Financial Performance - In Q3 2025, net sales decreased by 1.9% to $9,812,000 compared to Q3 2024, and year-to-date (9M) sales fell by 7.2% to $29,475,000[27] - Gross profit for Q3 2025 was $5,604,000, down 3.4% from Q3 2024, while gross profit for 9M 2025 decreased by 11.1% to $16,737,000[27] - Operating income in Q3 2025 dropped by 21.9% to $2,611,000, and for 9M 2025, it fell by 16.0% to $8,961,000[27] - Net income for Q3 2025 was $2,631,000, a decline of 26.2% compared to Q3 2024, and for 9M 2025, net income decreased by 20.5% to $8,720,000[27] - Earnings per diluted share (EPS) in Q3 2025 were $0.820, down 19.9% from Q3 2024, and for 9M 2025, EPS decreased by 13.5% to $2.680[27] Sales and Revenue - Sales to the China distributor were $395,000 in Q3 2025, down from $781,000 in Q3 2024, and $2,054,000 in 9M 2025 compared to $2,368,000 in 9M 2024[29] - Total consolidated sales for 9M 2025 were $2,271 (7.2%) lower than in 9M 2024, with U.S. domestic sales down 2.3% and OUS sales down 13.3%[46] - OUS sales in 3Q 2025 were $3,953, an 8.5% decrease from $4,318 in 3Q 2024, with a favorable FX impact of $114[43] - OUS sales in 9M 2025 were $12,167, a 13.3% decrease from $14,036 in 9M 2024, with a net favorable FX impact of $244[48] Operating Expenses - Operating expenses in Q3 2025 increased to $2,073,000, representing 21.1% of revenues, compared to 15.2% in Q3 2024[33] - S&M expenses in 3Q 2025 increased by $79, primarily due to higher health plan expenses and fees from U.S. distributors[56] - U.S. G&A expenses increased by $85 in 3Q 2025 compared to 3Q 2024, and by $124 in 9M 2025 compared to 9M 2024, primarily due to higher health plan costs and non-cash stock option expenses[61] - OUS G&A expenses were $1,254 in 3Q 2025 compared to $857 in 3Q 2024, with a total difference of $397 attributed to a $395 bad debt reserve expense and $25 from FX rate changes[62] Profitability Metrics - The gross profit margin for Q3 2025 was 57.1%, down from 58.0% in Q3 2024, and the operating income margin decreased to 26.6% from 33.4%[32] - Operating Income in 3Q 2025 was $2,611, a 21.9% decline from $3,343 in 3Q 2024, and $8,961 in 9M 2025, a 16.0% decline from $10,664 in 9M 2024[54] - Consolidated EBT in 3Q 2025 was $3,309 (33.7% of sales), down from $4,179 (41.8% of sales) in 3Q 2024; for 9M 2025, EBT was $11,004 (37.3% of sales) compared to $13,188 (41.5% of sales) in 9M 2024[68] - Adjusted consolidated EBITDA for 3Q 2025 was $4,170, a 15.9% decrease from $4,958 in 3Q 2024; for 9M 2025, it was $13,493, down 12.7% from $15,447 in 9M 2024[71] Future Outlook - Management now expects total annual 2025 consolidated sales to be about 7% lower compared to 2024, revised from an initial projection of 5%[49] - Annual sales for 2025 are now expected to be 6-7% lower than in 2024, with EPS projected in the range of $3.40-3.50[100] - Management plans to continue investing in new technology and processes, and may consider acquisitions to enhance revenue growth[90] Shareholder Returns - Dividends paid in 3Q 2025 were $988 ($0.305/share), compared to $1,052 ($0.300/share) in 3Q 2024, representing 38% of 3Q 2025 Net Income[81] - Dividends paid in 9M 2025 totaled $3,006, a decrease from $3,222 in 9M 2024, representing 34% of Net Income[84] Balance Sheet and Cash Flow - The balance sheet as of September 30, 2025, showed a stronger current ratio, lower total liabilities, and higher stockholders' equity despite lower sales and earnings[37] - Net cash provided by operating activities was $11,215 in 9M 2025, down from $11,894 in 9M 2024, primarily due to a $2,252 decrease in Net Income[86] - Total consolidated assets decreased by $564 to $121,975 as of September 30, 2025, despite a $201 increase in consolidated current assets[91] - Working capital increased to $93,521 at September 30, 2025, primarily due to a $1,291 increase in cash[94] - UTMD's total debt ratio was 3% as of September 30, 2025, down from 4% at the end of 2024[96] Stock Performance - The closing share price at the end of 3Q 2025 was $62.97, reflecting a 10.6% increase from the previous quarter[85]

