Quick musings, the gross profit margins are delightful at 48% from an already 42% and obviously coupled with the 71% YoY sales revenue growth the intuitive value that many investors recognised in the business potential starting to emerge in growing and fundamentally profitable base business operations. They reduced admin/general expenses, an unexpected bonus to me, and thankfully kept a lid on S&M expenses that had increases substantially - per their expansive business ambitions of course. The bottom line improvement to a mere $1.3 million loss very impressive and obviously a good deal attributable to the generous R&D/tax benefit.
The $1.3 million loss only a little dent to the $31 million cash in hand and the now impressive nearly $20 million in shareholder equity. Its making suggestions of moving towards cash/EBITDA neutrality as was obvious to most on these threads and that posited positive cash flow status Paul cited as 2027 (I feel vindicated it saying it was a poor statement that should have been more clearly clarified delivered in detail at the time - these figures showing its post tax benefits losses far below that perhaps suggested from cash flows induced forecasts) and obviously OCC has a very decent cash buffer for room/time to get there
Some of the human assets (and liabilities) to the business need to start performing next year with similar growth in sales revenue beginning to cover the expense therein. The increase of course due to business expansion. Great, but they need to keep those sales growth figures at those levels. But hey Directors fees down and share-based payments down! Bonus!! All of their option awards worked out very nicely anyway.
Operational cash flows for the year still a large(r) negative for the year at $5.6 million outflow, of course far eclipsed by equity inflows, should be addressed in the next year or two at sales revenues growing at 70% YoY at very nice 47% gross margins, that are only set to climb higher as Remplir sales ramp up and grow to dominate on higher revenue value and gross margins.
Its not just hindsight (I acted on it) but easier to perhaps see now, why OCC was not yet a $500 million company as some asserted (it maybe again in 2025 on Remplir approval - and will likely be on a more sustained business basis IMO in 2026). Increasingly as sophs and insto's own OCC shares, they are going to value on DCF modelling and the like. Whilst the promise and potential of the business is massive, a more cautious risk and valued based assessment of a company with sales revenues still only at $2.5 million, was always going to induce some sellers at a $400+ million valuation. The near $2 million interest revenue (thanks to the BH deal cash and inflows) a very nice and unusual buffer for a youthful bio-tech like this, but not likely to grow of course. Those same models will slowly reduce the discounted risk weighted cost of capital, particularly when it gets Remplir approval, sending forward valuations higher.
On quick perusal, overall a very positive half year with a few little bonuses on costs and handsome revenue growth (the sales we knew) IMO. Perhaps the absolute levels of financial reportings give a little perspective to the pull back of OCC from its recent run to lofty valuation. As these positive financial reports continue and business milestones and catalysts we all know about met, it will return to that valuation I suspect, possibly this year on FDA Remplir approval, but very likely next on the sustained business improvement this report is showing.
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