Retractable Technologies, Inc. (RVP) research, news, and more from GeoInvesting

Company description

Mon, 14 Jun 2021 17:12:14 GMT

Retractable Technologies, Inc. designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States, rest of North and South America, and internationally. It offers VanishPoint insulin syringes; tuberculin, insulin, and allergy antigen syringes; small diameter tube adapters; blood collection tube holder; allergy tray; IV safety catheter; Patient Safe syringes and Luer Caps; VanishPoint blood collection set; EasyPoint needles; and VanishPoint autodisable syringes. The company distributes its products through general line and specialty distributors, as well as through international distributors; and a direct marketing network. Retractable Technologies, Inc. was incorporated in 1994 and is headquartered in Little Elm, Texas.

Research

Wed, 21 Feb 2024 16:15:55 GMT

As we are still tracking Retractable Technologies, Inc. (NYSE:RVP) ($1.30; $38.9M market cap) , even after its huge post-Covid slide to current prices, we wanted to point out that the CEO Thomas Shaw’s insider purchase of shares has not gone unnoticed.

For example, the last 30+ Form 4’s have been filed by him, with one of the more notable one’s being filed yesterday showing that he bought 21,687 shares at about $1.28 per share. All of his previous buys were notably smaller.

We absolutely have to temper this with the fact that the company snuck in product recall news via an 8-K on Friday, after hours (no press release):

“On February 5, 2024, the Company initiated a voluntary recall of its EasyPoint Needle lot number K220402 which was shipped within the U.S. between July 20, 2022, and September 20, 2023. The Company shipped 477,600 units of the products into the market and is working with customers and distributors to determine how many of the units remain unused and subject to the recall. The recall is due to the possible detachment of the needle cannula from the needle holder, which could result in serious injury. The Company has advised its customers and distributors to review their inventory for the affected products, segregate and quarantine the affected products, discontinue any distribution of the affected products, inform all personnel not to use the affected products, and report and return remaining inventory to the Company. The Company submitted a Removal Report with the U.S. Food and Drug Administration on February 9, 2024, and will continue to work with it in connection with the recall.”

So, “how do we go about dissecting these contradictory signals” should be the question investors must ask?

For now, it’s still a tracking game until we see something more substantive come out of the company’s story, but we are not holding our breath that RVP will become the outperformer it was back during the peak of the pandemic, when the price of the needle manufacturer and distributor went from $0.70 in July of 2019 to a high of $21.50 in February of 2021, or an increase of more than 2,971%.

We caught part of that run in the midst of some deep dive due diligence we conducted on the company and its contracts, but didn’t take advantage of that full peak.

Research

Tue, 16 Nov 2021 18:05:00 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($12.25; $417.2M market cap) (medical device;safety syringes) filed its Q3 2021 10-Q, no press release at this time:

Sales of $36.3 million vs $27.0 million in the prior year
Non-GAAP EPS of $0.19 vs EPS of $0.33 in the prior year

“Domestic revenues increased 33.5% principally due to increased volumes primarily attributable to orders from the U.S. government. Domestic unit sales increased 34.1%. Domestic unit sales were 90.6% of total unit sales for the three months ended September 30, 2021. Domestic unit sales excluding the U.S. government rose approximately 32.6%. International revenues increased approximately 45.5% due to an increase in products available for international shipment. Our international orders may be subject to significant fluctuation over time and may not be reflective of the full year’s sales. Overall unit sales increased 34.2%. Other than the U.S. government, our increased sales are predominantly attributable to existing customers as well as several new smaller customers who do not operate as distributors. As discussed above, our gross margins were significantly impacted during the third quarter of 2021 due to the global demand for, and rising costs of, cargo freight transportation. Despite the increase in revenues for the third quarter of 2021, our gross profit decreased, both on a per unit basis and in the aggregate.”

We have not seen any mention of renewing its contract with the government which poses a significant risk heading into 2022.

“In the first nine months of 2021, approximately $83.6 million of the Company's sales were to the Department of Health and Human Services of the United States. Management expects the U.S. government to remain a significant customer through at least March 2022.”

