Core View - United-Guardian's second-quarter 2025 results indicate a challenging sales environment, particularly in the cosmetic ingredient segment, while showing resilience in pharmaceuticals and medical lubricants [11] Financial Performance - For Q2 2025, net sales were $2.84 million, a decrease of 16.3% from $3.39 million in Q2 2024 [2] - Net income fell 34.5% year-over-year to $626,826, or 14 cents per share, down from $956,225, or 21 cents per share [2] - On a six-month basis, net sales declined 20% to $5.32 million from $6.65 million, and net income slid 36.9% to $1.19 million, or 26 cents per share, from $1.88 million, or 41 cents per share [2] Cost and Expenses - Cost of sales as a percentage of net sales increased to 47% in Q2 2025 from 46% in the previous year [3] - Operating expenses rose 15.1% to $694,050, driven by higher marketing and selling costs [3] - Research and development expenses decreased slightly by 3.4% to $107,868 [3] Sales Performance by Product Category - Pharmaceuticals sales grew 11%, and medical lubricants rose 12% in the first half of 2025 [4] - Cosmetic ingredient sales dropped significantly due to reduced orders from the largest distributor, Ashland Specialty Ingredients, attributed to inventory overstock and softer demand in Asia [4] Management Insights - Management expressed optimism about resolving ASI's inventory issue to restore growth in the cosmetic segment [5] - The company is pursuing a strategic initiative to expand Renacidin's inclusion in drug formularies, which is expected to boost sales in the coming years [5] Factors Influencing Revenue - The year-over-year revenue decline was primarily due to weakness in cosmetic ingredient sales, which outweighed gains in pharmaceuticals and medical lubricants [6] - Higher marketing and selling costs contributed to rising operating expenses, impacting margins alongside the lower sales base [6] Future Outlook - Management anticipates a rebound in cosmetic ingredient sales in the second half of the year, contingent on resolving ASI's inventory overhang [8] - Long-term growth prospects may be supported by the expansion of Renacidin's formulary inclusion, dependent on successful execution of current initiatives [8] Other Developments - No acquisitions, divestitures, or major restructuring activities were disclosed in the quarter [10] - The company's dividend policy remained intact, reflecting continued capital return to shareholders despite profit pressures [10] - Management reaffirmed that its cash position and working capital are sufficient to meet operational needs and support strategic projects over the next 12 months [10]

Part I. FINANCIAL INFORMATION [ITEM 1. Condensed Financial Statements](index=4&type=section&id=ITEM%201.%20Condensed%20Financial%20Statements) This section presents the unaudited condensed financial statements for the periods ended June 30, 2025 and 2024, with accompanying notes [Statements of Income](index=4&type=section&id=Statements%20of%20Income) The company's net sales and net income declined significantly in the three and six months ended June 30, 2025 Statements of Income (Unaudited) - Key Figures | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $2,838,225 | $3,390,205 | $5,319,352 | $6,645,149 | | Total costs and expenses | $2,142,772 | $2,275,527 | $4,012,977 | $4,503,864 | | Income from operations | $695,453 | $1,114,678 | $1,306,375 | $2,141,285 | | Net income | $626,826 | $956,225 | $1,187,721 | $1,881,667 | | Earnings per common share (basic and diluted) | $0.14 | $0.21 | $0.26 | $0.41 | - Net sales decreased by **16%** for the three months ended June 30, 2025, and by **20%** for the six months ended June 30, 2025, compared to the respective periods in 2024[11](index=11&type=chunk) - Net income decreased by **34.4%** for the three months ended June 30, 2025, and by **36.9%** for the six months ended June 30, 2025, compared to the respective periods in 2024[11](index=11&type=chunk) [Balance Sheets](index=5&type=section&id=Balance%20Sheets) Total assets and stockholders' equity decreased from December 31, 2024, to June 30, 2025 Balance Sheets (Unaudited) - Key Figures | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $12,466,928 | $12,665,551 | | Total assets | $13,394,352 | $13,797,335 | | Total current liabilities | $1,853,471 | $1,914,469 | | Total liabilities | $1,931,777 | $1,914,469 | | Total stockholders' equity | $11,462,575 | $11,882,866 | - Total assets decreased by approximately **$402,983** from December 31, 2024, to June 30, 2025[13](index=13&type=chunk) - Total stockholders' equity decreased by approximately **$420,291** from December 31, 2024, to June 30, 2025[15](index=15&type=chunk) [Statements of Changes in Stockholders' Equity](index=7&type=section&id=Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity declined in the first half of 2025 as dividend payments outpaced net income Statements of Changes in Stockholders' Equity (Unaudited) - Key Figures | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Balance, January 1 | $11,882,866 | $11,388,582 | | Net income (six months) | $1,187,721 | $1,881,667 | | Dividends declared and paid (six months) | $(1,607,893) | $(1,148,468) | | Balance, June 30 | $11,462,575 | $12,121,669 | - Total stockholders' equity decreased from **$11,882,866** at January 1, 2025, to **$11,462,575** at June 30, 2025, primarily due to dividends declared and paid exceeding net income[17](index=17&type=chunk) [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Cash from operations decreased significantly, while investing activities generated a net inflow in H1 2025 Statements of Cash Flows (Unaudited) - Six Months Ended June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $625,323 | $1,968,250 | | Net cash provided by (used in) investing activities | $885,686 | $(657,533) | | Net cash used in financing activities | $(1,618,183) | $(1,148,468) | | Net (decrease) increase in cash and cash equivalents | $(107,174) | $162,249 | | Cash and cash equivalents at end of period | $1,768,481 | $8,405,371 | - Net cash provided by operating activities significantly decreased from **$1,968,250** in H1 2024 to **$625,323** in H1 2025, primarily due to a decrease in net income[21](index=21&type=chunk)[118](index=118&type=chunk) - Investing activities shifted from a net cash outflow of **$657,533** in H1 2024 to a net cash inflow of **$885,686** in H1 2025, driven by excess proceeds from marketable securities sales[21](index=21&type=chunk)[119](index=119&type=chunk) - Net cash used in financing activities increased due to higher dividend payments (**$0.35/share** in H1 2025 vs **$0.25/share** in H1 2024) and payment of accrued dividends[21](index=21&type=chunk)[120](index=120&type=chunk) [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) These notes detail the company's business operations, accounting policies, and financial instrument specifics [1. Business](index=9&type=section&id=1.