Retractable Technologies Inc 10-Q for FY2022 Q1

Retractable Technologies Inc (RVP)

10-Q 2022-05-16 For: 2022-03-31

Added on April 06, 2026

About this 10-Q

Retractable Technologies Inc filed this 10-Q on May 16, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $44.74M; down 10.6% from $50.07M a year earlier
Net income: $7.62M; down 57.6% from net income of $17.96M a year earlier
Diluted EPS: $0.23; down 55.8% from $0.52 a year earlier

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Texas		75-2599762
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

511 Lobo Lane
Little Elm, Texas		75068-5295
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	RVP	NYSE American


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐


	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	CONDENSED BALANCE SHEETS	1
	CONDENSED STATEMENTS OF OPERATIONS	2
	CONDENSED STATEMENTS OF CASH FLOWS	3
	CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY	4
	NOTES TO CONDENSED FINANCIAL STATEMENTS	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

	PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6.	Exhibits	23
SIGNATURES		24


	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	43,110,346	$	29,162,913
Accounts receivable, net		19,527,398		34,859,505
Receivable from Technology Investment Agreement (TIA)		5,542,048		5,924,136
Investments in debt and equity securities, at fair value		18,703,523		13,268,986
Inventories		18,857,009		20,589,919
Other current assets		759,597		701,969
Total current assets		106,499,921		104,507,428

Property, plant, and equipment, net		92,197,851		87,925,651
Deferred tax asset		8,794,315		13,865,834
Other assets		5,674		5,675
Total assets	$	207,497,761	$	206,304,588

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,291,544	$	20,404,573
Current portion of long-term debt		292,743		289,114
Accrued compensation		855,743		1,056,656
Dividends payable		1,417,937		1,438,371
Accrued royalties to shareholder		2,568,191		3,450,684
Other accrued liabilities		4,330,151		3,725,527
Income taxes payable		5,674,204		4,959,878
Total current liabilities		28,430,513		35,324,803

Other long-term liabilities		72,005,475		69,996,330
Long-term debt, net of current maturities		1,739,314		1,814,194
Total liabilities		102,175,302		107,135,327

Commitments and contingencies – see Note 8

Stockholders’ equity:
Preferred stock, $1 par value:
Class B; authorized: 5,000,000 shares
Series II, Class B		156,200		156,200
Series III, Class B		76,245		76,245
Common Stock, no par value		—		—
Additional paid-in capital		64,167,466		63,024,888
Retained earnings		48,740,773		41,182,429
Common stock in treasury – at cost		(7,818,225)		(5,270,501)
Total stockholders’ equity		105,322,459		99,169,261
Total liabilities and stockholders’ equity	$	207,497,761	$	206,304,588


	Three Months		Three Months
	March 31, 2022		March 31, 2021
Sales, net	$	44,742,350	$	50,073,725
Cost of sales:
Cost of manufactured product		26,606,238		19,157,341
Royalty expense to shareholder		2,568,191		2,921,597
Total cost of sales		29,174,429		22,078,938
Gross profit		15,567,921		27,994,787

Operating expenses:
Sales and marketing		1,017,884		931,231
Research and development		95,538		149,283
General and administrative		4,728,481		3,493,236
Total operating expenses		5,841,903		4,573,750
Income from operations		9,726,018		23,421,037

Other income - TIA		355,089		—
Unrealized gain on equity securities		3,331,109		1,103,972
Interest and other income		34,912		90,807
Interest expense		(47,105)		(65,095)
Income before income taxes		13,400,023		24,550,721
Provision for income taxes		5,783,568		6,594,837
Net income		7,616,455		17,955,884
Preferred Stock dividend requirements		(58,111)		(64,938)
Net income applicable to common shareholders	$	7,558,344	$	17,890,946

Basic earnings per share	$	0.23	$	0.53

Diluted earnings per share	$	0.23	$	0.52

Weighted average common shares outstanding:
Basic		33,265,453		33,967,771
Diluted		33,594,142		34,378,683