PodClips

Wed, 25 Aug 2021 16:22:41 GMT

Retractable Technologies (RVP) Q2 2021 Update

Research

Tue, 17 Aug 2021 16:23:06 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($12.25; $417.2M market cap) (medical device;safety syringes) filed its Q2 2021 10-Q, no press release at this time:

Sales of $42.4 million vs $11.5 million in the prior year
Non-GAAP EPS of $0.27 vs EPS of $0.03 in the prior year

The 10Q does not really offer many comments from management or forward looking statements. We are keeping our eye out for the press release which may offer more color. One thing to note is that EPS was sequentially lower than the Q1 EPS of $0.52, which may not be received favorably by the market as the U.S. moves closer to “full vaccination.”

Research

Mon, 14 Jun 2021 17:14:23 GMT

PodClip

---

1. Investor composition changing

COVID-19 investors vs. value investors

2. Financials and valuation

2018

Revenue = $33.3M
EPS = -$0.06

2019

Revenue = $41.8 M
EPS = $0.07

2020

Revenue = $81.9M
EPS = $0.80

2021 run-rates

Revenue = $150 to $200
EPS = $1.50 to $2.00
Cash = $44M (minus $15M spent buyback and dividends)

Current run-rate valuation based on

Enterprise Value = $362M
P/E = 6 to 8
EV/S = 1.81 to 2.4

3. Financials and targets in a worst-case scenario

50% reduction in COVID-19 sales

75M to $100M

Valuation based on worst-case scenario

P/E of 15 to 25
EV/S = 3.62 to 4.8

4. Bottom line

Good chance that shorts are going to get annihilated

Research

Tue, 08 Jun 2021 18:05:01 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($11.16; $379.4M market cap) (medical device;safety syringes) Yesterday, during the trading day the company announced a $10 million stock repurchase plan which commences June 18, 2021 and may continue to until June 18, 2022.

“Our management is embarking on purchasing the Company’s stock because - thanks to the dedication of our shareholders and continued efforts of our employees - the U.S. government has recognized (as has the medical community) that our technology provides a significant advantage in terms of eliminating waste of vital and costly medications and helps prevent the unnecessary spread of infectious diseases. Under these established circumstances, we believe that the Company’s stock is significantly undervalued."

The board also approved payment of its Class B convertible preferred shareholders including all dividend payments in arrears.

“On behalf of the Company, we would like to thank the shareholders for their patience and dedication to our mission of providing safe products for healthcare workers.”

As we mentioned in our premium tweet yesterday, we view these developments as extremely bullish for the Company. It's good to see that management is beginning to take shareholder friendly steps we suggested, in light of short seller attacks we generally disagree with by Bleecker Street Research and Edwin Dorsey. We continue to provide our opinion to RVP management on steps they should take to build shareholder confidence and increase transparency. With 20% of the float shorted (per Yahoo Finance), we think short sellers are playing a dangerous game that could end badly for them.

Research

Wed, 02 Jun 2021 20:28:57 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($10.06; $342.0M market cap) (medical device;safety syringes) announced (yesterday during trading day) that it received notice from the U.S Department of Health and Human Services expressing its intent to exercise all seven one-month options under its original contract.

The options will extend the contract to February 2022, and increase the value of the contract by $92.7 million. You can see our original contract news note here.

Research

Tue, 25 May 2021 14:47:12 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($9.06; $308.0M market cap) (medical device;safety syringes) shares are trading higher in the pre-market (up about 9%) on the heels of a Department of Defense contract to expand production for low dead-space safety syringes and needles. The funding allocated was $27.3 million.

On May 18, 2021, we highlighted the strong Q1 2021 results. The stock did not react to the strong results as many investors believe the revenues from COVID-19 related government work is nearing final stages. We are stepping up our research efforts to determine if the recent weak price performance is a buying opportunity.

Research

Tue, 18 May 2021 17:20:01 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($12.82; $433.5M market cap) (medical device;safety syringes) announced Q1 2021 results:

Sales of $50.1 million vs $11.2 million in the prior year (revenues without covid government work would have been $12.3 million)
EPS of $0.52 vs $0.00 in the prior year

While the quarter was extremely strong, we believe many investors will parse out a large part of the revenue that was attributable to COVID-19, and focus more closely on the non-Covid related revenues going forward as the pandemic seems to be in its final stages.