%20Business) The company develops and markets specialty ingredients for cosmetics, pharmaceuticals, and medical lubricants - United-Guardian, Inc. manufactures, markets, and develops specialty cosmetic ingredients (e.g., Lubrajel® hydrogels), pharmaceutical products (e.g., Renacidin®), medical lubricants, and sexual wellness ingredients[23](index=23&type=chunk)[24](index=24&type=chunk) - The company entered a distribution agreement with Brenntag Specialties in October 2023 for its new Natrajel® line of sexual wellness ingredients in the Americas, with manufacturing and sales anticipated to begin in the second half of 2025[23](index=23&type=chunk) - R&D focuses on new and unique specialty cosmetic and sexual wellness ingredients, medical lubricants, and product modifications, prioritizing natural and environmentally friendly raw materials[24](index=24&type=chunk) [2. Basis of Presentation](index=9&type=section&id=2.%20Basis%20of%20Presentation) Interim financial statements are prepared according to US GAAP and Regulation S-X - Interim condensed financial statements are prepared in accordance with US GAAP for interim financial information and Regulation S-X, with all necessary adjustments included for fair presentation[25](index=25&type=chunk) - Results for the three and six months ended June 30, 2025, are not necessarily indicative of future results for the full year[25](index=25&type=chunk) [3. Segment Information](index=9&type=section&id=3.%20Segment%20Information) The company operates as a single reportable segment with consolidated financial information review - The Company operates as a single operating and reportable segment, with the President (CODM) reviewing consolidated financial information and allocating resources based on metrics like net income[26](index=26&type=chunk) - Segment revenue, profit/loss, and significant expenses are consistent with consolidated results[27](index=27&type=chunk) [4. Impact of Global Supply Chain Instability, Inflation and Tariffs](index=10&type=section&id=4.%20Impact%20of%20Global%20Supply%20Chain%20Instability,%20Inflation%20and%20Tariffs) The company is monitoring trade policies and tariffs, particularly from China, which could impact business - The Company is monitoring trade policies and tariffs, particularly those on imports from China, which could significantly impact business, financial condition, and results of operations[28](index=28&type=chunk)[29](index=29&type=chunk) - New tariffs imposed on July 31, 2025, could make products less competitive, reduce gross margins, and potentially decrease demand, especially in China, as reflected in H1 2025 cosmetic product sales[28](index=28&type=chunk)[29](index=29&type=chunk) - While most raw materials are sourced domestically, three suppliers obtain materials from China, and one direct raw material supplier is in China; however, these are not large quantities and are not expected to materially impact pricing[31](index=31&type=chunk) [5. Use of Estimates](index=10&type=section&id=5.%20Use%20of%20Estimates) Financial statements rely on management estimates for key areas like credit losses and inventory valuation - Financial statements require management to make estimates and assumptions, including for allowance for credit losses, inventory obsolescence, accrued distribution fees, outdated material returns, marketable securities impairment, and overhead allocation[33](index=33&type=chunk) - Actual results may differ from these estimates[33](index=33&type=chunk) [6. Cash and Cash Equivalents](index=11&type=section&id=6.%20Cash%20and%20Cash%20Equivalents) Cash equivalents consist of highly liquid investments with maturities of three months or less - Cash equivalents include highly liquid investments with original maturities of three months or less[35](index=35&type=chunk) - Amounts exceeding FDIC and SIPC limits were **$397,000** and **$639,000** respectively at June 30, 2025[35](index=35&type=chunk) Cash and Cash Equivalents | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Demand Deposits | $629,658 | $404,801 | | Money Market Funds | $1,138,823 | $1,470,854 | | Total | $1,768,481 | $1,875,655 | [7. Accounts Receivable and Reserves](index=11&type=section&id=7.%20Accounts%20Receivable%20and%20Reserves) An allowance for credit losses is recognized based on the Current Expected Credit Losses (CECL) model - The Company recognizes an allowance for credit losses on accounts receivable based on ASC Topic 326 (CECL), reflecting expected credit losses over the asset's life[37](index=37&type=chunk)[38](index=38&type=chunk) Allowance for Credit Losses | Date | Allowance Amount | | :--- | :--- | | June 30, 2025 | $21,628 | | December 31, 2024 | $14,342 | [8. Revenue Recognition](index=11&type=section&id=8.