	Three Months		Three Months
	Ended		Ended
	March 31, 2022		March 31, 2021
Cash flows from operating activities
Net income	$	7,616,455	$	17,955,884
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		696,846		210,683
Net unrealized gain on investments		(3,331,109)		(1,103,972)
Realized loss on investments		38,378		—
Accreted interest		21,097		32,277
Deferred taxes		5,071,519		(1,738,795)
Provision for doubtful accounts		—		150,000
Share-based compensation		1,132,078		—
(Increase) decrease in operating assets:
Accounts receivable		15,332,107		(7,904,815)
Inventories		1,732,909		1,288,595
Other current assets		(57,627)		(129,173)
Other assets		—		12,844
Increase (decrease) in operating liabilities:
Accounts payable		(7,113,028)		(1,952,858)
Accrued liabilities		(439,435)		1,433,224
Income taxes payable		714,326		8,333,638
Net cash provided by operating activities		21,414,516		16,587,532

Cash flows from investing activities
Purchase of property, plant, and equipment		(4,969,045)		(12,611,028)
Purchase of debt and equity securities		(4,066,575)		(4,578,082)
Proceeds from the sales of debt and equity securities		1,924,769		—
Net cash used by investing activities		(7,110,851)		(17,189,110)

Cash flows from financing activities
Repayments of long-term debt		(71,252)		(68,128)
Proceeds from Technology Investment Agreement (TIA)		3,431,899		15,235,812
Proceeds from the exercise of stock options		10,500		43,350
Payment of preferred stock redemption price payable		—		(101,250)
Payment of preferred stock repurchase payable		(1,101,110)		(1,101,110)
Payment of preferred stock dividends		(78,545)		(49,091)
Repurchase of common stock		(2,547,724)		—
Net cash provided (used) by financing activities		(356,232)		13,959,583

Net increase in cash and cash equivalents		13,947,433		13,358,005
Cash and cash equivalents at:
Beginning of period		29,162,913		17,566,682
End of period	$	43,110,346	$	30,924,687

Supplemental schedule of cash flow information:
Interest paid	$	26,009	$	32,818

Supplemental schedule of noncash investing and financing activities:
Preferred dividends declared, not paid	$	1,417,937	$	39,050
Conversion of preferred stock to common stock	$	—	$	5,000
Amounts receivable under Technology Investment Agreement (TIA)	$	5,542,048	$	5,477,603
Preferred stock repurchase payable	$	1,058,935	$	1,098,282


			Series II		Series III
			Class B		Class B		Additional				Treasury
	Common		Preferred		Preferred		Paid-In		Retained		Stock –
	Stock		Stock		Stock		Capital		Earnings		at cost		Total
Balance at December 31, 2021	$	—	$	156,200	$	76,245	$	63,024,888	$	41,182,429	$	(5,270,501)	$	99,169,261
Stock Option Exercises		—		—		—		10,500		—		—		10,500
Dividends		—		—		—		—		(58,111)		—		(58,111)
Stock Option Compensation		—		—		—		1,132,078		—		—		1,132,078
Repurchase of Common Stock – at cost		—		—		—		—		—		(2,547,724)		(2,547,724)
Net Income		—		—		—		—		7,616,455		—		7,616,455
Balance at March 31, 2022	$	—	$	156,200	$	76,245	$	64,167,466	$	48,740,773	$	(7,818,225)	$	105,322,459


Production equipment		3 to 13 years
Office furniture and equipment		3 to 10 years
Buildings		39 years
Building improvements		15 years


	Three Months Ended			Three Months Ended
	March 31, 2022			March 31, 2021
Number of significant customers		3			1
Aggregate dollar amount of net sales to significant customers	$	33.8	million	$	37.8	million
Percentage of net sales to significant customers		75.6%			75.5%


