PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated condensed financial statements for Utah Medical Products, Inc. and its subsidiaries, including balance sheets, income statements, statements of stockholders' equity, and cash flows, along with explanatory notes for the periods ended March 31, 2025, and December 31, 2024 [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Consolidated Condensed Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash & Investments | $83,325 | $82,976 | | Total current assets | $96,399 | $96,330 | | Total assets | $122,519 | $122,538 | | Total current liabilities | $4,324 | $3,757 | | Total liabilities | $5,472 | $5,111 | | Total stockholders' equity | $117,047 | $117,427 | [Consolidated Condensed Statements of Income](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) Consolidated Condensed Statements of Income (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sales, net | $9,710 | $11,340 | | Cost of goods sold | $4,172 | $4,574 | | Gross profit | $5,538 | $6,766 | | Total operating expenses | $2,385 | $2,883 | | Operating income | $3,153 | $3,883 | | Income before provision for income taxes | $3,858 | $4,798 | | Net income | $3,041 | $3,956 | | Earnings per common share (basic) | $0.92 | $1.09 | | Earnings per common share (diluted) | $0.92 | $1.09 | [Consolidated Condensed Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders%27%20Equity) Changes in Stockholders' Equity (in thousands) | Item | Three Months Ended March 31, 2025 | | :-------------------------------- | :-------------------------------- | | Balance at December 31, 2024 | $117,427 | | Stock option compensation expense | $82 | | Common stock purchased and retired | $(3,221) | | Foreign currency translation adjustment | $718 | | Common stock dividends | $(1,001) | | Net income | $3,041 | | Balance at March 31, 2025 | $117,047 | [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Consolidated Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $4,464 | $5,276 | | Net cash provided by/(used in) investing activities | $(184) | $5 | | Net cash used in financing activities | $(4,238) | $(3,983) | | Effect of exchange rate changes on cash | $307 | $(358) | | Net increase in cash and cash equivalents | $349 | $940 | | Cash at end of period | $83,325 | $93,808 | [Notes to Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) [General Information](index=8&type=section&id=1.5.1%20General%20Information) - The unaudited financial statements are prepared in accordance with Form 10-Q and should be read in conjunction with the annual report on Form 10-K for the year ended December 31, 2024[15](index=15&type=chunk) - Currency amounts are in thousands except per-share amounts[15](index=15&type=chunk) [Recent Accounting Standards](index=8&type=section&id=1.5.2%20Recent%20Accounting%20Standards) - The company is evaluating the impact of ASU 2023-09 (Income Taxes), effective for fiscal years beginning after December 15, 2024[17](index=17&type=chunk) - The company is evaluating the impact of ASU 2024-03 (Income Statement Expenses), effective for fiscal years beginning after December 15, 2026[18](index=18&type=chunk) [Inventories](index=8&type=section&id=1.5.3%20Inventories) Inventories (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Finished goods | $1,602 | $1,913 | | Work-in-process | $1,544 | $1,414 | | Raw materials | $5,502 | $5,485 | | Total | $8,648 | $8,812 | [Stock-Based Compensation](index=8&type=section&id=1.5.4%20Stock-Based%20Compensation) - Recognized **$82 thousand** in stock-based compensation cost in Q1 2025, compared to **$79 thousand** in Q1 2024[19](index=19&type=chunk) [Warranty Reserve](index=8&type=section&id=1.5.5%20Warranty%20Reserve) - No warranty reserve was made at December 31, 2024, or March 31, 2025, as existing warranty obligations were deemed immaterial[19](index=19&type=chunk) [1Q 2025 Global Revenues by Product Category](index=9&type=section&id=1.5.6%201Q%202025%20Global%20Revenues%20by%20Product%20Category) 1Q 2025 Global Revenues by Product Category (in thousands) | Product Category | Domestic | Outside US | Total | | :-------------------------------- | :------- | :--------- | :---- | | Obstetrics | $832 | $193 | $1,025 | | Gynecology/Electrosurgery/Urology | $2,329 | $2,567 | $4,896 | | Neonatal | $1,622 | $360 | $1,982 | | Blood Pressure Monitoring and Accessories | $800 | $1,007 | $1,807 | | Total | $5,583 | $4,127 | $9,710 | [Earnings Per Share](index=9&type=section&id=1.5.7%20Earnings%20Per%20Share) Earnings Per Share Reconciliation (in thousands, except per share) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $3,041 | $3,956 | | Weighted average shares, basic | 3,310 | 3,618 | | Earnings per share, basic | $0.92 | $1.09 | | Earnings per share, diluted | $0.92 | $1.09 | [Segment Information](index=9&type=section&id=1.5.8%20Segment%20Information) - The company operates as **one operating segment**, with the CEO reviewing consolidated financial information to assess performance and allocate resources[21](index=21&type=chunk) Selected Financial Information by Segment (in thousands) | Metric | Quarter Ended March 31, 2025 | Quarter Ended March 31, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | | Revenues | $9,710 | $11,340 | | Gross Profit Margin | 57.0% | 59.7% | | Operating Income Margin | 32.5% | 34.2% | | Net Income | $3,041 | $3,956 | [Subsequent