OptimizeRx Earnings Recap: Management Expects Accelerating Revenue In 2012

Apr. 3.12 | About: OptimizeRx Corp. (OPRX)

Q4 2011 Results

OptimizeRx Corp (OTCQB:OPRX) filed their 10-K for the year ending 12/31/2011. Aside from higher than modeled advertising expense and one-time income from the settlement of an outstanding lawsuit, results were in-line with our numbers. In addition, the filing noted some operating metrics (i.e. - # of brands and offerings being promoted) that are also similar to our estimates. While we have made some minor revisions to our model following the 10-K, our outlook, price target and recommendation all remain intact.

Q4 revenue was $326k compared to our $347 estimate. Operating expenses were $1.1MM, substantially more than our $619k estimate as a result of significantly higher advertising spend in the quarter ($455k vs. $46k in Q3) - which reflects the launch of new ad and marketing campaigns in Q4.

Q4 and full year net income and EPS were ($504k), ($0.04) and ($2.1MM), ($0.15).

OPRX exited 2011 with $960k in cash, compared to $1.0MM at the end of Q3. Cash flow from operations was $83k in Q4 but this benefitted from $234k received from the settlement of an outstanding lawsuit against Beringea LLC. For the full year cash flow from operations was ($522k). As a reminder, OPRX pays for some services with stock and options which, coupled with only moderate operating expenses, helps keep its cash burn to a minimum.

Other points of interest in the 10-K include:

SampleMD roll-out: 10-K notes the roll-out with through Allscripts "showed early signs of great potential" also mentioning that while wrinkles needed to be ironed out, prescribers have been satisfied with the ease and availability of SampleMD. Version 3.0 was introduced in Q4 which incorporates enhanced access to formulary information, additional search capability and functionality to schedule meetings with drug reps - the launch in Q4 is commensurate with the expected timeline management had previously indicated.

SampleMD Adoption: OPRX continues to streamline the integration of SampleMD into eprescriber and electronic medical record systems. The most recent eprescriber to adopt SampleMD was NewCrop, which the 10-k notes has been used with over 150 electronic medical record providers and medical networks since 2003. Physician adoption of SampleMD also continues to grow.

Marketing/Advertising: OPRX recently hired a VP of Eastern Sales and beefed up their sales and marketing staff. The company attended some focused industry conferences, promoting the benefits of SampleMD to health systems and drug manufacturers. OPRX launched a new ad and marketing campaign, including advertisements in targeted industry publications.

Outlook: OPRX notes that they now "have signed contracts with eprescribing platforms that have the potential to triple our reach to over 100k physicians in 2012." The company anticipates "significant acceleration of revenue within the 2nd half of 2012".

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: I work as a Consultant Analyst for Zacks Investment Research. The article is written by me and is 100% my opinion. I receive compensation from Zacks for writing equity research reports and providing valuation analysis on this company’s stock and expect to do so in the future. Zacks receives compensation from the company. Please see the Zacks Disclaimer for further information: http://scr.zacks.com/Disclaimer/default.aspx