In the three months ended March 31, 2011, Litigation settlements, net reflects cash proceeds of $2.0 million from Hospira less royalty expense of $100 thousand.
Our effective tax rate on the net income (loss) before income taxes was 1.2% and 2.0% for the three months ended March 31, 2012 and March 31, 2011, respectively.
Discussion of Balance Sheet and Statement of Cash Flow Items
Our balance sheet remains strong with cash making up 53.3% of total assets. Working capital was $29.3 million at March 31, 2012, a decrease of $515 thousand from December 31, 2011.Finished goods inventory decreased 20.2% since December 31, 2011. Approximately $146 thousand in cash flow in the first quarter of 2012 was provided by operating activities. Uses of cash were primarily for repayments of long-term debt and purchase of fixed assets. Retractable manufactures and markets VanishPoint ® and Patient Safe ® safety medical products. 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. Retractable's products are distributed by various specialty and general line distributors. For more information on Retractable, visit our website 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 our current views with respect to future events. We believe that the expectations reflected in such forward-looking statements are accurate. However, we cannot assure you that such expectations will materialize. Our actual future performance could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain liquidity; our maintenance of patent protection; the impact of current litigation; our ability to maintain favorable supplier arrangements and relationships; our ability to quickly increase capacity in response to an increase in demand; our ability to access the market; our ability to maintain or lower production costs; our ability to continue to finance research and development as well as operations and expansion of production; the increased interest of larger market players, specifically Becton, Dickinson and Company, 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.