Latest news for Pharma-Bio Serv (OTC:PBSV) Stock

Pharma-Bio Serv

Pharma-Bio Serv Inc is a compliance and technology transfer services consulting firm. It also provides microbiological testing services and chemical testing services through its laboratory testing facility in Puerto Rico. It has three reportable segments: Puerto Rico technical compliance consulting which is the key revenue driver; United States technical compliance consulting; and Europe technical compliance consulting. The company offers solutions to the pharmaceutical, chemical, biotechnology, medical devices, cosmetic and food industries, and allied products companies. It generates maximum revenue from Puerto Rico and also has its presence in United States, Europe and Other countries.

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PBSV


  By Beth Senko, CFA

OTC:PBSV

READ THE FULL PBSV RESEARCH REPORT

PBSV: Lowering target; still a solid value

PBSV: Restarts Repurchase Plan


  By Beth Senko, CFA

OTC:PBSV

READ THE PBSV RESEARCH REPORT HERE

PBSV: Pharma-Bio Serv – Looking Ahead to 2021-2022

PHARM-BIO SERV INC by Pharma-Bio Serv, Inc.

Pharma-Bio Serv Inc

Pharma-Bio Serv reports Q3 results

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Pharma-Bio Serv reports FY results

Pharma-Bio Serv reports Q1 results

Pharma Bio Services (PBSV) has issued an update. At Pharma-Bio Serv, Inc.'s 2024 Annual Meeting, stockholders approved an extension of the 2014 Lon...

Pharma Bio Services: Incentive Plan Extended, Directors Elected

Pharma-Bio Serv reports Q2 results

Earnings

Press Releases

Pharma-Bio Serv Announces Results for the Three and Nine Months Ended July 31, 2023

Dividends

Pharma-Bio Serv Announces Special Dividend

Pharma-Bio Serv Announces Full Year Results

Pharma-Bio Serv Announces Results for the Quarter Ended January 31, 2024

Pharma-Bio Serv Announces Results for the Quarter Ended April 30, 2024

By <a href="https://scr.zacks.com/analyst-bios/person-details/default.aspx?ItemId=b8877843-0e4b-47b2-895e-10adc4acf236">Beth Senko, CFA</a>

<stock_ticker>OTC:PBSV</stock_ticker>

<a href="https://s27.q4cdn.com/906368049/files/News/2022/Zacks_SCR_Research_06282022_PBSV_Senko.pdf">READ THE FULL PBSV RESEARCH REPORT</a>

Pharma-Bio Serv (OTC:<a class="ticker" href="https://www.benzinga.com/stock/PBSV#OTC">PBSV</a>) continued on a steady path in 2Q FY22. Management's confidence in the underlying business led to the decision to pay an additional cash dividend of $0.075/share in March, its second since the end of FY21.

As we've seen in the past few years, economic uncertainty continues to push out new project starts across the pharmaceutical industry. In July 2021, the US FDA resumed a normalized pace of cGMP, but a significant backlog remains. According to <a href="https://www.fiercepharma.com/pharma/can-fda-whittle-down-its-manufacturing-site-inspection-backlog-2022">Fierce Pharma</a>, at the end of 2021, the FDA reported it had completed 1,139 of its outstanding pharmaceutical and medical device inspections, roughly 35% of its backlog. In addition, the FDA reported that its backlog of NDA approval inspections rose to 52 in December, from 39 in May 2021. As the FDA continues to clear its backlog, we expect PBSV's new project pipeline to accelerate, particularly in Puerto Rico and the US.

For now, we are trimming our FY22 forecast and our valuation target slightly. Our FY22 revenue target is now $20.8 million, down from $21.5 million. We are lowering our FY22 EPS estimate from $0.10 to $0.08. Our estimates for FY23 are unchanged.

Recent Results

In 2Q FY22, Pharma-Bio Serv's revenue was largely flat at $5.0 million, compared with the year earlier period. While weakness continues in the Puerto Rico consulting market, US business continues to rise $0.8 million (+157% YoY) in the US.

