RMS Medical Products Announces Record Quarterly Sales and Net Income

Published: Aug 06, 2018

 

- Net Sales for the quarter ended June 30, 2018 increased 17.6% over the same period last year
- Net Income increased to $475,723 or 10.6% of Net Sales
- Inaugural conference call August 7th at 9:00 AM ET

CHESTER, N.Y., Aug. 6, 2018 /PRNewswire/ -- Repro Med Systems, Inc. dba RMS Medical Products (OTCQX: REPR) today announced financial results for the second quarter ended June 30, 2018.

Net sales grew for the fifth consecutive quarter to $4.5 million, a 17.6% increase over the second quarter of 2017. The increase in net sales was driven by higher needle set sales, which we believe were bolstered by the FDA clearance on August 31, 2017, for the RMS "Integrated Catch-Up Freedom Syringe Driver Infusion System". Net sales during the period included approximately $0.3 million of revenue related to one-time sales to support the clinical activities of various pharmaceutical companies.

Gross profit grew to $2.7 million, a 19.3% increase over the second quarter of 2017 and a gross margin improvement of 80 basis points. The increase in gross profit and margin is principally the result of higher net sales.

Net income for the period increased to a record $475,723, or 10.6% of net sales, which compares with $148,472 reported during the second quarter of 2017. Higher net sales combined with improved gross profit on relatively flat operating expenses and a favorable tax rate change were principally responsible for the increase in profitability.

"Second quarter results were strong as RMS continues to grow market share within its core indications, as well as pursue new opportunities," stated Dan Goldberger, Chairman and interim President and CEO. "As we undergo the next phase of RMS's development, I want to assure all of our stakeholders that we will continue to pursue our mission to improve the quality of life of patients around the world through the design, development, and delivery of the highest quality innovative therapeutic solutions. Patient safety, product efficacy, respect for all of our stakeholders, customer service, and building shareholder value continue to be our highest priorities."

On July 26, 2018, the Company announced that RMS Medical Products' Board of Directors appointed Daniel Goldberger, Board Member, to the position of Chairman and interim President and Chief Executive Officer, replacing Andy Sealfon who will remain on the Board of Directors. Please reference the Company's recent press release and filings for background information.

Conference Call

The Company will host a conference call to discuss the second quarter 2018 financial results and business developments on Tuesday, August 7, 2018, at 9:00 AM ET. Please refer to the information below for conference call dial-in information and webcast registration:

Conference date: August 7, 2018, 9:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: RMS Medical Products (OTCQX: REPR) Second Quarter 2018 Results Call
Webcast Registration: Click Here

Following the live call, a replay will be available on the Company's website, www.rmsmedicalproducts.com, under "Investor Relations" for a period of one year.

About RMS Medical Products

The Company develops, manufactures and commercializes medical products used for home infusions and suctioning. The FREEDOM Syringe Infusion System currently includes the FREEDOM60® and FreedomEdge® Syringe Infusion Drivers, RMS Precision Flow Rate Tubing™ and RMS HIgH-Flo Subcutaneous Safety Needle Sets™. These devices are used for infusions administered in professional healthcare settings as well as at home. The Company's RES-Q-VAC® line of medical suctioning products is used by emergency medical service providers in addition to a variety of other healthcare providers. For more information about RMS Medical Products, please visit www.rmsmedicalproducts.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the term "believe" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission. The results of operations for the periods presented herein are not necessarily indicative of the results to be expected in the future.

 

                                                                                                                                  REPRO MED SYSTEMS, INC.

                                                                                                                                      BALANCE SHEETS


                                                                                                                                                                          June 30,               December 31,

                                                                                                                                                                                2018                      2017

                                                                                                                                                                         (Unaudited)
                                                                                                                                                                         ----------

                                                                                   ASSETS


    CURRENT ASSETS

    Cash and cash equivalents                                                                                                                                                         $3,421,186               $3,974,536

    Certificate of deposit (restricted cash)                                                                                                                                           1,504,818                        -

    Certificates of deposit                                                                                                                                                              159,462                  263,269

    Accounts receivable less allowance for doubtful accounts of                                                                                                                        1,840,094                1,861,949
                                                                                                               $77,067 at June 30, 2018 and $77,067 at December 31, 2017

    Inventory                                                                                                                                                                          1,718,294                1,658,681

    Prepaid expenses                                                                                                                                                                     255,888                  170,739
                                                                                                                                                                                         -------                  -------

