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].

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]