Retractable Technologies, Inc. Results for the Periods Ended June 30, 2022

Rhea-AI Summary

Retractable Technologies, Inc. (NYSE American: RVP) reported a significant decline in operating income, reporting $7.7 million for the first half of 2022 compared to $36.1 million in 2021. The second quarter saw an operating loss of $2.1 million, down from a profit of $12.7 million in 2021. Total net sales fell to $14.3 million for Q2 2022 and $59.1 million for the first half, mainly due to the absence of orders from the U.S. government, although international sales showed a notable increase. The company is uncertain about future orders from government contacts.

Positive

• International sales showed a 97.5% increase, indicating strong demand in international markets.
• Sales to non-U.S. government domestic customers were at the highest level in two years prior to the pandemic.

Negative

• Operating income dropped significantly, with a loss of $2.1 million in Q2 2022 compared to a profit of $12.7 million in Q2 2021.
• Total net sales decreased by over 66% for Q2 2022 compared to the same period in 2021, significantly impacting revenue.
• Domestic unit sales decreased 79.8% due to the lack of U.S. government orders.

LITTLE ELM, Texas--(BUSINESS WIRE)-- Retractable Technologies, Inc. (NYSE American: RVP) reports that its operating income was $7.7 million for the first six months of 2022 and that it had an operating loss of $2.1 million for the second quarter of 2022, as compared to an operating income for the same periods last year of $36.1 million for the first six months of 2021 and an operating income of $12.7 million for the second quarter of 2021. Total net sales were $14.3 million for the three months ended June 30, 2022 and $59.1 million for the six months ended June 30, 2022. In comparison, total net sales were $42.5 million for the three months ended June 30, 2021 and $92.6 million for the six months ended June 30, 2021. The differences in the revenues are largely due to the lack of second quarter sales to the U.S. government, offset by higher international sales. Although total revenues for the three and six months ended June 30, 2022 were significantly lower than the same periods in the prior year, sales to non-U.S. government domestic customers for both the first and second quarters of 2022 were higher than any quarter in the two years immediately prior to the COVID-19 pandemic.

While Retractable continues to work with its contacts at the U.S. Department of Health and Human Services, additional orders are uncertain.

International sales increased significantly in the periods ended June 30, 2022, with additional international orders accepted but delayed as of June 30, 2022 due to recent and temporary closures in China as a result of COVID-19 measures.

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 second 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 June 30,
(Amounts in millions)		2022			2021			2020			2019			2018
U.S. sales (excluding U.S. government)		$	9.5		$	12.7		$	9.4		$	7.8		$	6.3
Sales to U.S. government			—			27.4			—			—			—
North and South America sales (excluding U.S.)			4.3			1.5			2.0			1.2			0.8
Other international sales			0.5			0.9			0.2			0.6			0.4
Total sales		$	14.3		$	42.5		$	11.6		$	9.6		$	7.5

Retractable reports the following results of operations for the three and six months ended June 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 August 15, 2022 with the U.S Securities and Exchange Commission.

Comparison of Three Months Ended June 30, 2022 and June 30, 2021

Domestic sales accounted for 66.7% and 94.3% of the revenues for the three months ended June 30, 2022 and 2021, respectively. Domestic revenues decreased 76.1% principally due to the lack of second quarter sales to the U.S. government. Domestic unit sales decreased 79.8%. Domestic unit sales were 51.4% of total unit sales for the three months ended June 30, 2022. International revenues increased approximately 97.5% predominately due to international vaccination campaigns. Overall unit sales decreased 64.1%.

Cost of manufactured product decreased 51.7% principally due to lower volumes. Royalty expense decreased 65.1% due to decreased gross sales.

Operating expenses decreased 18.1% from the prior year. This is substantially due to lower consulting costs.

The loss from operations was $2.1 million compared to income from operations of $12.7 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 $3.9 million due to the decreased market values of those securities.

The benefit for income taxes was $1.6 million for the second quarter of 2022 in comparison to the provision for income taxes of $3.5 million in the second quarter of 2021.

Comparison of Six Months Ended June 30, 2022 and June 30, 2021

Domestic sales, including sales to the U.S. government, accounted for 60.1% and 96.0% of the revenues for the six months ended June 30, 2022 and 2021, respectively. Domestic revenues decreased 60.0% principally due to lower sales to the U.S. government. Domestic unit sales decreased 63.0%. Domestic unit sales were 46.5% of total unit sales for the six months ended June 30, 2022. Domestic unit sales excluding the U.S. government sales decreased approximately 32.3%. International revenues increased approximately 529.1% predominately due to first-quarter purchases from a non-governmental humanitarian organization for international vaccination campaigns. Overall unit sales decreased 25.5%.

Cost of manufactured product decreased 7.7% principally due to lower volumes. Royalty expense decreased 37.1% due to decreased gross sales.

Operating expenses were largely unchanged from the prior year.

Income from operations was $7.7 million compared to income from operations of $36.1 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 $572 thousand due to the decreased market values of those securities.

The provision for income taxes decreased to $4.2 million for the first six months of 2022 from $10.1 million in the first six 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 COVID-19 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005702/en/

Retractable Technologies, Inc.

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

Vice President, Chief Financial Officer, and Chief Accounting Officer

Source: Retractable Technologies, Inc.

FAQ

What were Retractable Technologies' operating results for Q2 2022?

Retractable Technologies reported an operating loss of $2.1 million for Q2 2022, down from a profit of $12.7 million in Q2 2021.

How did net sales for Retractable Technologies change in the first half of 2022?

Total net sales for the first half of 2022 were $59.1 million, a decrease from $92.6 million in the prior year.

How did international sales perform for Retractable Technologies in 2022?

International sales increased significantly, showing a 97.5% growth compared to the same quarter in 2021.

What factors contributed to the decline in Retractable Technologies' domestic sales?

The decline was largely due to the lack of second-quarter sales to the U.S. government, with domestic revenues decreasing 76.1%.

What is the stock symbol for Retractable Technologies?

The stock symbol for Retractable Technologies is RVP.