EX-99 2 a08-14621_1ex99.htm EX-99

Exhibit 99

 

RETRACTABLE TECHNOLOGIES, INC. REPORTS FIRST QUARTER 2008 SALES OF $5.3 MILLION

 

LITTLE ELM, Texas, May 15, 2008 —Retractable Technologies, Inc. (AMEX: RVP), a leading maker of safety needle devices, today reported revenues of $5.3 million for the three months ended March 31, 2008.

 

Domestic sales accounted for 86.4% and 70.2% of the revenues for the three months ended March 31, 2008 and 2007, respectively. International sales accounted for the remaining revenues. Domestic revenues increased 13.3% principally due to increased volumes and higher average sales prices and international revenues decreased 58.0% due primarily to the absence of PATH shipments in 2008. Overall, unit sales decreased 20.7%. Domestic unit sales increased 7.5% and international unit sales decreased 54.9%. Domestic unit sales were 74.4% of total unit sales for the three months ended March 31, 2008.

 

Gross profit increased primarily due to lower cost of manufactured product. Costs of manufactured product decreased due to lower volumes mitigated by higher unit costs. The average cost of manufactured product sold per unit increased by 11.2%. 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 decreased 1.6% due to lower gross sales.

 

Operating expenses increased 9.1%. The decrease in expense for Sales and marketing was attributable primarily to fewer trade shows and promotional material, lower compensation, and less travel and entertainment costs. The decrease was mitigated by higher consulting costs. The increase in Research and development costs was due principally to increased cost related to compensation, consulting, and validation costs. General and administrative costs increased due to additional legal expense as well as higher compensation costs.

 

Loss from operations increased due principally to higher operating expenses.

 

The Company’s effective tax rate on the net loss before income taxes was 0.0% for the three months ended March 31, 2008 and March 31 2007.

 

The Company’s balance sheet remains strong with cash making up 64.6% of total assets. Working capital was $40.3 million at March 31, 2008, a decrease of $2.8 million from December 31, 2007. The current ratio was 6.0 at December 31, 2007, and 5.9 at March 31, 2008. The quick ratio remained unchanged at 5.1 for December 31, 2007 and March 31, 2008. These indicators continue to demonstrate a strong financial position.

 

Approximately $1.1 million in cash flow was used by operating activities. The remaining uses of cash were for capital costs incurred for the acquisition of plant, property and equipment and intangible assets, and the repayment of long-term debt.

 

Further details concerning the results of operations as well as other matters are available in the Company’s Form 10-Q filed on May 15, 2008 with the U.S. Securities and Exchange Commission.

 

Retractable Technologies, Inc. manufactures and markets safety medical products, principally the 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 accidental needlestick injury to healthcare workers and device reuse. Our products 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 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 and the viability of our patents); the ability to successfully renegotiate or extend the Baiyin Tonsun Medical Device Co., Ltd. license agreement and  the receipt of payments thereunder; the impact of dramatic increases in demand; our ability to maintain and quickly increase our production capacity in the event of a dramatic 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 other larger market players, specifically Becton Dickinson & Company, in providing safety products; and other risks and uncertainties that are detailed from time to time in the Company’s periodic reports filed with the U. S. Securities and Exchange Commission.

 

CONDENSED BALANCE SHEETS

 

 

March 31, 2008

 

 

December 31, 2007

 

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

39,209,597

 

 

$

40,507,431

 

 

Accounts receivable, net

 

1,776,979

 

 

1,667,636

 

 

Inventories, net

 

6,686,657

 

 

7,037,129

 

 

Income taxes receivable

 

388,020

 

 

2,345,041

 

 

Other current assets

 

457,089

 

 

358,807

 

 

 

Total current assets

 

48,518,342

 

 

51,916,044

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

11,301,895

 

 

11,483,423

 

 

Intangible assets, net

 

413,696

 

 

424,560

 

 

Other assets

 

504,900

 

 

505,899

 

 

Total assets

 

60,738,833

 

 

$

64,329,926

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

4,807,503

 

 

$

5,535,365

 

 

Current portion of long-term debt

 

460,760

 

 

387,906

 

 

Accrued compensation

 

669,345

 

 

539,330

 

 

Marketing fees payable

 

1,419,760

 

 

1,419,760

 

 

Accrued royalties to shareholders

 

432,510

 

 

619,304

 

 

Other accrued liabilities

 

420,147

 

 

263,339

 

 

Current deferred tax liability

 

19,594

 

 

20,626

 

 

 

Total current liabilities

 

8,229,619

 

 

8,785,630

 

 

Long-term debt, net of current maturities

 

3,574,740

 

 

3,747,259

 

 

Long term deferred tax liability

 

31,695

 

 

36,200

 

 

Total liabilities

 

11,836,054

 

 

12,569,089

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock $1 par value:

 

 

 

 

 

 

 

 

Series I, Class B

 

144,000

 

 

144,000

 

 

 

Series II, Class B

 

219,700

 

 

219,700

 

 

 

Series III, Class B

 

130,245

 

 

130,245

 

 

 


 

 

Series IV, Class B

 

552,500

 

 

553,500

 

 

 

Series V, Class B

 

1,238,821

 

 

1,282,471

 

 

Common Stock, no par value

 

-

 

 

-

 

 

Additional paid-in capital

 

53,869,174

 

 

53,818,987

 

 

Retained Deficit

 

(7,251,661)

 

 

(4,388,066)

 

 

Total stockholders’ equity

 

48,902,779

 

 

51,760,837

 

 

Total liabilities and stockholders’ equity

 

60,738,833

 

 

64,329,926

 

 

 

 

CONDENSED STATEMENTS OF OPERATIONS

 

 

Three Months
Ended
March 31, 2008

 

 

Three Months
Ended
March 31, 2007

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

Sales, net

 

$

5,315,155

 

 

$

5,773,823

 

 

Cost of sales

 

 

 

 

 

 

 

Cost of manufactured product

 

3,596,914

 

 

4,074,914

 

 

Royalty expense to shareholders

 

432,510

 

 

439,400

 

 

Total cost of sales

 

4,029,424

 

 

4,514,314

 

 

Gross profit

 

1,285,731

 

 

1,259,509

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

1,167,908

 

 

1,341,922

 

 

Research and development

 

265,508

 

 

182,035

 

 

General and administrative

 

2,928,580

 

 

2,476,038

 

 

Total operating expenses

 

4,361,996

 

 

3,999,995

 

 

Loss from operations

 

(3,076,265)

 

 

(2,740,486)

 

 

Interest and other income

 

253,669

 

 

541,197

 

 

Interest expense, net

 

(40,999)

 

 

(76,794)

 

 

Net loss

 

(2,863,595)

 

 

(2,276,083)

 

 

Preferred Stock dividend requirements

 

(344,868)

 

 

(355,051)

 

 

Net loss applicable to common shareholders

 

$

(3,208,463)

 

 

$

(2,631,134)

 

 

Net loss per share – basic and diluted

 

$

(0.13)

 

 

$

(0.11)

 

 

Weighted average common shares outstanding

 

23,778,072

 

 

23,676,664

 

 

 

 

Investor Contact:

Douglas W. Cowan

Vice President and Chief Financial Officer

(888) 806-2626 or (972) 294-1010

rtifinancial@vanishpoint.com