Events](index=10&type=section&id=1.5.9%20Subsequent%20Events) - After March 31, 2025, through May 12, 2025, the company repurchased an additional **32,679 shares** of its stock for **$1,754 thousand** at an average price of **$53.67 per share**[23](index=23&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=10&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the first quarter of 2025, highlighting a significant decline in sales and profitability primarily due to reduced OEM sales to PendoTECH. It also discusses liquidity, capital resources, and future outlook [General](index=10&type=section&id=General) - Utah Medical Products, Inc. (UTMD) manufactures and markets a range of specialty medical devices[23](index=23&type=chunk) - Results for any given three-month period may not be indicative of comparative results for the year as a whole[23](index=23&type=chunk) [Analysis of Results of Operations](index=10&type=section&id=Analysis%20of%20Results%20of%20Operations) [Overview](index=10&type=section&id=2.2.1%20Overview) 1Q 2025 vs 1Q 2024 Income Statement Results (in thousands) | Metric | 1Q 2025 | 1Q 2024 | Change | | :-------------------- | :------ | :------ | :----- | | Net Sales | $9,710 | $11,340 | (14.4%) | | Gross Profit | $5,538 | $6,766 | (18.1%) | | Operating Income | $3,154 | $3,883 | (18.8%) | | Net Income | $3,041 | $3,956 | (23.1%) | | Earnings per Share (diluted) | $0.919 | $1.093 | (16.0%) | - Consolidated sales in 1Q 2025 were **$1,630 thousand lower** than in 1Q 2024, with OEM sales to PendoTECH accounting for **$1,476 thousand (91%)** of the decline[24](index=24&type=chunk) - Foreign currency exchange rates had a minor negative impact of **1.4%** on reported USD sales, decreasing reported USD sales by **$43 thousand**[25](index=25&type=chunk)[26](index=26&type=chunk) [Revenues](index=11&type=section&id=2.2.2%20Revenues) - Total consolidated 1Q 2025 sales were **$1,630 thousand (14.4%) lower** than in 1Q 2024; constant currency sales were **$1,588 thousand (14.0%) lower**[35](index=35&type=chunk) - U.S. domestic sales were **9.8% lower**, and OUS sales were **19.8% lower**[35](index=35&type=chunk) Worldwide Revenues (USD) by Product Category (in thousands) | Product Category | 1Q 2025 | % of Total | 1Q 2024 | % of Total | | :-------------------------------- | :------ | :--------- | :------ | :--------- | | Obstetrics | $1,025 | 11% | $1,025 | 9% | | Gynecology/Electrosurgery/Urology | $4,896 | 50% | $5,461 | 48% | | Neonatal | $1,982 | 20% | $1,642 | 15% | | Blood Pressure Monitoring and Accessories* | $1,807 | 19% | $3,212 | 28% | | Total | $9,710 | 100% | $11,340 | 100% | - Domestic direct sales increased by **$406 thousand (11.6%)** due to recovery of NICU device sales[39](index=39&type=chunk) - U.S. sales to UTMD's largest OEM customer, PendoTECH, were **$1,047 thousand lower** in 1Q 2025 compared to 1Q 2024[39](index=39&type=chunk) [Gross Profit](index=13&type=section&id=2.2.3%20Gross%20Profit) - Gross Profit was **$1,227 thousand (18.1%) lower** in 1Q 2025 than in 1Q 2024[40](index=40&type=chunk) - The Gross Profit Margin (GPM) was almost **three percentage points lower (57.0% vs 59.7%)** due to manufacturing overhead costs not declining proportionally to the **14.4% sales decline**[27](index=27&type=chunk)[40](index=40&type=chunk) [Operating Income](index=13&type=section&id=2.2.4%20Operating%20Income) - Operating Income in 1Q 2025 was **$3,154 thousand (32.5% of sales)** compared to **$3,883 thousand (34.2% of sales)** in 1Q 2024[28](index=28&type=chunk)[44](index=44&type=chunk) - Operating expenses decreased by **$498 thousand**, primarily due to **$437 thousand lower litigation expenses**[28](index=28&type=chunk) - R&D expenses decreased by **$112 thousand**, mainly due to one-time testing and certification in 1Q 2024[28](index=28&type=chunk)[44](index=44&type=chunk) - S&M expenses increased by **$88 thousand** due to increases in salaries, medical costs, and the timing of trade shows[28](index=28&type=chunk)[43](index=43&type=chunk) [Non-operating expense/ Non-operating income](index=13&type=section&id=2.2.5%20Non-operating%20expense%2F%20Non-operating%20income) - Net Non-operating income in 1Q 2025 was **$705 thousand** compared to **$915 thousand** in 1Q 2024[29](index=29&type=chunk)[47](index=47&type=chunk) - The decrease was primarily due to **$153 thousand lower interest income** and **$32 thousand higher excise tax** for share repurchases[47](index=47&type=chunk) [Income Before Income Taxes (EBT)](index=14&type=section&id=2.2.6%20Income%20Before%20Income%20Taxes%20%28EBT%29) - Consolidated 1Q 2025 EBT was **$3,859 thousand (39.7% of sales)** compared to **$4,798 thousand (42.3% of sales)** in 1Q 2024, a **19.6% decline**[48](index=48&type=chunk) UTMD Non-US GAAP Adjusted Consolidated EBITDA (in thousands) | Metric | 1Q 2025 | 1Q 2024 | | :-------------------------- | :------ | :------ | | EBT | $3,859 | $4,798 | | Depreciation Expense | $200 | $156 | | Femcare IIA Amortization Expense | $501 | $504 | | Other Non-Cash Amortization Expense | $8 | $10 | | Stock Option Compensation Expense | $82 | $78 | | Remeasured Foreign Currency Balances | $2 | $1 | | UTMD non-US GAAP EBITDA: | $4,652 | $5,547 | - Management believes 1Q 2025 operating performance is consistent with achieving its 2025 financial projections, targeting **$18 million in adjusted consolidated EBITDA**[50](index=50&type=chunk) [Net