RMS Medical Products Announces Record Quarterly Sales and Net Income

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- 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.

RMS Medical Logo (PRNewsfoto/RMS Medical Products)

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 
     $77,067 at June 30, 2018 and $77,067 at December 31, 2017

1,840,094

1,861,949

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 
     31, 2017

(344,204)

(344,204)

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

Three Months Ended

For the

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

Released August 6, 2018