Full Press Release Details
Technologies, Inc. Reports an Increase in Revenues of 39.7% for 2009
LITTLE ELM, Texas April 7,
2010 Retractable Technologies, Inc. ( Retractable ) (NYSE AMEX: RVP), a
leading maker of safety needle devices, announced an increase in revenues of
39.7% for the year 2009 over 2008.
Revenues increased due
principally to sales under the Department of Health and Human Services ( DHHS )
contract which was announced in the third quarter of 2009. The DHHS
program, which was estimated to run from August 2009 through March 2010,
ended in December 2009. Our revenue
increased 142.1% in the fourth quarter principally due to the DHHS
contract. We do not know if there will
be a similar program in 2010. Domestic
sales were 88.4% of revenues with international sales comprising the
remainder. Without the DHHS contract, our revenues would have increased
5.6%, with domestic revenues increasing 7.3% and international revenues
declining 3.0%. Unit sales of the 1mL syringe increased 17.1% and 3mL
unit sales increased 54.3%. Unit sales of all products increased
27.3%. Domestic unit sales as well as average sales prices
increased. International unit sales decreased slightly and average
selling prices increased.
Cost of sales increased
due to greater volumes. Royalty expenses were higher due to higher gross
As a result, gross profit
margins increased from 29.5% in 2008 to 34.7% in 2009.
increased from the prior year due to litigation costs and stock option expense
mitigated by the cost cutting measures implemented in the third quarter of
expenses decreased primarily due to lower compensation attributable to staff
reduction and reduction in pay, lower advertising expenses and reduced travel
costs. Stock option expense and consulting costs increased.
administrative costs increased due principally to litigation costs and stock
option expense. Compensation costs decreased due to staff reductions and
In the fourth quarter of
2009, we recognized an impairment charge of $2,594,602 associated with catheter
production equipment.
There are several charges
to our Statement of Operations in 2009 that are nonrecurring or are not typical
of a manufacturing company. These
charges include litigation costs, stock option expense (a noncash charge which
will be fully amortized at the end of the second quarter of 2010), and an
impairment of assets. Additionally we
recognized an income tax benefit attributable to recent tax legislation which
allows us to carry back our net operating losses to a prior period. Were it not for the charges and the tax
benefit described above, our Net earnings applicable to common shareholders for
the year would have been slightly above breakeven. The removal of the same items, applicable to
the fourth quarter of 2009, would have provided a Net earnings applicable to
common shareholders exceeding $4.0 million.
There would be no federal income tax impact since we have net operating
loss carry forwards which would eliminate the tax obligation. Based on the current status of legal matters,
our litigation costs should decline sometime prior to the end of the second
Cash flow from operations
was a negative $12.3 million for 2009 due principally to operating losses and
increases in receivables. Most of the increase in receivables was related
to billings in December 2009 to DHHS and collected in January 2010.
The increase in income taxes receivable is related to a refund for carryback of
our 2009 net operating loss. We will file for this refund early in the
second quarter of 2010. The effect of non-cash expenses and the change in
working capital was a negative $2.9 million. Investing activities
utilized $2.4 million in cash.
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 s 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
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.
Vice President and Chief
(888) 806-2626 or (972)