Income](index=14&type=section&id=2.2.7%20Net%20Income) - Net Income in 1Q 2025 of **$3,041 thousand** was **23.1% lower** than **$3,956 thousand** in 1Q 2024[52](index=52&type=chunk) - The consolidated income tax provision rate was **21.2%** in 1Q 2025 compared to **17.6%** in 1Q 2024, contributing to the greater net income decline[30](index=30&type=chunk)[52](index=52&type=chunk) [Earnings Per Share (EPS)](index=14&type=section&id=2.2.8%20Earnings%20Per%20Share%20%28EPS%29) - EPS in 1Q 2025 at **$0.919** was **16.0% lower** than **$1.093** in 1Q 2024[54](index=54&type=chunk) - The smaller decline in EPS relative to Net Income was a result of **307,920 fewer diluted shares** used to calculate EPS in 1Q 2025 compared to 1Q 2024, due to share repurchases[31](index=31&type=chunk)[54](index=54&type=chunk) - UTMD repurchased **54,267 shares** at an average price of **$59.35** during 1Q 2025[56](index=56&type=chunk) [Return on Equity (ROE)](index=15&type=section&id=2.2.9%20Return%20on%20Equity%20%28ROE%29) - Annualized ROE (before stockholder dividends) in 1Q 2025 was **10%**, down from **12%** in 1Q 2024[58](index=58&type=chunk) - The lower ROE was due to **23% lower Net Income** divided by **8% lower average Stockholders' Equity**[58](index=58&type=chunk) - Management targets a **high ROE of 20%**[58](index=58&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash flows](index=15&type=section&id=2.3.1%20Cash%20flows) - Net cash provided by operating activities totaled **$4,464 thousand** in 1Q 2025, down from **$5,276 thousand** in 1Q 2024[59](index=59&type=chunk) - Capital expenditures for property and equipment were **$184 thousand** in 1Q 2025, compared to **$(5) thousand** in 1Q 2024[60](index=60&type=chunk) - UTMD spent **$3,221 thousand** to repurchase **54,267 shares** and paid **$1,017 thousand** in cash dividends in 1Q 2025[61](index=61&type=chunk) [Assets and Liabilities](index=16&type=section&id=2.3.2%20Assets%20and%20Liabilities) - UTMD's balance sheet remained strong with **no debt**; Cash and liquid Investments represented **68% of total consolidated assets** at March 31, 2025[66](index=66&type=chunk) - The current ratio improved to **22.3** at March 31, 2025, from **19.6** at March 31, 2024[66](index=66&type=chunk) - Total debt ratio (total liabilities/total assets) as of March 31, 2025, was **4.5%**[67](index=67&type=chunk) - Stockholders' Equity declined **$10.7 million** compared to a year earlier due to **$24.4 million in share repurchases and dividends**, offset by **$13.0 million in Net Income**[67](index=67&type=chunk) [Management's Outlook](index=17&type=section&id=Management%27s%20Outlook) - 1Q 2025 results are consistent with 2025 projections, primarily due to the anticipated continuing loss of the largest biopharma pressure sensor OEM customer, PendoTECH, which accounted for **91% of the quarterly revenue decline**[69](index=69&type=chunk) - The company anticipates a possible negative impact in 2025 from geopolitical tariffs, particularly reciprocal tariffs imposed by sovereignties of OUS customers[70](index=70&type=chunk) - Key objectives for 2025 include exploiting biopharma market opportunities, leveraging OUS distribution and manufacturing synergies, introducing new products, maintaining financial performance, utilizing cash for dividends and share repurchases, and seeking accretive acquisition opportunities[71](index=71&type=chunk)[73](index=73&type=chunk) [Forward-Looking Information](index=17&type=section&id=Forward-Looking%20Information) - The report contains forward-looking statements subject to risks, uncertainties, and assumptions, and actual results may differ materially[71](index=71&type=chunk) - The company assumes no obligation to update or disclose revisions to financial estimates[71](index=71&type=chunk) [Accounting Policy Changes](index=17&type=section&id=Accounting%20Policy%20Changes) - No new accounting policy changes were reported[73](index=73&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=17&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency exchange rate fluctuations due to its multinational operations. It manages this risk through operational strategies like local currency invoicing and optimizing global account structures, rather than separate hedging transactions - UTMD has manufacturing and trading operations in the U.S. (USD), Ireland (EUR), England (GBP), Australia (AUD), and Canada (CAD), exposing it to exchange rate fluctuations[72](index=72&type=chunk) - Foreign currency risk is managed by invoicing customers in the local currency where costs were incurred, converting currencies as transactions occur, and optimizing global account structures, without separate hedging transactions[74](index=74&type=chunk) [Item 4. Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and Principal Financial Officer, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated as **effective** as of March 31, 2025[75](index=75&type=chunk) - No material changes in internal controls over financial reporting occurred during the quarter ended March 31, 2025[76](index=76&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=18&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings, primarily Filshie clip product liability lawsuits, but does not anticipate these to have a material impact on its consolidated financial results - UTMD is a party to litigation incidental to its business, specifically Filshie clip product liability lawsuits[77](index=77&type=chunk) - The company does not expect the outcome of the Filshie clip litigation to be **material** to consolidated financial results[77](index=77&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Investors are advised to review the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, as additional unforeseen risks could also materially affect the business - Investors should carefully consider the risk factors discussed in Part I, 'Item 1A. Risk Factors' in UTMD's Annual Report on Form 10-K for the year ended December 31, 2024[78](index=78&type=chunk) - Additional risks and uncertainties not currently known or deemed immaterial may also materially adversely affect the company's business[78](index=78&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its long-standing practice of open market share repurchases in Q1 2025, acquiring 53,340 shares at an average price of $59.41. These repurchases are intended to maximize stockholder value and return on equity, without a publicly announced plan or expiration date Issuer Purchases of Equity Securities (1Q 2025) | Period | Total number of shares purchased | Average price paid per share | | :-------------------- | :----------------------------- | :--------------------------- | | 01/01/25 - 01/31/25 | 13,840 | $60.75 | | 02/01/25 – 02/28/25 | 13,885 | $60.01 | | 03/01/25 – 03/31/25 | 25,615 | $58.36 | | Total | 53,340 | $59.41 | - The company's open market share repurchases are a continuing and long-term pattern since **1992**, without an established expiration date or maximum limit[80](index=80&type=chunk) - The purpose of ongoing share repurchases is to **maximize the value** of the company for continuing stockholders and **maximize return on stockholder equity**[81](index=81&type=chunk) [Item 6. Exhibits](index=20&type=section&id=Item%206.%20Exhibits) This section lists the exhibits accompanying the Form 10-Q, including certifications from the CEO and Principal Financial Officer as required by the Sarbanes-Oxley Act, and various XBRL documents - Includes certifications of the CEO and Principal Financial Officer pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002[83](index=83&type=chunk) - Lists XBRL Instance, Schema, Calculation, Definition, Label, and Presentation files[83](index=83&type=chunk) SIGNATURES [Signatures](index=21&type=section&id=Signatures) The report was officially signed on May 13, 2025, by Kevin L. Cornwell, CEO, and Brian L. Koopman, Principal Financial Officer, on behalf of Utah Medical Products, Inc - The report was signed by Kevin L. Cornwell (CEO) and Brian L. Koopman (Principal Financial Officer) on **May 13, 2025**[87](index=87&type=chunk)

Core Viewpoint - Utah Medical Products, Inc. (UTMD) reported a decline in earnings and sales for the first quarter of 2025, leading to muted investor enthusiasm as reflected in its stock performance compared to the S&P 500 index [1][2]. Financial Performance - Earnings per share (EPS) for Q1 2025 were 92 cents, a 16% decrease from $1.09 in the same quarter last year [2]. - Net sales were $9.7 million, down 14.4% from $11.3 million year-over-year [2]. - Gross profit declined 18.1% year-over-year to $5.5 million [2]. - Operating income fell 18.8% to $3.2 million, while net income decreased 23.1% to $3 million [3]. Business Metrics - Gross profit margin decreased to 57% from 59.7% due to challenges in aligning fixed manufacturing overhead costs with declining sales volume [4]. - Operating income margin slipped to 32.5% from 34.2%, and net income margin contracted to 31.3% from 34.9% [5]. - Domestic direct sales increased by 11.6% year-over-year, driven by recovering demand for neonatal intensive care unit (NICU) devices [5]. - U.S. OEM sales dropped significantly by 61.3%, primarily due to reduced purchases by PendoTECH [5]. - International sales declined 19.8% year-over-year, affected by lower volumes and adverse currency effects [6]. Management Commentary - Management indicated that the sales decline was mainly due to reduced OEM orders from PendoTECH, which accounted for 91% of the total sales decline [7]. - Gross margin erosion was attributed to fixed overhead costs not decreasing in line with revenue drops [7]. - General and administrative costs were reduced, while sales and marketing expenses increased due to higher employee costs and trade show activities [7]. - The effective tax rate rose to 21.2% from 17.6% the previous year, impacting net income due to a shift in income mix and a tax provision related to repatriated earnings [8]. Outlook - Management did not provide specific financial forecasts but stated that Q1 performance aligns with full-year expectations outlined in the 2024 10-K filing [9]. - The company anticipates that revenue and gross margin levels will remain consistent throughout the year, targeting an adjusted EBITDA of approximately $18 million for 2025 [9]. Other Developments - During the quarter, UTMD repurchased 54,267 shares at an average price of $59.35, utilizing $3.2 million in cash [10]. - The company paid $1 million in dividends and maintained a strong financial position, with cash and investments totaling $83.3 million at the end of the quarter [10][11]. - Stockholders' equity remained stable at $117 million, reflecting financial discipline amid capital return activities [11].