Research

Fri, 16 Apr 2021 16:35:41 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($10.88; $369.7M market cap) (medical device;safety syringes) - A Wall Street Journal article referencedPfizer CEO ALbert Bourla’s comments that it is likely that people who receive the vaccine will need booster shots within a year and then annual vaccinations to protect against the virus as it evolves.

On May 1, 2020, RVP was awarded a Department of Human and Health Services order to supply automated retraction safety syringes for COVID-19 vaccination efforts. It has always been unclear if this would only result in a short-term bump for RVP sales. However, as more data is collected, it seems like annual vaccination needs could be the norm. While there is no guarantee that RVP will be awarded follow-on syringe orders, the fact they were already selected and awarded contracts for the Covid vaccine efforts leads us to believe that it's a strong possibility.

You can see our full research coverage on RVP here.

Research

Thu, 01 Apr 2021 17:32:12 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($12.82; $433.5M market cap) (medical device;safety syringes) announced Q4 2020 results: (results via 10k only at the moment)

Sales of $32.0 million vs $12.6 million in the prior year
EPS of $0.35 vs $0.05 in the prior year

While we await the press release for possible comments from management, we wanted to highlight the recent events discussed in the 10-K, which are “material events particular to the COVID-19 pandemic”:

On May 1, 2020, awarded the HHS Order under an existing contract by the Department of Health and Human Services
another contract on February 12, 2021 to supply low dead space safety syringes for COVID-19 vaccination efforts
Entered into TIA with multiple government agencies for funding for expanding our domestic production of needles and syringes

The complete details of the above are as follows:

"On May 1, 2020, we were awarded the HHS Order under an existing contract by the Department of Health and Human Services of the United States to supply automated retraction safety syringes for COVID-19 vaccination efforts, which order was in the amount of $83.8 million plus $10 million in expedited freight costs. As of December 31, 2020, we recorded sales of $31.6 million under the 2020 HHS Order, representing 39.0% of our overall revenues for 2020, and we expect the remaining sales under the HHS Order in 2021. During 2020 and through March 2021, we have timely completed our delivery obligations under the HHS Order.

The Department of Health and Human Services awarded us another contract on February 12, 2021 to supply low dead space safety syringes for COVID-19 vaccination efforts. The base price for the contract and purchase order is $54,217,800 for the five-month base period of performance (February 15, 2021 to July 14, 2021). Such price includes both the fixed price for the products as well as cost reimbursement for freight. The terms of the contract allow for extensions at the option of the U.S. government for up to seven additional one-month periods. If all option periods are exercised, the value of the contract could increase by an additional $92,772,680, including the price of the products and freight reimbursement. For each period, the freight cost is estimated at approximately 25% of the overall price.

Effective July 1, 2020, we entered into the TIA with the United States Government Department of Defense, U.S. Army Contracting Command-Aberdeen Proving Ground, Natick Contracting Division & Edgewood Contracting Division (ACC-APG, NCD & ECD) on behalf of the Biomedical Advanced Research and Development Authority (BARDA) for $53,664,286 in government funding for expanding our domestic production of needles and syringes. Pursuant to the terms of the TIA, we are expecting to make significant additions to our facilities which should allow us to increase domestic production. Additionally, the TIA provides for reimbursement for equipment and supplies. As of early March 2021, we have negotiated contracts for the purchase of automated assembly equipment, molds, and molding equipment, as well as portions of auxiliary equipment, for approximately $42.1 million. As of March 2021, we have substantially completed construction of expanded facilities consisting of approximately 27,800 square feet of additional controlled environment within existing properties and we expect to complete approximately 55,000 square feet of new warehouse space within the second quarter of 2021. The estimated cost of the controlled environment within existing properties is $6.4 million. The increase from the original $6 million estimate is due to change orders and an expedited completion date in order to receive certain manufacturing equipment at an earlier date. The cost of the controlled environment will be funded by the U.S. government under the TIA, while the cost of the new warehouse will be our financial obligation.