Gross profit margins in the quarter declined 110bps in FY21 to 24.5% period due largely to the end of a high-margin long-term contract in Puerto Rico, and inflation. For FY22, we are targeting gross margins in the 27-28% range. Long-term, we model gross margins in the 30-31% range, although contracts outside Puerto Rico can be more profitable in some cases. Project staffing is the Company's primary expense and is largely variable, so margin expansion will come primarily through leveraging SG&A. Net income for the quarter was largely unchanged at $0.24 million. 

At April 30, the Company had $13.2 million in cash on its balance sheet. On September 24, the Company resumed its share repurchase program, of which 1.7 million shares were still authorized for repurchase. With the shares trading at book value, and modest capital expense and working investment needs, we view this as a reasonable action. 

The Company has emphasized organic growth in Puerto Rico and increasingly in other geographies. In addition, the Company looks to provide GMP services outside its core pharmaceutical client base, such as food, cosmetic and automotive manufacturers. Any additional investments the Company makes in its business and the rate of its expansion will factor significantly in both our forecasts and financial valuation.

Our updated target valuation is $1.77, driven primarily by a $2.7 million reduction in cash on the balance sheet, due to the March dividend payment, and more modest top-line and margin expectations for FY22.

<a href="http://scr.zacks.com/Subscribe/defaultaspx/ default.aspx" style="color: rgb(242, 132, 16); text-size-adjust: auto;">SUBSCRIBE TO ZACKS SMALL CAP RESEARCH</a> to receive our articles and reports emailed directly to you each morning. Please visit our <a href="http://scr.zacks.com/Home/default.aspx" style="color: rgb(242, 132, 16); text-size-adjust: auto;">website</a> for additional information on Zacks SCR.  DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer <a href="https://scr.zacks.com/disclaimer/default.aspx" style="color: rgb(242, 132, 16);">HERE</a>.

By <a href="https://scr.zacks.com/analyst-bios/person-details/default.aspx?ItemId=b8877843-0e4b-47b2-895e-10adc4acf236">Beth Senko, CFA</a>

<stock_ticker>OTC:PBSV</stock_ticker>

<a href="https://s27.q4cdn.com/906368049/files/News/2021/Zacks_SCR_Research_10052021_PBSV_Senko.pdf">READ THE FULL PBSV RESEARCH REPORT</a>

We are confident that while FY2021 has had a slow start, business has been largely stable for the past nine months at Pharma-Bio Serv, Inc. (OTC:<a class="ticker" href="https://www.benzinga.com/stock/PBSV#OTC">PBSV</a>).

The pandemic disrupted manufacturing and development of products across industries (including pharmaceuticals). For Pharma-Bio Serv, this disruption means a delay in new consulting project starts, leading to a gap in what is normally a consistent, moderate-growth top line. At the same time, the pandemic has raised concerns over the reliability of the supply chain, leading manufacturers to consider relocating some capacity closer to home. In our view, Puerto Rico and Pharma-Bio Serv, will ultimately benefit from these trends.

Pharma-Bio Serv has a well-established business model serving an industry with complex, specific needs. New contracts are generally won through a competitive bid process and generally go to companies with an established reputation for delivering high quality, reliable and timely solutions. 

Quarterly revenues have held in the $5.0 million range for the past four quarters. Revenues for the three and nine months ended July 31, were approximately $5.0 million and $14.5 million, down from $6.3 million and $16.5 million in the year earlier periods. The decline was largely concentrated in Puerto Rico, and to a lesser extent in the continental US; however, business was up $0.2 million (87%) in Europe. 

Gross profit margins declined 430bp in the July quarter to 25.2% from 29.5% in the year earlier period due largely to the end of a high-margin long-term contract in Puerto Rico. Long-term, we model gross margins in the 30-31% range, although contracts outside Puerto Rico can be more profitable in some cases. Project staffing is the Company's primary expense and is largely variable, so margin expansion will come primarily through leveraging SG&A.