Financial Performance - In Q1 2025, Utah Medical Products, Inc. reported total revenues of $1,630,000, a decline of 14.4% compared to Q1 2024[3] - Gross Profit (GP) for Q1 2025 was $5,538,000, which is $1,227,000 (18.1%) lower than Q1 2024 GP of $6,766,000[5] - Operating Income (OI) in Q1 2025 was $3,154,000, representing 32.5% of sales, compared to $3,883,000 (34.2% of sales) in Q1 2024[6] - Net Income (NI) for Q1 2025 was $2,174,000, a decrease of 23.1% from Q1 2024[9] - Earnings Per Share (EPS) in Q1 2025 was $0.56, only 16.0% lower than Q1 2024 despite a 23.1% decrease in NI due to share repurchases[10] - Total net sales for Q1 2025 were $9,710, down 14.4% from $11,340 in Q1 2024, with gross profit declining by 18.1%[35] Sales Performance - Domestic sales in Q1 2025 were $5,583,000, down 9.8% from $6,192,000 in Q1 2024, with direct sales increasing by 11.6%[13] - OUS sales in Q1 2025 were $4,127,000, a decrease of 19.8% compared to Q1 2024, with OEM sales to PendoTECH contributing significantly to the decline[14] Expenses and Costs - Operating Expenses (OE) in Q1 2025 were $2,385,000, representing 24.6% of sales, compared to $2,882,000 (25.4% of sales) in Q1 2024[16] - Research and Development (R&D) expenses decreased to $155,000 (1.6% of sales) in Q1 2025 from $266,000 (2.3% of sales) in Q1 2024, primarily due to one-time testing costs[19] Tax and Income Metrics - The consolidated income tax provision rate increased to 21.2% in Q1 2025 from 17.6% in Q1 2024, impacting the net income[9] - Consolidated EBT for Q1 2025 was $3,859, a decrease of 19.6% from $4,798 in Q1 2024, representing 39.7% of sales[20] - Net Income in Q1 2025 was $3,041, down 23.1% from $3,956 in Q1 2024, with a net income margin of 31.3% compared to 34.9% in Q1 2024[23] - Earnings per share (EPS) for Q1 2025 was $0.919, a decline of 16.0% from $1.093 in Q1 2024, with diluted shares decreasing to 3,310,248 from 3,618,168[24] Cash and Liquidity - Cash and investments increased by $349, totaling $83.3 million as of March 31, 2025, despite cash outflows for share repurchases and dividends[29] - Total current liabilities were $4,324, an increase from $3,757 at the end of 2024, while stockholders' equity decreased slightly to $117.0 million[30] - The current ratio improved to 22.3 as of March 31, 2025, compared to 19.6 a year earlier, indicating strong liquidity[31] Share Repurchase - The company repurchased 54,267 shares at an average price of $59.35 during Q1 2025, with no options awarded in either Q1 2025 or Q1 2024[26] Receivables Management - The aging of receivables improved to 36.6 days at the end of Q1 2025, down from 40.3 days at the end of 2024[29] EBITDA - The trailing twelve-month EBITDA as of March 31, 2025, was $18,957, supporting a target of $18 million for the year 2025[22]

Group 1 - The investment landscape is increasingly competitive, prompting a focus on value investing principles from renowned investors like Benjamin Graham and Warren Buffett [2] - The analysis emphasizes uncovering investment opportunities in overlooked micro-cap and small-cap stocks, which are often neglected by larger investment firms [2] - A fundamental, bottom-up investment approach is adopted, considering factors such as management quality, company incentives, and capital allocation [2] Group 2 - The analyst has over 10 years of experience in the financial sector and aims to present investment opportunities in a clear and comprehensive manner [2] - Engagement with the investment community is encouraged, inviting questions and new ideas [2]

Sales and Revenue Performance - UTMD's consolidated sales from four acquisitions comprised 56% of total sales in 2024[16]. - In 2024, UTMD's worldwide revenues decreased by 18.6% to $40.9 million compared to $50.2 million in 2023[145]. - Total global revenues for UTMD in 2024 were $40,903, down 18.5% from $50,224 in 2023, with significant declines in the blood pressure monitoring category[186]. - U.S. domestic sales in 2024 were $23,444, down $4,759 (16.9%) from $28,204 in 2023, with OEM sales declining by $3,857 (45.7%)[173]. - OUS sales in 2024 were $17,458, a decrease of $4,562 (20.7%) compared to $22,020 in 2023, with constant currency OUS sales down 21.2%[179]. - The decline in revenues was primarily attributed to a 64% drop in PendoTECH OEM sales, which fell from $8.6 million in 2023 to $2.7 million in 2024[145]. - The company expects a revenue decrease of approximately $2 million (about 5%) in 2025 compared to 2024, primarily due to declining sales from PendoTECH and ongoing litigation impacts[187]. Profitability and Financial Metrics - Gross profit for 2024 was $24.1 million, down 19.6% from $30.0 million in 2023, resulting in a gross profit margin of 59.0%[145]. - Operating income fell to $13.6 million in 2024, a decrease of 19.0% from $16.8 million in 2023, maintaining an operating income margin of 33.2%[145]. - Net income for 2024 was $13.9 million, down 16.6% from $16.6 million in 2023, with earnings per share (EPS) of $3.961, a decline of 13.4%[145]. - The gross profit margin contracted by 0.8 percentage points to 59.0% in 2024, attributed to increased fixed