Cumberland Pharmaceuticals Inc. (CPIX) Bundle
Understanding Cumberland Pharmaceuticals Inc. (CPIX) Revenue Streams
Understanding Cumberland Pharmaceuticals Inc.’s Revenue Streams
This section provides a detailed analysis of the revenue streams of Cumberland Pharmaceuticals Inc. as of 2024, including primary revenue sources, year-over-year growth rates, and contributions from different business segments.
Breakdown of Primary Revenue Sources
- Kristalose: $10,935,702 for the nine months ended September 30, 2024, compared to $12,313,321 for the same period in 2023, representing a decrease of $1,377,619.
- Sancuso: $6,624,102 for the nine months ended September 30, 2024, compared to $5,736,981 for the same period in 2023, an increase of $887,121.
- Vibativ: $5,087,983 for the nine months ended September 30, 2024, compared to $6,785,592 for the same period in 2023, a decrease of $1,697,609.
- Caldolor: $3,586,199 for the nine months ended September 30, 2024, compared to $3,316,866 for the same period in 2023, an increase of $269,333.
- Acetadote: $144,973 for the nine months ended September 30, 2024, compared to $440,071 for the same period in 2023, a decrease of $295,098.
- Omeclamox-Pak: $(2,574) for the nine months ended September 30, 2024, compared to $28,832 for the same period in 2023, a decrease of $31,406.
- Vaprisol: $(128,684) for the nine months ended September 30, 2024, compared to $39,866 for the same period in 2023, a decrease of $168,550.
- RediTrex: $71,350 for the nine months ended September 30, 2024, compared to $(254,108) for the same period in 2023, an increase of $325,458.
- Other Revenue: $1,113,325 for the nine months ended September 30, 2024, compared to $1,792,020 for the same period in 2023, a decrease of $678,695.
| Product | Revenue (2024) | Revenue (2023) | Change |
|---|---|---|---|
| Kristalose | $10,935,702 | $12,313,321 | $(1,377,619) |
| Sancuso | $6,624,102 | $5,736,981 | $887,121 |
| Vibativ | $5,087,983 | $6,785,592 | $(1,697,609) |
| Caldolor | $3,586,199 | $3,316,866 | $269,333 |
| Acetadote | $144,973 | $440,071 | $(295,098) |
| Omeclamox-Pak | $(2,574) | $28,832 | $(31,406) |
| Vaprisol | $(128,684) | $39,866 | $(168,550) |
| RediTrex | $71,350 | $(254,108) | $325,458 |
| Other Revenue | $1,113,325 | $1,792,020 | $(678,695) |
Year-over-Year Revenue Growth Rate
Net revenues for the nine months ended September 30, 2024, were $27,432,376, compared to $30,199,441 for the same period in 2023, indicating a decrease of $(2,767,065) or approximately (9.2%).
Contribution of Different Business Segments to Overall Revenue
The contributions from key products are as follows:
- Kristalose: 39.9% of total revenue.
- Sancuso: 24.1% of total revenue.
- Vibativ: 18.5% of total revenue.
- Caldolor: 13.1% of total revenue.
- Other Products: 4.4% of total revenue.
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- The increase in Sancuso revenue by $887,121 due to reduced sales deductions.
- The decrease in Kristalose revenue by $1,377,619 attributed to timing of shipments.
- The decline in Vibativ revenue by $1,697,609 due to lower sales volume.
- Acetadote experienced a revenue drop of $295,098 due to decreased shipments.
- Omeclamox-Pak reported no sales for the nine months ended September 30, 2024, due to inventory issues.
A Deep Dive into Cumberland Pharmaceuticals Inc. (CPIX) Profitability
Profitability Metrics
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was calculated as follows:
| Period | Net Revenues | Cost of Products Sold | Gross Profit | Gross Profit Margin (%) |
|---|---|---|---|---|
| 2024 | $27,432,376 | $4,609,499 | $22,822,877 | 83.2% |
| 2023 | $30,199,441 | $4,536,628 | $25,662,813 | 84.9% |
The gross profit margin has decreased from 84.9% in 2023 to 83.2% in 2024, indicating a slight decline in profitability on sales.