Net income for the three and nine months ended July 31 totaled $2.3 million and $2.8 million compared to $0.7 million and $1.9 million in the same periods last year. Net income for the July 31 reported periods includes of $2.0 million in PPP loan forgiveness. 

At July 31, the Company had $16.5 million in cash on its balance sheet. On September 24, the Company resumed its share repurchase program, of which 1.7 million shares were still authorized for repurchase. With the shares trading at book value, and modest capital expense and working investment needs, we view this as a reasonable action.

The Company has emphasized organic growth in Puerto Rico and increasingly in other geographies. In addition, the Company looks to provide GMP services outside its core pharmaceutical client base, such as food, cosmetic and automotive manufacturers. Any additional investments the Company makes in its business and the rate of its expansion will factor significantly in both our forecasts and financial valuation.
Our $2.11 target is based on a 10-year DCF with an 18% terminal EBIT margin and an 11% discount rate. The shares trade at book value which we think will continue to be supported by cash flow generation, positive ROI and a renewed repurchase program acting as a floor on the share price. 

We believe that after a post-COVID slow start to 2021, Pharma-Bio Serv will build on the strong progress of 2020 over the next three years. With stable profit margins, $16.5 million cash on the balance sheet, regular payouts to shareholders in the past three years yielding over 6% annually, and myriad opportunities to expand their focus beyond pharmaceutical manufacturers, we believe Pharma-Bio Serv is a unique opportunity for value-oriented investors. 

<a href="http://scr.zacks.com/Subscribe/defaultaspx/ default.aspx" style="color: rgb(242, 132, 16); text-size-adjust: auto;">SUBSCRIBE TO ZACKS SMALL CAP RESEARCH</a> to receive our articles and reports emailed directly to you each morning. Please visit our <a href="http://scr.zacks.com/Home/default.aspx" style="color: rgb(242, 132, 16); text-size-adjust: auto;">website</a> for additional information on Zacks SCR.  DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer <a href="https://scr.zacks.com/disclaimer/default.aspx" style="color: rgb(242, 132, 16);">HERE</a>.

By <a href="http://scr.zacks.com/Analysts/Person-Details/default.aspx?ItemId=f13b2ddc-7dca-4726-8518-d5004249bdba">Beth Senko, CFA</a>

<stock_ticker>OTC:PBSV</stock_ticker>

<a href="https://scr.zacks.com/files/News/2020/Zacks_SCR_Research_12292020_PBSV_Senko.pdf">READ THE PBSV RESEARCH REPORT HERE</a>

We believe the next two years at Pharma-Bio Serv (OTC:<a class="ticker" href="/stock/PBSV#OTC">PBSV</a>) will build on the strong progress of 2020. We are establishing 2022 estimates of $27 million in sales and $0.20 in earnings compared with our 2021 estimates of $23 million in sales and $0.16 in earnings.  With stable profit margins, $17 million cash on the balance sheet, and myriad opportunities to expand their focus beyond pharmaceutical manufacturers, we view Pharma-Bio Serv as an interesting opportunity for the long-term.

Pharma-Bio Serv is expected to report fiscal year-end 2020 results in late January. Despite economic disruption from the pandemic, 2020 has been a good year for the Company. Revenues have increased every quarter from $4.6 million in Q1 to $5.6 million in Q2 and $6.3 in the most recent quarter. Through the first three quarters of fiscal 2020, revenues total $16.6 million compared with $14.8 million in the year-earlier period.

Gross margins for the first three quarters of 2020 expanded 50bp to 32.0% from 31.5% in the comparable period. SG&A spending is largely flat with the comparable period at $3.4 million, but down 400bp to 19.5% of revenues through Q3, compared with 23.5% a year ago.

For the full year, we look for PBSV to report revenues of $21 million and earnings of $0.13.