manufacturing overhead costs amid declining sales[189]. - Management projects consolidated 2025 Operating Income of about $12 million, which is expected to be 11% lower than in 2024 due to a 5% revenue decline and lower GPM[207]. Product Development and Innovation - The company continues to investigate tools that enhance fetal monitoring techniques, indicating ongoing product development efforts[23]. - UTMD's current product development projects include neonatal intensive care and specialized procedures for cervical/uterine disease[88]. - No new products were launched in 2024, but R&D expenses increased due to independent testing for biopharma sensors, with projections for R&D to remain between 1% and 2% of revenues in 2025[200]. Market and Competitive Landscape - The company faces increasing competition from lower-cost manufacturers in Mexico, Eastern Europe, India, and China, impacting its cost-competitiveness[75]. - UTMD's marketing strategy focuses on clinician engagement through clinical meetings and trade shows, but access to U.S. hospital clinicians has become increasingly restricted[73]. Legal and Regulatory Matters - As of March 25, 2025, five lawsuits related to clip migration have been dismissed by summary judgment, with additional motions pending[56]. - Over the last 31 years, there have been no product liability claims filed for any UTMD device, excluding the Filshie Clip System, after distributing over 20 million critical care and surgical devices[115]. - The company believes that increasing regulatory burdens may lead to significant revenue loss and unpredictable costs[120]. Shareholder Returns and Stock Performance - The company has returned $151 million in share repurchases and $86 million in cash dividends to stockholders since 1992[15]. - UTMD repurchased 301,961 shares of its common stock in 2024 for a total cost of $19.968 million, averaging $66.13 per share[140]. - The company paid total cash dividends of $1.2000 per share in 2024, compared to $1.1800 per share in 2023[145]. Operational Efficiency and Workforce - The average tenure of full-time employees at UTMD is 13 years, with 35% having over 25 years of service[89]. - The company operates in 105,000 square feet of facilities in Midvale, Utah, and additional facilities in Ireland, England, Australia, and Canada[134]. Financial Position and Assets - Year-end 2024 total consolidated assets were $122.5 million, down from $135.5 million at the end of 2023, with current assets decreasing by $9.9 million[152]. - Working capital at year-end 2024 was $92.6 million, a 9% decrease from $101.6 million at year-end 2023, primarily due to share repurchases[154]. - The company's current ratio improved to 25.6 at the end of 2024 from 22.6 at the end of 2023, indicating strong liquidity despite a decline in working capital[151].

Core Viewpoint - Utah Medical Products, Inc. (UTMD) experienced a significant decline in earnings and revenues for the fourth quarter and full year of 2024, leading to a drop in stock price despite stable gross profit margins. Financial Performance - For Q4 2024, UTMD reported earnings per share (EPS) of 86 cents, a 27.4% decrease from $1.18 in Q4 2023 [2] - Total revenues for Q4 were $9.2 million, down 25.8% from $12.3 million in the same quarter last year [3] - Net income for Q4 was $2.9 million, a decline of 32.3% from $4.3 million in the previous year [3] - Full-year revenues were $40.9 million, an 18.6% decline from $50.2 million in 2023 [4] - Full-year net income fell 16.6% to $13.9 million from $16.6 million, with EPS dropping 13.4% to $3.96 from $4.57 [4] Key Business Metrics - The gross margin for Q4 was 58.1%, slightly up from 57.6% in the prior-year period, while the full-year gross margin was 59%, down from 59.8% in 2023 [5] - Operating income for Q4 declined 25.7% year over year to $2.9 million, and full-year operating income fell 19% to $13.6 million [5] - Cash and investments totaled $83 million as of Dec. 31, 2024, down from $92.9 million a year earlier [6] Revenue Decline Factors - The revenue decline was attributed to a $5.9 million drop in PendoTECH sales, lower sales to outside-the-U.S. (OUS) distributors, and a 12% decline in worldwide Filshie Clip System device sales [7] - PendoTECH accounted for 64% of the total revenue drop, with a $2.1 million decrease in OUS distributor sales primarily due to reduced shipments to China [8] Management Commentary and Guidance - Management expects total worldwide revenues to decline again in 2025, though at a lower rate than in 2024, with further declines in PendoTECH sales but a slight rebound anticipated in OUS distributor sales and Filshie device revenues [10] Shareholder Returns - During 2024, the company repurchased over 301,000 shares at an average price of $66.13 per share, totaling nearly $20 million [11] - The quarterly dividend was increased to 30.5 cents per share, effective January 2025 [11]

