Retractable Technologies(RVP) - 2025 Q2 - Quarterly Report

Sales Performance - In the first six months of 2025, syringes accounted for 68.8% of total sales, with EasyPoint® products contributing 27.6% and other products 3.6%[86] - Domestic revenues increased by 36.6% for the six months ended June 30, 2025, while domestic unit sales rose by 47.1%[112] - International revenues for the same period increased by 42.8%, although the average selling price per unit declined due to a shift in product mix[113] - Domestic unit sales represented 74.9% of total unit sales for the six months ended June 30, 2025[112] - The mix of domestic and international sales affects average sales prices, with domestic sales generally yielding higher prices and margins[128] Financial Performance - The loss from operations for the first half of 2025 was $9.8 million, compared to a loss of approximately $8.7 million for the same period in 2024[118] - Cash flow used by operations was $5.2 million for the six months ended June 30, 2025, primarily due to a net loss and changes in working capital[121] - The unrealized loss on debt and equity securities was $5.6 million for the first half of 2025, affecting overall financial performance[118] - The estimated total potential future credits for customer rebates is $2.0 million, recognized as a liability in accounts payable[134] Cost Management - Tariff expenses amounted to approximately $2.1 million in the first six months of 2025, significantly impacting the cost of manufactured products[117] - The company expects to reduce tariff expenses by shifting more manufacturing to domestic facilities, which will incur an estimated annual cost of $3.8 million in workforce expenses[89] - The annual increase in workforce costs to produce new products is approximately $3.8 million, although the company has reduced manufacturing support staff costs by $1.6 million annually[127] - The tariffs imposed in 2024-2025 have negatively impacted margins, prompting the company to increase domestic production and reduce reliance on imports[129] Operational Strategy - The company expects to meet short-term operational funding needs for at least 12 months, but anticipates a material decline in liquidity over the next 1-3 years due to new tariffs and increased domestic manufacturing costs[130] - The company plans to spend approximately $1 million on equipment expenditures to increase production capacity at its U.S. facility, with most of this already completed in Q2 2025[131] - The cost to convert existing equipment and purchase additional molds for new products is approximately $1 million, with these products accounting for 9.4% of overall domestic unit sales and 16.0% of domestic syringe unit sales for Q2 2025[127] - The company is focused on refining its manufacturing process while evaluating importing practices to mitigate the impact of tariffs[129] Settlement and Funding - The company received a settlement payment of $1.9 million in May 2025[125] - The company has historically funded operations through revenues, private placements, and loans, and may utilize cash reserves and investments in trading securities for future funding[125] Pricing Dynamics - The average selling price reduction was significantly impacted by the increase in EasyPoint® needle sales relative to all products sold[106]