Both of the abovementioned orders from the Department of Health and Human Services as well as the TIA from the U.S. government are material events particular to the COVID-19 pandemic and may not be indicative of future operations. While the addition of manufacturing equipment and facilities will greatly increase our production capacity, we cannot be assured that there will be increased demand for our products once orders from the U.S. government have been filled. If future orders are not placed by the U.S. government and orders from new and existing customers do not materialize, we would have significant excess productive capabilities."

Research

Wed, 17 Feb 2021 16:44:31 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($19.06; $644.5M market cap) (medical device;safety syringes). We are looking into what looks to be a new $55 million dollar contract from the U.S. Government. Yesterday during the trading day, a new contract was published on the government contract site. It seems to be an award for RVP in the amount of $54.2 million with the possibility of $146.9 million if all extensions are met. It should be noted that the government website published the information first then the company issued an 8k after hours. It is unclear if the company will release a press release.

We do believe this is an additional contract and not a work order off of the original large government contract won last year. However, we are still looking into that possibility. Recall, in May 2020 we highlighted a similar $83.8 million award.

The stock remains as one of our best performing stocks of the past 12 months. We covered our history with RVP in our December 6, 2020 email:

On March 11, 2020 when the stock was trading at $1.50, we released a full in-depth article on Retractable Technologies, Inc. (NYSE:RVP) and disclosed our long position in the syringe maker. Shares went on to have a strong run to hit a high of $13.65 in late July. Then, in late October 2020, we locked in some profits in our RVP position.

By late September , the stock retreated all the way back to $5.26, as impatient investors dumped shares when Q2 results did not show meaningful sales contribution from a contract with the U.S. government for the purchase of RVP's syringes that will be used for COVID-19 vaccine administration.

Well, on the heels of strong Q3 2020 results and COVID-19 vaccine rollouts, shares of RVP have been strong over the past few weeks. In fact, The stock hit a new high in yesterday’s trading session of $15.79. We have used this run to once again reduce our long position. Shares are up 900% from our initial long disclosure.

Since that post, shares continued higher hitting new highs to a peak of $21.50, or over 1300% since our initial call to action.

Research

Wed, 16 Dec 2020 16:42:07 GMT

**Call To Action - Locking In Some Gains In RVP

On March 11, 2020 when the stock was trading at $1.50, we released a full in-depth article on Retractable Technologies, Inc. (NYSE:RVP) and disclosed our long position in the syringe maker. Shares went on to have a strong run to hit a high of $13.65 in late July. Then, in late October 2020, we locked in some profits in our RVP position.

By late September , the stock retreated all the way back to $5.26, as impatient investors dumped shares when Q2 results did not show meaningful sales contribution from a contract with the U.S. government for the purchase of RVP's syringes that will be used for COVID-19 vaccine administration.

Well, on the heels of strong Q3 2020 results and COVID-19 vaccine rollouts, shares of RVP have been strong over the past few weeks. In fact, The stock hit a new high in yesterday’s trading session of $15.79. We have used this run to once again reduce our long position. Shares are up 900% from our initial long disclosure.

We encourage you to listen to this week's installment of the Avoiding the Crowd podcast hosted by Maj, where our InfoArb journey in RVP is discussed.

View the podcast here.

Research

Tue, 17 Nov 2020 19:18:52 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($8.39; $282.2M market cap) (medical device) announced Q3 2020 results:

Sales of $27.0 million vs $11.6 million in the prior year
Non-GAAP EPS of $0.25 vs $0.03

The results were released via 10-Q only. We are waiting for the press release to see if it offers any guidance as the company continues to benefit from a large contract from the government for syringes to be used in administration of Covid-19vaccines.

Research

Fri, 23 Oct 2020 19:33:42 GMT

Investor Alerts Us To Material Information Arbitrage On RVP

On the heels of the FDA approving Remdesivir for treatment of Covid and the administration believing a vaccine will be available in the near term, we wanted to again highlight Retractable Technologies, Inc. (NYSE:RVP) (Medical Device; Safety Syringes) potential role in Covid-19. An investor in our network alerted us to Information Arbitrage from a town council meeting in Little Elm Texas, where RVP’s manufacturing facility is located. The meeting took place on September 1, 2020 and discussed RVP’s plans to expand the facility in order to achieve a government goal of producing 427 million US manufactured safety injection devices for vaccination per year.

