UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) Indicate by check mark whether the registrant is a ...

Commission File No. 001-12575 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) Utah 87-0342734 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organi ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) Utah Medical Products, Inc. (UTMD) designs, manufactures, and distributes medical devices for critical care, neonatal intensive care, labor and delivery, and women's health, selling directly and through distributors globally - UTMD specializes in producing high-quality, cost-effective medical devices focused on safety and improved patient outcomes, particularly in NICU, labor & delivery, and women's health[12](index=12&type=chunk) - The company utilizes a mixed distribution model: direct sales in the U.S., Canada, UK, France, Ireland, Australia, and New Zealand, and a network of over 220 distributors in other countries[14](index=14&type=chunk) - Products from four key acquisitions (Columbia Medical, Gesco, Abcorp, Femcare) accounted for **51% of the company's consolidated sales in 2021**[16](index=16&type=chunk) [Products](index=5&type=section&id=Products) UTMD's product portfolio spans Labor and Delivery, Neonatal Intensive Care, Gynecology/Urology/Electrosurgery, and Blood Pressure Monitoring, with the Filshie Clip System being a significant revenue contributor - The Filshie® Clip System, a female surgical contraception device, was a major revenue contributor, representing **27% of UTMD's total U.S. Dollar denominated sales in 2021**[51](index=51&type=chunk) - The Labor and Delivery product line includes fetal monitoring accessories like the INTRAN® PLUS transducer-tipped IUP catheter system and specialized tools such as the BT-CATH® for postpartum hemorrhage[19](index=19&type=chunk)[20](index=20&type=chunk)[23](index=23&type=chunk) - The Neonatal Intensive Care portfolio features devices specifically designed for premature infants, such as DISPOSA-HOOD™ for oxygen administration and the GESCO® line of biocompatible silicone catheters (e.g., UMBILI-CATH™, PICC-NATE®)[30](index=30&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The Gynecology/Urology/Electrosurgery segment includes the LETZ® System for treating HPV-related cervical lesions, the EPITOME® electrosurgical scalpel for precise incisions, and the LIBERTY® System for treating urinary incontinence[45](index=45&type=chunk)[49](index=49&type=chunk)[64](index=64&type=chunk) [Marketing, Competition, and Distribution](index=13&type=section&id=Marketing,%20Competition,%20and%20Distribution) UTMD competes on patient safety and device performance, facing challenges from GPOs, with 38% of 2021 sales from outside the U.S. through direct and distributor channels Sales Breakdown (2019-2021) | Region | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | OUS Sales (% of Total) | 38% | 39% | 41% | - The primary marketing challenge is maintaining customer focus on the clinical benefits of UTMD's differentiated products, as U.S. hospitals increasingly prioritize out-of-pocket unit price, weakening UTMD's competitive position[74](index=74&type=chunk) - In the U.S., sales to Med/Surg distributors comprised **11% of total domestic direct sales in 2021** (excluding OEM sales)[82](index=82&type=chunk) - The company's direct sales force is primarily composed of "inside" representatives who operate via telephone and email, supplemented by independent representatives and clinical specialists for training[83](index=83&type=chunk) [New Product Development, Employees, and IP](index=15&type=section&id=New%20Product%20Development,%20Employees,%20and%20IP) UTMD focuses on R&D (1-2% of sales) for product enhancement and acquisitions, values its experienced workforce (14-year average tenure), and prioritizes trademarks over patents for intangible value - Internal product development expenses are expected to remain in the range of **1-2% of sales**[88](index=88&type=chunk) - As of December 31, 2021, the company had 178 full-time and 33 part-time employees worldwide, with an average tenure of **14 years for full-time employees** in the U.S. and Ireland[89](index=89&type=chunk) - The company owns eight unexpired U.S. patents and **31 registered trademarks**, but considers its trademarks and brand recognition more valuable than its patents[92](index=92&type=chunk) [Government Regulation and Operations](index=16&type=section&id=Government%20Regulation%20and%20Operations) UTMD's products are FDA-regulated, with the Filshie Clip System as a Class III device, and its facilities are ISO13485:2016 and MDSAP certified, managing supply chain risks