Rockwell Medical Technologies Inc. has a market cap of $144.1 million; its shares were traded at around $8.5 with and P/S ratio of 2.5. RMTI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Sales in the third quarter of 2010 were $14.7 million an increase of $0.6 million or 4.1% over the third quarter of 2009. Sales for the first nine months of 2010 were $45.2 million, an increase of $5.3 million or 13.2% over the first nine months of 2009. The increases were due to increased sales with a single international distributor whose orders are dependent upon its success at winning national tenders. Sales to this single distributor increased $1.4 million and $6.7 million for the three and nine month periods ended September 30, 2010 compared to the same periods in 2009.
Gross profit in the third quarter of 2010 was $2.4 million unchanged from the third quarter of 2009. Gross profit margins were 16.3% compared to 17.0% in the third quarter of 2009 as revenues increased in the third quarter of 2010. Gross profit in the first nine months of 2010 was $7.5 million compared to $5.5 million in the first nine months of 2009. Gross profit margins increased to 16.5% in the first nine months of 2010 compared to 13.7% in the first nine months of 2009.
SG&A was $6.8 million in the first nine months of 2010 compared to $5.1 million in the first nine months of 2009. The increase was primarily due to higher non-cash equity compensation expense of $1.2 million and increased personnel costs of $0.5 million. Personnel costs were higher due to a combination of compensation for new positions, increased performance bonuses, wage inflation and higher benefit costs.
Research and development (R&D) costs were $0.7 million and $2.0 million in the third quarter of 2010 and 2009, respectively. R&D costs were $1.7 million in the first nine months of 2010 compared to $5.3 million in the first nine months of 2009. Spending in both years was primarily for development and approval of SFP. During 2009, we conducted a Phase 2b study which was completed in late 2009. We plan to commence our SFP Phase 3 clinical trials in late 2010 as well as other related studies. Research and development spending will increase significantly when the Phase 3 program commences.
Our net interest income was $15,795 in the third quarter of 2010 compared to a net interest expense of $3,990 in the third quarter of 2009. Net interest income in the first nine months of 2010 was $28,765 compared to a net interest expense of $20,493 in the first nine months of 2009. The increase in interest income was the result of investing the proceeds from the October 2009 equity offering in short term investments. However, we do not expect that this investment will continue to materially increase interest income due to the current low short term interest rate environment.
In the first nine months of 2010, our cash increased by $0.6 million as a result of cash flow generated from operations of $1.3 million offset by $0.7 million in capital expenditures. Cash provided by operations totaled $1.3 million for the first nine months of 2010 and was primarily the result of $3.0 million in cash generated from business operations partially offset by a $1.7 million increase in working capital. Accounts receivable as of September 30, 2010 increased $1.1 million compared to December 31, 2009 as a result of a large early payment made prior to year end which temporarily decreased accounts receivable at December 31, 2009. We also realized a $0.5 million reduction in inventory due to normal fluctuations coupled with reduced inventory requirements for certain product lines.
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