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Retractable Technologies, Inc. (NYSE MKT: RVP) reports the following results of operations for the second quarter, and the first half, of 2013:
Comparison of Three Months Ended June 30, 2013 and June 30, 2012
Domestic sales accounted for 69.0% and 77.9% of the revenues for the three months ended June 30, 2013 and 2012, respectively. Domestic revenues decreased 29.9% principally due to lower average selling prices and lower volumes. Domestic unit sales decreased 18.7% due to decreased sales of the 1mL syringe. Domestic unit sales were 55.6% of total unit sales for the three months ended June 30, 2013. International revenue and unit sales increased 10.8% and 15.6%, respectively, due to higher South American sales. Overall unit sales decreased 6.3%.
Gross profit decreased 47.8% primarily due to lower average domestic sales volume and lower domestic sales prices. The average cost of manufactured product sold per unit increased by 3.5% principally due to reducing capitalized cost of inventory. Gross profit as a percentage of net sales was 25.2% in the three months ended June 30, 2013 as compared to 38.2% in 2012 due to lower average sales prices. Profit margins can fluctuate depending upon, among other things, the cost of manufactured product and the capitalized cost of product recorded in inventory, as well as product sales mix.
Operating expenses increased 6.8% or $263 thousand. The principal cause of the increase was the Medical Device Excise Tax of $234 thousand.
Our operating loss was $2.4 million compared to an operating loss for the same period last year of $532 thousand due primarily to lower gross profit and higher operating expenses.
Our effective tax rate on the net loss before income taxes was (0.1)% and (2.4)% for the three months ended June 30, 2013 and June 30, 2012, respectively.
Comparison of Six Months Ended June 30, 2013 and June 30, 2012
Domestic sales accounted for 74.6% and 79.1% of the revenues for the six months ended June 30, 2013 and 2012, respectively. Domestic revenues decreased 17.8% principally due to decreased average sales prices and lower volumes. Domestic unit sales decreased 6.3% due to lower sales of the 1mL and 3mL syringes. Domestic unit sales were 63.0% of total unit sales for the six months ended June 30, 2013. International revenues and unit sales increased 6.0% and 5.9%, respectively due to higher South American sales. Overall unit sales decreased 2.1%.