Financial Performance - Revenues for 2024 decreased by 19% to $40.9 million compared to $50.2 million in 2023[4] - Net Income for 2024 was $9.2 million, a decline of 17% from $11.1 million in 2023[4] - Earnings Per Share (EPS) fell by 13% to $1.73 in 2024 from $1.99 in 2023[2] - In Q4 2024, total revenues were $9.2 million, down 25.8% from $12.3 million in Q4 2023[11] - The decline in annual revenues was primarily due to a $5.9 million (69%) drop in OEM sales to PendoTECH[17] - OUS distributor sales, excluding Filshie devices, decreased by $2.1 million (20%) in 2024[17] - Gross Profit (GP) for 2024 was $5,895 lower (19.6%) than in 2023, with a GP margin of 59.0% compared to 59.8% in 2023[24] - Operating Income (OI) decreased by $3,183 (19.0%) to $13,594 in 2024 compared to $16,777 in 2023[25] - Consolidated 2024 EBT was $16,802, representing 41.1% of sales, down from $20,089 (40.0% of sales) in 2023[33] - Adjusted consolidated EBITDA for 2024 was $19,852, a decrease from $26,635 in 2023, with a percentage of sales at 48.5% compared to 53.0% in 2023[35][36] - UTMD's non-US GAAP adjusted consolidated EBITDA for 2024 was $19,852 million, down 25.7% from $26,635 million in 2023[37] - Net Income for 2024 was $13,874 million, a decrease of 16.6% compared to $16,635 million in 2023, representing 33.9% of sales[38] - Diluted EPS for 2024 was $3.961, down 13.4% from $4.574 in 2023, with diluted shares decreasing from 3,637,071 to 3,503,165[39] Sales and Revenue Trends - The company expects a slight increase in sales from its China distributor for blood pressure monitoring kits in 2025[17] - UTMD projects higher OUS Filshie device sales in 2025 due to expected regulatory approvals[17] - OUS USD-denominated sales in 2024 were $17,458, a decrease of $4,562 (20.7%) compared to $22,020 in 2023[18] - Domestic U.S. sales in 2024 were $23,444, down $4,759 (16.9%) from $28,204 in 2023[21] - Sales invoiced in foreign currencies were $12,911, representing 74% of OUS sales and 32% of total consolidated sales[19] - The combined weighted-average favorable FX impact on 2024 foreign currency OUS sales was 0.3%, increasing reported USD sales by $113 compared to 2023[20] Shareholder Actions and Stock Performance - UTMD repurchased over 8% of its shares during the year, contributing to a stock price decline of 27%[2] - UTMD repurchased a total of 301,961 shares in 2024 at an average cost of $66.13 per share, totaling $19.968 million[44] - The number of outstanding shares at the end of 2024 was 3,335,156, down 8.1% from 3,629,525 at the end of 2023[40] - Dividends paid in 2024 totaled $4,260 million ($1.20 per share), slightly lower than $4,282 million ($1.18 per share) in 2023[43] Liquidity and Assets - Total cash and investments at the end of 2024 were $82.976 million, a decrease of $9.9 million from $92.868 million at the end of 2023[45] - The company's total assets decreased to $122.538 million at the end of 2024 from $135.458 million at the end of 2023[50] - The current ratio as of December 31, 2024, was 25.6, indicating strong liquidity[48] - The average inventory turns in 2024 were 1.8, reflecting inventory management efficiency[48] Future Outlook - Looking forward to 2025, UTMD expects total WW consolidated revenues to be lower again, in the low to mid-single percentage digits relative to 2024[23] - Litigation expenses in 2024 were $2,139 (5.2% of sales), up from $1,660 (3.3% of sales) in 2023[30]

Group 1 - Utah Medical Products, Inc. (NASDAQ: UTMD) is facing negative market sentiment due to ongoing litigation related to its Filshie Clip product and a reduction in operational scale [1] - The company is perceived to be unfairly punished in the market despite its long-term potential [1] Group 2 - The article does not provide additional insights or data related to the broader industry or market trends [2][3]

Financial Performance - Net sales for Q3 2024 were $10,005, a decrease of 20.0% compared to $12,505 in Q3 2023, and for the first nine months of 2024, net sales were $31,745, down 16.2% from $37,891 in the same period of 2023[27]. - Gross profit for Q3 2024 was $5,802, down 21.2% from $7,359 in Q3 2023, and for 9M 2024, gross profit was $18,820, a decrease of 18.0% from $22,940 in 9M 2023[27]. - Operating income for Q3 2024 was $3,343, down 15.8% from $3,969 in Q3 2023, and for 9M 2024, operating income was $10,664, a decrease of 16.9% from $12,833 in 9M 2023[27]. - Earnings per diluted share (EPS) for Q3 2024 were $1.025, down 5.2% from $1.081 in Q3 2023, and for 9M 2024, EPS were $3.098, a decrease of 8.7% from $3.394 in 9M 2023[27]. - Net income in Q3 2024 was $3,563 (35.6% of sales), a decrease of 9.4% from $3,935 (31.5% of sales) in Q3 2023; for 9M 2024, net income was $10,972 (34.6% of sales), down 11.1% from $12,349 (32.6% of sales) in 9M 2023[73]. Sales and Market Trends - Worldwide sales to the major OEM customer, PendoTECH, were $1,704 lower in Q3 2024 compared to Q3 2023, accounting for 73% of the lower year-to-date sales[27]. - Domestic U.S. sales in Q3 2024 were $5,687, a decrease of 21.7% from $7,265 in Q3 2023, with OEM sales down 54.7%[37]. - OUS sales in 9M 2024 decreased by 14.5% to $14,036 million compared to $16,424 million in 9M 2023, with a constant currency decline of 15.2%[44][45]. - In 3Q 2024, WW labor & delivery device sales were down 26%, and blood pressure monitoring and