Core Viewpoint - Utah Medical Products, Inc. (UTMD) reported a disappointing third quarter for 2025, with significant declines in earnings and revenue, attributed to unexpected order cancellations and a challenging operating environment [1][2][5]. Financial Performance - Earnings per share (EPS) for Q3 2025 was 82 cents, down 19.9% from $1.025 in the same quarter last year [1]. - Revenue decreased by 1.9% to $9.8 million from $10 million year-over-year [2]. - Net income fell by 26.2% to $2.6 million from $3.6 million [2]. Key Business Metrics - Gross profit declined 3.4% year-over-year to $5.6 million, with gross margin dropping to 57.1% from 58% [3]. - Operating income decreased by 21.9% to $2.6 million, resulting in an operating margin of 26.6%, down from 33.4% [3]. - Adjusted EBITDA fell 15.9% to $4.2 million, with the adjusted EBITDA margin contracting to 42.5% from 49.6% [4]. Management Commentary - Management cited unexpected cancellations or delays from two non-U.S. distributors, leading to a revenue loss of $0.6 million and a $0.4 million bad debt provision [5]. - The cancellation from a China distributor may indicate the end of a long-term business relationship [5]. - Sales from former major OEM customer PendoTECH dropped to $0.01 million from $0.3 million year-over-year, but management believes this decline has nearly bottomed out [6]. Factors Influencing Results - Manufacturing costs increased due to U.S. tariffs, impacting the cost of goods sold by $0.08 million in Q3 [7]. - Gross margins were further affected by under-absorption of fixed overheads due to lower sales volumes [7]. - Litigation expenses were high at $0.38 million, though down from $0.43 million a year earlier [8]. Revenue Breakdown - Domestic U.S. sales rose 3% year-over-year, driven by a 7.7% increase in direct device sales and a 16.5% gain in Filshie product sales [9]. - International sales declined by 8.5%, significantly impacted by a 21.7% drop in constant currency OUS sales [9]. Guidance - Management now expects full-year 2025 revenue to decline approximately 7% year-over-year, revised from an earlier estimate of a 5% drop [11]. - Adjusted EBITDA for the full year is projected to be in the range of $17 to $18 million [11]. Other Developments - During the quarter, UTMD repurchased 11,729 shares for $0.7 million, totaling 130,984 shares worth $7.4 million year-to-date [12]. - Dividends paid during the quarter amounted to $1 million, representing 38% of quarterly net income [12]. - Since the end of 2023, UTMD has spent $34.6 million on share repurchases and dividends, with a minimal decrease of $8.6 million in cash and investments, indicating strong cash generation capacity [12].

Revenue Performance - UTMD's 3Q 2025 revenues decreased by 2% compared to 3Q 2024, with a total revenue loss of $581, attributed to foreign trade uncertainties and order cancellations [4][5][6]. - Total consolidated sales for 9M 2025 were $2,271 million, a decrease of 7.2% compared to 9M 2024 [20]. - U.S. domestic sales in 9M 2025 were $17,308 million, down 2.3% from $17,709 million in 9M 2024 [21]. - OUS sales in 9M 2025 were $12,167 million, representing a 13.3% decline from $14,036 million in 9M 2024 [22]. - Sales to UTMD's China distributor were $395 in 3Q 2025, significantly lower than $781 in 3Q 2024, contributing to a negative sales trend [7][8]. - Domestic U.S. sales increased by 3.0% in 3Q 2025, reaching $5,859, despite a decline in sales to PendoTECH [17]. Profitability Metrics - Gross profit margin for 3Q 2025 was 57.1%, down from 58.0% in 3Q 2024, reflecting higher manufacturing overhead costs and lower sales absorption [9][10]. - Operating income in 3Q 2025 fell by 22% year-over-year, leading to a 26% decline in net income [4][12]. - Earnings per share (EPS) in 3Q 2025 were 20% lower than in 3Q 2024, reflecting a 26% decrease in net income [13]. - Gross profit in 9M 2025 was $2,083 million, an 11.1% decrease compared to 9M 2024 [25]. - Operating income in 9M 2025 was $8,961 million, down 16.0% from $10,664 million in 9M 2024 [26]. - Net Income in 3Q 2025 was $2,631 (26.8% of sales), a 26.2% decrease from $3,563 (35.6% of sales) in 3Q 2024; for 9M 2025, Net Income was $8,720 (29.6% of sales), down 20.5% from $10,972 (34.6% of sales) in 9M 2024 [40]. Expenses and Costs - Total operating expenses for 3Q 2025 were $2,073, representing 21.1% of revenues, up from 15.2% in 3Q 2024 [10]. - Adjusted consolidated EBITDA for 3Q 2025 was $4,170 million, a decrease of 15.9% compared to $4,958 million in 3Q 2024 [36]. - Adjusted consolidated EBITDA for 9M 2025 was $13,493, a decrease of 12.7% from $15,447 in 9M 2024, with a projected range of $17 to $18 million for the entire 2025 calendar year [37]. - Adjusted consolidated EBITDA as a percentage of sales was 42.5% in 3Q 2025, down from 49.6% in 3Q 2024, and 45.8% in 9M 2025 compared to 48.7% in 9M 2024 [38]. Balance Sheet and Cash Flow - The balance sheet showed a stronger position with lower total liabilities and higher stockholders' equity as of September 30, 2025 [14]. - Cash and investments increased to $84,267 at September 30, 2025, despite using $7,361 for share repurchases and paying $3,006 in dividends [47]. - The current ratio improved as current liabilities declined by 20% while current assets remained stable [47]. - Total shares repurchased in 9M 2025 were 130,984 for $7,362, representing 3.9% of shares outstanding at the end of 2024 [45]. Market and Share Performance - The closing share price at the end of 3Q 2025 was $62.97, reflecting a 10.6% increase from $56.92 at the end of 2Q 2025 [46]. - The average exercise price of unexercised employee options was $73.75, higher than the market price, resulting in no dilution for 3Q 2025 [44]. Foreign Currency Impact - Foreign currency sales accounted for 29% of total consolidated sales in 3Q 2025, with a favorable impact from stronger EUR and GBP [9][18]. - The weighted-average favorable impact on 9M 2025 consolidated sales from foreign currency exchange rates was 0.8%, adding $244 million to reported sales [22]. Taxation - The company has consistently paid millions in income taxes annually, with the basic corporate income tax rates unchanged from 2024 [41].

Core Viewpoint - Utah Medical Products, Inc. reported third quarter and first nine months financial results for 2025, indicating that performance was significantly affected by global trade uncertainty [1] Financial Results - The financial results for the third quarter (3Q) and first nine months (9M) of 2025 were notably impacted by global trade uncertainties [1]

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[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated condensed financial statements and management's discussion for Utah Medical Products, Inc [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents UTMD's unaudited consolidated condensed financial statements, covering balance sheets, income, cash flow, and equity statements [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Details UTMD's financial position, presenting assets, liabilities, and stockholders' equity at reporting dates | (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Total current assets | $94,375 | $96,330 | | Property and equipment, net | $10,257 | $9,763 | | Goodwill | $14,193 | $13,580 | | Other intangible assets, net | $1,977 | $2,865 | | **Total assets** | **$120,802** | **$122,538** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $2,254 | $3,757 | | Total liabilities | $3,269 | $5,111 | | Total stockholders' equity | $117,533 | $117,427 | | **Total liabilities and stockholders' equity** | **$120,802** | **$122,538** | - Total assets decreased by **$1,736 thousand** from December 31, 2024, to June 30, 2025, primarily due to decreases in current assets[8](index=8&type=chunk)[88](index=88&type=chunk) - Total liabilities decreased by **$1,842 thousand**, driven by a **$1,502 thousand** reduction in current liabilities and a **$339 thousand** reduction in long-term liabilities[8](index=8&type=chunk)[92](index=92&type=chunk) [Consolidated Condensed Statements of Income](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) Outlines UTMD's financial performance over specific periods, detailing revenues, expenses, and net income | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales, net | $9,953 | $10,400 | $19,663 | $21,740 | | Gross profit | $5,595 | $6,253 | $11,133 | $13,018 | | Operating income | $3,196 | $3,438 | $6,349 | $7,321 | | Income before provision for income taxes | $3,836 | $4,211 | $7,694 | $9,010 | | Net income | $3,048 | $3,453 | $6,089 | $7,409 | | Earnings per common share (basic) | $0.94 | $0.98 | $1.86 | $2.07 | | Earnings per common share (diluted) | $0.94 | $0.98 | $1.86 | $2.07 | - Net sales decreased by **4.3%** in Q2 2025 and **9.6%** in 1H 2025 compared to the same periods in 2024[9](index=9&type=chunk)[24](index=24&type=chunk) - Net income decreased by **11.7%** in Q2 2025 and **17.8%** in 1H 2025 year-over-year[9](index=9&type=chunk)[24](index=24&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Reports