Retractable Technologies, Inc. Reports Results for the First Quarter of 2016
May 17 2016 - 1:19PM
Business Wire
Retractable Technologies, Inc. (NYSE MKT: RVP) reported the
following results of operations for the first quarter of 2016 and
other matters in its quarterly report on Form 10-Q filed on May 16,
2016.
The EasyPoint™ Needle
In the second quarter of 2016, Retractable began selling a new
product, the EasyPoint™ needle. The EasyPoint™ is a retractable
needle that can be used with luer lock syringes, luer slip
syringes, and prefill syringes to give injections. The EasyPoint™
needle also can be used to aspirate fluids and for blood
collection.
A recent article published in Medical Design Technology details
the benefits of the EasyPoint™ needle as well as the existing
VanishPoint® syringe. The article states that when the EasyPoint™
needle becomes available, “for the first time, clinicians will be
able to change needles and have the safety of automated needle
retraction.” The March 7, 2016 article is available on the Article
Archives tab of Retractable’s website at www.vanishpoint.com.
In the second quarter of 2016, Retractable placed orders for
additional injection molding machines and additional molds to
provide additional capacity for the manufacture of the EasyPoint™
needle. The expenditure for this equipment is expected to be $1.4
million.
Suspension of Medical Device Excise Tax
The Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
signed into law on December 18, 2015, includes a two-year
moratorium on the medical device excise tax imposed by Internal
Revenue Code section 4191. Thus, the medical device excise tax was
suspended beginning on January 1, 2016 and ending on December 31,
2017. The impact of this tax was $360,000 in 2015.
Results of Operations from the First Quarter of 2016 versus the
First Quarter of 2015
Domestic sales accounted for 92.9% and 94.4% of the revenues for
the three months ended March 31, 2016 and 2015, respectively.
Domestic revenues decreased 5.7% principally due to lower average
sales prices and slightly lower unit sales. Domestic unit sales
decreased 1.2%. Domestic unit sales were 90.6% of total unit sales
for the three months ended March 31, 2016. International unit sales
and revenues increased 14.9% and 21.8%, respectively. International
orders may be subject to significant fluctuation over time. Overall
unit sales increased 0.1%.
Gross profit decreased 8.7% primarily due to lower revenues.
The average cost of manufactured products sold per unit
decreased by 1.2%. 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 decreased 2.5% due to decreased
gross sales.
Operating expenses decreased 6.4% or $209 thousand. The decrease
was primarily due to lower tax expense, principally the Medical
Device Excise Tax, lower non-litigation legal fees, and lower bad
debt accrual. The decrease in expenses was mitigated by an increase
in Sales and marketing costs of $50,000 related to compensation and
international consulting costs.
The operating loss was $894 thousand compared to an operating
loss for the same period last year of $895 thousand due primarily
to lower operating expenses offset by lower revenues.
The balance sheet remains strong with cash making up 44.9% of
total assets. Working capital was $21.8 million at March 31, 2016,
a decrease of $906 thousand from December 31, 2015.
Approximately $218 thousand in cash flow in the three months
ended March 31, 2016 was provided by operating activities.
On April 5, 2016, Thomas J. Shaw exercised the remaining portion
of his stock option. Retractable issued 1,000,000 shares of Common
Stock to him at an exercise price of $0.81 (aggregate consideration
of $810,000).
Further details concerning the results of operations as well as
other matters are available in Retractable’s Form 10-Q filed on May
16, 2016 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 prefill 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.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 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;
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 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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version on businesswire.com: http://www.businesswire.com/news/home/20160517006461/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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