For more background on RVP, please see our article we published with research assistance from Geoinvesting members Tom Birnie and Andrew Vemeer.

Recall in early July we mentioned that the company entered into a Technology Investment Agreement with the Department of Defense to help in the production of its equipment and supplies to address syringe capacity needs created by the Covid-19 pandemic. RVP will receive $53.6 million, possibly over 10 years, to assist in the production of supplies.

Below is a snapshot from the Little Elm town council meeting:

RVP has already been awarded a $83 million contract to provide the U.S government with its syringes. However, a majority of these syringes will be coming from China. Now, there is a push to have all the syringes produced in the U.S and the need is magnified since vaccines may need to be administered twice per year and occur on a yearly basis.

We need to look into at what price RVP will be selling the syringes to the government and if the 427 million syringe goal is the government’s overall production goal or the specific amount for RVP to produce. However, we believe that 427 million number refers to RVP. Either way we view this development as a big deal.

From our initial research it appears that RVP's needles retail for around 50 cents. Again, while we still need clarity on the price to be charged to the government, here is what it could look like:

427 million syringes at $0.50 = $213 million annual sales
427 million syringes at $0.25 = $106 million annual sales

RVP Year end 2019 revenues were $41 million. It is also unclear if the original $83 million contract award accounts for a portion of the order related to the information from the town council meeting.

Finally, it was nice to see that on October 22, 2020, RVP was mentioned in a Vaccines and Related Biological Products Advisory Committee video presentation (1:38:35 mark) as one of three companies alongside Becton, Dickinson and Company (NYSE:BDX) and Marathon Medical that the government will work with to support syringe supply needs.

Again, you can go here to see our past coverage on when the original $83 million contract was awarded and then funded. We released a full in depth article and disclosed our position on March 11, 2020 when the stock was trading at $1.50. We locked some of our profits in as stock ran to over $13 a share in late July, representing an over 700% gain from our original call to action.

Caveats:

Without knowing syringe selling pricing details it is hard to know the financial impact this could have for the company
It is unclear if the 427 million syringe number is the government’s overall production goal or the specific amount for RVP to produce

Research

Mon, 17 Aug 2020 12:00:17 GMT

Retractable Technologies, Inc. (NYSE:RVP) (Medical Device; Safety Syringes) – Reported strong Q2 2020 results. Non-GAAP EPS of $0.06 vs $0.01 on 20% top line growth. Moving forward, the company should start seeing more contributions from the recently awarded large contract win from the Department of Health and Human services.

“On May 1, 2020, we were awarded a delivery order under an existing contract by the Department of Health and Human Services of the United States to supply automated retraction safety syringes. The total fixed price under the delivery order is $83,788,440. The existing contract was executed in September 2018, but the order placed on May 1, 2020 is unusually significant. In the second quarter of 2020, our sales under this order were approximately $1.4 million and we expect such sales to increase each quarter through May 2021.”

Research

Fri, 31 Jul 2020 19:13:25 GMT

**Calls To Action - Locked in Some RVP and INTZ Gains

Retractable Technologies, Inc. (NYSE:RVP) ($13.10; $428m market cap) (medical device) has had a phenomenal run since we disclosed our long position and bullish article back on March 11, 2020 at $1.50. Shares began to tick up when we highlighted a contract award from a government site showing the company had been awarded an $83 million dollar contract. With shares up over 700+% we locked in some of our position’s gains.

Intrusion Inc (OOTC:INTZ) ($9.95; $137M market cap) (cyber security) has also had a strong run recently, doubling from early June 2020 when it traded atf $4.60. In May 2018, we initiated our long position in INTZ when the stock was trading at $1.35 based on a possible contract win and information arbitrage (InfoArb) from past conference calls. On April 6, 2020, we also published a video where Maj went over the INTZ bullish thesis detailing more InfoArb. The stock was also added to our Favorite Model Portfolio and eventually earned a top 5 spot in it. You can see our original note here.

With the recent surge in price on the heels of strength in many cyber security names, we have decided to lock some of our position’s gains.

Research

Thu, 09 Jul 2020 15:02:24 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($7.70; $246.7M market cap), a company that designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States and internationally, saw its shares hit new highs in a volatile trading session yesterday, on the heels of an 8K filing showing the company entered into a Technology Investment Agreement with the Department of Defense to help assist in the production of its equipment and supplies to help fight the Covid-19 pandemic.

The funding is for $53.6 million over a 10 year period.

Research

Mon, 18 May 2020 04:00:00 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($5.11; $167.0M market cap), a company that designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States and internationally announced Q1 2020 results via 10-Q late on Friday.

Sales of $11.2 million vs $7.9 million in the prior year
EPS of $0.00 vs a loss of $0.01

While the results for Q1 were sequentially down from Q4, this has been the typical pattern for the company in which the company reports stronger results in the latter half of the year when flu season is at its height. The current quarter also had not begun to realize the impact from its recent large COVID-19 contract win. The 10-Q discusses the large contract:

“On May 1, 2020, the Company was awarded a delivery order under an existing contract by the Department of Health and Human Services of the United States to supply automated retraction safety syringes. The total fixed price under the delivery order is $83,788,440. The existing contract was executed in September 2018, but the order placed on May 1, 2020 is unusually significant to the Company. The Company expects to increase both domestic and foreign production and add additional personnel in response to this material delivery order. The Company expects to perform under this delivery order during 2020 and a portion of 2021.”

Company verbiage clears up a bit of confusion centered around the period of time the contract would be recognized, mostly since there was some information that indicated that the contract ran through 2023. There was some good information disclosed in the 10Q showing that the company’s domestic and international revenues are growing aggressively.

“Domestic sales accounted for 74.4% and 77.4% of our revenues for the three months ended March 31, 2020 and 2019, respectively. Domestic revenues increased 35.8% principally due to increased volumes. Domestic unit sales increased 31.4%. Domestic unit sales were 65.2% of total unit sales for the three months ended March 31, 2020. International unit sales and revenues increased 56.8% and 59.9%, respectively, due to higher unit sales. Our international orders may be subject to significant fluctuation over time. Overall unit sales increased 39.2%. While we cannot predict the effect of the novel coronavirus on future periods, we do not believe that the virus had a material effect on sales in the first quarter of 2020.”

It is possible that a perfect storm is shaping up for RVP, allowing it to produce consistent and elevated growth for a period of time.

The legal egal victory it had against BDX who used unfair marketing practices could lead to significant market share gains for the company, as it now faces less resistance in marketing its first class safety syringe product to healthcare customers. We highly doubt that given the COVID-19 situation that BDX will “play nasty” again.
Obviously, the contract with the government helps validate the company’s product

See our original report here.

Research

Mon, 04 May 2020 15:51:46 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($3.64; $120.7M market cap), a company that designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States and internationally saw its shares soar to new highs yesterday on a government contract for procuring needles and syringes for COVID-19.

On March 30, 2020 we issued the following tweet:

This morning, in an updated post on this official government site, we noticed that the full amount of this contract has been exercised.

Based on information from the site, it seems like the duration of contract is one to 3 years:

With trailing twelve month sales of $41.8 million, the $83.7 million is a significant amount of potential revenue for the company if the entire contract is fulfilled.

Research

Tue, 31 Mar 2020 16:15:14 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($1.71; $55.8M market cap), a company that designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States and internationally, announced its full year 2019 results via 10-K:

Full year 2019 sales of $41.7 million vs $33.2 million in the prior year
Full year 2019 EPS of $0.07 vs a loss of $0.06 in the prior year
Q4 2019 sales of $12.6 million vs $8.2 million in the prior year
EPS of $0.05 vs a loss of $0.01 in the prior year

On March 10, 2020, we published an in depth-article talking about the pros and cons of the RVP growth story.

The company has not issued a press release for its full year results yet. After filing its Q3 10-Q, the company issued a press release midway through the following day. So we will be on the lookout for a possible release sometime during the trading day today.

In related news, yesterday we issued the following Tweet:

We are hoping management’s earnings release will provide more color on this possible contract modification, which explicitly mentions coronavirus in the description of the contract requirement.

