WEB NEWS Research
Nocopi Technologies (OTC:NNUP) ($0.20, $13.9m market cap), a company that develops and markets specialty reactive inks for unique, mess-free applications in the toy and educational product markets, announced Q2 2021 results:
Sales of $513,900 vs $627,300 in the prior year
EPS of $0.00 vs $0.00 in the prior year
“Despite near-term logistics issues which are driving higher costs and shipment delays, we remain confident in our growth prospects over the balance of 2021 and subsequent years. Our outlook is rooted in the expected, gradual rebound in consumer traffic at the approximately 80,000 pre-pandemic bricks & mortar retailers across North America that carried products featuring our specialty inks. Many of these include retailers at airports, train stations and highway rest stops which are important contributors to the sale of consumer products utilizing our ink technologies. While this broad retail footprint was substantially impacted by store closures and reduced foot traffic due to the beginning of the COVID-19 pandemic in Q1’20, it was offset to a meaningful degree by improving online sales. Additionally, we expect to benefit from our licensee’s planned expansion into new European markets as health and economic conditions allow, along with the continued development of new product offerings leveraging our specialty ink technologies.
Our growing cash balance reflects the efficiency of our operations, receivables collections and a quarterly $100,000 minimum guarantee payment from our largest licensee, which is not reflected in our income statement.”
On May 12, 2020 we offered a brief initial look at NNUP and its strong Q4 2019 results filed on March 30, 2020 .
Research
Nocopi Technologies (OTC:NNUP) ($0.16, $10.2m market cap), a company that develops and markets specialty reactive inks for unique, mess-free applications in the toy and educational product markets, announced Q4 2020 results:
Sales of $756,300 vs $974,400 in the prior year
EPS of $0.00 vs $0.01 in the prior year
“We expect the decline in specialty ink sales in the fourth quarter to be a temporary phenomenon as certain customers work through their existing production backlogs. We are already seeing an improving product sales trend in the current March quarter as one key customer has more than doubled their amount of ink orders placed relative to the same period last year. Our outlook is further reinforced by dialogues with partners and suppliers.”
Research
Nocopi Technologies (OTC:NNUP) announced Q3 2020 results:
Sales of $754,800 vs $637,500 in the prior year
Net income of $163,100 vs $206,800 in the prior year
EPS of $0.00 vs $0.00 in the prior year
“COVID-related factors continued to negatively impact overall consumer spending at physical stores during the third quarter, however this trend was offset somewhat by solid increases in online sales activity. The net effect was a lower level of product sell-through that caused a lower level of revenues from licenses, royalties and fees in Q3’20 versus the year ago period.
Similarly, we continued to experience weakness in our smaller anticounterfeiting and anti-product diversion applications for our specialty ink technologies, principally due to COVID-19-related plant closures and budget and procurement freezes. We are optimistic that these markets will return to more normal levels of activity as we progress into FY 2021.”
Research
Nocopi Technologies (OTC:NNUP) ($0.16, $10.2m market cap) develops and markets specialty reactive inks for unique, mess-free applications in the toy and educational product markets. The company announced its Q2 2020 results:
Sales of $627,300 vs $516,100 in the prior year
Net income of $70,800 vs $148,900 in the prior year
EPS of $0.00 vs $0.00 in the prior year
“Despite macro disruptions, first half 2020 specialty ink purchases from our overseas printing partners rose 61% over those in the year-ago period. Importantly, this increase in ink and other product sales is an excellent indicator of future royalty income as Nocopi earns per unit royalties on retail sales of most entertainment products incorporating our ink technologies. This high-margin revenue source plays an important role in enhancing our gross margin and future profitability.
“While there are no certainties in the current COVID-19 economic environment, recent business partner activity and their growth plans for new products and geographic expansion provide a favorable outlook for our company over the next few quarters while also confirming our solid competitive position."