with safety stocks - The Filshie Clip System is a **Class III device**, subject to more stringent regulatory controls than the company's other devices, which are primarily Class I or Class II[98](index=98&type=chunk) - UTMD's manufacturing facilities in the UK, Ireland, and Utah are certified under the **ISO13485:2016 standard** and the Medical Device Single Audit Program (MDSAP)[99](index=99&type=chunk) - The company is self-insured for product liability risk and has no product liability judgments against it in its 44-year history, considering recent lawsuits without merit[110](index=110&type=chunk)[111](index=111&type=chunk) Order Backlog (Shippable < 90 days) | As of | Amount (in thousands) | | :--- | :--- | | Jan 1, 2022 | $4,956 | | Jan 1, 2021 | $3,008 | | Jan 1, 2020 | $1,627 | [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces market unpredictability from healthcare legislation, increased regulatory burdens, GPO pressures, product liability, reliance on distributors, key personnel loss, and foreign currency fluctuations - Legislative healthcare interference and restrictions on "nonessential" medical procedures in the U.S. create an unpredictable marketplace[115](index=115&type=chunk) - Increasing regulatory burdens and substantial user fees create significant barriers to new product introduction and revenue generation[116](index=116&type=chunk) - Group Purchasing Organizations (GPOs) add costs and restrict market access by treating specialized devices as commodities, focusing on price over clinical value[117](index=117&type=chunk) - A significant portion of sales are invoiced in foreign currencies, making financial results susceptible to fluctuations in exchange rates relative to the USD[123](index=123&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[126](index=126&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) UTMD is a vertically-integrated manufacturer, owning most of its facilities, including a 105,000 sq ft facility in Utah and a 77,000 sq ft facility in Ireland for primary manufacturing - The company owns all its property and facilities, with the exception of a long-term lease on a section of its Midvale parking lot[128](index=128&type=chunk) - Total operational space includes **105,000 sq ft in Utah**, **77,000 sq ft in Ireland**, **38,600 sq ft in England**, **3,200 sq ft in Australia**, and **4,700 sq ft in Canada**[128](index=128&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company states there is no current or threatened litigation expected to materially impact its consolidated financial results - There is no current or threatened litigation expected to have a material impact on the company's consolidated financial results[129](index=129&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) UTMD common stock trades on NASDAQ, with at least 2,000 beneficial stockholders, paid **$3.140 per share in dividends in 2021** (including a special dividend), and made no share repurchases in 2021 Cash Dividends Per Share | Year | Total Dividends Paid Per Share | | :--- | :--- | | 2021 | $3.140 | | 2020 | $1.120 | - The company did not purchase any of its own securities in 2021, but purchased **87,000 shares for $6,977 thousand in 2020**[135](index=135&type=chunk) - As of March 6, 2022, the number of beneficial stockholders was at least **2,000**[133](index=133&type=chunk) [Selected Financial Data](index=23&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of UTMD's consolidated financial data, showing net sales growth to **$49.1 million in 2021**, net income of **$14.8 million**, diluted EPS of **$4.04**, and zero long-term debt Five-Year Selected Financial Data (in thousands, except per share data) | | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $49,054 | $42,178 | $46,904 | $41,998 | $41,414 | | Net Income | 14,788 | 10,798 | 14,727 | 18,555 | 8,505 | | Earnings Per Common Share (Diluted) | 4.04 | 2.94 | 3.94 | 4.95 | 2.28 | | Total Assets | 115,636 | 111,745 | 109,787 | 99,768 | 92,745 | | Long-term Debt | 0 | 0 | 0 | 0 | 0 | | Cash Dividends Per Common Share | 3.140 | 1.120 | 1.100 | 1.085 | 1.065 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) UTMD's 2021 financial performance showed strong recovery, with worldwide revenues growing **16.3% to $49.1 million**, net income rising **37.0% to $14.8 million**, improved profit margins, and a strengthened debt-free financial condition Consolidated Income Statement Highlights (2021 vs. 2020 & 2019) | Consolidated Income Statement | 2021 | % Change vs 2020 | % Change vs 2019 | | :--- | :--- | :--- | :--- | | Worldwide Revenues (in thousands) | $49,054 | +16.3% | +4.6% | | Gross Profit (in