%20Revenue%20Recognition) Revenue is recognized from product sales when control transfers to the customer, net of deductions - Revenue is recognized in accordance with ASC Topic 606 when a customer obtains control of promised goods or services, primarily from product sales[39](index=39&type=chunk) - Sales are reported net of deductions (e.g., chargebacks, rebates, distribution fees, discounts, outdated product returns), which are estimated and recorded in the same period as revenue[40](index=40&type=chunk) - For the six months ended June 30, 2025, approximately **23%** of total sales were to customers outside the U.S., up from **15%** in the prior year, though a significant portion of U.S. sales to ASI are ultimately shipped to foreign customers, with China representing a decreasing share of ASI's foreign sales (**40%** in H1 2025 vs **50%** in H1 2024)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Disaggregated Sales by Product Class | Product Class | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Cosmetic ingredients | $896,549 | $1,419,374 | $1,595,546 | $3,295,856 | | Pharmaceuticals | $1,451,679 | $1,413,664 | $2,620,137 | $2,363,987 | | Medical lubricants | $489,997 | $557,167 | $1,103,669 | $985,306 | | Total Net Sales | $2,838,225 | $3,390,205 | $5,319,352 | $6,645,149 | Disaggregated Sales by Geographic Region | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | United States | $2,346,526 | $2,808,237 | $4,103,793 | $5,627,173 | | Other countries | $491,699 | $581,968 | $1,215,559 | $1,017,976 | | Total Sales | $2,838,225 | $3,390,205 | $5,319,352 | $6,645,149 | [9. Accounting for Financial Instruments – Credit Losses](index=13&type=section&id=9.%20Accounting%20for%20Financial%20Instruments%20%E2%80%93%20Credit%20Losses) The company maintains a credit loss allowance for trade receivables based on historical and economic data - The Company maintains an allowance for credit losses on trade receivables based on CECL, considering historical experience, customer creditworthiness, and economic trends[52](index=52&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) - Credit risk is concentrated among a small number of customers, making the Company vulnerable to changes in their financial position[53](index=53&type=chunk) [10. Marketable Securities](index=14&type=section&id=10.%20Marketable%20Securities) Marketable securities include equity mutual funds, U.S. Treasury Bills, and Certificates of Deposit - Marketable securities include equity mutual funds (fair value), U.S. Treasury Bills, and Certificates of Deposit (amortized cost)[57](index=57&type=chunk) - Proceeds from sales and redemptions of marketable securities were **$7,301,264** in H1 2025, recognizing **$1,507** in realized losses, compared to **$775,000** in H1 2024 with no realized gains or losses[61](index=61&type=chunk) Net Gains (Losses) on Marketable Securities | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $24,576 (gain) | $(9,501) (loss) | | Six Months Ended June 30 | $36,926 (gain) | $31,995 (gain) | Marketable Securities Holdings | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :--- | :--- | :--- | | Equity and other mutual funds | $710,829 | $663,682 | | U.S. Treasury Bills | $5,941,815 | $6,288,943 | | Fixed income Certificates of Deposit | - | $570,000 | | Total marketable securities | $6,652,644 | $7,522,625 | [11. Inventories](index=16&type=section&id=11.%20Inventories) Inventories are valued at the lower of average cost or net realizable value - Inventories are valued at the lower of cost and net realizable value, using the average cost method[64](index=64&type=chunk) Inventories | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $384,387 | $448,113 | | Work in process | $18,286 | $58,699 | | Finished products | $1,129,144 | $945,183 | | Total inventories | $1,531,817 | $1,451,995 | | Reserve for slow moving and obsolete inventory | $30,006 | $32,792 | [12. Income Taxes](index=16&type=section&id=12.%20Income%20Taxes) The company's effective income tax rate was 21% for the first half of 2025 and 2024 - The Company's effective income tax rate was **21%** for both the second quarter and first half of 2025 and 2024, and is expected to remain at **21%** for the current fiscal year[114](index=114&type=chunk) Provision for Income Taxes | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Federal income taxes - current | $(51,536) | $302,100 | $56,324 | $472,040 | | State income taxes - current | - | - | $813 | $225 | | Federal income taxes - deferred | $215,312 | $(53,141) | $253,703 | $17,428 | | Total provision for income taxes | $163,776 | $248,959 | $310,840 | $489,693 | [13. Defined Contribution Plan](index=16&type=section&id=13.%20Defined%20Contribution%20Plan) The company sponsors a 401(k) plan with employer matching and discretionary contributions - The Company sponsors a 401(k) defined contribution plan with a dollar-for-dollar employer matching contribution up to **4%** of employee pay, with immediate vesting[66](index=66&type=chunk) - Discretionary contributions are also made based on a safe-harbor formula, with vesting over six years[67](index=67&type=chunk) DC Plan Contributions (Six Months Ended June 30) | Type | 2025 | 2024 | | :--- | :--- | :--- | | Accrued contributions | $57,500 | $54,500 | | Discretionary contributions paid | $115,000 | $109,000 | [14. Other Information (Accrued Expenses)](index=17&type=section&id=14.%20Other%20Information) Total accrued expenses decreased primarily due to lower accrued bonuses and 401(k) contributions - Total accrued expenses decreased from **$1,467,933** at December 31, 2024, to **$1,297,869** at June 30, 2025, primarily due to lower accrued bonuses and 401(k) contributions[70](index=70&type=chunk) Accrued Expenses | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bonuses | $101,500 | $290,000 | | Distribution fees | $448,511 | $441,397 | | Payroll and related expenses | $144,842 | $73,915 | | Reserve for outdated material | $295,469 | $276,732 | | Company 401(k) contribution | $57,500 | $115,000 | | Audit fee | $46,115 | $73,364 | | Annual report expenses | $41,722 | $83,238 | | Sales rebates | $93,827 | $90,904 | | Insurance | $50,497 | - | | Other | $17,886 | $23,383 | | Total accrued expenses | $1,297,869 | $1,467,933 | [15. Recent Accounting Pronouncements](index=17&type=section&id=15.%20Recent%20Accounting%20Pronouncements) The company has adopted or is evaluating several new accounting standards updates - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for annual periods after December 15, 2026, and interim periods after December 15, 2027[71](index=71&type=chunk) - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for fiscal years beginning after December 31, 2024; the Company implemented this on January 1, 2025, for additional disclosures in its 2025 10-K[72](index=72&type=chunk) - ASU 2023-07 (Improvements to Reportable Segment Disclosures) is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024; the Company adopted this on January 1, 2024[73](index=73&type=chunk) [16. Concentrations of Credit Risk](index=18&type=section&id=16.