Yahoo Finance
Filing
Nov. 25, 2018
Q3 2018 Data
Price: $7.45, Shares: 14.5m, Cap: $108m
1.Business Information
(1) History
The company was called Hedley Technologies before 2006. It was founded at the early 1990s and IPOed at around 1997. Its major product is called Protect-It which is an insecticide product. Revenue is very low at around 700k for many years until 2006 which generates $1.5m sales but soon fell back to $1m level in 2007. After that, the revenue from it just stays below $1m. In 2017, revenue increased to $1.4m and then at first 3Q 2018, it fell back to $1m level again.
In 2006 the company created a new subsidiary called BioSyent Pharma Inc. Also, it changed its name to BioSyent which aimed to launch new pharmaceutical products. In 2007, the company launched a new iron supplements product FeraMax. It turns out to be a very successful product. Revenue from it reaches $2m in 2011 and the company turns into profitable since then. By estimate, revenue for FeraMax might reach $11m-$13m. Very impressive, however, it seems FeraMax revenue had stopped growing at 2018.
(2) Major business.
Protect-it: A pest control product which is its original business. Currently, it still generates around $1m/year sales.
FeraMax 150 & Powder: OTC Iron supplements mainly for female. This is its major product, might count 60%-70% of its total revenue right now.
Cathejell: a surface anesthesia product. Might count around 10% to 20% of revenue.
CYSVIEW® Blue-Light Cystoscopy: A product used in bladder tumor remove procedure. Current revenue from this is still pretty low but grows very well.
(3) Debt and Credit Facility.
Currently, there is $22m in cash and no debt.
(4) Employee numbers
(5) Industry comparison.
(6) Major events
2. Management
(1) Key person
Rene Goehrum is the current CEO. He joined the company in 1996 and became CEO at 1999. Previously he was doing marketing for Procter & Gamble. He seems to be more a business person.
(2) Insider ownership
Rene Goehrum holds 2.3m share around 16% of total 14.5m shares. At 2001, he owns 700k shares of total 9m shares.
3. Financial data.
4. Valuation
(1) Currently, it is trading around 11 EV/EBITDA which is not very expensive compared to the same industry. However, if the company can't grow its revenue further, the price is actually not cheap.
(2) It has $22m in the balance sheet which can be put into new acquisitions. Also, several products other than FeraMax does have some growth potential.
5. Risk
(1) The company's growth for the past several years is mainly driven by FeraMax sales. It seems it had reached the mature state. Also, since FeraMax is not patented, the competition might even decrease the sales of FeraMax.
(2) It is hard to tell whether those other products can keep the company growing.
6. Conclusion
Overall the company was well managed with some growth potential. Current price is not very cheap if the company stop growing its revenue. However, it does have some potential to do well in the future.
7.Links
