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OxySure Systems, Inc. (OXYS) Demonstrates Growth through Positive Second Quarter Results

OxySure Systems is showing sure signs of progress and momentum, as demonstrated by its performance over the past few quarters and data released this week on this year’s second quarter earnings.

On August 13, 2013, the company reported its second quarter financial results for the period ending on June 30. Total revenues were reported at $476,000, a 657% increase over the same period in 2012 and 98% sequentially from the first quarter of this year. Revenues consisted of $364,000 in products sales and $113,000 in revenues under licensing and service agreements.

Operating expenses for the second quarter totaled $664,000, consisting of $152,000 in cost of goods sold, $133,000 in sales and marketing, $195,000 in general and administrative, and $183,000 in research and development. The company’s gross margin hit 68% in the second quarter, up from 60% in the same period of last year.

The company’s operating expenses continue to remain under control; net loss totaled $193,000, a $25,000 improvement from the second quarter 2012. OxySure exited the second quarter with $96,000 in cash. Operating and investing cash burn totaled $293,000, however, the company saw a number of warrants exercised that provided approximately $294,000 in cash. The company continues to fund operations through warrant exercising and small equity “drip” financings.

Over the past year, the total number of derivative securities outstanding was reduced by approximately 2.038 million. As of June 30, OxySure had $288,000 in inventory on the books. Total assets increased to $1.37 million as of the same time, up from $1.21 million at the end of December 2012. Although still not yet profitable, OxySure is clearly moving in the right direction.

Analysts believe that OxySure’s top-line growth is being driven by a combination of new customer wins, continued business with existing customers, a new and growing military business, and signing new distribution partners in the U.S. and internationally.

One product in particular, the Model 615 Emergency Oxygen System, which is designed to deliver supplemental oxygen in medical emergencies, is a potential breakthrough product that could help the company achieve real gains over the next few years. This, and the company’s significant growth, leads many to believe that the company will generate a positive cash flow by 2016 and could generate over $10 million in operating cash flow by 2018.

The positive developments seen in the first half of this year are expected to continue as 2013 wraps up, as OxySure has been very active in signing new partnerships and distribution agreements. In March, the company signed a deal with Aero Healthcare for a minimum purchase order of 4,500 units of the Model 615. In May, OxySure signed a deal with Medizon B.V. Medizon for distribution of Automated External Defibrillators (AEDs) in the Netherlands, Belgium, and Luxembourg, and will now distribute the Model 615 as well. The deal comes with a minimum purchase order of 2,250 units.

A month later, in June, OxySure signed a non-exclusive distribution agreement with Aventric Technologies to sell the company’s full portfolio of products. Aventric Technologies has a strong presence in the K-12 education market, and also sells imaging and medical equipment, including AEDs, to hospitals, clinics and other alternative point-of-care facilities.

With an expanding product line and an increasing number of distribution agreements, the positive momentum clearly evident in the first half of the year is expected to carry over to the third and fourth quarter.

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