Replies to post #346529 on Elite Pharmaceuticals Inc (ELTP)

[YJ4LIFE]

Great post . Thanks N2K

[dest_golf]

You know you are brilliant. But I know you tell us that all the time.Right, the bottom line is important, however a company at the stage of eltp is all about growth in revenue. Yes, Controlling cost and corresponding bottom line is important. However, at their stage rev/sales growth or in this case sustainability IMO is also important, more so. To not acknowledge that in your 101 lessons is really unfortunate for who ever you’re trying to teach.

[meshcan]

Thanks no2koolaid for the informative post!

Numbers never lie.

[Je3232]

In the real business world if you’re not growing, you’re dying. Quarter over quarter, they’re relationships with Walgreens seems to be flat. Why? We will drop today. He will say future looks good. Then Nasrat goes silence until next quarter.

Bad quarter. Just my opinion.

[Je3232]

What happens to the stock when companies have a reduction in revenue. You’re a sharp person / be honest


Since repetition is the mother’s milk of learning, let me repeat that point…Q2 had an increase in profit of nearly 3X despite a 1.8% reduction in revenues!

[Je3232]

With revenue staying flat one has to ask, what’s happening to the roll out of aderall. Lanette showed a 3 million increase in CNS. Where did it go. Did aderall go up and they dropped somewhere else. I’m guessing that the case as their margins improved.

Who knows but hope Nasrat provides some information that moves the stock. It’s about time. If not , in my opinion time for a change

[littlerhody]

Thanks for the facts! Lately, facts have been hard to come by. I believe that the flat revenue numbers have a direct result of the pandemic. Access to doctors for scripts, etc. I am pleased with ELTP's progress year over year. The ELTP faithful will be rewarded but not as quickly as we all would like.

Keep your fact based, informative posts coming. They certainly shine the light on our successes as well as our opportunities.

[JustGoDeep]

Wait, Net-Profit $2,4-Million = PE 20 = $.20

[blue_skies]

NEVER UNDER ESTIMATE THE POWER OF PEOPLE TO BE BLINDED BY THIER BELIEFS

HOW IS THAT A PROBLEM? AND, GIVEN HOW CRYSTAL CLEAR THAT IS, HOW CAN IT POSSIBLY BE MISAPPREHENDED?

[namtae]

Nonsense!!

Historically, when a companies top line begins to level off or turn down and the bottom line temporarily becomes more attractive - its a sign that management recognizes their market potentially shrinking and begins cutting costs.

Initially, this looks good to amateurs reviewing financials.

Sophisticated investors see the company circling the wagons in anticipation of darker days .

Soon, as revs continue to shrink and there are no more expenses to cut, the bottom line begins a sharp turn down

Is that whats happening to Elite?

Is that why so many feel Elite is in its best position ever yet the stock price keeps suggesting otherwise?

[dr_lowenstein]

ah must be some new kind of business philosophy, shrink the revenues, but do a little better on the bottom line. LOL never heard of such nonsense. The goal SHOULD be to grow revenues AND increase profitability thru economies of scale

[WeeZuhl]

In Q1 they had total revenues of $7,538,744 and a net profit of $830,600. In Q2 they had total revenues of $7,399,892 - a reduction of 1.8% - and they had a net profit of $2,484,062 – an increase of 2.99X.

Since repetition is the mother’s milk of learning, let me repeat that point…Q2 had an increase in profit of nearly 3X despite a 1.8% reduction in revenues!

Now, let me ask two questions:
1) Which Q should the investor prefer?
2) Why?

The answers are layups…
1) Q2
2) Because the company has more revenues flowing to the BOTTOM LINE and that is indicative of a more efficient business; one unencumbered by debt.

HOW IS THAT A PROBLEM? AND, GIVEN HOW CRYSTAL CLEAR THAT IS, HOW CAN IT POSSIBLY BE MISAPPREHENDED?

The decrease in revenue in the current quarter is disappointing for several reasons. First, there is usually an increase in sales of ADHD drugs as kids go back to school. A lot of kids go on a so-called "Ritalin holiday" on breaks from school, and pharmacies usually stock up mid-late Summer for the Fall increase in sales. Shipments should have been way up this quarter, but they went down instead. Of course, this year is not typical because of COVID-19, so it would be unwise to put too much weight on the lack of a back-to-school effect. However, it is also unwise to somehow surmise these numbers indicate the company has become more efficient in the last 3 months.

The reason profit increased is because Q2 included more profit splits from previous quarters' shipments. We saw the manufacturing fees during the quarter that the customer received the product, and now those license fees are making their way in. This is the other reason why decreased manufacturing fees are disappointing- because they foretell decreases in license fees in future quarters. Fewer shipments also means more stock on hand and decrease in expenditures for API, which results in lower cost of revenue. In this case, the lower cost of revenue is due to decreased manufacturing and not increased efficiency. So yes, profit did increase while revenue decreased, but it was because of work done in previous quarters.

We had good reasons to expect more revenue, but we got less. That is a problem for the current quarter and upcoming quarters. Fewer manufacturing fees now mean fewer licensing fees in the future, and that is the true bottom line.

[Jimmy Joe]

Given the current share price, and I realize folks that are long timers are sick of waiting, depending on what is said during the CC this is yet another buying opportunity.
I have not bought in a long time, but hold my core and have not sold one share in years. Call me a fool, I do see things changing here for Elite.
Very positive things. Could buy down here and average down, but I have enough Elite. Buying others that look promising. Elite will come in time.
Just my opinion.

N2K, keep 'em coming, I learn from your posts and enjoy reading them.

[namtae]

Complete nonsense

Any professional worth his/her salt places overwhelming weight ona companies OPERATING PROFITS, as "the measure" of a companys efficiencies

As we can see in Elites Q2, they had an OPERATING PROFIT of $1,340,257

In contrast we are offered the following misleading bunch of useless BS:

In Q2 they had total revenues of $7,399,892 - a reduction of 1.8% - and they had a net profit of $2,484,062 – an increase of 2.99X

.

But lets examine more closely./

We find a change in fair value of derivative instruments increasing net income by $1,220,069

Yet everyone knows changes in fair value of derivatives is merely an accounting entry - it does not represent cash income, it does not effect the real P&L of a company.

Yet we have to somehow stomach the reasoning that a change in derivative fair value is the result of Elites improved business

HOGWASH!!!