%20Concentrations%20of%20Credit%20Risk) Credit risk is highly concentrated among a small number of major distributors - The Company's accounts receivable expose it to credit risk, with a high concentration among a small number of cosmetic ingredient and pharmaceutical distributors[75](index=75&type=chunk) - For the three months ended June 30, 2025, major distributors accounted for **79%** of gross sales and **86%** of outstanding accounts receivable[76](index=76&type=chunk) - For the six months ended June 30, 2025, major distributors accounted for **73%** of gross sales and **86%** of outstanding accounts receivable[77](index=77&type=chunk) [17. Supplier Concentration](index=18&type=section&id=17.%20Supplier%20Concentration) The company relies heavily on three raw material suppliers and one contract manufacturer - Three major raw material suppliers collectively accounted for approximately **85%** of raw material purchases in H1 2025 (**79%** in H1 2024)[78](index=78&type=chunk) - The Company relies on one contract manufacturer for its pharmaceutical product, Renacidin, making it vulnerable to disruptions in that manufacturer's operations[78](index=78&type=chunk) [18. Related-Party Transactions](index=18&type=section&id=18.%20Related-Party%20Transactions) Related-party transactions include payments to a director's accounting firm and a former president - No consulting payments were made to former President Ken Globus in H1 2025, as his agreement expired May 31, 2024[79](index=79&type=chunk) - Payments to accounting firm PKF O'Connor Davies (where a director is a partner) were **$4,000** in H1 2025, down from **$10,750** in H1 2024[80](index=80&type=chunk) [19. Earnings Per Share](index=18&type=section&id=19.%20Earnings%20Per%20Share) Earnings per share decreased significantly in the first half of 2025 compared to the prior year - EPS decreased significantly for both the three-month and six-month periods ended June 30, 2025, compared to 2024[82](index=82&type=chunk) Earnings Per Share (Basic and Diluted) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.14 | $0.21 | | Six Months Ended June 30 | $0.26 | $0.41 | [20. Dividends](index=19&type=section&id=20.%20Dividends) The company declared and paid cash dividends in the first half of 2025 - The Board declared a cash dividend of **$0.35** per share on January 27, 2025, paid on February 18, 2025[83](index=83&type=chunk) - Total dividends declared in H1 2025 were **$1,608,012**, with **$1,607,893** paid[83](index=83&type=chunk) - In H1 2024, a dividend of **$0.25** per share was declared, totaling **$1,148,580**, with **$1,148,468** paid[85](index=85&type=chunk) [21. Subsequent Events](index=19&type=section&id=21.%20Subsequent%20Events) A cash dividend was declared in July 2025 after the reporting period - On July 11, 2025, the Board declared a cash dividend of **$0.25** per share, paid on August 1, 2025[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's financial performance declined due to reduced cosmetic sales, alongside discussions of liquidity and operational risks [Executive Overview](index=20&type=section&id=EXECUTIVE%20OVERVIEW) The company specializes in cosmetic ingredients and pharmaceuticals and is expanding into sexual wellness - United-Guardian, Inc. specializes in manufacturing cosmetic ingredients, pharmaceuticals, medical lubricants, and sexual wellness ingredients through its Guardian Laboratories division[90](index=90&type=chunk) - The company expanded into the sexual wellness market with the Natrajel line via a distribution agreement with Brenntag Specialties in October 2023, with sales expected in H2 2025[91](index=91&type=chunk) - Distribution channels are being expanded globally, including adding South Korea for personal care products and extending medical product distribution with Azelis Group NV in the UK and Ireland[92](index=92&type=chunk)[93](index=93&type=chunk) [Critical Accounting Policies](index=20&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Key accounting policies remain unchanged, with a focus on revenue recognition and credit risk - Critical accounting policies include revenue recognition, concentration of credit risk, investments, inventory, and income taxes, with no significant changes to assumptions or estimates since December 31, 2024[94](index=94&type=chunk) - The company recognizes an allowance for credit losses for financial assets at amortized cost based on expected credit losses over the asset's life, in accordance with ASU-2016-13[96](index=96&type=chunk) [Results of Operations](index=20&type=section&id=RESULTS%20OF%20OPERATIONS) Net sales and income decreased due to lower cosmetic ingredient sales, particularly in China [Net Sales](index=20&type=section&id=Net%20Sales) Net sales declined in Q2 and H1 2025, driven by a sharp drop in cosmetic ingredient sales - Net sales decreased by **$551,980 (16%)** in Q2 2025 and by **$1,325,797 (20%)** in H1 2025 compared to the same periods in 2024[97](index=97&type=chunk) - Cosmetic ingredients sales decreased by **37%** in Q2 2025 and **52%** in H1 2025, primarily due to softer demand in China (trade uncertainty, tariffs) and excess inventory held by distributor ASI[97](index=97&type=chunk)[99](index=99&type=chunk) - Pharmaceutical net sales increased by **3%** in Q2 2025 and **11%** in H1 2025, driven by increased Renacidin orders from a new customer, partially offset by fluctuations in Clorpactin WCS-90 sales[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Medical lubricant sales decreased by **12%** in Q2 2025 due to reduced orders from an Indian customer with excess inventory, but increased by **12%** in H1 2025 due to higher orders from a Chinese customer[106](index=106&type=chunk) [Cost of Sales](index=22&type=section&id=Cost%20of%20Sales) Cost of sales as a percentage of net sales remained relatively stable compared