Retractable Technologies, Inc. Reports Operating Profit of $ 44.1 Million for the First Nine Months of 2021 | Business

LITTLE ELM, Texas – (BUSINESS WIRE) – November 16, 2021–

Retractable Technologies, Inc. (NYSE American: RVP) reports that its operating profit was $ 44.1 million for the first nine months of 2021, compared to operating profit for the same period last year. of $ 11.8 million, and that profit applicable to common shareholders was $ 35.0 million for the first nine months of 2021, compared to $ 14.7 million the previous year. Net sales were $ 36.4 million for the quarter ended September 30, 2021 and $ 128.9 million for the nine months ended September 30, 2021. The US government remained a major customer, accounting for 50 , 7% and 64.8% of three and nine month net sales. -periods ended September 30, 2021. During the quarter ended September 30, 2021, despite the increase in revenues, Retractable’s gross profit margins were affected by the widespread and unprecedented increase in transportation costs and delays affecting almost all importers due to The impact of COVID-19 on the global supply chain.

Retractable presents the following operating results for the three and nine months ended September 30, 2021 and 2020, respectively.

Comparison of the three months ended September 30, 2021 and September 30, 2020

Domestic sales, including sales to the U.S. government, represented 93.7% and 94.2% of revenue for the three months ended September 30, 2021 and 2020, respectively. Domestic revenues increased 33.5% primarily due to higher volumes primarily attributable to US government orders. Domestic unit sales increased 34.1%. Domestic unit sales represented 90.6% of total unit sales for the quarter ended September 30, 2021. Domestic non-government unit sales increased approximately 32.6%. International revenues increased by approximately 45.5% due to an increase in products available for international shipping. Our international orders may be subject to significant fluctuations over time and may not reflect full year sales. Overall unit sales increased 34.2%. Aside from the US government, the increase in our sales is primarily attributable to existing customers as well as several new, smaller customers who do not operate as distributors. Our gross margins were strongly impacted during the third quarter of 2021 due to global demand and rising freight transportation costs. Despite the increase in revenues for the third quarter of 2021, our gross margin declined, both on a unit basis and overall.

The cost of manufactured goods increased 78.4%, mainly due to both an increase in the number of units sold and higher materials and transportation costs. Royalty expense increased 36.6% due to higher gross sales.

Operating expenses increased by 56.0% compared to the previous year. This is mainly due to the increase in staff and other personnel costs, as well as consultancy costs. Each of these factors is attributable to the higher order volume and expansion activities required by the Technology Investment Agreement (“TIA”). The increase in personnel costs included $ 1.2 million in stock-based compensation costs and $ 338,000 in general salary and staff increases. Sales and marketing expenses decreased due to a reduction in marketing samples and bonus spending.

Operating income was $ 8.0 million compared to operating income of $ 10.3 million for the same period last year. The decrease is attributable to the decrease in gross margins mentioned above and to an increase in general and administrative expenses.

Interest and other income (losses) amounted to ($ 319 thousand) for the quarter ended September 30, 2021, compared to ($ 87 thousand) for the same period last year, mainly due to a decrease in investment balances arising from unrealized losses from the previous quarter. Interest expense for the third quarter of 2021 increased by approximately 46.4% compared to the same period last year. The increase is primarily attributable to imputed interest associated with amounts payable for the repurchase of preferred shares of former shareholders.

Comparison of the nine months ended September 30, 2021 and September 30, 2020

Domestic sales, including sales to the U.S. government, represented 95.3% and 86.8% of revenue for the nine months ended September 30, 2021 and 2020, respectively. Domestic revenues increased 184.0% mainly due to higher average prices and higher volumes mainly due to US government orders. Domestic unit sales increased 160.9%. National unit sales represented 92.7% of total unit sales for the nine-month period ended September 30, 2021. National non-government unit sales increased by approximately 36.6%. International revenues fell by about 8.6%. Our international orders may be subject to significant fluctuations over time and may not reflect full year sales. Overall unit sales increased 129.9%. Due to the product mix and customer base for the nine month period 2021, our average net income per unit sold increased 12.5%. Aside from the US government, the increase in our sales is primarily attributable to existing customers as well as several new, smaller customers who do not operate as distributors.

