IRVINE, Calif., Nov. 22, 2010 /PRNewswire-FirstCall/ -- Patient Safety Technologies, Inc. (the "Company", OTC Bulletin Board: PSTX) today announced financial results for its third quarter of 2010 and for the nine months ended September 30, 2010.
The Company reported third quarter revenues of $4.1 million compared to $978 thousand reported in the third quarter of 2009. Third quarter revenues included $2.5 million shipped to the Company's distributor under an inventory stocking purchase order that applies solely to 2010. Excluding the effect of these shipments, third quarter revenues were $1.7 million, an increase of 70% versus the prior year quarterly period.
Reported gross profit was $2.2 million in the third quarter compared to $438 thousand reported in the third quarter of 2009. Reported gross margins were 52.7% for the quarter, compared to 44.8% for the same period in 2009.During the third quarter of 2010, newly appointed management initiated a comprehensive restructuring program focused on a number of initiatives, including reducing operating expenses and achieving positive operating income and operating cash flow. As a direct result of this initiative, combined with the continued growth of the Company's revenues (both from hospital consumption and inventory stocking shipments to its distributor), the Company reported positive operating income of $925 thousand for the third quarter, the first period of reported positive operating income since the Company's acquisition of SurgiCount Medical in 2005. Additionally, excluding a payment of $2.4 million for past due amounts owed to the Company's manufacturing partner, cash flow from operations would have turned positive during the third quarter. "Our revenue growth, combined with the early success of our restructuring efforts have improved our financial strength and better positioned us to accelerate adoption of the Safety-Sponge® System and improve shareholder value. We will continue to proactively manage our cash burn while investing in our future growth," stated Brian E. Stewart, President and Chief Executive Officer. "During the third quarter, not only did we make great strides in our efforts to improve financial performance, but we also continued to add to our impressive list of user hospitals. Additionally, during the quarter we scheduled a number of new hospitals for implementation of the Safety-Sponge® System in the fourth quarter of 2010 and first quarter of 2011," continued Mr. Stewart.