MMCLUB

[Rawnoc]

REPR = home run biomed stock in the making IMO

1. Earnings out...
Sequentially for the Q:
Record sales +25%
Record operating income +268%
Record earnings +444% to +.01 EPS
Next Q due July 15.

I think REPR is well on its path to getting +.02/+.03 quarters in earnings
Translates to +.08/+.12 EPS annual pace, $1.00 - $2.00 potential target.
Lots of goodies in the 10K. A sample of them below.

2. How To Get To .02/.03 EPS Per Quarter

Gotta increase net income by $350k to $700k.

How to do that:

(1) Gross profit margins are now 70% and growing.

http://finance.yahoo.com/q/is?s=REPR.OB

I happen to be a huge fan of large GPM because it means rapid EPS growth with small upticks in sales. For example, notice how operating income TRIPLED (+200%) with a mere 24% increase in sales.

(2) Notice how SG&A has been flat to down even while sales increase. This means that increases in gross profit go straight to the bottom line.

(3) So in order to get a $350k to $700k increase in pre-tax income, we need $500k to $1 million increase in sales.

(4) With a 2nd shift in production, a new drug approved, and all of the recent tidbits spelled out in the 10K for sales growth, I think it is reasonable to see a 45-90% increase in sales over last quarter.

3. Tidbits from the 10K...

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7290970

Price increase:
"In the past we marketed the pump priced at a discount to promote sales of tubing sets. We now market pumps at fair market value."

"During January 2010, a new subcutaneous immune globulin called Hizentra(R) with a greater concentration was approved by the FDA. We have performed significant testing of the new drug with the Freedom60 and have been approved by the drug company for use with their drug. Based on initial reactions, the new formulation appears to be an improved drug at higher concentrations, and is expected to replace the previous offerings."

"We anticipate these sales to continue to increase as the SCIG market continues to develop and as we work on new enhancements to the Freedom60 that we believe will expand this market even further. In addition, we expect many of the SCIG users will see benefit in using the Freedom60 system for other uses, such as antibiotics, chemotherapeutics and pain medications."

"We have been developing our own needle administration sets for subcutaneous immune globulin, which incorporates many enhanced features that we believe will address many of the issues faced by current offerings. Due to the introduction of Hizentra with its increased viscosity, the new needle administration sets were designed with improved flow characteristics. Our new needle set design has very low fluid resistance creating the ability for rapid administrations with improved safety. As mentioned previously, we are negotiating with FDA and plan to submit an FDA 510(k) application for the new set and updated performance features of the Freedom60."

"Additional new markets we have recently sold include schools and hospital-based respiratory centers. We are also planning mailings into those markets. In the school market, we have been informed that any school with a swimming pool is normally required to have suction equipment available. In addition, many schools are installing automatic electronic defibrillators (AED's) for which suction is mandatory in more than 50% of uses for this device."

4. REPR, being a biomedical stock, is largely unaffected by a negative economy. Their core product, the Freedom60, is the only device in his market approved by Medicare as it actually is a much cheaper alternative to anything out there and much safer.
From Medicare letter: "The Freedom60 Syringe Infusion Pump is the only allowable pump to be billed with the Subcutaneous Immune Globulin (SCIG)"