DALLAS, TX / ACCESSWIRE / October 18, 2017 / Sonoma Pharmaceuticals, Inc. ("Sonoma") (NASDAQ: SNOA).
COMPANY DESCRIPTION
Sonoma Pharmaceuticals, Inc. ("Sonoma") is a specialty pharmaceutical company that develops and markets solutions for the treatment of dermatological conditions and advanced tissue care based upon its proprietary technology, Microcyn®. The Company's products, which are sold throughout the United States and internationally, have improved outcomes for more than five million patients globally by reducing infections, itching, pain, scarring, and harmful inflammatory responses. The Company's headquarters are in Petaluma, California, with manufacturing operations in the United States and Latin America. European marketing and sales are headquartered in Roermond, Netherlands.
SUMMARY
As part of this notable turnaround story, Sonoma Pharmaceuticals continues to expand domestically and abroad, capturing a greater share of the US dermatology market and executing upon its revamped long-term strategic plan put in place mid-2014.
- As of 12/6/16, the Company announced a name change from Oculus Innovative Sciences, Inc. to Sonoma Pharmaceuticals, Inc. as part of a rebranding initiative and the Company's commitment to focusing on the high-margin US dermatology market moving forward.
- The dermatology market offers tremendous upside potential. Within dermatology, the Company has a core focus of topical dermatitis, a $1.3B addressable market, and a secondary focus of systemic acne, a $3.9B addressable market. Also, Sonoma has launched a new scar treatment to support the approximately 42 million surgical skin procedures that are performed in the US per year, with many patients experiencing hypertrophic scarring and keloids after those surgical procedures; newer product launches address sizable markets, as well.
- Sonoma currently sells six product lines in the US, with some products developed in-house and some acquired, and the Company has several additional products set to hit the market in 2H 2017 and 1H 2018.
- Sonoma created a new direct sales force in 2014 with 14 sales team members initially. Currently, the Company has a sales team of 30 sales reps and 5 senior sales managers, both to support the launch of products and to increase market share for those currently in the bags.
- The Company's Microcyn®-based products are sold throughout the US and the world, and have treated more than 5M patients globally to reduce infection, itch, pain, scarring, and harmful inflammatory responses; these products are based on technology designed to be a non-irritating, shelf-stable solution containing oxychlorine compound with an established safety profile.
- The Company grows sales abroad through its relationships with distributors. Approximately 49% of its revenue came from sales internationally in Q1 FY18. Sonoma has made a concerted effort to engage strong partners internationally.
- As of 10/31/16, management announced the sale of its Latin American business for $19.5M cash to Invekra S.A.P.I. de C.V of Mexico; the deal enabled the Company to sell a slower growing, lower margin segment of its business in exchange for a sizable cash payment that has been put to work advancing its US dermatology business (fast growing and higher margin).
- A key focus for management is driving towards commercial EBITDA breakeven without shareholder dilution; with careful execution, the timing within various quarter-over-quarter growth scenarios shows this goal likely being achieved 2H calendar 2018.
- As of 6/30/17, the Company reported $3.8M in total revenue for Q1 FY18, with product revenues up 49% year-over-year driven by growth in US dermatology and acute care markets and in products sold to new owner of Latin American assets, and with approximately $12.6M in cash on hand and minimal debt.
On an EV/R basis, Sonoma currently trades at 0.2x vs. the median of its peers at 34.5x based on FY18 estimates. In addition, companies in the dermatology space have been acquired at a median EV/R multiple of 3.6x. See full report for additional details.
The full report can be accessed by clicking on the following link:
http://stonegateinc.com/reports/SNOA_Oct_2017.pdf
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high quality investment opportunities.
SOURCE: Stonegate Capital Partners