to the prior year - Cost of sales as a percentage of net sales slightly increased to **47%** in Q2 2025 from **46%** in Q2 2024, but slightly decreased to **46%** in H1 2025 from **47%** in H1 2024[109](index=109&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) Operating expenses increased due to higher sales, marketing, and payroll-related costs - Operating expenses increased by **$91,273 (15%)** in Q2 2025 and **$155,143 (13%)** in H1 2025, primarily due to increases in sales and marketing, and payroll and payroll-related expenses[110](index=110&type=chunk) [Research and Development Expenses](index=22&type=section&id=Research%20and%20Development%20Expenses) R&D expenses showed mixed results, decreasing in Q2 but increasing for the first half of 2025 - R&D expenses decreased by **3%** in Q2 2025 (due to lower accrued bonuses) but increased by **4%** in H1 2025 (due to higher payroll and related expenses)[111](index=111&type=chunk) [Investment Income](index=22&type=section&id=Investment%20Income) Investment income decreased due to lower interest rates and a smaller investment base - Investment income decreased by **29%** in Q2 2025 and **22%** in H1 2025, attributed to lower interest rates and a decrease in invested funds[112](index=112&type=chunk) [Net gain (loss) on Marketable Securities](index=22&type=section&id=Net%20gain%20(loss)%20on%20Marketable%20Securities) The company recorded a net gain on marketable securities, improving from a loss in the prior year's quarter - Net gain on marketable securities improved from a **$9,501 loss** in Q2 2024 to a **$24,576 gain** in Q2 2025[113](index=113&type=chunk) - For H1 2025, the net gain increased to **$36,926** from **$31,995** in H1 2024[113](index=113&type=chunk) [Provision for Income Taxes](index=22&type=section&id=Provision%20for%20Income%20Taxes) The effective income tax rate remained consistent at 21% for all reported periods - The effective income tax rate remained consistent at **21%** for both Q2 and H1 2025 and 2024, and is expected to remain so for the current fiscal year[114](index=114&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Working capital decreased, but the current ratio improved, and liquidity is deemed sufficient - Working capital decreased by **$137,625** to **$10,613,457** at June 30, 2025, primarily due to a decrease in cash and cash equivalents and marketable securities[115](index=115&type=chunk) - The current ratio increased from **6.6:1** at December 31, 2024, to **6.7:1** at June 30, 2025, mainly due to a decrease in accrued expenses[115](index=115&type=chunk) - The Company believes its working capital is sufficient for the next twelve months and plans to use cash for organic growth, strategic transactions, and inflation mitigation, as well as continued dividend payments and marketable securities purchases[117](index=117&type=chunk)[121](index=121&type=chunk) [Off Balance-Sheet Arrangements](index=23&type=section&id=OFF%20BALANCE-SHEET%20ARRANGEMENTS) The company has no material off-balance sheet arrangements - The Company has no off-balance sheet transactions that have, or are reasonably likely to have, a material impact on its financial condition or results of operations[122](index=122&type=chunk) [Contractual Obligations and Commitments](index=23&type=section&id=CONTRACTUAL%20OBLIGATIONS%20AND%20COMMITMENTS) As a smaller reporting company, disclosure of contractual obligations is not required - Information regarding contractual obligations and commitments is not required for smaller reporting companies[123](index=123&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, market risk disclosures are not required - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[124](index=124&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and reported no material changes to internal controls [(a) Disclosure Controls and Procedures](index=23&type=section&id=(a)%20DISCLOSURE%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were evaluated and found to be effective as of June 30, 2025 - Management, including the Principal Executive Officer and CFO, evaluated the disclosure controls and procedures and determined they were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[125](index=125&type=chunk) [(b) Changes in Internal Control Over Financial Reporting](index=24&type=section&id=(b)%20CHANGES%20IN%20INTERNAL%20CONTROL%20OVER%20FINANCIAL%20REPORTING) No material changes to internal control over financial reporting occurred during the reporting period - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the period covered by the report[126](index=126&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=24&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that there are no legal proceedings to report - There are no legal proceedings to disclose[128](index=128&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from global supply chain instability, inflation, and tariffs, especially with China - The Company is actively monitoring trade policy and tariff announcements, especially those concerning China, which have the greatest potential to significantly impact its business[128](index=128&type=chunk) - Significant tariffs or restrictions on Chinese imports could make products less cost-competitive, reduce gross margins, and decrease demand, as already reflected in cosmetic product sales in H1 2025[129](index=129&type=chunk) - The overall impact of tariffs remains uncertain, depending on factors like duration, expansion, retaliatory measures, inflationary effects, and the effectiveness of the Company's responses[133](index=133&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section indicates no unregistered sales of equity securities to report - There are no unregistered sales of equity securities or use of proceeds to disclose[134](index=134&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there are no defaults upon senior securities to report - There are no defaults upon senior securities to disclose[134](index=134&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section indicates that there are no mine safety disclosures to report - There are no mine safety disclosures to