RMS Medical Products Posts Strong Results for Three and Seven Months Ending September 30, 2017

Repro-Med Systems Inc.

Companies Mentioned:

Primary Exchange: OTCQX
Under the Symbol: REPR

RMS Medical Products Posts Strong Results for Three and Seven Months Ending September 30, 2017

Wednesday, November 15, 2017 6:00 PM

RMS Medical Products Reports Double-digit Percentage Growth in Net Sales for Three and Seven Months Ending September 30, 2017

CHESTER, NY / ACCESSWIRE / November 15, 2017 / Repro Med Systems, Inc., dba RMS Medical Products (OTCQX: REPR), today announced the latest financial results for the three and seven months ending September 30, 2017.

The Company changed its fiscal year ending February 28 to a calendar fiscal year ending December 31. This report encompasses the seven month period since the Company's fiscal year ending on February 28, 2017.

Highlights Three Months Ending September 30, 2017

19.5% Increase in Net Sales

  • $3,849,338 compared with $3,221,502 for the same period last year.
  • The increase was driven principally by domestic volume growth with increases in all major product categories.

17.0% Increase in Gross Profit

  • $2,378,730 compared with $2,032,944 for the same period last year.
  • The increase in the quarter was mostly driven by increased net sales, partially offset by higher production costs related to increased scrap during quality inspections as we continue to work to implement a nondestructive testing protocol. Additionally, we incurred slightly higher payroll costs as we built up inventory.

12.1% Decrease in Operating Expenses

  • $1,986,280 as compared with $2,260,540 for the same period last year.
  • Decreases in selling, general and administrative expenses were the result of a significant reduction in legal fees related to our litigation and FDA regulatory efforts compared with last year. We also had reductions in sales and marketing, driven by lower salary and related costs due to attrition in Europe and lower overall marketing spend due to timing. Offsetting these savings were increased costs in our regulatory department due to headcount to support our regulatory compliance requirements, the addition of our Chief Operating Officer, recruiting fees in Europe and an increase in bad debt expense related to an international customer.

Increase in Net Income

  • $265,826 net income compared to a net loss of $153,213 for the same period last year

Highlights Seven Months Ending September 30, 2017

26.0% Increase in Net Sales

  • $9,188,414 compared with $7,293,695 for the same period last year.
  • The increase is driven principally by organic growth with our existing customers both domestically and internationally. Part of the increase was the result of the backorders of $0.4 million from the period ended February 28, 2017, which were filled during the four months ended June 30, 2017. Excluding these backorders, the net sales increase was 18.0% for the seven month period ending September 30, 2017. The launch of a new drug generated increased needle sales as customers built inventory, two large pump orders were accelerated forward into this period and last year included a large return of product related to the market withdrawal.

21.5% Increase in Gross Profit

  • $5,648,752 compared with $4,649,770 for the same period last year.
  • This increase for the seven months was mostly driven by the increase in net sales, partially offset by higher production costs related to increased scrap during quality inspections as we work to implement a nondestructive testing protocol. Additionally, we had higher sterilization costs due to more frequent cycles required to meet demand and backlog and increased shipping costs due to the backlog. We also had higher salary and related benefits costs from overtime and the addition of a second shift to meet increased demand.

8.4% Decrease in Operating Expenses

  • $4,764,392 as compared with $5,202,257 for the same period last year.
  • Decreases in selling, general and administrative expenses were the result of a significant reduction in legal fees related to our litigation and regulatory efforts. We also had reductions in sales and marketing, driven by lower consulting fees related to website redesign last year, timing of spending this year on marketing initiatives, and lower salary and related costs due to attrition in Europe. Offsetting these savings were increased costs in our regulatory department due to headcount to support our regulatory compliance requirements, the addition of our Chief Operating Officer, and a payment dispute with an international customer.

Increase in Net Income

  • $626,587 net income compared to a net loss of $359,095 for the same period last year.

Andrew Sealfon, RMS Chief Executive Officer, commented, "Sales growth continued for the current quarter and while expanding internationally, we generated our first sales in Asia and Africa." Sealfon continued, "The FDA issued a new 510(k) clearance for our Integrated Catch-Up Freedom Syringe Driver System, the first ever fully integrated 510(k) cleared system by the FDA, confirming the science behind the performance of using the dedicated RMS system. It is also the only mechanical infusion system cleared for both subcutaneous drugs (SCIg) and intravenous (antibiotics), clearing the path for customers to invest in one system to meet all their needs."

The Company manufactures medical products used for intravenous or subcutaneous infusions and suctioning. The Infusion product portfolio currently includes the FREEDOM60® and our latest FreedomEdge® Syringe Infusion Pumps, RMS Precision Flow Rate Tubing™ and RMS HIgH-Flo Subcutaneous Safety Needle Sets™. These devices are used for infusions administered in hospital, home, or ambulatory settings. 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.

The Company's website may be visited at www.rmsmedicalproducts.com.

The results of operations for the three and seven months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year.

For more information, please call:

Jon Di Gesu
800 Meters
603-770-5731; [email protected]

Or

Mike King
Princeton Research, Inc
702 650 3000

SELECTED FINANCIAL RESULTS

For the
Three Months Ended
For the
Seven Months Ended
September 30
September 30
2017
2016
2017
2016
NET SALES
$ 3,849,338 $ 3,221,502 $ 9,188,414 $ 7,293,695
Cost of goods sold
1,470,680 1,188,558 3,539,662 2,643,925
Gross Profit
2,378,658 2,032,944 5,648,752 4,649,770
OPERATING EXPENSES
Selling, general and administrative
1,893,911 2,114,407 4,536,954 4,887,608
Research and development
14,852 75,198 47,564 147,136
Depreciation and amortization
77,517 70,935 179,874 167,513
Total Operating Expenses
1,986,280 2,260,540 4,764,392 5,202,257
Net Operating Profit/(Loss)
392,378 (227,596 ) 884,360 (552,487 )
Non-Operating Income/(Expense)
Gain/(Loss) on currency exchange
10,419 (4,096 ) 65,079 8,237
Interest and other income
361 262 1,104
TOTAL OTHER INCOME/(EXPENSE)
10,780 (3,834 ) 66,183 9,573
PROFIT/(LOSS) BEFORE TAXES
403,158 (231,430 ) 950,543 (542,914
Income Tax (Expense)Benefit
(137,404 ) 78,217 (323,956 ) 183,819
NET INCOME/(LOSS)
$ 265,754 $ (153,213 ) $ 626,587 $ (359,095 )
NET INCOME/(LOSS) PER SHARE
Basic
$ 0.01 $ - $ 0.02 $ (0.01 )
Diluted
$ 0.01 $ - $ 0.02 $ (0.01 )
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic
37,898,357 37,779,427 37,856,074 37,885,432
Diluted
38,056,604 37,779,427 38,014,321 37,885,432

SOURCE: Repro Med Systems, Inc.


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