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OTC:PBSV
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Pharma-Bio Serv (OTC:PBSV) announced results for the quarter ended January 31, 2025. The headline revenue and earnings releases were a pleasant surprise by returning to revenue growth y/y and moving back to breakeven on earnings. Additionally, management issued comments regarding future prospects that have us optimistic that the improved trend will continue. Management noted that, "…we are poised for continued expansion as we drive growth by anticipating client needs….” The company had revenues for the quarter of $2.5 million, which was $0.1 million above the year ago revenue, while breakeven earnings were also better than the $0.01 loss seen in 1Q 2024.
We have believed the company needed to invest in improved technology and expand its presence in the marketplace for some time, while bringing in new customers and fostering profitable partnerships and are pleased to hear that the company is making the investments required to achieve those goals. The previous few quarters were certainly disappointing, but we are now starting to see the benefits of those investments. Sometimes a company must take a step back in order to move forward in a meaningful way and we believe this is one of those cases that is now starting to play out in a positive way.
For investors, however, the company continues to focus on rewarding shareholders. Pharma-Bio Serv again paid a dividend of $0.075 per share for shareholders of record as of February 28, 2025, and we believe management is committed to continuing to pay this dividend. This announcement continues a trend for the company of rewarding shareholders with a healthy dividend. We believe this makes a nice combination and urge investors to look at the under-the-radar stock for a potential addition to a portfolio.
Additionally, the balance sheet continues to look solid. The cash on hand is impressive at $7.3 million but that’s not the whole story. As we’ve discussed before, the company has done something with that excess cash that we believe is much smarter and will benefit the company and shareholders—management has decided to invest around $5.1 million in US Treasury Bills. With recent yields on T-bills between 4-5%, this move allows the company to hold cash equivalents that are actually earning a nice yield, while remaining safe and liquid—a win, win for investors and the company and adding to the revenue for Pharma-Bio Serv. Additionally, the solid liquidity of the company means that management has the internal funds needed to continue to make the investments that will solidify PBSV on the growth trajectory investors are now beginning to see.