Operating Profit Margin: The operating loss for the nine months ended September 30, 2024, was $(4,590,370), while the total revenues were $27,432,376. The operating profit margin is calculated as:
| Period | Operating Loss | Net Revenues | Operating Profit Margin (%) |
|---|---|---|---|
| 2024 | $(4,590,370) | $27,432,376 | (16.7%) |
| 2023 | $(3,375,422) | $30,199,441 | (11.2%) |
The operating profit margin has worsened from (11.2%) in 2023 to (16.7%) in 2024, reflecting increased operational inefficiencies.
Net Profit Margin: The net loss attributable to common shareholders for the nine months ended September 30, 2024, was $(4,575,956). The net profit margin is calculated as:
| Period | Net Loss | Net Revenues | Net Profit Margin (%) |
|---|---|---|---|
| 2024 | $(4,575,956) | $27,432,376 | (16.7%) |
| 2023 | $15,086 | $30,199,441 | 0.05% |
This significant shift from a small profit margin of 0.05% in 2023 to a net loss margin of (16.7%) in 2024 illustrates deteriorating profitability.
Trends in Profitability Over Time: The following table summarizes the trends in profitability metrics over the last two years:
| Year | Gross Profit Margin (%) | Operating Profit Margin (%) | Net Profit Margin (%) |
|---|---|---|---|
| 2022 | 85.3% | (9.4%) | (5.2%) |
| 2023 | 84.9% | (11.2%) | 0.05% |
| 2024 | 83.2% | (16.7%) | (16.7%) |
This data shows a consistent decline in profitability metrics from 2022 through 2024, indicating worsening financial health.
Comparison of Profitability Ratios with Industry Averages: The average profitability margins for the pharmaceutical industry are typically as follows:
| Metric | Industry Average (%) | Company's Margin (%) |
|---|---|---|
| Gross Profit Margin | 80-90% | 83.2% |
| Operating Profit Margin | 10-20% | (16.7%) |
| Net Profit Margin | 5-15% | (16.7%) |
The company's gross profit margin is within the industry average range, but its operating and net profit margins are significantly below industry standards, indicating operational challenges.
Analysis of Operational Efficiency: The total costs and expenses for the first nine months of 2024 were $32,022,746, compared to $33,574,863 in 2023. The breakdown is as follows:
| Expense Category | 2024 ($) | 2023 ($) |
|---|---|---|
| Cost of Products Sold | 4,609,499 | 4,536,628 |
| Selling and Marketing | 12,800,469 | 13,692,535 |
| Research and Development | 3,523,535 | 4,569,476 |
| General and Administrative | 7,800,435 | 7,212,731 |
| Amortization | 3,288,808 | 3,563,493 |
| Total | 32,022,746 | 33,574,863 |
The decrease in total expenses is a positive indicator, yet the company still operates at a loss, highlighting the need for improved cost management strategies.
Debt vs. Equity: How Cumberland Pharmaceuticals Inc. (CPIX) Finances Its Growth
Debt vs. Equity: How Cumberland Pharmaceuticals Inc. Finances Its Growth
The financial structure of Cumberland Pharmaceuticals Inc. is characterized by its debt levels, which include both long-term and short-term obligations. As of September 30, 2024, the company reported $16.1 million in borrowings outstanding under its revolving credit facility, an increase from $12.8 million as of December 31, 2023. The applicable interest rate under this facility was 8.000% at the end of the third quarter of 2024.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is a key indicator of a company's financial leverage. For Cumberland Pharmaceuticals, the total equity as of September 30, 2024, stood at $24.5 million. Using the formula:
Debt-to-Equity Ratio = Total Debt / Total Equity
We calculate:
Debt-to-Equity Ratio = $16.1 million / $24.5 million = 0.656
This ratio indicates that for every dollar of equity, the company has approximately $0.66 of debt. This ratio is below the industry average of approximately 0.8, suggesting that Cumberland maintains a conservative approach to leveraging its resources.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In September 2023, Cumberland entered into a new Revolving Credit Loan Agreement with Pinnacle Bank, which allows for an aggregate principal funding amount of up to $25 million. The initial revolving line of credit is set at $20 million, with conditions for potential increase. This agreement has a term of three years, expiring on October 1, 2026. The company also amended this loan agreement on May 6, 2024, providing an alternative financial covenant.