related OEM product sales decreased by 44% compared to 3Q 2023[48]. Profitability and Margins - The gross profit margin for Q3 2024 was 58.0%, slightly down from 58.8% in Q3 2023, while the operating income margin improved to 33.4% from 31.7% in the same period[29]. - Operating expenses as a percentage of sales were 24.6% in 3Q 2024, down from 27.1% in 3Q 2023, indicating improved cost management[54][60]. - Gross profit in 9M 2024 was $4,120 million lower (18.0%) compared to 9M 2023, but margins remained stable due to overhead adjustments[52]. - Consolidated EBT for Q3 2024 was $4,179 (41.8% of sales), down from $4,781 (38.2% of sales) in Q3 2023; for 9M 2024, EBT was $13,188 (41.5% of sales) compared to $15,072 (39.8% of sales) in 9M 2023[67]. Shareholder Returns - The company repurchased shares totaling $13,259 and paid $3,222 in dividends to stockholders during the first nine months of 2024[32]. - Dividends paid in Q3 2024 totaled $1,052 ($0.300/share), compared to $1,071 ($0.295/share) in Q3 2023; for 9M 2024, dividends were $3,222 ($0.300/share) versus $3,211 ($0.295/share) in 9M 2023[81]. - The company repurchased 58,377 shares for $3,866 in Q3 2024, at an average cost of $66.22/share; total shares repurchased in 9M 2024 were 196,592 for $13,259, averaging $67.45/share[79]. - UTMD returned $16,481 to stockholders in 9M 2024 through dividends and share repurchases, a substantial increase from $3,211 in 9M 2023[84]. Cash Flow and Investments - Net cash provided by operating activities in 9M 2024 was $11,894, down 29.9% from $16,949 in 9M 2023, primarily due to a $1,377 decrease in Net Income[82]. - Capital expenditures for property and equipment (PP&E) were $221 in 9M 2024, significantly lower than $549 in 9M 2023, indicating no expansion-related investments[83]. - The company plans to continue investing in new technology and processes, and remain open to acquisition opportunities to enhance revenue and EPS growth[86]. Future Outlook - The company expects a total annual consolidated sales decline of 18% to 19% in 2024 compared to 2023, with WW PendoTECH biopharmaceutical OEM sales projected to be $6 million lower[46]. - Management expects a revenue decline of 18 to 19% for the year 2024, along with a similar decline in Net Income[96]. Balance Sheet and Financial Ratios - Working capital decreased to $98,221 at September 30, 2024, from $101,559 at December 31, 2023, primarily due to a $4,416 decrease in cash[90]. - Total debt ratio improved to 4% as of September 30, 2024, down from 5% at December 31, 2023[92]. - UTMD's total consolidated assets decreased by $5,764 to $129,694 as of September 30, 2024, compared to December 31, 2023[87]. - Annualized ROE in 9M 2024 was 8%, down from 10% in 9M 2023; before dividends, it was 12% compared to 14% in the prior year[80].

Core Insights - Utah Medical Products, Inc. (UTMD) reported a decrease in earnings per share (EPS) to $1.025, down 5.2% from the previous year, with revenues dropping 20% year over year to $10 million [1][2] Revenue Performance - Worldwide consolidated sales decreased by 20%, with U.S. sales down 21.7% and international sales down 17.6% [3] - Domestic OEM sales experienced a significant decline of 54.7%, primarily due to a $1.1 million drop in PendoTECH sales, while direct Filshie Clip System sales fell by 10.7% [3] Profitability Metrics - Gross profit decreased by 21.2% to $5.8 million, with gross profit margin slightly contracting from 58.8% to 58% due to material cost inflation and lower operational efficiencies [4] - Operating income fell by 15.8% to $3.3 million, but the operating income margin improved from 31.7% to 33.4% due to reduced operating expenses [6] - Net income was reported at $3.6 million, a decrease of 9.4%, yet the net income margin improved from 31.5% to 35.6% [7] Operating Expenses - Operating expenses were reduced to $2.5 million, a 27.5% decrease from $3.4 million in the same quarter of the previous year, largely due to the end of amortization related to previous acquisitions [5] Non-Operating Income - Net non-operating income rose to $0.84 million from $0.81 million, supported by higher interest income and currency remeasurement gains, despite the impact of the U.S. excise tax on share repurchases [8] Balance Sheet Overview - As of September 30, 2024, cash and investments totaled $88.5 million, down from $92.9 million at the end of 2023, while total assets decreased to $129.7 million [9] - Current liabilities were reduced to $3.4 million, and stockholders' equity stood at $124.2 million, reflecting a minor decrease [9] Management Guidance - Management anticipates a $6 million annual revenue decline in 2024, primarily from reduced PendoTECH sales, projecting an overall revenue decline of around 18-19% year over year [10] - EBITDA is projected to range from $19 to $20 million for the full calendar year, indicating a focus on maintaining operational profitability [10] Share Repurchase Activity - During the third quarter, UTMD repurchased 58,377 shares at an average cost of $66.22 per share, totaling $3.9 million, reflecting management's confidence in the company's long-term value [11]