Patient Safety Technologies, Inc., a company that engages in the development, marketing, and sale of products and services focused on the medical patient safety markets in the United States, released its financial results for the second quarter of 2011.
During the quarter, the number of institutions that utilize the Company’s SurgiCount Safety-Sponge® System exceeded 70 and the Company did not lose any customers. This compares to approximately 52 institutions utilizing the solution at the end of the second quarter of 2010. Although it is not exactly proportional to the reported revenue, the number of hospitals using the Company’s products is a good indication of their underlying business.
Total revenue for the quarter ended June 30, 2011 was $2.6 million, which was inclusive of $0.5 million of revenue from the delivery to the Company’s exclusive distributor as part of the $10.0 million inventory stocking order. Not including the effect of this inventory stocking order, revenue for the quarter ended June 30, 2011 was $2.1 million. This is in comparison with the total revenue for the corresponding quarter in 2010 of $3.8 million, which is inclusive of $2.3 million of revenue from the delivery under the same $10 million inventory stock order. Not including the effect of this inventory stocking order, revenue for the second quarter of 2010 would have amounted to $1.4 million.
Excluding the effects of the inventory stocking order, revenue for the three-month period ended June 30, 2011 of $2.1 million represents about 50% growth over the $1.4 million that was generated for the three months ended June 30, 2010. This growth in revenue, not including the effects of the stocking order, is mainly due to the significant growth in the number of hospitals that utilize the Safety-Sponge® System at the end of the second quarter of 2011, compared to that of the second quarter of last year. Also, during the second quarter of 2011, the Company successfully completed the delivery of the last of the $10.0 million stocking order.
As a result of the comprehensive restructuring program that began in the third quarter of 2010, the operating expense for the second quarter of 2011 were reduced drastically as compared to the second quarter of the year 2010. The reported GAAP operating expenses were $1.7 million and $3.0 million for the second quarters of 2011 and 201, respectively, a decline of $1.3 million or 44%. Not including non-cash expenses for stock depreciation and compensation, operating expenses in the second quarter 2011 were 50% of what the comparable expenses were for the second quarter of 2010.
As a direct result of the continuous growth of the Company’s customer base and reported revenues not including stocking orders, combined with the success of the restructuring program, the Company generated an Adjusted Operating Loss of $23 thousand for the second quarter of 2011. This is in comparison with an Adjusted Operating Loss of $332 thousand for the same quarter in the year 2010.
The Company ended the second quarter with $5.7 million of cash and cash equivalents and no debt. Also, the Company predicts that the $224 thousand of restricted cash that was reported at quarter end will be released in the third quarter of 2011. Including the restricted cash, total cash and cash equivalents at the end of the second quarter amounted to $5.9 million.
Current users of the SurgiCount Safety-Sponge® System include more than 70 hospitals, including six of the 17 hospitals that were named to the U.S. News and World Report 2011-12 Best Hospitals Honor Roll. Also, as previously stated, during the second quarter of 2011, utilization of the SurgiCount Safety-Sponge® System exceeded 50 million sponges used successfully in more than 2.5 million procedures.
“During the second quarter we continued to add to the list of hospitals who are taking a proactive step to improve their patient outcomes and reduce their preventable costs through the use of the Safety-Sponge® System. With additional hospitals already under contract in the third quarter, we are well positioned to continue to grow our user base, revenues and profitability,” said Brian E. Stewart, President and Chief Executive Officer of Patient Safety Technologies.
For more information on the Company, visit their website at http://www.surgicountmedical.com
Let us hear your thoughts below:
