- Ultrasound specialist Uscom (UCM) has pulled in record cash receipts and made a profit in China over the past quarter
- From the start of January to March 23, Uscom recorded $2.14 million in customer receipts and had $2.47 million cash on hand
- Further, the Uscom China business made a $350,000 profit in its first quarter of operations
- With COVID-19 thrusting the company in the spotlight, Uscom hopes to ride the momentum to increase sales in the mid-term and further down the track
- Uscom shares are up 13 per cent in early afternoon trade, currently worth 30.5 cents each
Non-invasive meditech specialist Uscom (UCM) has pulled in record cash receipts and made a profit in China over the past quarter.
The company started turning heads in February when its USCOM-1A device was recommended by the Hubei government to help treat children with COVID-19.
Making the most of its time in the spotlight, Uscom revealed 10 days later the same device was recognised by the Society of Critical Care Medicine for treating severe sepsis in children.
Subsequently, Uscom shares soared more than 200 per cent over the month of February.
Over March, however, Uscom could not escape the brutal sell-off brought about by coronavirus panic, though shares were still strong compared to the start of the year.
As such, the company has released some financial figures from January 1 to March 23 today to prove it can live up to the February hype.
Maiden profits and record sales
In today's presentation, Uscom management highlighted a record number of cash receipts coming in over the quarter, totalling $2.14 million.
Moreover, Uscom China managed to pull in a profit during its first quarter of operations. While the $350,000 profit might be marginal, it bodes well for the company that the Chinese arm of the business is making more than it's spending in such a short period of time.
Further, Uscom had $2.47 million cash on hand as of March 23 — roughly $1 million more than it did at the end of December, according to its latest half-yearly report.
With no company debt, the growing positive balance sheet means the company may be able to build up its cash balance without the need for more dilution.
It seems a core part of Uscom's strategy is to ride the wave of momentum launched by the COVID-19 spike in demand.
With the USCOM-1A ultrasound doppler device receiving special attention in the midst of the pandemic, Uscom is hoping mid-term sales continue as hospitals around the world recognise the need for improved ICU services.
Of course, this strategy is speculative and relies on a shift in the industry from an "emergency response" to a "structural response" in the health care sector.
Further, should the upswing in demand for USCOM products be maintained, this comes with its own set of challenges.
Firstly, rapid growth from the company will require rapid spending for some time. Though its balance sheet is currently growing organically, the company may not have the cash available to fund rapid expansion just yet.
Secondly, as the company expands, regulatory hurdles become "increasingly complex, expensive, and time-consuming", according to Uscom.
When coupling these with the current uncertainty of the global market, it seems Uscom is not quite on the straight-and-narrow just yet.
Nevertheless, CEO Rob Phillips said this quarter's results speak to the company's credibility in the midst of the current health crisis.
"Results for this quarter represent 15 years of product development, clinical testing, targeted corporate acquisitions and strategic global expansion. We have acquired companies, saved lives, and become a global standard of care for coronavirus and sepsis, paediatrics and maternal health," Rob touted.
With Uscom China now a strong catalyst for growth, Rob said he believes Uscom is part of the global health solution for an unpredictable world.
Shareholders seem pleased with today's presentation as Uscom shares are trading 13 per cent higher in early afternoon trade. Currently, shares are worth 30.5 cents each in a $40.40 million market cap.