Balancing Between Debt Financing and Equity Funding
Cumberland Pharmaceuticals balances its debt financing with equity funding, as evidenced by a consistent approach to managing its capital structure. The company has historically utilized equity for growth, evidenced by a significant amount of $46.8 million in total equity as of June 30, 2024. This strategic balance allows the company to fund operations and growth initiatives while maintaining a manageable level of debt.
| Metric | Amount |
|---|---|
| Outstanding Borrowings (September 30, 2024) | $16.1 million |
| Total Equity (September 30, 2024) | $24.5 million |
| Debt-to-Equity Ratio | 0.656 |
| Interest Rate on Debt | 8.000% |
| Initial Revolving Credit Facility | $20 million |
| Maximum Potential Borrowing | $25 million |
| Equity (June 30, 2024) | $46.8 million |
Assessing Cumberland Pharmaceuticals Inc. (CPIX) Liquidity
Assessing Cumberland Pharmaceuticals Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio was 1.1, compared to 1.3 as of December 31, 2023.
Quick Ratio: The quick ratio was not explicitly provided in the data; however, typically it is calculated as (Current Assets - Inventories) / Current Liabilities. Given the current assets and liabilities, further calculations would be needed to determine this ratio accurately.
Working Capital Trends: The working capital, defined as current assets minus current liabilities, was $4,148,891 as of September 30, 2024, down from $7,732,161 as of December 31, 2023.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $17,464,754 | $18,321,624 |
| Working Capital | $4,148,891 | $7,732,161 |
| Current Ratio | 1.1 | 1.3 |
| Revolving Line of Credit Availability | $3,908,408 | $7,215,856 |
Cash Flow Statements Overview:
Operating Cash Flow: For the nine months ended September 30, 2024, cash used in operating activities totaled $(2,516,804), compared to cash provided of $5,053,700 for the same period in 2023.
Investing Cash Flow: Cash provided by investing activities was $84,651 for the nine months ended September 30, 2024, compared to cash used of $(366,334) in the prior year.
Financing Cash Flow: Cash provided by financing activities was $1,575,283 for the nine months ended September 30, 2024, compared to cash used of $(5,937,371) for the same period in 2023.
| Cash Flow Activity | 2024 | 2023 |
|---|---|---|
| Operating Activities | $(2,516,804) | $5,053,700 |
| Investing Activities | $84,651 | $(366,334) |
| Financing Activities | $1,575,283 | $(5,937,371) |
Potential Liquidity Concerns: The decrease in cash and cash equivalents from $18,321,624 at the end of 2023 to $17,464,754 at the end of September 2024 raises potential liquidity concerns. This decrease was primarily due to cash used in operating activities, which reflects a net loss of $(4,542,078) during the nine months ended September 30, 2024.
Debt and Credit Facilities: The company entered into a Revolving Credit Loan Agreement with Pinnacle Bank on September 5, 2023, providing for an aggregate principal funding amount of up to $25 million. As of September 30, 2024, the company had $16.1 million in borrowings outstanding under its revolving credit facility.
Is Cumberland Pharmaceuticals Inc. (CPIX) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will examine key financial ratios and metrics, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio is — (negative earnings). For the trailing twelve months, the earnings per share (EPS) is $(0.11) for the most recent quarter, reflecting a net loss attributable to common shareholders of $(1,544,081).