report[134](index=134&type=chunk) [Item 5. Other Information](index=25&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that there is no other information to report - There is no other information to disclose[134](index=134&type=chunk) [Item 6. Exhibits](index=25&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed, including Sarbanes-Oxley certifications and XBRL documents - Exhibits include certifications from the President/Principal Executive Officer and Chief Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act of 2002)[134](index=134&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the Cover Page Interactive Data File are also filed[134](index=134&type=chunk) [Signatures](index=26&type=section&id=SIGNATURES) The report is certified by the company's authorized officers as of August 6, 2025 - The report is signed by Donna Vigilante, President, and Andrea Young, Chief Financial Officer, on behalf of United-Guardian, Inc. on August 6, 2025[136](index=136&type=chunk)[137](index=137&type=chunk)

[Key Financial Highlights (Q2 and H1 2025)](index=1&type=section&id=Key%20Financial%20Highlights%20(Q2%20and%20H1%202025)) Q2 and H1 2025 net sales and income declined year-over-year, with Q2 showing sequential improvement Second Quarter Financial Performance (YoY) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 2,838,225 | 3,390,205 | -551,980 | -16.28% | | Net Income | 626,826 | 956,225 | -329,399 | -34.45% | | EPS | 0.14 | 0.21 | -0.07 | -33.33% | First Half Financial Performance (YoY) | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 5,319,352 | 6,645,149 | -1,325,797 | -19.95% | | Net Income | 1,187,721 | 1,881,667 | -693,946 | -36.88% | | EPS | 0.26 | 0.41 | -0.15 | -36.59% | - Compared with the first quarter of 2025, second quarter net sales increased by **14%** and net income increased by **12%**[2](index=2&type=chunk) [Management Commentary and Business Segments](index=1&type=section&id=Management%20Commentary%20and%20Business%20Segments) H1 2025 sales: pharmaceuticals and medical lubricants up, cosmetic ingredients down due to distributor overstock and soft Asian demand; Renacidin formulary expansion is a key initiative - Sales of pharmaceuticals increased by **11%** and medical lubricants increased by **12%** for the first half of 2025 compared to the same period in 2024[3](index=3&type=chunk) - Decrease in cosmetic ingredients sales in H1 2025 was attributable to reduced purchases by Ashland Specialty Ingredients (ASI), the largest cosmetic distributor, due to softer demand in Asia and an inventory overstock situation[3](index=3&type=chunk) - A new project is underway to include Renacidin, the most important pharmaceutical product, in additional drug formularies, with the goal of significantly increasing sales in coming years[3](index=3&type=chunk) - United-Guardian is a manufacturer of cosmetic ingredients, pharmaceuticals, medical lubricants, and sexual wellness ingredients[3](index=3&type=chunk) [Financial Results for the Three and Six Months Ended June 30, 2025 and 2024](index=1&type=section&id=Financial%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Unaudited consolidated income statements for Q2 and H1 2025 and 2024 detail key financial performance metrics Consolidated Statements of Income (Unaudited) | | 2025 (Three Months, $) | 2024 (Three Months, $) | 2025 (Six Months, $) | 2024 (Six Months, $) | | :--- | :--- | :--- | :--- | :--- | | Net sales | 2,838,225 | 3,390,205 | 5,319,352 | 6,645,149 | | Costs and expenses: | | | | | | Cost of sales | 1,340,854 | 1,561,090 | 2,463,930 | 3,117,580 | | Operating expenses | 694,050 | 602,777 | 1,326,785 | 1,171,642 | | Research and development expense | 107,868 | 111,660 | 222,262 | 214,642 | | Total costs and expenses | 2,142,772 | 2,275,527 | 4,012,977 | 4,503,864 | | Income from operations | 695,453 | 1,114,678 | 1,306,375 | 2,141,285 | | Other income (expense): | | | | | | Investment income | 70,573 | 100,007 | 155,260 | 198,080 | | Net gain (loss) on marketable securities | 24,576 | (9,501) | 36,926 | 31,995 | | Total other income | 95,149 | 90,506 | 192,186 | 230,075 | | Income before provision for income taxes | 790,602 | 1,205,184 | 1,498,561 | 2,371,360 | | Provision for income taxes | 163,776 | 248,959 | 310,840 | 489,693 | | Net income | 626,826 | 956,225 | 1,187,721 | 1,881,667 | | Earnings per common share (basic and diluted) | 0.14 | 0.21 | 0.26 | 0.41 | | Weighted average shares (basic and diluted) | 4,594,319 | 4,594,319 | 4,594,319 | 4,594,319 |

Core Viewpoint - United-Guardian, Inc. reported a decline in net sales and net income for the second quarter and first half of 2025 compared to the same periods in 2024, although there was a sequential increase from the first quarter of 2025 [1][2]. Financial Performance - Second quarter net sales decreased from $3,390,205 in 2024 to $2,838,225 in 2025, a decline of approximately 16.3% - Net income for the second quarter fell from $956,225 ($0.21 per share) in 2024 to $626,826 ($0.14 per share) in 2025, a decrease of about 34.4% - For the six-month period ended June 30, net sales decreased from $6,645,149 in 2024 to $5,319,352 in 2025, a decline of approximately 20% - Net income for the six-month period decreased from $1,881,667 ($0.41 per share) in 2024 to $1,187,721 ($0.26 per share) in 2025, a decrease of about 37% [1][5][6]. Segment Performance - Sales of pharmaceuticals and medical lubricants increased by 11% and 12%, respectively, in the first half of 2025 compared to the same period in 2024 - The increase in these segments was offset by a decrease in sales of cosmetic ingredients, primarily due to reduced purchases by Ashland Specialty Ingredients (ASI), the largest cosmetic distributor - The decline in ASI's purchases was attributed to softer demand in Asia, leading to an inventory overstock situation [2][3]. Future Outlook - The company is optimistic about improving cosmetic sales in the second half of the year as ASI resolves its overstock situation - A new project is being initiated to include Renacidin, a key pharmaceutical product, in additional drug formularies, which could significantly boost sales in the coming years [2][3].