UTMD's cash inflows and outflows from operating, investing, and financing activities | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $7,337 | $8,038 | | Net cash used in investing activities | $(235) | $(110) | | Net cash used in financing activities | $(8,726) | $(11,173) | | Net increase in cash and cash equivalents | $(797) | $(3,649) | | Cash at end of period | $82,179 | $89,219 | - Net cash provided by operating activities decreased by **$701 thousand** in 1H 2025 compared to 1H 2024, primarily due to lower net income and increased use of cash to decrease accrued expenses[10](index=10&type=chunk)[81](index=81&type=chunk) - Cash and investments decreased by **$797 thousand** in 1H 2025, after paying **$2.0 million** in dividends and repurchasing **$6.7 million** of common stock[10](index=10&type=chunk)[28](index=28&type=chunk)[87](index=87&type=chunk) [Consolidated Condensed Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders'%20Equity) Details changes in UTMD's stockholders' equity, including common stock, retained earnings, and comprehensive income | (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :----------------------------------- | :---------------------- | :----------------------- | | Common Stock (Shares) | 3,335 | 3,216 | | Common Stock (Amount) | $33 | $32 | | Accumulated Other Comprehensive Loss | $(11,908) | $(9,362) | | Retained Earnings | $129,302 | $126,862 | | Total Stockholders' Equity | $117,427 | $117,533 | - Total stockholders' equity increased slightly from **$117,427 thousand** at December 31, 2024, to **$117,533 thousand** at June 30, 2025, despite common stock repurchases and dividend payments[12](index=12&type=chunk) - The company repurchased **119,255 shares** of common stock in 1H 2025 for **$6,708 thousand**[12](index=12&type=chunk)[76](index=76&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) Provides additional information and disclosures relevant to the consolidated condensed financial statements - The company is evaluating the impact of new FASB ASUs 2023-09 (Income Taxes) and 2024-03 (Income Statement Expenses), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[14](index=14&type=chunk)[15](index=15&type=chunk) Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Finished goods | $971 | $1,913 | | Work-in-process | $1,407 | $1,414 | | Raw materials | $5,855 | $5,485 | | Total | $8,233 | $8,812 | - Stock-based compensation expense was **$86 thousand** in Q2 2025 and **$168 thousand** in 1H 2025, compared to **$52 thousand** and **$131 thousand** in the respective prior year periods[16](index=16&type=chunk) - No warranty reserve was made at December 31, 2024, or June 30, 2025, as existing warranty obligations were deemed immaterial[16](index=16&type=chunk) Global Revenues by Product Category (in thousands) | Product Category | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Obstetrics | $1,025 | $1,019 | $2,050 | $2,044 | | Gynecology/Electrosurgery/Urology | $4,807 | $5,452 | $9,703 | $10,912 | | Neonatal | $2,102 | $1,546 | $4,084 | $3,188 | | Blood Pressure Monitoring and Accessories | $2,019 | $2,383 | $3,826 | $5,596 | | Total | $9,953 | $10,400 | $19,663 | $21,740 | - The company operates as a single operating segment, with the CEO reviewing consolidated gross profit margin, operating margin, and net income to assess performance and allocate resources[20](index=20&type=chunk) - After June 30, 2025, through August 11, 2025, UTMD repurchased an additional **10,178 shares** for

Core Insights - Utah Medical Products, Inc. (UTMD) experienced a 3% decline in share price following its earnings report for Q2 2025, contrasting with a 0.6% increase in the S&P 500 index during the same period [1] - The company reported earnings per share (EPS) of 94 cents, a 4% decrease from 98 cents in Q2 2024 [1] Financial Performance - Net sales were $10 million, down 4.3% from $10.4 million in the same quarter last year [2] - Income before tax decreased by 8.9% to $3.8 million, while net income fell 11.7% to $3.1 million compared to $3.5 million in Q2 2024 [2] Sales Trends - Domestic sales increased by 0.6% to $5.9 million, driven by a 10% rise in direct non-Filshie device sales and an 8% increase in Filshie device sales [3] - However, OEM domestic sales plummeted by 38% due to a significant drop in PendoTECH orders [3] - International sales dropped 10.5% to $4.1 million, with direct sales by subsidiaries falling 15.8% [4] Profitability Metrics - Gross profit margin contracted to 56.2% from 60.1% a year earlier, with gross profit declining 10.5% to $5.6 million [5] - Operating income fell 7.1% to $3.2 million, and the operating margin decreased to 32.1% from 33.1% [5] - Net income margin narrowed to 30.6% from 33.2%, influenced by a higher effective tax rate of 20.5% compared to 18% in the previous year [6] Expense Management - Total operating expenses decreased by 14.8% to $2.4 million, with general and administrative expenses dropping 13.6% to $1.7 million [7] - R&D spending saw a significant decline of 47.1% to $0.1 million following the completion of biopharma sensor validation [7] Capital Allocation - The company repurchased 64,988 shares at an average price of $53.67 and paid $1 million in dividends, which accounted for 33% of net income [8] - Cash and investments at the end of the quarter totaled $82.2 million, slightly down from $83 million at the end of 2024 [8] Management Insights - Management attributed revenue decline to the expected drop in PendoTECH sales but highlighted the strength of core direct sales, particularly in the U.S. [9] - Full-year 2025 results are expected to reflect continued weakness in PendoTECH sales, projected to be about $2 million lower than in 2024 [10] - The current trailing twelve-month (TTM) EBITDA stands at $18.6 million, with a target range of $16 million to $18 million for the year [10]

Core Insights - Utah Medical Products reported a 4.3% decrease in GAAP revenue for Q2 2025, totaling $9.95 million, primarily due to a decline in sales to its largest customer, PendoTECH [1][2] - Diluted earnings per share (GAAP) were $0.94, with net income falling to $3.05 million, reflecting pressures on both gross and net margins [1][2] Financial Performance - Revenue decreased from $10.40 million in Q2 2024 to $9.95 million in Q2 2025, a drop of 4.3% [2] - Diluted EPS fell by 4.0% from $0.98 in Q2 2024 to $0.94 in Q2 2025 [2] - Gross profit margin contracted to 56.2%, down from 60.1% year-over-year, indicating a 3.9 percentage point decline [2][7] - Operating income decreased by 7.1% to $3.20 million, while net income fell by 11.7% [2] Sales and Market Dynamics - Domestic direct sales increased, with other device sales up 10% year-over-year, and Filshie Clip System sales in the U.S. rising by 8% [5] - However, domestic OEM sales dropped 38%, now representing only 12% of total domestic sales [5] - International sales declined by 11.6% in the first half of 2025 compared to the same period in 2024, with significant drops in Canada and Australia [6][11] Cost Management and Legal Exposure - The company reduced operating costs by $416,000 year-over-year, mainly through lower litigation expenses [8][12] - Legal costs remain a concern, with ongoing exposure related to product liability litigation [9][12] Strategic Focus and Future Outlook - Utah Medical Products focuses on product innovation, regulatory compliance, and international expansion, with a need to offset declining OEM sales [4] - Management anticipates an additional $200,000 reduction in PendoTECH-related revenue for the second half of 2025 compared to the same period in 2024 [14] - The company maintains a strong balance sheet with $82.2 million in cash and no debt, and has returned $1.0 million to shareholders through dividends [13]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) UTMD's 2Q and 1H 2025 results met projections, with revenue and margin declines largely offset by share repurchases, maintaining a strong debt-free balance sheet [Second Quarter (2Q) and First Half (1H) 2025 Highlights](index=1&type=section&id=2Q%20and%201H%202025%20Highlights) UTMD's 2Q and 1H 2025 results met projections, with revenue and margin declines driven by PendoTECH sales, but EPS was cushioned by share repurchases, maintaining a strong debt-free balance sheet - The year-over-year revenue decline was dominated by a continued drop in sales to OEM customer PendoTECH, which accounted for **71% of the Q2 2025 revenue decline** and **86% of the 1H 2025 decline**[4](index=4&type=chunk) - Share repurchases during Q2 and 1H 2025 significantly mitigated the decline in EPS relative to the decline in Net Income[6](index=6&type=chunk) - The balance sheet as