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio is calculated as follows:
- Book value per share: $1.20 (Total equity: $24,469,392, Shares outstanding: 14,010,736).
- Current stock price: $1.10.
- P/B Ratio: 0.92 (calculated as $1.10 / $1.20).
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the enterprise value is calculated as:
- Market capitalization (stock price × shares outstanding): $15,411,000 (based on $1.10 stock price).
- Total debt: $16,100,000.
- Cash and cash equivalents: $17,464,754.
- Enterprise Value: $14,046,246 (calculated as $15,411,000 + $16,100,000 - $17,464,754).
EBITDA for the last twelve months is $(4,590,370), leading to an EV/EBITDA ratio of — (negative EBITDA).
Stock Price Trends
Over the last 12 months, the stock price has exhibited the following trends:
- 12 months ago: $2.50.
- Current price: $1.10.
- Percentage decline: 56%.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also 0% due to the absence of dividend payments.
Analyst Consensus on Stock Valuation
Analyst ratings for the stock are as follows:
- Buy: 1
- Hold: 2
- Sell: 1
Summary Table of Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | — |
| P/B Ratio | 0.92 |
| EV/EBITDA Ratio | — |
| 12-Month Stock Price Change | -56% |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 1/2/1 |
Key Risks Facing Cumberland Pharmaceuticals Inc. (CPIX)
Key Risks Facing Cumberland Pharmaceuticals Inc.
The financial health of Cumberland Pharmaceuticals Inc. is influenced by various internal and external risk factors. Understanding these risks is crucial for investors looking to assess the company's stability and growth potential.
Industry Competition
The pharmaceutical industry is characterized by intense competition. Cumberland faces significant competition from both established pharmaceutical companies and new entrants. The company’s market share and revenue can be adversely affected by competitors introducing similar or more effective products. For example, net revenues for the nine months ended September 30, 2024, decreased to $27.4 million from $30.2 million in the same period of 2023, reflecting a year-over-year decline of $2.8 million.
Regulatory Changes
Cumberland operates within a heavily regulated environment. Changes in regulations or the introduction of new laws can impact the company's operational capabilities and financial health. For instance, the company is currently awaiting FDA approval for new manufacturers of its products, which could affect product availability and sales.
Market Conditions
Fluctuations in market conditions, including economic downturns, can adversely affect sales. The company reported a net loss of $(4,542,078) for the nine months ended September 30, 2024. Such losses can limit the company's ability to invest in new opportunities or sustain its operations without additional financing.
Operational Risks
Operational risks include disruptions in the supply chain and manufacturing processes. For example, Cumberland faced challenges in securing inventory for its product Omeclamox-Pak, leading to no sales for the nine months ended September 30, 2024. Such operational challenges can lead to revenue losses and increased costs.
Financial Risks
Cumberland's financial health is also at risk due to its reliance on debt financing. As of September 30, 2024, the company had outstanding borrowings of $16.1 million under its revolving credit facility. High debt levels can lead to increased interest expenses and limit financial flexibility, especially in a rising interest rate environment where the current interest rate is 8.000%.
Strategic Risks
Strategic risks arise from the company’s decision-making processes and its ability to execute its business strategy effectively. The company’s recent acquisitions, such as the FDA-approved oncology-supportive care medicine Sancuso, require significant investments and successful integration into the existing portfolio. Failure to achieve anticipated synergies or market acceptance can negatively impact financial performance.
