RMS Medical Products Announces Record Quarterly Sales and Net Income

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

(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