    TOTAL CURRENT ASSETS                                                                                                                                                               8,899,742                7,929,174

    Property and equipment, net                                                                                                                                                          795,484                  836,283

    Patents, net of accumulated amortization of $220,340 and $203,768 at June 30, 2018 and December 31, 2017, respectively                                                               531,685                  483,821

    Other assets                                                                                                                                                                          31,582                   31,582
                                                                                                                                                                                          ------                   ------

    TOTAL ASSETS                                                                                                                                                                     $10,258,493               $9,280,860
                                                                                                                                                                                     ===========               ==========


                                                                    LIABILITIES AND STOCKHOLDERS' EQUITY


    CURRENT LIABILITIES

    Deferred capital gain - current                                                                                                                                                      $15,003                  $22,481

    Accounts payable                                                                                                                                                                     711,947                  454,398

    Accrued expenses                                                                                                                                                                     539,473                  658,060

    Accrued payroll and related taxes                                                                                                                                                    187,307                  334,903

    Accrued tax liability                                                                                                                                                                 91,488                  115,854

    TOTAL CURRENT LIABILITIES                                                                                                                                                          1,545,218                1,585,696

    Deferred capital gain - long term                                                                                                                                                          -                   3,762

    Deferred tax liability                                                                                                                                                                20,733                   21,675
                                                                                                                                                                                          ------                   ------

    TOTAL LIABILITIES                                                                                                                                                                  1,565,951                1,611,133
                                                                                                                                                                                       ---------                ---------


    STOCKHOLDERS' EQUITY

    Common stock, $0.01 par value; 75,000,000 shares authorized, 40,907,991 and 40,731,529 shares issued, 38,170,760 and 37,994,298 shares outstanding at
     June 30, 2018 and December 31, 2017, respectively                                                                                                                                   409,080                  407,315

    Additional paid-in capital                                                                                                                                                         4,358,618                4,216,718

    Retained earnings                                                                                                                                                                  4,269,048                3,389,898
                                                                                                                                                                                       ---------                ---------

                                                                                                                                                                                       9,036,746                8,013,931

    Less: Treasury stock, 2,737,231 shares at June 30, 2018 and December                                                                                                               (344,204)               (344,204)
         31, 2017


    TOTAL STOCKHOLDERS' EQUITY                                                                                                                                                         8,692,542                7,669,727
                                                                                                                                                                                       ---------                ---------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                       $10,258,493               $9,280,860
                                                                                                                                                                                     ===========               ==========

 

                                                                   REPRO MED SYSTEMS, INC.

                                                             STATEMENTS OF OPERATIONS (UNAUDITED)


                                              For the                           For the

                                        Three Months Ended                  Six months Ended

                                             June 30,                           June 30,
                                             --------                         --------

                                                      2018                    2017                       2018    2017
                                                                                                              ----


    NET SALES                                              $4,502,326                             $3,829,457           $8,535,550   $7,467,893

    Cost of goods sold                                      1,762,742                              1,532,158            3,330,142    3,068,639
                                                            ---------                              ---------            ---------    ---------

    Gross Profit                                            2,739,584                              2,297,299            5,205,408    4,399,254


    OPERATING EXPENSES

    Selling, general and administrative                     2,022,631                              2,005,336            3,902,900    3,780,445

    Research and development                                   23,963                                 24,840               33,811       70,746

    Depreciation and amortization                              75,978                                 76,781              150,556      151,662
                                                               ------                                 ------              -------      -------

    Total Operating Expenses                                2,122,572                              2,106,957            4,087,267    4,002,853
                                                            ---------                              ---------            ---------    ---------


    Net Operating Profit                                      617,012                                190,342            1,118,141      396,401


    Non-Operating (Expense)/Income

     (Loss)/Gain on currency exchange                        (19,838)                                34,670             (10,414)      51,744

    Interest and other income                                   5,501                                    421                6,116        2,066
                                                                -----                                    ---                -----        -----

    TOTAL OTHER (EXPENSE)/INCOME                             (14,337)                                35,091              (4,298)      53,810
                                                              -------                                 ------               ------       ------


    PROFIT BEFORE TAXES                                       602,675                                225,433            1,113,843      450,211


    Income Tax Expense                                      (126,952)                              (76,961)           (234,693)   (174,788)
                                                             --------                                -------             --------     --------


    NET INCOME                                               $475,723                               $148,472             $879,150     $275,423
                                                             ========                               ========             ========     ========


