Retractable Technologies, Inc. Announces Litigation Update and Results for the First Quarter of 2017
May 15 2017 - 5:55PM
Business Wire
Retractable Technologies, Inc. (NYSE MKT: RVP) announced today
that the bench trial in the case of Retractable Technologies, Inc.
v. Becton, Dickinson and Company (“BD”) was held on May 11th in the
United States District Court for the Eastern District of Texas,
Sherman Division. The Court announced that it will issue its
decision within 3 months. We cannot predict any recovery of damages
in our litigation against BD at this time. The ultimate outcome of
this suit could have a material effect on our financial
condition.
Retractable is also reporting the following results for the
first quarter of 2017 which are included in its report on Form 10-Q
filed on May 15, 2017 with the U.S. Securities and Exchange
Commission.
Domestic sales accounted for 85.9% and 92.9% of our revenues for
the three months ended March 31, 2017 and 2016, respectively.
Domestic revenues increased 8.1% principally due to increased sales
of the 0.5 mL and 3 mL syringes. Domestic unit sales increased
6.7%. Domestic unit sales were 82.5% of total unit sales for the
three months ended March 31, 2017. International unit sales and
revenues increased 118.3% and 132.9%, respectively, due to
increased sales in South America, Australia, the European Union,
and Africa. Our international orders may be subject to significant
fluctuation over time. Overall unit sales increased 17.2%.
Gross profit increased 6.2% primarily due to higher
revenues.
The average cost of manufactured products sold per unit
increased by 6.1% due to the increased volume of syringes produced
in China. Profit margins can fluctuate depending upon, among other
things, the cost of manufactured product and the capitalized cost
of product recorded in inventory, as well as product sales mix.
Royalty expense increased 16.3% due to increased gross sales.
Operating expenses increased 12.7% or $393 thousand. The
increase was primarily due to bonuses granted to two officers and
stock option expense, mitigated by a reduction in litigation
costs.
Our operating loss was $1.2 million compared to an operating
loss for the same period last year of $894 thousand. The increase
was due primarily to bonus expense for officers and stock option
expense, mitigated by a reduction in litigation costs.
Our effective tax rate on the net loss before income taxes was
0.0% and (0.1)% for the three months ended March 31, 2017 and March
31, 2016, respectively.
Our balance sheet remains strong with cash making up 42.4% of
total assets. Working capital was $20.3 million at March 31, 2017,
an increase of $841 thousand from December 31, 2016.
Cash flow from operations was a negative $977 thousand for the
three months ended March 31, 2017 due primarily to the loss from
operations and changes in working capital, namely increased
inventories and other current assets, mitigated by an increase in
other accrued liabilities. Noncash expenses such as share based
compensation and depreciation and amortization also reduced the
cash flow impact of the net loss. Purchases of Common Stock
directly from the Company in the first quarter of 2017 by Thomas J.
Shaw, CEO and President, resulted in additional capital of
$1,780,000.
Further details concerning the results of operations as well as
other matters are available in Retractable's Form 10-Q filed on May
15, 2017 with the U.S. Securities and Exchange Commission.
Retractable manufactures and markets VanishPoint® and Patient
Safe® safety medical products and the EasyPoint® needle. The
VanishPoint® syringe, blood collection, and IV catheter products
are designed to prevent needlestick injuries and product reuse by
retracting the needle directly from the patient, effectively
reducing exposure to the contaminated needle. Patient Safe®
syringes are uniquely designed to reduce the risk of bloodstream
infections resulting from catheter hub contamination. The
EasyPoint® is a retractable needle that can be used with luer lock
syringes, luer slip syringes, and prefilled syringes to give
injections. The EasyPoint® needle also can be used to aspirate
fluids and for blood collection. Retractable's products are
distributed by various specialty and general line distributors.
For more information on Retractable, visit its website at
www.retractable.com.
Forward-looking statements in this press release are made
pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 and reflect Retractable's current
views with respect to future events. Retractable believes that the
expectations reflected in such forward-looking statements are
accurate. However, Retractable cannot assure you that such
expectations will materialize. Actual future performance could
differ materially from such statements.
Factors that could cause or contribute to such differences
include, but are not limited to: Retractable's ability to maintain
liquidity; Retractable's maintenance of patent protection; the
impact of current and future Court decisions regarding current
litigation; Retractable's ability to maintain favorable third party
manufacturing and supplier arrangements and relationships; foreign
trade risk; Retractable's ability to quickly increase capacity in
response to an increase in demand; Retractable's ability to access
the market; Retractable's ability to maintain or lower production
costs; Retractable's ability to continue to finance research and
development as well as operations and expansion of production; the
impact of larger market players, specifically BD, in providing
devices to the safety market; and other risks and uncertainties
that are detailed from time to time in Retractable's periodic
reports filed with the U.S. Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20170515006740/en/
Retractable Technologies, Inc.Douglas W. Cowan, 888-806-2626 or
972-294-1010Vice President and Chief Financial Officer
Retractable Technologies (AMEX:RVP)
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