Retractable Technologies, Inc. Reports 30.1 Percent Increase in Sales in the First Quarter
Domestic sales increased 36.7 percent while international sales dropped 10.9 percent; combined unit sales for the domestic and international markets rose 16.9 percent. International sales declined in the first quarter of 2006 due to lower shipments under the Bush Administration’s global HIV/AIDS initiative compared with the same period last year. The timing of shipments, and therefore the Company’s recognition of revenues, under this program vary from quarter to quarter depending in part on logistical requirements in Africa and the Caribbean.
Largely because of a 25.3 percent increase in operating expenses, including higher sales and marketing and research and development costs in the quarter, the Company posted an operating loss of $1.2 million. The increase in sales and marketing expense resulted primarily from the hiring of additional sales personnel, whereas the increase in R&D costs was due mainly to consulting expenditures and costs associated with the development of the new VanishPoint® safety intravenous (I.V.) catheter. General and administrative costs also rose because of higher compensation, travel and legal expenses.
The Company’s balance sheet remains strong with cash making up $51.6 million, or 70.6 percent, of total assets. Further details are available on the Company’s Form 10-Q/A filed with the Securities and Exchange Commission.
Retractable Technologies, Inc. manufactures and markets VanishPoint® automated retraction safety syringes and blood collection devices, which virtually eliminate health care worker exposure to accidental needlestick injuries. These revolutionary devices use a patented friction ring mechanism that causes the contaminated needle to retract automatically from the patient into the barrel of the device, a feature that is designed to prevent reuse. VanishPoint® safety needle devices are distributed by various specialty and general line distributors. For more information on Retractable, visit our Web site 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 the Company’s current views with respect to future events. The Company believes that the expectations reflected in such forward-looking statements are accurate. However, the Company cannot assure you that such expectations will materialize.
The Company’s actual future performance could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to: the impact of dramatic increases in demand; the Company’s ability to quickly increase its capacity in the event of a dramatic increase in demand; the Company’s ability to access the market; the Company’s ability to reduce production costs; the Company’s ability to continue to finance research and development as well as operations and expansion of production; the recently increased interest of larger market players, specifically BD, in providing safety needle devices to their customers; and other risks and uncertainties that are detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.
RETRACTABLE TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
----------------------------------------------------------------------
March 31,
2006 December 31,
(Unaudited) 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $51,561,260 $52,513,935
Accounts receivable, net 2,821,074 3,404,908
Inventories, net 3,453,737 3,297,726
Income taxes receivable 916,502 561,062
Current deferred tax asset 1,135,327 1,245,508
Other current assets 626,903 462,150
----------- -----------
Total current assets 60,514,803 61,485,289
Property, plant, and
equipment, net 12,171,697 11,925,976
Intangible assets, net 306,512 316,926
Other assets 26,075 27,334
----------- -----------
Total assets $73,019,087 $73,755,525
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,381,387 $ 2,345,613
Current portion of long-term
debt 246,234 295,417
Accrued compensation 530,508 388,726
Marketing fees payable 1,419,760 1,419,760
Accrued royalties to a
shareholder 369,228 540,888
Other accrued liabilities 334,729 467,812
----------- -----------
Total current
liabilities 5,281,846 5,458,216
Long-term debt, net of current maturities 4,300,638 4,350,625
Long-term deferred tax liability 770,717 711,443
----------- -----------
Total liabilities 10,353,201 10,520,284
----------- -----------
Stockholders' equity:
Preferred stock $1 par value:
Series I, Class B 171,000 171,000
Series II, Class B 242,700 255,200
Series III, Class B 135,245 135,245
Series IV, Class B 556,000 556,000
Series V, Class B 1,381,221 1,381,221
Common Stock, no par value - -
Additional paid-in capital 54,350,136 54,307,053
Retained Earnings 5,829,584 6,429,522
----------- -----------
Total stockholders'
equity 62,665,886 63,235,241
----------- -----------
Total liabilities and
stockholders' equity $73,019,087 $73,755,525
=========== ===========
RETRACTABLE TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS - (Unaudited)
----------------------------------------------------------------------
Three months Three months
ended ended
March 31, March 31,
2006 2005
------------ ------------
Sales, net $ 3,881,805 $ 4,063,874
Reimbursed discounts 1,640,925 180,300
----------- -----------
Total sales 5,522,730 4,244,174
----------- -----------
Cost of sales
Cost of manufactured product 3,241,962 2,417,016
Royalty expense to a shareholder 369,228 314,619
----------- -----------
Total cost of sales 3,611,190 2,731,635
----------- -----------
Gross profit 1,911,540 1,512,539
----------- -----------
Operating expenses:
Sales and marketing 1,113,006 940,383
Research and development 315,195 119,094
General and administrative 1,723,771 1,455,782
----------- -----------
Total operating expenses 3,151,972 2,515,259
----------- -----------
Loss from operations (1,240,432) (1,002,720)
Interest income 462,197 252,139
Interest expense, net (110,707) (62,413)
----------- -----------
Net loss before income taxes (888,942) (812,994)
Provision (benefit) for income taxes (289,004) (290,059)
----------- -----------
Net loss (599,938) (522,935)
Preferred Stock dividend requirements (367,078) (381,345)
----------- -----------
Loss applicable to common shareholders $ (967,016) $ (904,280)
=========== ===========
Loss per share - basic and diluted $ (0.04) $ (0.04)
=========== ===========
Weighted average common shares outstanding 23,521,551 23,203,665
=========== ===========