    NET INCOME PER SHARE


    Basic                                                       $0.01                         $            -               $0.02        $0.01
                                                                =====                       ===          ===               =====        =====

    Diluted                                                     $0.01                         $            -               $0.02        $0.01
                                                                =====                       ===          ===               =====        =====


    WEIGHTED AVERAGE NUMBER
    OF COMMON SHARES
    OUTSTANDING


    Basic                                                  38,100,040                             37,825,209           38,058,500   37,799,981
                                                           ==========                             ==========           ==========   ==========

    Diluted                                                38,872,998                             37,899,619           38,815,301   37,866,730
                                                           ==========                             ==========           ==========   ==========

 

                                                                          REPRO MED SYSTEMS, INC.

                                                                          STATEMENTS OF CASH FLOWS

                                                                                (UNAUDITED)


                                                                                                   For the Six Months Ended

                                                                                                           June 30,
                                                                                                           --------

                                                                                                                       2018             2017
                                                                                                                       ----             ----


    CASH FLOWS FROM OPERATING ACTIVITIES

    Net Income                                                                                                                 $879,150             $275,423

    Adjustments to reconcile net income to net cash provided by/(used in)
      operating activities:

    Amortization of deferred compensation cost                                                                                        -               7,000

    Stock based compensation expense                                                                                             94,170               41,479

    Depreciation and amortization                                                                                               150,556              151,662

    Deferred capital gain - building lease                                                                                     (11,240)            (11,240)

    Deferred taxes                                                                                                                (941)              12,937

    Provision for returns and doubtful accounts                                                                                       -             (5,603)

    Changes in operating assets and liabilities:

    Decrease/(Increase) in accounts receivable                                                                                   21,855            (597,699)

    (Increase)/Decrease in inventory                                                                                           (59,613)              94,177

    (Increase)/Decrease in prepaid expense and other assets                                                                    (85,149)              33,174

    Increase/(Decrease) in accounts payable                                                                                     257,549            (492,919)

    (Decrease)/Increase in accrued payroll and related taxes                                                                  (147,597)              71,113

    Decrease in accrued expense                                                                                               (118,587)            (12,207)

    (Decrease)/Increase in accrued tax liability                                                                               (24,366)             161,851
                                                                                                                                                    -------

    NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                                                                         955,787            (270,852)
                                                                                                                                -------             --------


    CASH FLOWS FROM INVESTING ACTIVITIES

    Payments for capital expenditures                                                                                          (93,185)            (89,437)

    Purchase of certificate of deposit (restricted cash)                                                                    (1,500,000)                   -

    Reinvested earnings on certificate of deposit (restricted cash)                                                             (4,818)                   -

    Payments for patents                                                                                                       (64,436)            (53,346)

    Proceeds/(reinvested earnings) from certificates of deposit                                                                 103,807              (1,196)
                                                                                                                                                     ------

    NET CASH USED IN INVESTING ACTIVITIES                                                                                   (1,558,632)           (143,979)
                                                                                                                             ----------             --------


    CASH FLOWS FROM FINANCING ACTIVITIES

    Stock issuances                                                                                                              51,250                    -

    Payment for cancelled shares                                                                                                (1,755)            (19,360)

    Purchase of treasury stock                                                                                                        -               (484)
                                                                                                                                                       ----

    NET CASH PROVIDED BY/(USED) IN FINANCING ACTIVITIES                                                                          49,495             (19,844)
                                                                                                                                 ------              -------


    NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                                 (553,350)           (434,675)

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                                            3,974,536            3,417,183
                                                                                                                              ---------            ---------

    CASH AND CASH EQUIVALENTS, END OF PERIOD                                                                                 $3,421,186           $2,982,508
                                                                                                                             ==========           ==========


    Supplemental Information

    Cash paid during the periods for:

    Interest                                                                                                              $           -        $          -
                                                                                                                        ===         ===      ===        ===

    Taxes                                                                                                                      $260,000         $          -
                                                                                                                               ========       ===        ===


    NON-CASH FINANCING AND INVESTING ACTIVITIES

    Issuance of common stock as compensation                                                                                    $67,500              $67,500
                                                                                                                                =======              =======

 

Contact
CG Capital
877.889.1972
investorrelations@cg.capital

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SOURCE RMS Medical Products

Company Codes: OTC-PINK:REPR, OTC-QX:REPR

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