Aug 16 2011
Patient Safety Technologies, Inc. (the "Company", OTCBB: PSTX, OTCQB: PSTX) today announced financial results for its second quarter of 2011 ended June 30, 2011.
Financial Highlights
During the second quarter of 2011, the number of institutions using the Company's SurgiCount Safety-Sponge® System surpassed 70 and the Company lost no customers. This compares to approximately 52 institutions using the solution at the end of the second quarter of 2010. Although not necessarily proportional to reported revenue, the number of hospitals using the Company's products is a good indicator of our underlying business.
Total revenue for the quarter ended June 30, 2011 was $2.6 million, which included $0.5 million of revenue from the delivery to the Company's exclusive distributor as part of a $10.0 million inventory stocking order. Excluding the effect of this inventory stocking order, revenue for the quarter ended June 30, 2011 was $2.1 million. This compares with total revenue for the quarter ended June 30, 2010 of $3.8 million, which included $2.3 million of revenue from the delivery under the same $10 million inventory stocking order. Excluding the effect of this inventory stocking order, revenue for the second quarter of 2010 would have been $1.4 million. Accordingly, excluding the effects of this inventory stocking order, revenue for the three months ended June 30, 2011 of $2.1 million represents approximately 50% growth over the $1.4 million generated for the three months ended June 30, 2010. This growth in revenue excluding the effects of the stocking order is primarily the result of the significant growth in the number of hospitals using the Safety-Sponge® System at the end of the second quarter of 2011 as compared to the second quarter of 2010. Additionally, during the second quarter 2011, the Company successfully completed the delivery of the last of the $10.0 million stocking order.
As a result of a comprehensive restructuring program begun in the third quarter of 2010 focused on a number of initiatives including reducing cash operating expenses, our operating expenses in the second quarter of 2011 were reduced significantly as compared to the second quarter of 2010. Reported GAAP operating expenses were $1.7 million and $3.0 million for the second quarters of 2011 and 2010, respectively, a decrease of $1.3 million or 44%. Excluding non-cash expenses for stock compensation and depreciation, our operating expenses in the second quarter 2011 were 50% of what the comparable expenses were in second quarter 2010.
As a direct result of the continued growth of the Company's customer base and reported revenues excluding stocking orders, combined with the success of the restructuring program, the Company generated an Adjusted Operating Loss (defined as reported operating income adjusted to exclude certain non-cash expenses) of $23 thousand during the second quarter of 2011. This compares with an Adjusted Operating Loss of $332 thousand during the second quarter of 2010.
The Company ended the second quarter of 2011 with $5.7 million of cash and cash equivalents and no debt. Additionally, the Company anticipates that the $224 thousand of restricted cash reported at quarter end will be released during the third quarter of 2011. Including this restricted cash, total cash and cash equivalents at the end of the second quarter were $5.9 million.
Expanded customer base
Current users of the SurgiCount Safety-Sponge® System include over 70 hospitals, including six of the 17 hospitals named to the U.S. News and World Report 2011-12 Best Hospitals Honor Roll. Additionally, as previously disclosed, during the second quarter of 2011 use of the Safety-Sponge® System surpassed 50 million sponges successfully used in over 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.
SOURCE Patient Safety Technologies, Inc.