Please be aware that this contract is not new and is only a modification on the prior contract to specifically mention coronavirus. One of our premium members, Michael Liu, alerted us of this fact.

However, it appears that there have been no awards assigned to this contract yet. You can view all modifications of the contract here

Now, with the arrival of the coronavirus, combined with the increasing need to protect healthcare personnel, we are curious to see if the government may actually start executing task orders against the contract.

Research

Mon, 10 Feb 2020 16:14:32 GMT

Retractable Technologies, Inc. (NYSE:RVP) - (Medical Device/Needlestick Prevention)

As we prepare to publish our notes on Retractable Technologies, Inc. (NYSE:RVP) we wanted to give you a headstart in learning how their needlestick prevention solutions work, which can be seen on the video at this page. It’s actually pretty cool!

We are also attempting to track down videos that highlight needlestick solutions of competing companies. But so far, our findings indicate that RVP may have the “best in class” solution. One thing we will point out in our RVP article is that the company’s ability to gain market shares has been challenged by deceptive marketing practices by "monopolistic" competitor, Becton, Dickinson and Company (NYSE:BDX). However, we came across some U.S. regulatory mandates that have us investigating if group purchasing organizations (GPO) will be more likely to recommend RVP’s solutions to hospitals and physicians. If this is the case, we believe RVP has multi-bagger potential But at this point, it’s still a BIG if.

Stay tuned for more on RVP this week!

Research

Thu, 26 Sep 2019 04:00:00 GMT

Retractable Technologies, Inc. (NYSE:RVP) ($1.09; $35.5M market cap), a company that designs, develops, manufactures, and markets safety syringes and other medical products for the healthcare industry in the United States and internationally, has been on our radar the last few months as there has been significant insider buying at open market prices, mainly by CEO Thomas Shaw.

Mr. Shaw filed a number of form 4’s over the last several months that show a number of open market purchases. Since March, he has purchased roughly 400,000 shares, adding to his significant stake of over 14 million shares.

In mid August 2019, the Company posted strong Q2 2019 results:

Sales of $9.5 million vs $7.4 million in the prior year
EPS of $0.01 vs a loss of $0.03 in the prior year

Both domestic and international sales grew nicely in the quarter with 24.2% and 36.9% growth respectively. (Domestic sales account for 80% of overall revenues).

The company’s press release offers no comments from management. We plan to reach out to management to determine if Q2’s growth trend can carry forward during the remainder of 2019 and into 2020.

The company recently announced settlement of all existing litigation it was facing in regards to:

“In 2007, Retractable sued BD for violations of antitrust acts, false advertising, product disparagement, tortious interference, unfair competition, and other matters. In 2007, BD and MDC sued Retractable for patent infringement. A settlement agreement, effective May 3, 2019, released all claims by Retractable against BD and MDC arising prior to May 3, 2019 and all claims by BD and MDC against Retractable arising prior to May 3, 2019. As a result, on May 6, 2019, the following actions were taken in each of the two cases: Retractable withdrew its petition before the U.S. Court of Appeals for the Fifth Circuit for an en banc rehearing; and the parties filed for a dismissal with prejudice in the U.S. District Court for the Eastern District of Texas, Texarkana Division. The settlement does not obligate either party to make any payment to the other and each party shall be responsible for its own costs and attorneys’ fees.”

We believe with the lawsuits behind them it could be a positive for the Company as management can focus their attention on resources to grow the company.

There is a specific caveat that we plan to gain a better understanding on as well, beyond what we've already gleaned.

The Company is behind on some preferred stock dividends. RVP has several series of convertible preferred stock, which by itself is not a huge dilution risk, as the total number of shares they would convert into is 781,000 at much higher strike prices from the current price.

The big concern we have is that they are roughly $12 million behind on dividend payment for series 3 through 5. Obviously, a discussion with management to determine how they plan to address this debt is warranted.

With roughly $11 million in cash & debt and equity securities, the company has some funds to address the dividend arrearage. As a medical device company trading at a P/S ratio of near 1, we feel nice upside to the stock is possible if growth momentum can continue and a shareholder friendly move is finalized in regards to the dividend payments.