Nov 22 2010
Patient Safety Technologies, Inc. (the "Company", OTC Bulletin Board: PSTX) today announced financial results for its third quarter of 2010 and for the nine months ended September 30, 2010.
Financial Highlights
The Company reported third quarter revenues of $4.1 million compared to $978 thousand reported in the third quarter of 2009. Third quarter revenues included $2.5 million shipped to the Company's distributor under an inventory stocking purchase order that applies solely to 2010. Excluding the effect of these shipments, third quarter revenues were $1.7 million, an increase of 70% versus the prior year quarterly period.
Reported gross profit was $2.2 million in the third quarter compared to $438 thousand reported in the third quarter of 2009. Reported gross margins were 52.7% for the quarter, compared to 44.8% for the same period in 2009.
During the third quarter of 2010, newly appointed management initiated a comprehensive restructuring program focused on a number of initiatives, including reducing operating expenses and achieving positive operating income and operating cash flow. As a direct result of this initiative, combined with the continued growth of the Company's revenues (both from hospital consumption and inventory stocking shipments to its distributor), the Company reported positive operating income of $925 thousand for the third quarter, the first period of reported positive operating income since the Company's acquisition of SurgiCount Medical in 2005. Additionally, excluding a payment of $2.4 million for past due amounts owed to the Company's manufacturing partner, cash flow from operations would have turned positive during the third quarter.
"Our revenue growth, combined with the early success of our restructuring efforts have improved our financial strength and better positioned us to accelerate adoption of the Safety-Sponge® System and improve shareholder value. We will continue to proactively manage our cash burn while investing in our future growth," stated Brian E. Stewart, President and Chief Executive Officer.
"During the third quarter, not only did we make great strides in our efforts to improve financial performance, but we also continued to add to our impressive list of user hospitals. Additionally, during the quarter we scheduled a number of new hospitals for implementation of the Safety-Sponge® System in the fourth quarter of 2010 and first quarter of 2011," continued Mr. Stewart.
Additional Milestones Achieved During the Third Quarter
•Awarded GPO Contract – During the quarter, the Company was awarded a contract by a large group purchasing and supply chain management organization (the "GPO") to provide the Safety-Sponge® System to its more than 3,300 member hospitals. Prior to awarding the agreement, the GPO had created an entirely new product category called Retained Surgical Sponge Prevention. The Company intends on collaborating with the GPO on customized marketing promotions and educational efforts in an attempt to drive adoption of the Safety-Sponge® System into its membership base.
•Expanded Intellectual Property Portfolio – In September the Company was issued an additional patent focused on protecting both current and future potential features and capabilities of the Safety-Sponge® System. Combined with another patent issued to the Company during the second quarter of 2010, the Company has significantly expanded its intellectual property portfolio during the year.
Current users of the SurgiCount Safety-Sponge® System include over 50 hospitals across the U.S., including five of the 14 hospitals named to the U.S. News and World Report 2010-11 Honor Roll. Over an estimated 36 million Safety-Sponges® have been used in more than 1.45 million procedures without a single undetected sponge left inside a patient in all cases where our solution was utilized.
The Company's third quarter financial statements are included in their Quarterly Report on Form 10-Q filed by the company on November 19, 2010 and available at the SEC's website at www.sec.gov
Source:
Patient Safety Technologies, Inc.