IRVINE, Calif., May 5 /PRNewswire-FirstCall/ -- Robert DelVecchio, CEO of Assured Pharmacy, Inc. (BULLETIN BOARD: APHY) , sent the following letter, dated May 5:
Dear Valued Shareholder,
This has been a successful and pivotal year for Assured Pharmacy. Realizing that our business was not growing as anticipated, we decided in September 2004 to temporarily halt new pharmacy openings in order to evaluate and improve existing operations. In addition to reviewing several internal and management issues, we felt that we had not developed a successful marketing strategy enabling our Company to generate sufficient cash to fund our growing operations.
As a result of the reevaluation of our business we replaced our previous President, CEO, CFO, Executive Vice President, and two Board members in early 2005. I, Robert DelVecchio, was named CEO in February 2005. Working diligently, your new management team has made great strides in expanding the business. We implemented a program that has redirected this company towards growth and increasing gross margins.
We began 2005 as eRXSYS, Inc., an e-prescribing pharmacy, and ended the year as Assured Pharmacy Inc. While remaining loyal to our core customers in the pain management arena, we have broadened our reach to include other specialties such as oncology and psychiatry, giving us a larger opportunity to grow and serve our communities while increasing our audience and revenue. These additional specialties will give us greater operating stability.
Last year we learned a lot about our patients and how to attract them. We offer a unique service which needed to be clearly articulated and marketed to the communities we serve. Superior customer service is the cornerstone of our success. We strive to create a personal relationship with each and every customer. We work to provide a spirit of cooperation with the doctor offices that we service. We make every effort to understand the medical needs and wants of our customers. By doing these simple things, we have developed very strong customer loyalty. The old eRXSYS sales model failed because it did not adequately focus on creating a patient-centric marketing program.
Because of our restructuring and our new strategic focus,
* We have positioned ourselves as a specialty pharmacy with a focus on
pain management, oncology and psychology, while still offering
electronic prescribing services. This new focus was the birth of the
current Assured Pharmacy. It is our goal to become your local
community specialty pharmacy emphasizing superlative customer care.
The pharmacists and their staff strive to create a one-on-one personal
relationship with each of our customers. We have received
overwhelmingly positive feedback from our customer base for our efforts
* We have created strong relationships with our drug wholesalers.
* We now have a dependable line of credit to cover the cash drains of
building inventories and carrying the receivables due from health care
companies. We have been able to reduce our collection times over the
course of the year reducing our dependency on the credit line.
* We have hired the California based integrated marketing company
Rainmaker & Sun to create a customer awareness campaign. Our new focus
is patient-centric. We have begun to initiate a highly focused
marketing and branding campaign which includes creating direct
marketing materials to increase community understanding of our product
offering and services.
* On February 24, 2006, we entered into an arrangement with AnazaoHealth,
a custom prescription compounder licensed by the DEA to provide
controlled substances in 50 states. AnazaoHealth specializes in
providing sterile custom preparations for nuclear medicine, pain
management, and drugs for clinical trials.
* On January 26, 2006, we entered into an arrangement which we are very
excited about with Affiliate Healthcare Administrations, a third party
health plan administrator, to be the exclusive provider of
prescriptions to its 3500 members. We have enhanced our service to
Affiliate members with overnight courier prescription delivery.
The Affiliate Healthcare agreement gives us a second revenue source to
leverage our existing prescription filling capacity. Because we see
this as a synergistic business opportunity, which is likely to have
higher margins than our core business, we have established a wholly
owned subsidiary, Assured Pharmacy Plus, Corp., to manage this
business, and we are evaluating the option of marketing our services to
other third party health plan administrators.
* We have converted debt into additional equity of our joint venture
entity, Assured Pharmacies Northwest, Inc., increasing our ownership
percentage to 94.75%.
As a result of all these efforts, our core business grew last year, with revenues more than doubling to approximately $1,419,000 in the Fourth Quarter 2005 from approximately $644,000 in Fourth Quarter 2004. Most importantly, we have just had our fourth consecutive quarter of positive gross margins. Our monthly sales progressively increased from $210,000 in January 2005, to $486,000 in December 2005. Please refer to our web site at http://www.assuredpharmacy.com/ for a graphical snapshot of our progress in generating revenue during the year.
For a more complete discussion of our financial statements for the fiscal year ended December 31, 2005, I encourage you to review in our Annual Report on Form 10-KSB recently filed with the Securities and Exchange Commission.
I am pleased to announce that as a sign of our confidence in the renewed health of our firm, we have once again commenced our expansion program, and will be opening our fifth pharmacy, to be located in Portland, Oregon in the near future.
We have also made a commitment to keep the public and our shareholders abreast of our progress, and to that end we would like to announce that Wall Street Consultants Corp. has rejoined our team, heading up our shareholder relations effort. We will all be investing much more time and effort in our investor relations program, including improvements in our web-site to make it more current and informative.
Our goal for 2006 is to continually reevaluate our corporate structure and make changes where necessary. It is vitally important to our success to be able to have a robust infrastructure capable of handling growth. I am confident by staying the course, 2006 will be a giant step forward in our company's success.
In closing I would like to thank the hard working employees of Assured Pharmacy for all their unyielding efforts last year, and you, our shareholders who have stood by us during our restructuring.
The realignment of our internal organization will continue to improve operations, customer service, and financial performance, benefiting our customers, shareholders, employees, vendors and other stakeholders. I feel that our company is now poised for the future. I appreciate the support you have given me, and I can assure you that your management and I are looking forward to the months and years ahead with confidence and excitement.
Thank you,
Robert DelVecchio, CEO Assured Pharmacy
