Yahoo Finance
Filing
Aug. 16, 2018
Q3 2018 Data, Year end: Aug. 31th
Price: $0.90, Shares: 90m, Cap: $81m
1.Basic Information
(1) History
At 1994 Claude Belleville, Gaétan Duplain, both are optical specialists, co-founded FISO Technologies Inc. at Quebec city. The company is specialized in fiber optical sensors. It was acquired by Roctest in the same year. Later in 2003, they left the company and joined by Pierre Carrier who was CEO of Roctest at that time, a geologist, founded Opsens Inc. The new company was trying to apply the optical sensors in the oil and gas sector. Carrier took the CEO role and the company IPOed in 2006 and gradually grew its revenue. By 2012, it hit revenue of $6.3m in the oil and gas sector. However, since then the oil and gas revenue started to drop and only generated $1.5m in revenue in 2017. At Jan. 2013, following by $5m distribution rights contract for the medical sector, Carrier stepped down from CEO role and the CFO Louis Laflamme replaced him as new CEO. Since then, the medical sector has been picked up and reached $12m in 2017. For the first 3Q of 2018, its medical sector generated around $15m in revenue.
(2) Business-related.
Opto-wire: This is its main product. It is a guidewire with an optical sensor. Compare to the traditional electric based sensor, it seems more reliable and accurate. The major problem with the electric sensor is drifting which creates unreliable data. The optic sensor has much less drifting.
(3) Management.
Pierre Carrier: The original CEO until Jan 2013. At 2014 he resigned from director position as well.
Louis Laflamme: He is the original CFO and replaced Carrier as CEO since 2013. He has been with the company since IPO.
(4) Debt and Credit Facility.
$12m in cash and around $1m in debt.
(5) Insider holding, options, Insider trading info, share buyback.
Gaétan Duplain: 3.7m share. around 4.2%.
Pierre Carrier: by 2013, he is still holding 3.1m shares. Not mentioned since 2014.
Louis Laflamme: 440k shares.
Louis Laflamme: 440k shares.
(7) Industry comparison.
St. Jude Medical, Inc. and Volcano Corporation: Electric sensor guidewire. They are the major market shareholders.
ACIST: fiber optic sensors combined with a microcatheter used over a standard guidewire. ACIST sue the company in 2011 for patent issues and later at 2012 both company withdraw the lawsuit.
Boston Scientific: Guidewire with Optic Sensor. Its main product called COMET optic guidewire.
I think both ACIST and Boston Scientific are the direct competitor of the company. Boston Scientific's product seems very close to Opsens's. However, since the traditional electric sensor takes over 80% of the market share, there is plenty of room for them to grow.
(8) Major events
2. Financial data.
3. Valuation
(1) Currently, the company lost around 0.8m per quarter. It has never made any money but losses have been reduced quite a bit recently.
(2) If just based on revenue, it generates around 20m revenue currently. The current market cap is close to 4 times its annual revenue. Not really cheap.
4. Risk
(1) it still loses money and might need to raise money again.
(2) Its revenue growth might slow down or even drop in the medical sector. Don't really know what its advantage over its competitors.
(3) The sales and marketing expense counts almost 40% of total revenue. If it can't get it down, then it is very hard to be profitable.
(4) The CEO owns not many shares and not sure whether he cares about making a profit. However, two of its co-founders still are with the company.
5. Conclusion
It seems to be a disruptive product and the growth is good. However, it still loses money and it is far from sure whether it will continue to grow and whether it will be profitable in the future.
6.Links