of June 30, 2025, remained strong with **no debt**; Cash and Investments totaled **$82.2 million** after paying **$2.0 million** in dividends and repurchasing **$6.7 million** of stock during 1H 2025[7](index=7&type=chunk)[8](index=8&type=chunk) Profit Margin Comparison (2025 vs. 2024) | Profit Margin | 2Q 2025 (%) | 2Q 2024 (%) | 1H 2025 (%) | 1H 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit Margin | 56.2% | 60.1% | 56.6% | 59.9% | | Operating Income Margin | 32.1% | 33.1% | 32.3% | 33.7% | | Income B4 Tax Margin | 38.5% | 40.5% | 39.1% | 41.4% | | Net Income Margin | 30.6% | 33.2% | 31.0% | 34.1% | [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) This section analyzes UTMD's revenue performance for 2Q and 1H 2025, highlighting the impact of PendoTECH sales and trends in domestic and international markets [Second Quarter (2Q) 2025 Revenues](index=2&type=section&id=2Q%202025%20Revenues) Total revenue for Q2 2025 decreased by 4.3% year-over-year, primarily due to a significant drop in sales to PendoTECH, despite domestic sales growth and weaker international direct sales Q2 2025 Revenue Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Consolidated Sales | $9,953k | $10,400k | (4.3%) | | Sales to PendoTECH | $196k | $511k | (61.7%) | | Total Domestic Sales | $5,865k | $5,831k | +0.6% | | Total International (OUS) Sales | $4,088k | $4,569k | (10.5%) | - Domestic sales growth was driven by a **10% increase** in direct non-Filshie device sales (to **$4,047k**) and an **8% increase** in Filshie Clip System sales (to **$1,107k**)[10](index=10&type=chunk) - International direct-to-end-user sales were **$282k (15.8%) lower** than Q2 2024, with declines across all major direct markets including Ireland, Canada, and the UK[11](index=11&type=chunk) - Favorable foreign exchange rates (stronger GBP and EUR) increased total consolidated sales by **$173k** in Q2 2025; In constant currency, foreign currency sales were **21.4% lower** than in Q2 2024[14](index=14&type=chunk) [First Half (1H) 2025 Revenues](index=3&type=section&id=1H%202025%20Revenues) For 1H 2025, total revenue declined by 9.6% year-over-year, largely driven by a substantial decrease in PendoTECH sales, while domestic sales showed growth excluding PendoTECH, and international sales declined 1H 2025 Revenue Performance (in thousands) | Metric | 1H 2025 | 1H 2024 | Change | | :--- | :--- | :--- | :--- | | Total Consolidated Sales | $19,663k | $21,740k | (9.6%) | | Sales to PendoTECH | $265k | $2,056k | (87.1%) | | Total Domestic Sales | $11,448k | $12,022k | (4.8%) | | Total International (OUS) Sales | $8,215k | $9,718k | (15.5%) | - Excluding sales to PendoTECH, domestic sales in 1H 2025 were **$11,184k**, a **7.6% increase** compared to **$10,396k** in 1H 2024[17](index=17&type=chunk) - International (OUS) sales, excluding PendoTECH sales from the prior year, were **11.6% lower** in 1H 2025 compared to 1H 2024[19](index=19&type=chunk) - Favorable foreign exchange rates had a net positive impact of **$130k** on 1H 2025 sales; In constant currency terms, foreign currency sales were **18.0% lower** than in 1H 2024[22](index=22&type=chunk) [Profitability Analysis](index=4&type=section&id=Profitability%20Analysis) This section details UTMD's profitability metrics, including Gross Profit, Operating Income, Income Before Tax, and Net Income, for 2Q and 1H 2025, analyzing key drivers of change [Gross Profit (GP)](index=4&type=section&id=Gross%20Profit%20(GP)) Gross Profit Margin contracted in 2Q and 1H 2025, primarily due to challenges in Ireland operations, including unfavorable product mix, reduced fixed cost absorption, and higher raw material costs Gross Profit and Margin Comparison (in thousands, except for margins) | Metric | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $5,595k | $6,253k | $11,133k | $13,018k | | Gross Profit Margin | 56.2% | 60.1% | 56.6% | 59.9% | - The lower margins were mainly due to Ireland operations, stemming from an unfavorable product mix, lower sales volume to absorb fixed costs, higher raw material costs, and an increase in intercompany inventory requiring reserved gross profit[25](index=25&type=chunk) - In contrast, gross margins in the U.S. operations remained consistent with prior periods in 2024 and Q1 2025, helped by higher direct sales[25](index=25&type=chunk) [Operating Income (OI)](index=5&type=section&id=Operating%20Income%20(OI)) Operating Income decreased in 2Q and 1H 2025 due to lower Gross Profit, but the decline was mitigated by reduced Operating Expenses, notably a significant drop in U.S. litigation costs Operating Income and Margin Comparison (in thousands, except for margins) | Metric | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Income | $3,196k | $3,438k | $6,349k | $7,321k | | Operating Margin | 32.1% | 33.1% | 32.3% | 33.7% | Operating Expenses Breakdown (as % of sales) | OE Category | 2Q 2025 (%) | 2Q 2024 (%) | 1H 2025 (%) | 1H 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | S&M | 5.3% | 5.3% | 5.2% | 4.4% | | G&A | 17.5% | 19.4% | 17.6% | 19.4% | | R&D | 1.3% | 2.4% | 1.5% | 2.4% | | Total OE | 24.1% | 27.1% | 24.3% | 26.2% | - The primary driver for lower G&A expenses was a significant reduction in U.S. litigation costs, which were **$355k lower** in Q2 2025 and **$791k lower** in 1H 2025 compared to the same periods in 2024[30](index=30&type=chunk) [Income Before Tax (EBT) and EBITDA](index=6&type=section&id=Income%20Before%20Tax%20(EBT)%20and%20EBITDA) EBT declined in 2Q and 1H 2025, exacerbated by lower non-operating income, yet non-GAAP adjusted EBITDA remained strong, with the company on track for its full-year target EBT and Margin Comparison (in thousands, except for margins) | Metric | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | :--- | :--- | | Income Before Tax (EBT) | $3,835k | $4,211k | $7,694k | $9,010k | | EBT Margin | 38.5% | 40.5% | 39.1% | 41.4% | - Net non-operating income (NOI) decreased in 1H 2025 by **$343k** compared to 1H 2024, primarily due to receiving approximately **$332k less** in interest income because of lower cash balances and interest rates[35](index=35&type=chunk)[36](index=36&type=chunk) - Management's beginning-of-year EBITDA target of **$17-$18 million** is still considered achievable[38](index=38&type=chunk) Non-US GAAP Adjusted EBITDA Reconciliation (1H 2025 vs 1H 2024) (in thousands) | Component | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | | EBT | $7,694k | $9,010k | | Depreciation Expense | $405k | $327k | | Femcare IIA Amortization | $1,032k | $1,005k | | Stock Option Expense | $168k | $130k | | **Adjusted EBITDA** | **$9,323k** | **$10,489k** | [Net Income (NI)](index=7&type=section&id=Net%20Income%20(NI)) Net Income fell in 2Q and 1H 2025 due to lower operating and non-operating income, further impacted by an increased effective tax rate Net Income and Margin Comparison (in thousands, except for margins) | Metric | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $3,048k | $3,453k | $6,089k | $7,409k | | Net Income Margin | 30.6% | 33.2% | 31.0% | 34.1% | - The average consolidated income tax provision rate rose to **20.5%** in Q2 2025 (vs. 18.0% in Q2 2024) and **20.9%** in 1H 2025 (vs. 17.8% in 1H 2024), amplifying the decline in Net Income[40](index=40&type=chunk)[41](index=41&type=chunk) [Shareholder Metrics and Capital Allocation](index=7&type=section&id=Shareholder%20Metrics%20and%20Capital%20Allocation) This section examines UTMD's shareholder-focused metrics and capital allocation strategies, including Earnings Per Share, share repurchases, and dividend payments [Earnings Per Share (EPS)](index=7&type=section&id=Earnings%20Per%20Share%20(EPS)) Diluted EPS experienced a more moderate decline than Net Income in 2Q and 1H 2025, primarily due to the company's active share repurchase program reducing outstanding shares Diluted EPS Comparison | Metric | 2Q 2025 | 2Q 2024 | 1H 2025 | 1H 2024 | | :--- | :--- | :--- | :--- | :--- | | Diluted EPS | $0.939 | $0.978 | $1.858 | $2.070 | | % Change | (4.0%) | | (10.3%) | | - The percentage decreases in EPS were substantially smaller than the decreases in Net Income due to a lower number of diluted shares outstanding[43](index=43&type=chunk) - Diluted shares used for EPS calculation decreased to **3,277,936** in 1H 2025 from **3,579,435** in 1H 2024 as a result of share repurchases[44](index=44&type=chunk) [Share Repurchases and Dividends](index=8&type=section&id=Share%20Repurchases%20and%20Dividends) UTMD actively returned capital to shareholders in 1H 2025 through significant share repurchases and consistent dividend payments, demonstrating a commitment to shareholder value - In 1H 2025, UTMD repurchased **119,255 shares** at an average price of **$56.26**, for a total