	For the three months ended March 31, 2022:
			Blood						Total
			Collection		EasyPoint^®		Other		Product
Geographic Segment	Syringes		Products		Needles		Products		Sales
U.S. sales (excluding U.S. government)	$	8,395,303	$	1,077,695	$	729,970	$	9,874	$	10,212,842
Sales to U.S. government		15,731,136		—		—		—		15,731,136
North and South America sales (excluding U.S.)		11,074,246		—		2,608		274		11,077,128
Other international sales		7,505,438		211,368		2,888		1,550		7,721,244
Total	$	42,706,123	$	1,289,063	$	735,466	$	11,698	$	44,742,350


	March 31, 2022		December 31, 2021
Raw materials	$	4,114,611	$	4,402,828
Finished goods		14,742,398		16,187,091
	$	18,857,009	$	20,589,919


	March 31, 2022
	Level 1		Level 2		Level 3		Total
Equity securities	$	16,665,257	$	—	$	—	$	16,665,257
Mutual funds and exchange traded funds		2,038,266		—		—		2,038,266
	$	18,703,523	$	—	$	—	$	18,703,523


	March 31, 2022
			Gross Unrealized				Aggregate
	Cost		Gains		Losses		Fair Value
Equity securities	$	10,765,378	$	5,899,879	$	—	$	16,665,257
Mutual funds and exchange traded funds		2,094,182		—		(55,916)		2,038,266
	$	12,859,560	$	5,899,879	$	(55,916)	$	18,703,523


	March 31, 2022		December 31, 2021
Prepayments from customers	$	2,470,949	$	2,339,530
Accrued property taxes		292,741		—
Accrued professional fees		290,828		185,515
Current portion – preferred stock repurchase		1,058,935		1,098,282
Other accrued expenses		216,698		102,200
Total	$	4,330,151	$	3,725,527


Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 – January 31, 2022	136,734	5.95	136,734	3,923,659
February 1 – February 28, 2022	160,076	4.88	160,076	3,142,728
March 1 – March 31, 2022	202,997	4.64	202,997	2,201,367
Total	499,807	5.07	499,807


Exhibit No.		Description of Document

31.1		Certification of Principal Executive Officer

31.2		Certification of Principal Financial Officer

32		Certification Pursuant to 18 U.S.C. Section 1350

101		The following materials from Retractable Technologies, Inc.’s Form 10-Q for the quarter ended March 31, 2022, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets as of March 31, 2022 and December 31, 2021, (ii) Condensed Statements of Operations for the three months ended March 31, 2022 and 2021, (iii) Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021, (iv) Condensed Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021; and (v) Notes to Condensed Financial Statements

104		Interactive Data File (formatted Inline XBRL and contained in Exhibit 101)

DATE: May 16, 2022	RETRACTABLE TECHNOLOGIES, INC.
	(Registrant)


	By:	/s/ John W. Fort III
		JOHN W. FORT III VICE PRESIDENT, CHIEF FINANCIAL OFFICER, AND CHIEF ACCOUNTING OFFICER


	March 31, 2022		December 31, 2021
Technology Investment Agreement (TIA)	$	72,005,475	$	68,955,664
Stock repurchase		—		1,040,666
Total	$	72,005,475	$	69,996,330


	March 31, 2022		December 31, 2021
Long-lived assets
U.S.	$	87,678,525	$	83,695,991
International		4,519,326		4,229,660
Total	$	92,197,851	$	87,925,651

Date: May 16, 2022

/s/ Thomas J. Shaw
THOMAS J. SHAW
PRESIDENT, CHAIRMAN, AND
CHIEF EXECUTIVE OFFICER

Date: May 16, 2022

/s/ John W. Fort III
JOHN W. FORT III
VICE PRESIDENT,
CHIEF FINANCIAL OFFICER,
AND CHIEF ACCOUNTING OFFICER

Date:	May 16, 2022	/s/ Thomas J. Shaw

		THOMAS J. SHAW PRESIDENT, CHAIRMAN, AND CHIEF EXECUTIVE OFFICER

		/s/ John W. Fort III

		JOHN W. FORT III VICE PRESIDENT, CHIEF FINANCIAL OFFICER, AND CHIEF ACCOUNTING OFFICER