Core Points - United-Guardian, Inc. has appointed Donna Vigilante as a new director on its Board of Directors, highlighting her extensive experience with the company over the past 20 years [1] - Ms. Vigilante holds a Bachelor of Science degree in biochemistry and has previously served as Vice President and Manager of R&D and microbiology departments, overseeing the development of new products [1] - The company is implementing new initiatives focused on global marketing and distribution of cosmetic ingredients, as well as increasing sales of medical and pharmaceutical products [2] Company Overview - United-Guardian, Inc. is a manufacturer of cosmetic ingredients, pharmaceuticals, medical lubricants, and sexual wellness ingredients [1] - The company is emphasizing a renewed focus on its product lines, particularly in the areas of medical and pharmaceutical products [2] Leadership Insights - Donna Vigilante expressed her excitement about her appointment and the confidence shown by the Board, indicating a positive outlook for the company's future [2] - The management team is enthusiastic about the significant changes being made in the company's marketing and distribution strategies [2]

Core Insights - United-Guardian, Inc. reported a decline in both net sales and net income for the first quarter of 2025, with net sales at $2.48 million, down 24% from $3.25 million year-over-year, and net income falling 39% to $560,895 or 12 cents per share from $925,442 or 20 cents per share [2][6] Business Segment Performance - The cosmetic ingredients segment experienced a significant decline, with sales dropping 63% year-over-year to $698,998 from $1.88 million, primarily due to a 74% reduction in orders from its largest distributor, Ashland Specialty Ingredients [3] - Pharmaceutical sales rebounded, with net sales increasing 23% to $1.17 million from $950,323 in the previous year, driven by the normalization of Renacidin supply, which saw gross sales rise 38% year-over-year to $1.23 million [4] - Medical lubricant sales grew 43% year-over-year to $613,671, benefiting from increased demand in India and China, making it the strongest performing segment [5] Management Commentary - The company's president acknowledged the challenging start to the year, attributing revenue shortfalls to the cosmetic ingredient business but highlighted the strength in medical lubricants and pharmaceuticals as positive signs [6] - Concerns were raised regarding evolving trade policies and tariffs by the U.S. government, which could introduce uncertainty for product lines tied to China markets, although the company is monitoring these risks [7] Financial Metrics - Cost of sales decreased to $1.12 million from $1.56 million year-over-year, improving as a percentage of revenues to 45% from 48% [8] - Operating expenses rose 11% to $632,735 due to higher payroll and marketing costs, while research and development expenses also increased by 11% to $114,394 [8] - Investment income and gains on marketable securities fell to $97,037 from $139,569 a year earlier, attributed to lower interest income and reduced unrealized gains [9] Future Outlook - The company expressed confidence in its long-term strategy, particularly in product development and market expansion, with plans to begin manufacturing and sales of the Natrajel product in 2025 [10] - In February 2025, United-Guardian expanded its partnership with Azelis Group NV to include South Korea and broadened coverage in the U.K. and Ireland [11]

Financial Performance - Net sales for Q1 2025 were $2,481,127, a decrease of 23.7% compared to $3,254,944 in Q1 2024[11] - Net income for Q1 2025 was $560,895, down 39.4% from $925,442 in Q1 2024[11] - Earnings per share (basic and diluted) decreased to $0.12 in Q1 2025 from $0.20 in Q1 2024[11] - Total net sales for the three months ended March 31, 2025, were $2,481,127, down from $3,254,944 in the same period of 2024, representing a decline of approximately 23.7%[52] - Revenue from pharmaceutical sales increased to $1,168,458 in Q1 2025, compared to $950,323 in Q1 2024, reflecting a growth of approximately 23%[52] - Net sales for Q1 2025 decreased by $773,817 (approximately 24%) compared to Q1 2024, primarily due to a 63% decrease in sales of cosmetic ingredients[93] Assets and Liabilities - Total current assets decreased to $11,691,416 in Q1 2025 from $12,665,551 in Q4 2024, a decline of 7.7%[14] - Total liabilities remained stable at $1,927,638 in Q1 2025, compared to $1,914,469 in Q4 2024[17] - Cash and cash equivalents at the end of Q1 2025 were $1,269,212, down 32.3% from $1,875,655 at the end of Q4 2024[14] - Cash held in excess of FDIC limits was approximately $962,000 as of March 31, 2025, compared to $234,000 at December 31, 2024[38] - Working capital decreased by $987,304 to $9,763,778 at March 31, 2025, down from $10,751,082 at December 31, 2024[104] Expenses - Research and development expenses increased to $114,394 in Q1 2025 from $102,982 in Q1 2024, reflecting a growth of 11.5%[11] - Operating expenses increased by $63,870 (approximately 11%) in Q1 2025 compared to Q1 2024, mainly due to higher sales and marketing expenses[98] - R&D expenses rose by $11,412 (approximately 11%) in Q1 2025 compared to Q1 2024, driven by increased payroll-related expenses[99] - The provision for income taxes for Q1 2025 was $147,064, a decrease from $240,734 in Q1 2024, with federal income taxes current provision at $107,860 compared to $169,940 in the prior year[67] Dividends - Dividends declared and paid in Q1 2025 were $1,607,893, compared to $1,148,468 in Q1 2024, an increase of 40%[24] - The company declared a cash dividend of $0.35 per share in January 2025, totaling $1,608,012, compared to a dividend of $0.25 per share totaling $1,148,580 in January 2024[82][83] Market and Distribution - The company entered a distribution agreement with Brenntag Specialties for its new Natrajel® line, expecting to begin sales in 2025[27] - The company expanded its presence in the sexual wellness market by partnering with Brenntag Specialties to distribute the new Natrajel line across North and South America, with manufacturing and revenue expected to begin in 2025[86] - A new territory, South Korea, was added for personal care distribution in February 2025, expanding the relationship with Azelis Group NV, which also includes the medical market in the UK and Ireland[87] - Approximately 29% of total sales in Q1 2025 were to customers outside the United States, up from 13% in Q1 2024[52] - Three pharmaceutical distributors and one cosmetic ingredient distributor accounted for 67% of gross sales in Q1 2025, down from 83% in Q1 2024[76] Cash Flow - The company generated cash from operations of $322,080 in Q1 2025, down from $644,120 in Q1 2024, primarily due to a decrease in net income[107] - Net cash used in financing activities increased to $1,607,893 in Q1 2025 from $1,148,468 in Q1 2024, due to higher dividend payments[109] Other Financial Metrics - The allowance for credit losses related to accounts receivable increased to $18,114 as of March 31, 2025, compared to $14,342 on December 31, 2024[41] - The company recognized net gains of $12,350 on marketable securities for the three months ended March 31, 2025, compared to $41,496 in the same period of 2024[60] - As of March 31, 2025, total marketable securities amounted to $6,851,997, with an unrealized gain of $42,834 compared to a total of $7,522,625 and an unrealized gain of $28,977 as of December 31, 2024[62][63] - The company reported proceeds from the redemption of marketable securities of $6,148,493 in Q1 2025, including realized losses of $1,507, compared to $150,000 with no realized gains or losses in Q1 2024[64] - Cost of sales as a percentage of net sales decreased to 45% in Q1 2025 from 48% in Q1 2024, attributed to lower per-unit overhead rates[97] - The effective income tax rate was approximately 21% for both Q1 2025 and Q1 2024, expected to remain stable for the current fiscal year[103] Supply Chain and Risks - The company is monitoring the impact of global supply chain instability and tariffs, particularly concerning imports from China[33] - The company has a significant concentration of receivables, with potential risks associated with the financial position of a small number of customers[55]

