Retractable Technologies, Inc. (NYSE American: RVP) reports that
its operating income was $7.0 million for the first nine months of
2022 and that it had an operating loss of $691 thousand for the
third quarter of 2022, as compared to an operating income for the
same periods last year of $44.1 million for the first nine months
of 2021 and an operating income of $8.0 million for the third
quarter of 2021. Total net sales were $23.1 million for the three
months ended September 30, 2022 and $82.1 million for the nine
months ended September 30, 2022. In comparison, total net sales
were $36.4 million for the three months ended September 30, 2021
and $129.0 million for the nine months ended September 30, 2021.
The differences in the revenues are largely due to the lack of
second and third quarter sales to the U.S. government, offset by
much higher international sales. Although total revenues for the
three months ended September 30, 2022 were significantly lower than
the same periods in the prior year, both domestic and international
sales were higher than any quarter ended September 30 in 2018-2019
prior to the COVID-19 pandemic.
International sales increased significantly in the periods ended
September 30, 2022 due to international vaccination campaigns.
International unit sales were 71% of total unit sales for the third
quarter of 2022. Nearly a third of such international unit orders
would have been shipped in the second quarter of 2022 but were
delayed due to the closure of the Shanghai ports in that
quarter.
Retractable experienced significant growth in 2021 and late 2020
due to material orders from the U.S. government to supply syringes
for COVID-19 vaccination efforts. Such orders included payment for
certain freight charges as well. As a result, comparability to
revenues and expenses in recent years may be challenging. Below are
third quarter revenue figures from 2018 – 2022, as obtained from
Retractable’s Quarterly Reports on Form 10-Q as filed with the U.S
Securities and Exchange Commission.
Three Months Ended September
30,
(Amounts in millions)
2022
2021
2020
2019
2018
U.S. sales (excluding U.S. government)
$
9.2
$
15.7
$
12.6
$
9.0
$
8.8
Sales to U.S. government
—
18.4
12.9
—
—
North and South America sales (excluding
U.S.)
9.8
0.7
1.3
2.4
0.8
Other international sales
4.0
1.6
0.3
0.2
0.3
Total sales
$
23.0
$
36.4
$
27.1
$
11.6
$
9.9
Retractable reports the following results of operations for the
three and nine months ended September 30, 2022 and 2021,
respectively. Further details concerning the results of operations,
as well as other matters, are available in Retractable’s Form 10-Q
filed on November 14, 2022 with the U.S Securities and Exchange
Commission.
Comparison of Three Months Ended September
30, 2022 and September 30, 2021
Domestic sales accounted for 39.9% and 93.7% of the revenues for
the three months ended September 30, 2022 and 2021, respectively.
Domestic revenues decreased 73.0% principally due to the lack of
third quarter sales to the U.S. government. Domestic unit sales
decreased 71.6%. Domestic unit sales were 29.0% of total unit sales
for the three months ended September 30, 2022. International
revenues increased approximately 507.4% predominantly due to
international vaccination campaigns. Overall unit sales decreased
11.3%. There is uncertainty as to the timing of future
international orders. The revenues on a per-unit basis in the
international market are significantly lower than in the U.S.
market. As a result, increases in international orders and unit
sales have the potential to lower our overall revenues on a
per-unit basis, as well as our profit margins.
Cost of manufactured product decreased 18.5% principally due to
lower volumes. Royalty expense decreased 35.2% due to decreased
gross sales.
Operating expenses were largely unchanged from the prior
year.
The loss from operations was $691 thousand compared to income
from operations of $8.0 million for the same period last year. The
decrease was due to an overall decrease in revenues and because
per-unit costs have risen with lower production levels.
The unrealized loss on equity securities was $615 thousand due
to the decreased market values of those securities. Interest
expense for the third quarter of 2022 decreased by approximately
23.8% from the same period in the prior year due to less imputed
interest associated with the stock exchanges discussed in Note 12
of the financial statements.
The benefit for income taxes was $5.8 million for the third
quarter of 2022 in comparison to the provision for income taxes of
$1.1 million in the third quarter of 2021.
Comparison of Nine Months Ended September
30, 2022 and September 30, 2021
Domestic sales, including sales to the U.S. government,
accounted for 54.4% and 95.3% of the revenues for the nine months
ended September 30, 2022 and 2021, respectively. Domestic revenues
decreased 63.6% principally due to lower sales to the U.S.
government. Domestic unit sales decreased 65.5%. Domestic unit
sales were 40.7% of total unit sales for the nine months ended
September 30, 2022. Domestic unit sales excluding the U.S.
government sales decreased approximately 38.2%. International
revenues increased approximately 520.9% predominantly due to
international vaccination campaigns. Overall unit sales decreased
21.4%. There is uncertainty as to the timing of future
international orders. The revenues on a per-unit basis in the
international market are significantly lower than in the U.S.
market. As a result, increases in international orders and unit
sales have the potential to lower our overall revenues on a
per-unit basis, as well as our profit margins.
Cost of manufactured product decreased 11.4% principally due to
lower volumes. Royalty expense decreased 36.5% due to decreased
gross sales.
Operating expenses were largely unchanged from the prior
year.
Income from operations was $7.0 million compared to income from
operations of $44.1 million for the same period last year. The
decrease was due to an overall decrease in revenues and because
per-unit costs have risen with lower production levels.
The unrealized loss on equity securities was $1.2 million due to
the decreased market values of those securities. Interest expense
for the first nine months of 2022 decreased by approximately 27.2%
from the same period in the prior year due to less imputed interest
associated with the stock exchanges discussed in Note 12 of the
financial statements.
The first nine months of 2022 reflected a $1.5 million benefit
for income taxes as opposed to a provision of $11.1 million for the
first nine months of 2021.
ABOUT RETRACTABLE
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 line distributors.
For 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 such statements.
Factors that could cause or contribute to such differences
include, but are not limited to: the impact of supply chain and
transportation delays on all facets of logistics and operations, as
well as costs, Retractable’s ability to scale up production volumes
in response to an increase 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20221114006088/en/
Retractable Technologies, Inc. John W. Fort III, 888-806-2626 or
972-294-1010 Vice President, Chief Financial Officer, and Chief
Accounting Officer
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