Retractable Technologies, Inc. Announces Record 2006 Revenues of $25.3 Million on 32.6% Unit Sales Increase
LITTLE ELM, Texas–April 10, 2007–Retractable Technologies, Inc. (AMEX:RVP), a leading maker of safety needle devices, today reported record total revenues of $25.3 million for the year ended December 31, 2006, an increase of 4.5% over 2005. Unit sales rose 32.6%. These gains were due largely to higher sales volumes in the international and alternate care markets, which includes nursing homes. Total sales in 2006 also included $4.4 million in reimbursed discounts compared with $3.1 million in the previous year. This reimbursement program, which ended in 2006, stemmed from the Company’s 2003 legal settlement with a large hospital group purchasing organization (GPO).
Despite these improvements, the loss applicable to common shareholders for 2006 widened to $5.3 million, compared with $2.7 million in 2005. This resulted from significantly higher operating expenses, including sales and marketing expenses as well as general and administrative costs. Sales and marketing expenses, including compensation costs and travel and entertainment, rose as the Company continued to build its national sales force. General and administrative costs increased mainly because of higher legal costs, compensation expense, consulting costs, and taxes other than income taxes. As a result of these developments, the gross profit margin declined to 29.8% in 2006 from 36.3% the year before.
The provision for income tax benefits of $1.3 million consists primarily of federal taxes subject to carry back provisions. State income taxes are also subject to the various states’ carry back rules.
Further details are available on Form 10-K filed on April 2, 2007 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 t the Company’s ability to maintain liquidity; maintenance of patent protection; the impact of current and potential litigation; the impact of dramatic increases in demand; the Company’s ability to maintain and quickly increase its production capacity in the event of a dramatic increase in demand; the Company’s ability to access the market; the Company’s ability to decrease production costs; the Company’s 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 and Company, Inc., 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.
BALANCE SHEETS
December 31,
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2006 2005
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ASSETS
Current assets:
Cash and cash equivalents $46,814,689 $52,513,935
Accounts receivable 1,956,756 3,404,908
Inventories, net 6,385,780 3,297,726
Income taxes receivable 2,355,732 561,062
Current deferred tax asset - 1,245,508
Other current assets 267,707 462,150
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Total current assets 57,780,664 61,485,289
Property, plant, and equipment, net 12,212,140 11,925,976
Intangible assets, net 279,846 316,926
Other assets 522,294 27,334
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Total assets $70,794,944 $73,755,525
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,247,630 $2,345,613
Current portion of long-term debt 261,905 295,417
Accrued compensation 472,573 388,726
Marketing fees payable 1,419,760 1,419,760
Accrued royalties to shareholder 2,755 540,888
Other accrued liabilities 440,253 467,812
Current deferred tax liability 45,697 -
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Total current liabilities 6,890,573 5,458,216
Long-term debt, net of current maturities 4,137,231 4,350,625
Long-term deferred tax liability 56,828 711,443
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Total liabilities 11,084,632 10,520,284
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Stockholders' equity:
Preferred Stock $1 par value:
Series I, Class B 164,000 171,000
Series II, Class B 224,700 255,200
Series III, Class B 135,245 135,245
Series IV, Class B 553,500 556,000
Series V, Class B 1,363,721 1,381,221
Common Stock - -
Additional paid-in capital 54,709,108 54,307,053
Retained earnings 2,560,038 6,429,522
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Total stockholders' equity 59,710,312 63,235,241
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Total liabilities and stockholders'
equity $70,794,944 $73,755,525
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RETRACTABLE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
Years Ended December 31,
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2006 2005 2004
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Sales, net $20,897,207 $21,156,666 $21,135,943
Reimbursed discounts 4,427,312 3,078,350 385,757
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Total sales 25,324,519 24,235,016 21,521,700
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Cost of Sales
Costs of manufactured product 15,684,450 13,713,675 14,564,404
Royalty expense to
shareholder 2,093,822 1,715,024 1,846,195
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Total cost of sales 17,778,272 15,428,699 16,410,599
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Gross profit 7,546,247 8,806,317 5,111,101
Operating expenses:
Sales and marketing 5,545,500 4,148,688 3,648,454
Research and development 958,798 934,209 626,941
General and administrative 7,756,647 6,600,133 8,834,527
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Total operating expenses 14,260,945 11,683,030 13,109,922
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Loss from operations (6,714,698) (2,876,713) (7,998,821)
Interest income 1,976,406 1,372,715 475,121
Interest expense, net (411,154) (339,688) (243,922)
Litigation settlements, net - - 74,635,362
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Net income (loss) before income
taxes (5,149,446) (1,843,686) 66,867,740
Provision (benefit) for income
taxes (1,279,962) (605,363) 12,176,345
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Net income (loss) (3,869,484) (1,238,323) 54,691,395
Preferred Stock dividend
requirements (1,451,321) (1,502,887) (1,993,516)
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Earnings (loss) applicable to
common shareholders (5,320,805) ($2,741,210) $52,697,879
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Earnings (loss) per share -basic ($0.23) ($0.12) $2.33
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Earnings (loss) per share
-diluted ($0.23) ($0.12) $2.08
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Weighted average common shares
outstanding 23,591,999 23,332,277 22,600,166
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Contact:
Retractable Technologies, Inc., Little Elm Investor Contact: Douglas W. Cowan, 888-806-2626 or 972-294-1010 Vice President and Chief Financial Officer rtifinancial@vanishpoint.com or Media Contact: Phillip L. Zweig, 212-490-0811 or 214-912-7415 (cell) Communications Director plzweig@aol.com