Mitigation Strategies
Cumberland has implemented several strategies to mitigate these risks. The company has established a revolving credit facility with Pinnacle Bank, providing up to $25 million in funding. This financial cushion can help manage operational costs and invest in growth opportunities. Additionally, the company continues to build international partnerships to diversify its revenue streams and reduce reliance on domestic sales.
| Risk Factor | Description | Impact on Financial Health | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | Intense competition from established and new pharmaceutical companies. | Decline in market share and revenue. | Diversify product offerings and strengthen marketing efforts. |
| Regulatory Changes | Changes in regulations affecting operations. | Potential delays in product approvals and increased compliance costs. | Proactive engagement with regulatory bodies. |
| Market Conditions | Economic downturns affecting sales. | Reduced revenue and profitability. | Strengthen financial reserves and explore new markets. |
| Operational Risks | Disruptions in supply chain and manufacturing processes. | Revenue losses and increased operational costs. | Enhance supply chain management and develop alternative suppliers. |
| Financial Risks | High levels of debt financing. | Increased interest expenses and financial strain. | Maintain a healthy balance between debt and equity financing. |
| Strategic Risks | Challenges in executing business strategy. | Failure to achieve growth targets and profitability. | Continuous market analysis and strategic planning. |
Future Growth Prospects for Cumberland Pharmaceuticals Inc. (CPIX)
Future Growth Prospects for Cumberland Pharmaceuticals Inc.
In analyzing the growth opportunities for Cumberland Pharmaceuticals Inc. (CPIX), several key drivers and strategic initiatives are evident. These include product innovations, market expansions, and potential acquisitions that can significantly influence future revenue growth.
Key Growth Drivers
- Product Innovations: The company continues to focus on its existing product line while also developing new formulations. For instance, Sancuso’s net revenue for the nine months ended September 30, 2024, was $6,624,102, compared to $5,736,981 for the same period in 2023, marking an increase of $887,121 .
- Market Expansions: The strategic entry into new markets, particularly in Asia through partnerships, is expected to bolster growth. The joint venture with WinHealth Investment aims to commercialize products in China and other Asian markets .
- Acquisitions: Acquisitions like that of Vibativ and Sancuso have expanded the company’s portfolio. Vibativ contributed $5,089,271 in net revenue for the nine months ended September 30, 2024, down from $7,785,592 in 2023 .
Future Revenue Growth Projections
Revenue projections indicate a challenging yet potentially rewarding landscape. For the nine months ended September 30, 2024, total net revenues were $27,432,376, a decrease from $30,199,441 in 2023 . This reflects a strategic pivot to improve product performance and market penetration.
Earnings Estimates
Net loss for the nine months ended September 30, 2024, was $4,542,078, compared to a loss of $28,779 in the same period of the previous year . Analysts project that with continued focus on operational efficiencies and cost reductions, the company may break even or achieve profitability in the near term.
Strategic Initiatives
- Partnerships: Collaborations with research institutions and commercial partners are set to enhance product development. Funding for these initiatives is primarily sourced from SBIR/STTR programs and grants .
- Debt Management: The new revolving credit agreement with Pinnacle Bank provides up to $25 million in financing, which is crucial for funding growth initiatives .
Competitive Advantages
Cumberland Pharmaceuticals leverages several competitive advantages, including:
- Established Market Presence: The company has a solid foothold in specialized pharmaceutical markets such as hospital acute care and oncology.
- Innovative Product Pipeline: A focus on developing unique products that address unmet medical needs positions the company favorably against competitors.
- Financial Flexibility: The availability of a revolving line of credit enhances liquidity, allowing for timely investments in growth opportunities .
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Total Net Revenues | $27,432,376 | $30,199,441 | ($2,767,065) |
| Sancuso Net Revenue | $6,624,102 | $5,736,981 | $887,121 |
| Vibativ Net Revenue | $5,089,271 | $7,785,592 | ($2,696,321) |
| Net Loss | ($4,542,078) | ($28,779) | ($4,513,299) |
As the company capitalizes on these growth opportunities, it is positioned to enhance its market share and potentially improve financial performance in the coming years.
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Resources:
- Cumberland Pharmaceuticals Inc. (CPIX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cumberland Pharmaceuticals Inc. (CPIX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cumberland Pharmaceuticals Inc. (CPIX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.