Call to Action
**Call To Action
Established Long Position and Added NNUP to Our Run to One
Nocopi Technologies (OTC:NNUP) ($0.14, $8.5m market cap) develops and markets specialty reactive inks for unique, mess-free applications in the toy and educational product markets. For example, coloring books with blank pages that when “scratched” will reveal a picture.
Based on its reactive ink technology, Nocopi also develops and markets product authentication technologies designed to combat product counterfeiting and/or unauthorized product diversion.
On May 12, 2020 we offered a brief initial look at NNUP and its strong Q4 2019 results filed on March 30, 2020 . We mentioned we were still very early in our diligence process and were evaluating it from a Run to One (R21) perspective.
When Q1 2020 results were filed on May 14, 2020, sales were sequentially down from Q4 2019. However, they were up 27%, year over year , to $520,300. The company does exhibit some seasonality throughout the year, so we are not that concerned about sequential volatility in sales and earnings. More importantly, the company has increased annual sales for 6 out of the last 7 years .
After a brief call with management, we have decided to add NNUP to our Run to One Model Portfolio and establish a long position. We will release our full interview notes shortly, which will highlight the opportunities for growth and why we think it could accelerate moving forward. We caution that a Run to One scenario would likely take several years to play out. NNUP has 60 million shares outstanding, which is above our maximum threshold of about 40M to 50M. Based on a 5x fair valuation scenario, the company would need to achieve annual revenue of around $12 million to reach $1 per share. While we think this is possible, NNUP revenues for 2019 were $2.5 million, so they have a long way to go. However, we do think management would consider ways to improve its capital structure. Shares are currently trading at a P/S of around 3 and P/E of 13.
We do plan to conduct a follow up live webcast call with management on July 16, where Geoinvesting members will be able to attend.
Shareholder Letters
June 12, 2013
West Conshohocken, Pa., June 12, 2013/PR Newswire-Michael A. Feinstein, M.D., Chairman and CEO of Nocopi Technologies, Inc. today announced an update to the Company’s ongoing corporate activities. Dr. Feinstein stated the update will serve as a prelude to Nocopi’s filing of past overdue financial statements and other quarterly and annual reports. “Nocopi intends to be current in all reporting within the near future,” said Dr. Feinstein. “The financial restraints leading to our delay in the past year’s filings are in the process of being relieved and we intend to move forward.” Nocopi has been steadily increasing its business for both specialty inks used in the children’s education and entertainment industries, and for its ink technology used in the security marketplace.
Over the past six months, Nocopi has renewed and added new licensees to its impressive portfolio of children’s publishers and toy companies. In addition, Nocopi has broadened its line of patented and proprietary specialty inks licensed to these companies and continues with vigorous research and development activities in search of new ink technologies and applications.
The Company is proud of the wide and growing distribution of products utilizing its technologies. “It is now possible to find children’s products enabled by our unique and proprietary technologies in venues such as major chain stores, specialty shops, travel shops, drug stores, supermarkets, and over the internet,” said Dr. Feinstein. “It is also possible to now find our technologies incorporated into products being marketed on several continents,” he added.
At the same time, Nocopi has added several new accounts to its security product lines. From retail sales protection to the manufacturing of automotive parts, Nocopi offers a tested security technology to inhibit and deter the diversion or counterfeiting of valuable merchandise. “We continue to upgrade and add to our portfolio of security technologies, and we maintain exceptional research and development techniques to customize our technology to the client’s needs on a case by case basis. We do all this, while keeping affordability to the end user in mind” said Feinstein.
Nocopi believes the continuing development of and upgrading to its patented and proprietary technologies, added to the proven acceptance of these technologies in the worldwide marketplace, will contribute to future success for the Company. Nocopi expects consistent growth in both product lines and distribution of these products over the next several quarters.
“We believe that once we have become current with our filings, our shareholders will be pleased with the positive steps our Company has taken. We expect 2013 to be a year of exciting progress for Nocopi” concluded Dr. Feinstein.
