Retractable Technologies, Inc. Reports 61.0% Sales Increase for the First Quarter of 2010
May 19 2010 - 4:18PM
Business Wire
Retractable Technologies, Inc. (NYSE AMEX: RVP), a leading maker
of safety medical devices, reported net sales of $8.5 million for
the three months ended March 31, 2010, a 61% increase over net
sales for the three months ended March 31, 2009.
Domestic sales accounted for 88.2% and 78.8% of the revenues for
the three months ended March 31, 2010 and 2009, respectively.
International sales accounted for the remaining revenues. Domestic
revenues increased 80.1% principally due to higher average prices
and higher volumes. Most of the increase in domestic revenues is
attributable to sales of the 1mL and 3mL syringes. International
revenues decreased 10.1% due primarily to lower volumes mitigated
by higher prices. Overall, unit sales increased 27.6%. Domestic
unit sales increased 47.9% due to increased sales to our major
domestic distributors and filling orders from the Department of
Health and Human Services from 2009. International unit sales
decreased 14.3%. Domestic unit sales were 78.1% of total unit sales
for the three months ended March 31, 2010.
Gross profit increased 181% primarily due to higher revenues and
lower unit costs. The average cost of manufactured product sold per
unit decreased by 3.9% due to higher volumes. Profit margins can
fluctuate depending upon, among other things, the cost of product
manufactured and the capitalized cost of product recorded in
inventory, as well as product sales mix. Royalty expense increased
39.5% due to higher gross sales.
Operating expenses increased 6.9%. The increase was mitigated by
the effect of cost cutting measures taken in 2009. Compensation
costs declined $270,000 and 401(k) matching expense declined
$26,000. Other related costs such as travel and entertainment,
marketing expense, and consulting declined $176,000. General and
administrative costs increased due primarily to stock options and
litigation expense. The decrease in expense for Sales and marketing
was attributable primarily to lower compensation costs. Research
and development costs increased $163,000 due to impairment charges
mitigated by lower compensation costs.
Loss from operations decreased 46% due principally to higher
gross profit.
The Company’s effective tax rate on the net loss before income
taxes was 0.1% and 2.6% (benefit) for the three months ended
March 31, 2010 and March 31, 2009, respectively.
There are two charges to our Statement of Operations in the
first quarter of 2010 that are nonrecurring or are not typical of a
manufacturing company. These charges include litigation costs and
stock option expense (a noncash charge which will be fully
amortized at the end of the second quarter of 2010). Were it not
for these two charges, our Net earnings applicable to common
shareholders for the quarter would have been approximately $350,000
and our Net income would have been approximately $700,000. There
would be no federal income tax impact since we have net operating
loss carryforwards which would have eliminated the tax
obligation.
Further details concerning the results of operations as well as
other matters are available in the Company’s Form 10-Q filed on May
17, 2010 with the U.S. Securities and Exchange Commission.
Retractable manufactures and markets safety medical products,
principally VanishPoint® automated retraction safety syringes,
automated retraction blood collection devices, and automated
retraction IV catheters, that virtually eliminate healthcare worker
exposure to accidental needlestick injuries. These revolutionary
devices use patented technology that causes the contaminated needle
to retract automatically, a feature that is designed to prevent
both accidental needlestick injury and device reuse. Retractable
also manufactures and markets Patient Safe® syringes that are
uniquely designed to reduce the risk of bloodstream infections
resulting from catheter hub contamination. Patient Safe® syringes’
unique luer guard reduces the risk of luer tip contact
contamination and the risk of contamination of intravenous fluid.
Retractable's products are distributed by various specialty and
general line distributors. For more information on Retractable,
visit our website at www.vanishpoint.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 our current views with
respect to future events. We believe that the expectations
reflected in such forward-looking statements are accurate. However,
we cannot assure you that such expectations will materialize. Our
actual future performance could differ materially from such
statements.
Factors that could cause or contribute to such differences
include, but are not limited to: our ability to maintain liquidity;
our maintenance of patent protection; the impact of current
litigation (as it affects our costs as well as market access); our
ability to maintain favorable supplier arrangements and
relationships; our ability to receive royalties from Baiyin Tonsun
Medical Device Co., Ltd.; our ability to quickly increase capacity
in response to an increase in demand; our ability to access the
market; our ability to maintain or lower production costs; our
ability to continue to finance research and development as well as
operations and expansion of production; the increased interest of
larger market players, specifically Becton Dickinson and Company,
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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