRC would have PR'd it as they PR'd and 8K'd the termination and both the termination and any such new agreement would BOTH be material events... ...so although this 1st scenario may be possible, it probably isn't very likely, IMO.

(2)
Main Ave entered into a new agreement with one or more other pharmacy benefits managers in the wake of the CVS/Caremark termination and this new channel is starting to feed new populations of insured employees (i.e. customers) to Main Ave.

(3)
The sales folks signed up one or more new hospital/physician networks, feeding new populations of insured patients (i.e. customers) to Main Ave.


Point being that the magnitude of this growth from MAR to APR is reminiscent of Main Ave's early months when it first launched in 2014 where its monthly growth was by leaps and bounds and followed a typical growth curve until flattening out towards the end of Q3'14 -- and this type of growth rate was typically fueled by new agreements and new physician/hospital networks coming on board, each one pumping new life into Main Ave's customer base, and then the flatling coming later when Main Ave fully absorbed these new customers and was waiting for new agreements/networks to be signed in order to fuel the next leg of growth.


So... ...what does this $3.5M number now mean to shareholders?

(1)
Conservatively assuming no growth, this translates to Main Ave contributing $10.5M/quarter and $42M/annum in terms of potential revenue run rate. This gets us back within shouting distance of the $64.8M annual run rate which we experienced during Q4'14 -- a far better position than the $17.4M annual run rate that last month's $1.45M for MAR had us on.

(2)
If all other revenue streams conservatively contribute $1M per quarter like it did during Q4'14 (again, conservatively assuming no growth), this puts SCRC as a consolidated entity at $46M/annum in topline revenues.

(3)
Now here is the kicker: As stated previously, topline revenues won't mean squat if SCRC's expenses continue to eat it all up and leave nothing behind in terms of net bottom line earnings.

IMO, I am cautiously optimistic re: SCRC's public statements on recent changes to decrease operating expenses. HOWEVER, given BS Schneiderman's past history of making false statements and "over-promising but under-delivering", I believe that most market participants have taken the "fool me once, shame on you; fool me twice, shame on me" mindset and will want to see these cost savings etched in stone inside a formal SEC filing before jumping back into the SCRC pool with both feet.

Remember, during Q3'14, SCRC reported $1.5M in net earnings based on $14.4M in approved orders. But Q4'14 had higher approved orders of $16.2M -- but SCRC managed to LOSE MONEY and somehow report a net loss. And for Q1'15, SCRC PR'd that on almost $10M of revenue, it only earned net income of a measly $400k.

As we can all see, net earnings is all over the f'ing map and there is NOTHING by which any reasonable investor can build a forecasting model off of even if they wanted to speculate on SCRC's future.

What this means is that we will need to wait until the 2nd Qtr 10Q comes out in mid-AUG, approx 3 months from now, in order to see the actual financial results of these "cost savings". As these cost savings measures were not implemented until recently, the Q1'15 10Q will be meaningless... ...and as a side note, to be quite blunt, the 10K is equally meaningless in light of the fact that the NT filing told us already what Q4'14 did financially, and SCRC already PR'd that Q1'15 will only net $400k in earnings... ...the only useful nuggets of info from the 10K and Q1'10Q, IMO, will be any new info contained in the MD&A and the disclosures... ...but, of course, simply getting the damn 10K filed is itself an important event even though 2015 is almost half over for no other reason than the fact that staying current with filings and being in good standing with the SEC is the bare minimum that investors look for. It is like getting the Good Housekeeping Seal of Approval -- after all, public companies out of compliance with the SEC simply will not attract new buyers. It IS important, plain and simple, regardless of how much the homophobic criminal JOSEPH ZAMPETTI and his harem of paid CORE whores are desperately trying to make folks believe that failing to file mandatory financial reports is a relative non-event...

(4)
Now that SCRC is potentially back with an acceptable annual topline run rate (again, assuming that the $3.5M in APR is at least sustainable), here is what shareholders and potential new investors can use as a benchmark to gauge their own personal entry/exit/re-entry points based upon their own individual risk profiles:

Based on $46M annual revenue run rate...

If Net Income % is 12%, EPS will be .04 (.033 fully-diluted), so a 10x multiple would yield a sp of .40 (.329 fully-diluted).

If Net Income % is 10%, EPS will be .033 (.027 fully-diluted), so a 10x multiple would yield a sp of .333 (.274 fully-diluted).

If Net Income % is 8%, EPS will be .027 (.022 fully-diluted), so a 10x multiple would yield a sp of .267 (.219 fully-diluted).

If Net Income % is 6%, EPS will be .02 (.016 fully-diluted), so a 10x multiple would yield a sp of .20 (.164 fully-diluted).

If Net Income % is 4%, EPS will be .013 (.011 fully-diluted), so a 10x multiple would yield a sp of .133 (.109 fully-diluted).


*** NOTE ***

The above EPS estimates are based on a 138M O/S count and a 168M fully-diluted share count. These are the most recent published numbers as of 9/30/14, so they are stale and folks should expect that these numbers are assuredly higher currently. So with more mouths to feed, the EPS and 10x projections should be lowered a wee bit, but should materially still be in the same ballpark...

Continued GLTA...