[United-Guardian Q1 2025 Earnings Release](index=1&type=section&id=United-Guardian%20Q1%202025%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) United-Guardian reported significant Q1 2025 declines in net sales (23.8% to $2.48 million) and net income (39.4% to $0.56 million), with EPS falling from $0.20 to $0.12 Q1 2025 vs Q1 2024 Key Financial Results | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,481,127 | $3,254,944 | -23.8% | | Net Income | $560,895 | $925,442 | -39.4% | | EPS (basic and diluted) | $0.12 | $0.20 | -40.0% | [Business Segment Performance and Outlook](index=1&type=section&id=Business%20Segment%20Performance%20and%20Outlook) Strong growth in medical lubricant and pharmaceutical segments was offset by a 63% decline in cosmetic ingredients due to reduced ASI orders and excess inventory in China, with tariff concerns noted - The overall decrease in sales and earnings was primarily driven by a significant downturn in the cosmetic ingredient business, despite positive performance in other segments[3](index=3&type=chunk) Q1 2025 Year-over-Year Sales Growth by Segment | Business Segment | Sales Change vs Q1 2024 | | :--- | :--- | | Medical Lubricant | +43% | | Pharmaceutical | +23% | | Cosmetic Ingredients | -63% | - The reduction in cosmetic ingredient orders from partner ASI is attributed to excess inventory in China and the timing of orders. ASI has confirmed no significant loss of customers[3](index=3&type=chunk) - Potential tariffs announced by the U.S. government on imports remain a concern, with the financial impact currently difficult to determine[3](index=3&type=chunk) [Consolidated Statements of Income](index=1&type=section&id=Consolidated%20Statements%20of%20Income) Unaudited Q1 2025 statements show decreased net sales and income from operations, falling from $1.03 million in Q1 2024 to $0.61 million, despite reduced total costs and expenses Statements of Income (Unaudited) - For the Three Months Ended March 31, | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | **Net sales** | **$2,481,127** | **$3,254,944** | | Cost of sales | 1,123,076 | 1,556,490 | | Operating expenses | 632,735 | 568,865 | | Research and development | 114,394 | 102,982 | | *Total costs and expenses* | *1,870,205* | *2,228,337* | | **Income from operations** | **610,922** | **1,026,607** | | Investment income | 84,687 | 98,073 | | Net gain on marketable securities | 12,350 | 41,496 | | *Total other income* | *97,037* | *139,569* | | **Income before provision for income taxes** | **707,959** | **1,166,176** | | Provision for income taxes | 147,064 | 240,734 | | **Net income** | **$560,895** | **$925,442** | | **Earnings per common share** | **$0.12** | **$0.20** | | Weighted average shares | 4,594,319 | 4,594,319 |

Financial Performance - United-Guardian, Inc. reported a decrease in first quarter sales from $3,254,944 in 2024 to $2,481,127 in 2025, representing a decline of approximately 23.7% [1][4] - Net income also decreased from $925,442 ($0.20 per share) in 2024 to $560,895 ($0.12 per share) in 2025, reflecting a decline of about 39.3% [1][5] Business Segment Performance - The medical lubricant and pharmaceutical segments showed positive performance, with sales increasing by 43% and 23% respectively in the first quarter of 2025 compared to the same period in 2024 [2] - Conversely, sales in the cosmetic ingredient segment decreased significantly by 63% in the first quarter of 2025, primarily due to reduced orders from Ashland Specialty Ingredients (ASI) [2] Operational Insights - The decrease in orders from ASI was attributed to excess inventory in China that needed to be worked off and the timing of product orders, although ASI confirmed no significant loss of business or customers [2] - The company expressed concerns regarding potential impacts from tariff announcements by the U.S. federal government on imports, indicating uncertainty in future operations and financial conditions [2]

Core Viewpoint - United-Guardian, Inc. reported improved financial results for 2024, driven by strong sales in cosmetic ingredients and medical lubricants, despite challenges in the pharmaceutical segment due to supply disruptions [14]. Revenue & Earnings Growth From Prior Year - The company achieved a 12% year-over-year increase in net sales, rising from $10.89 million in 2023 to $12.18 million in 2024 [2]. - Net income increased by 26% to $3.25 million, or $0.71 per share, compared to $2.58 million, or $0.56 per share, in the previous year [2]. Segment Performance & Business Drivers - Sales of cosmetic ingredients surged by 32% year over year, attributed to increased purchase orders from the largest distributor and improved demand in China [4]. - Medical lubricant sales rose by 16%, driven by demand from a major contract manufacturer in China [4]. - Pharmaceutical sales declined by 5% due to a supply disruption of Renacidin, which affected sales in the first quarter of 2024 [5]. Management Commentary - The president of United-Guardian highlighted the strong performance in the cosmetics and medical lubricant segments as key contributors to revenue and profit growth [6]. - Management expressed optimism regarding the recovery of Renacidin sales in 2025 following the supply issues [7]. Financial Position & Key Metrics - Total assets increased to $13.80 million from $12.92 million, while current assets rose to $12.67 million from $12.25 million [8]. - Total liabilities increased to $1.91 million from $1.53 million, and stockholders' equity grew to $11.88 million from $11.39 million [8]. Factors Influencing Financial Results - Improved financial performance was driven by increased sales volumes in higher-margin product categories and controlled operating expenses [10]. - Investment income contributed positively to net income, reflecting a favorable interest rate environment [11]. - The decline in pharmaceutical sales highlighted the company's exposure to supply-chain volatility, but management indicated that these issues are now resolved [12]. Other Developments - The company maintained its focus on organic growth across its core business lines without changes in strategic direction or corporate structure [13].