The cost of manufactured goods increased 137.1% mainly due to an increase in the total number of units sold as well as higher inventory carrying costs. Royalty expense increased 123.3% due to higher gross sales.

An 83.6% increase in operating expenses compared to the previous year is mainly attributable to an increase in headcount, personnel expenses and consulting fees. These increases are due to the growth in order volume and expansion activities required by TIA. The increase in personnel costs included bonuses and retroactive salary increases of approximately $ 650,000 for Named Executive Officers, $ 2.2 million in bonuses from other employees and $ 2.5 million in bonuses. stock-based compensation expense. Selling and marketing expenses increased due to employee bonuses and an increase in GPO expenses based on increased sales.

Operating profit was $ 44.1 million compared to $ 11.8 million for the same period last year. The increase is due to the increase in net revenues and the resulting gross margin.

Interest and other income (losses) increased 15.1% for the nine-month period ended September 30, 2021 compared to the same period last year, primarily due to unrealized gains on our investments. Interest expense for the first nine months of 2021 increased by approximately 63.0% compared to the same period last year. The increase is primarily attributable to imputed interest associated with amounts payable for the repurchase of preferred shares of former shareholders.

The recognition in 2021 of the gain from the forgiveness of the PPP loan and the release in 2020 of the valuation allowance for approximately $ 1.8 million of deferred tax assets affect the comparability of the nine-month periods ended. September 30, 2021 and 2020.

Further details regarding the results of operations and other matters are available in Retractable’s Form 10-Q filed on November 15, 2021 with the United States Securities and Exchange Commission.

ABOUT RETRACTABLE

Retractable manufactures and markets the VanishPoint ® and Patient Safe ® medical safety products and the EasyPoint ® needle. VanishPoint ® Syringe, Blood Collection and IV Catheter products are designed to prevent needle stick injuries and product reuse by retracting the needle directly from the patient, effectively reducing exposure to the contaminated needle . Patient Safe ® syringes are specially designed to reduce the risk of blood infections resulting from contamination of the catheter tip. The EasyPoint ® is a retractable needle that can be used with Luer Lock syringes, Luer Slip syringes and pre-filled syringes for giving injections. The EasyPoint ® needle can also be used for aspirating fluids and for drawing blood. Retractable’s products are distributed by various specialized and general distributors.

For more information on Retractable, visit its website at www.retractable.com.

The forward-looking statements contained in this press release are made in accordance with 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 these forward-looking statements are correct. However, Retractable cannot guarantee that such expectations will be realized. Actual future performance could differ materially from these statements.

Factors that could cause or contribute to such differences include, but are not limited to: the impact of COVID-19 on all facets of logistics and operations, as well as costs, Retractable’s ability to achieve improvements in capital and to increase domestic production in response to government agreements, potential tariffs, Retractable’s ability to maintain liquidity; Retractable’s patent protection continued; Retractable’s ability to maintain favorable manufacturing and supplier agreements and relationships with third parties; foreign trade risk; Retractable’s ability to access the market; production costs; the impact of major market players in the supply of devices to the security market; and other risks and uncertainties which are detailed from time to time in Retractable’s periodic reports filed with the United States Securities and Exchange Commission.

View source version on businesswire.com:https://www.businesswire.com/news/home/20211116006221/en/

CONTACT: Retractable Technologies, Inc.

John W. Fort III, 888-806-2626 or 972-294-1010

Vice-President, Chief Financial Officer and Chief Accounting Officer

KEYWORD: UNITED STATES NORTH AMERICA TEXAS

INDUSTRY KEYWORD: MEDICAL SUPPLIES HEALTH

SOURCE: Retractable Technologies, Inc.

Copyright Business Wire 2021.

PUB: 11/16/2021 12:58 / DISC: 11/16/2021 12:58

http://www.businesswire.com/news/home/20211116006221/en


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