Full Press Release Details
RETRACTABLE TECHNOLOGIES, INC. RESULTS
FOR THE PERIODS ENDED JUNE 30, 2024
ELM, TEXAS, August 14, 2024 - Retractable Technologies, Inc. (NYSE American: RVP) reports total net sales of $6.0 million
for the second quarter of 2024 and an operating loss of $5.8 million for the period, as compared to total net sales for the same period
last year of $8.0 million and an operating loss of $5.0 million. For the first half of the year, net sales were $13.6 million and
operating losses were $8.7 million as compared to 2023 net revenues of $19.0 million and operating losses of $7.8 million. In the three
months ended June 30, 2024, declines in domestic demand were a primary factor in Retractable's lower revenues and in the six
months ended June 30, 2024, lower international vaccination-related sales had a larger impact on lower revenues.
In May 2024, a new 50% tariff on syringes
and needles imported from China was proposed but has not yet been enacted. A final determination regarding the tariffs is expected later
this month and the rules would likely take effect within two weeks thereof. For the first six months of 2024, 91% of Retractable's
products were purchased from China, most of which would be impacted by the contemplated tariffs. In the event that the tariffs are enacted,
the resulting increase in costs could have a material impact to Retractable's results of operations and financial position. Retractable
is working to evaluate options to lessen the financial impact of the tariffs, including shifting a larger portion of its manufacturing
to its domestic manufacturing facility. Such a shift would likely increase labor costs, and the Company estimates additional one-time
equipment expenditures of approximately $1 million.
A material portion of the net losses of $14.2
million and $13.7 million for the three and six months ended June 30, 2024, respectively, is comprised of the approximately $8.3
million change in valuation allowance on the deferred tax asset. Based on current information, it is more likely than not that Retractable
wouldn't be in a position to use loss carryforwards against future taxable net income based on a variety of factors and accounting
guidelines. The expected implementation of tariffs on imported syringes from China was one of the factors considered in this determination.
Retractable reports the following results of operations
for the three and six months ended June 30, 2024 and 2023, respectively. Further details concerning the results of operations, as
well as other matters, are available in Retractable's Form 10-Q filed on August 14, 2024 with the U.S Securities and Exchange
Comparison of Three Months Ended June 30,
2024 and June 30, 2023
Domestic sales accounted for 83.2% and 91.6% of
the revenues for the three months ended June 30, 2024 and 2023, respectively. Domestic revenues decreased 31.3% principally due to
lower demand. Domestic unit sales decreased 22.1%. Domestic unit sales were 79.3% of total unit sales for the three months ended June 30,
2024. International revenues increased approximately 51.5% or $345 thousand. The increase in international revenues is primarily due to
the timing of international shipments. Overall unit sales decreased 13.6%. There is uncertainty as to the timing of future international
of manufactured product decreased 15.7% principally due to lower unit sales. Royalty expense decreased 8.8% due to the associated
decrease in gross sales.
Operating expenses decreased 1.2% from the prior
year due to a reduction of property tax expense as a result of newly enacted property tax exemption legislation relating to medical device
property, offset by an increase in the allowance for anticipated credit losses.
The loss from operations was $5.8 million compared
to a loss of $5.0 million for the same period last year. The increased loss was due to lower gross profit for the current period, offset
by a slight reduction in overall operating expenses.
The unrealized loss on debt and equity securities
was $1.8 million due to the decreased market values of those securities.
The provision for income taxes was $8.3 million
for the second quarter of 2024 as compared to a benefit for income taxes of $932 thousand in the second quarter of 2023. The increase
in income tax expense is primarily related to the valuation allowance against the Deferred tax asset.
Comparison of Six Months Ended June 30,
2024 and June 30, 2023
Domestic sales accounted for 85.5% and 67.1% of
the revenues for the six months ended June 30, 2024 and 2023, respectively. Domestic revenues decreased 8.4% principally due to lower
demand. Domestic unit sales decreased 4.6%. Domestic unit sales were 82.8% of total unit sales for the six months ended June 30,
2024. International revenues decreased approximately 68.4% predominately due to fewer international vaccination-related sales. Overall
unit sales decreased 35.8%. There is uncertainty as to the timing of future international orders.
of manufactured product decreased 23.8% principally due to lower unit sales. Royalty expense decreased 12.5% due to the associated
decrease in gross sales.
Operating expenses decreased 7.2% from the prior
year. This is substantially due to a reduction of property tax expense as a result of newly enacted property tax exemption legislation
relating to medical device property.
The loss from operations was $8.7 million compared
to a loss of $7.8 million for the same period last year. The increased loss was due to lower gross profit for the current period, offset
by a slight reduction in overall operating expenses.
The provision for income taxes was $8.4 million
for the first six months of 2024 as compared to a benefit for income taxes of $701 thousand in the first six months of 2023. The year-to-date
income tax provision is primarily related to the second quarter of 2024 as a result of fully reserving the Company's Deferred tax
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 prefilled 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
more information on Retractable, visit its website at www.retractable.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
Factors that could cause or contribute to such
differences include, but are not limited to: material changes in demand, potential tariffs, Retractable's ability to maintain liquidity;
Retractable's maintenance of patent protection; Retractable's ability to maintain favorable third party manufacturing and supplier arrangements
and relationships; foreign trade risk; Retractable's ability to access the market; production costs; the impact of larger market players
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.
Retractable Technologies, Inc.
John W. Fort III, 888-806-2626 or 972-294-1010
Vice President, Chief Financial Officer, and Chief Accounting