cost of **$6.7 million**[45](index=45&type=chunk) - The company paid dividends of **$0.305 per share** in 1H 2025, totaling **$2.018 million**; This payout represented **33% of Net Income** for the period[47](index=47&type=chunk) [Financial Position](index=8&type=section&id=Financial%20Position) This section provides an overview of UTMD's robust financial position, including its balance sheet strength, liquidity, and working capital management as of June 30, 2025 [Balance Sheet Analysis](index=8&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2025, UTMD maintained a strong, debt-free balance sheet with high liquidity, evidenced by a significantly improved current ratio and efficient working capital management - The company's cash and investments balance declined by only **$0.8 million** to **$82.2 million** in 1H 2025, despite using **$6.7 million** for share repurchases and **$2.0 million** for dividends[49](index=49&type=chunk) - The current ratio improved significantly to **41.9** at June 30, 2025, compared to **25.6** at December 31, 2024, as a result of favorable changes in non-cash working capital[49](index=49&type=chunk) Key Financial Ratios (as of June 30, 2025) | Ratio | Value | | :--- | :--- | | Current Ratio | 41.9 | | Days in Trade Receivables | 33 | | Average Inventory Turns | 2.1 | | 2025 YTD ROE (before dividends) | 10% | [Financial Statements](index=10&type=section&id=Financial%20Statements) This section presents the detailed consolidated financial statements, including the Income Statement and Balance Sheet, for the specified periods, offering a comprehensive view of the company's financial health [Income Statement](index=10&type=section&id=Income%20Statement) This section provides the consolidated income statements for 2Q and 1H 2025, detailing key financial performance indicators such as Net Sales, Gross Profit, Operating Income, Net Income, and Earnings Per Share INCOME STATEMENT, Second Quarter (three months ended June 30) (in thousands except EPS) | (in thousands except EPS) | 2Q 2025 | 2Q 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Net Sales | $ 9,953 | $ 10,400 | ( 4.3%) | | Gross Profit | 5,595 | 6,253 | (10.5%) | | Operating Income | 3,196 | 3,438 | ( 7.1%) | | Income Before Tax | 3,835 | 4,211 | ( 8.9%) | | Net Income | 3,048 | 3,453 | (11.7%) | | Earnings Per Share | $ 0.939 | $0.978 | ( 4.0%) | INCOME STATEMENT, First Half (six months ended June 30) (in thousands except EPS) | (in thousands except EPS) | 1H 2025 | 1H 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Net Sales | $ 19,663 | $ 21,740 | ( 9.6%) | | Gross Profit | 11,133 | 13,018 | (14.5%) | | Operating Income | 6,349 | 7,321 | (13.3%) | | Income Before Tax | 7,694 | 9,010 | (14.6%) | | Net Income | 6,089 | 7,409 | (17.8%) | | Earnings Per Share | $ 1.858 | $ 2.070 | (10.3%) | [Balance Sheet](index=10&type=section&id=Balance%20Sheet) This section presents the consolidated balance sheet as of June 30, 2025, with comparative data, offering a snapshot of the company's assets, liabilities, and stockholders' equity BALANCE SHEET (in thousands) | | JUN 30, 2025 | DEC 31, 2024 | JUN 30, 2024 | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash & Investments | $82,179 | $82,976 | $89,219 | | Total Current Assets | 94,375 | 96,331 | 102,322 | | Total Assets | $120,802 | $122,538 | $130,032 | | **Liabilities & Stockholders' Equity** | | | | | Total Current Liabilities | $2,254 | $3,757 | $3,939 | | Stockholders' Equity | 117,533 | 117,427 | 124,052 | | Total Liabilities & Stockholders' Equity | $120,802 | $122,538 | $130,032 |

Core Viewpoint - The article emphasizes the strong balance sheet and profitability of Utah Medical Products (UTMD), suggesting a favorable risk/reward ratio for investors at its current price [1]. Group 1: Company Analysis - Utah Medical Products (UTMD) was initially rated as a Strong Buy due to its financial strength and profitability [1]. - The investment approach focuses on identifying micro-cap and small-cap opportunities that align with long-term success criteria established by renowned investors [1]. Group 2: Research Background - TQP Research is led by a Certified Public Accountant (CPA) with experience in structured finance, capital markets, and credit risk [1]. - The research emphasizes a value-oriented investment strategy, engaging actively with the investment community [1].