We believe that growth will accelerate in 2021 and 2022, buoyed by new vaccine introductions, manufacturing expansion and efforts to reinvest in pharmaceutical manufacturing in Puerto Rico. There are two bills in legislation (H.R. 7527 and S.4467) seeking to boost investment in Puerto Rico. H.R. 7527 was introduced in early July and referred to the House Subcommittee on Health, House Ways and Means and the House Committee on Energy and Commerce. S.4467, has been read twice and referred to the Senate Finance Committee. We look for updates in the late spring once the new administration is seated.

For 2021, we look for Pharma-Bio Serv to post revenues of $23-24 million and earnings of $0.16 per share. Our initial estimates for 2022 call for revenues of $27 million and earnings of $0.20 per share.

The shares trade largely in-line with book value, suggesting there is a solid floor on the current share price.  With $17 million in cash on its balance sheet as of July 31, 2020 and solid prospects ahead, we continue to believe there is room for multiple expansion. Our valuation for now remains $1.95, based on a modest multiple of 12x our 2021 estimate.

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DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer <a href="http://scr.zacks.com/Disclaimer/default.aspx" style="color: rgb(242, 132, 16);">HERE</a>.

By <a href="http://scr.zacks.com/Analysts/Person-Details/default.aspx?ItemId=f13b2ddc-7dca-4726-8518-d5004249bdba">Beth Senko, CFA</a>

<stock_ticker>OTC:PBSV</stock_ticker>

<a href="https://s1.q4cdn.com/460208960/files/News/2020/Zacks_SCR_Research_09212020_PBSV_Senko.pdf">READ THE FULL PBSV RESEARCH REPORT</a>

Pharma-Bio Serv's (OTC:<a class="ticker" href="/stock/PBSV#OTC">PBSV</a>) shares got a boost late last week when President Trump remarked during a press briefing that his administration plans to, <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-press-briefing-september-18-2020/">"bring pharmaceutical manufacturing back to Puerto Rico." </a>

The administration announced it will provide $13 billion in emergency relief award to Puerto Rico to rebuild its infrastructure was devastated by Hurricane Maria three years ago. The reward represents a shift in position for an administration that has largely denied funding to the island since the incident. 

Any effort to incentivize pharmaceutical manufacturing in Puerto Rico is likely to benefit Pharma-Bio Serv. However, as with much election season rhetoric, the President's comments were light on details and more likely directed at boosting support among Latinx voters rather than implementing meaningful change. In our view, the announcement is at worst a neutral for PBSV, should the administration not follow through. A change in control in the White House and/or Congress would increase the likelihood of new investment in Puerto Rico.

Pharma-Bio Serv continues to post solid results despite economic disruption from the pandemic. In the quarter ended July, revenues rose 26% to $6.3 million from $5.0 million in the year-earlier period. Revenue growth was strongest in all geographies. Sales for the quarter in Puerto Rico rose 14%, while US business increased 86% and European revenues rose ten-fold to $0.3 million. It's important to note, however that as a project-based business, quarterly results can be volatile as contracts roll on or roll off.

Gross profit margins declined slightly to to 29.5% from 31.5% in the year-earlier period, reflecting higher growth in smaller geographies.

SG&A declined 14% to $1.0 million compared with $1.2 million in the year-earlier period and declined as a percent of revenue to 16.5% from 24.3%.

These minor changes led to a 109% gain in operating income to $0.82 million, from $0.39 million a year ago. Net income was roughly flat sequentially $0.69 million in July compared with the April quarter, but rose 60% from $0.43 million in the year-earlier period.

Pharma-Bio Serv's balance sheet remains strong with $16.8 million in cash.

We are maintaining our 2020 estimates of $21.4 million in revenues and EPS of $0.13. We are maintaining our valuation of $1.95. The shares trade largely in-line with book value, suggesting there is a solid floor on the current share price. With expectations that PBSV generates positive cash flow and continues to generate positive ROI on reinvested capital, we think there is good reason to believe that book value will grow. 

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DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer <a href="http://scr.zacks.com/Disclaimer/default.aspx" style="color: rgb(242, 132, 16);">HERE</a>.

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