thousands) | $30,917 | +21.0% | +4.9% | | Operating Income (in thousands) | $18,880 | +37.7% | +7.1% | | Net Income (US GAAP) (in thousands) | $14,788 | +37.0% | +0.4% | | EPS (US GAAP) | $4.041 | +37.4% | +2.6% | Key Profit Margins (2019-2021) | | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Gross Profit Margin (GPM) | 63.0% | 60.6% | 62.8% | | Operating Income Margin | 38.5% | 32.5% | 37.6% | | Net Income Margin (US GAAP) | 30.1% | 25.6% | 31.4% | - The company's financial condition improved significantly, with cash increasing by **$9.4 million to $61.0 million** and working capital up **19% to $69.4 million**, despite paying a **$7.3 million special dividend** in late 2021[150](index=150&type=chunk)[152](index=152&type=chunk) - The company remains debt-free, with a total debt ratio (total liabilities to total assets) of **7% at the end of 2021**[152](index=152&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) In 2021, total revenues increased **16.3% to $49.1 million**, driven by U.S. OEM sales and global direct-to-end-user recovery, leading to a gross profit margin of **63.0%** and operating income growth of **37.7%** Revenue by Channel (in thousands) | Channel | 2021 | % Change vs 2020 | % Change vs 2019 | | :--- | :--- | :--- | :--- | | Direct to End-User | $28,441 | +9.7% | (6.0%) | | All Other OUS (Distributors) | $11,050 | +13.3% | +9.5% | | U.S. OEM Sales | $9,563 | +47.3% | +46.1% | | **Worldwide Revenues** | **$49,054** | **+16.3%** | **+4.6%** | Global Revenues by Product Category (in thousands) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Obstetrics | $4,675 | $4,523 | $5,000 | | Gynecology/ Electrosurgery/ Urology | $21,973 | $20,552 | $25,354 | | Neonatal | $6,691 | $5,870 | $6,066 | | Blood Pressure Monitoring/Other | $15,715 | $11,233 | $10,484 | | **Total** | **$49,054** | **$42,178** | **$46,904** | - Gross Profit Margin (GPM) improved to **63.0% in 2021** from **60.6% in 2020**, attributed to better absorption of fixed manufacturing overheads and a return to more normal self-insured health care plan costs[186](index=186&type=chunk)[187](index=187&type=chunk) - Total operating expenses were **$12.0 million**, of which **$6.6 million (55%)** was non-cash amortization expense for identifiable intangible assets (IIA) from the Femcare and CooperSurgical acquisitions[193](index=193&type=chunk)[202](index=202&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity in 2021, with **$21.2 million** in operating cash flow, a **$9.4 million** increase in cash to **$61.0 million**, and **$11.5 million** in dividend payments, remaining debt-free Cash Flow Summary (in thousands) | Activity | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $21,203 | $20,137 | $17,056 | | Net Cash from Investing Activities | ($552) | ($860) | ($21,540) | | Net Cash from Financing Activities | ($10,905) | ($10,734) | ($4,227) | | **Net Increase (Decrease) in Cash** | **$9,384** | **$8,803** | **($8,325)** | - Financing activities in 2021 were dominated by **$11.5 million in cash dividends** paid to stockholders[235](index=235&type=chunk) - The company did not repurchase any of its stock in 2021, compared to repurchasing **87,000 shares for $7.0 million in 2020**[232](index=232&type=chunk)[233](index=233&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) UTMD's primary market risk stems from foreign currency exchange rate fluctuations (USD, EUR, GBP, AUD, CAD), which it manages by invoicing in local currency or converting as needed, without using hedging instruments - The primary market risk is from foreign currency exchange rate fluctuations involving the USD, EUR, GBP, AUD, and CAD[250](index=250&type=chunk) - The company does not use separate hedging transactions to manage its foreign currency risk[250](index=250&type=chunk) [Financial Statements and Supplementary Data](index=41&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents UTMD's audited consolidated financial statements for 2021 and 2020, including Management's Report on Internal Control and independent auditor reports, with an unqualified opinion - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2021[256](index=256&type=chunk) - The independent auditor, Haynie & Company, issued an unqualified opinion on the financial statements for the two-year period ended December 31, 2021[260](index=260&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=66&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - None[355](index=355&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures) The CEO and Principal Financial Officer concluded that disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal controls during Q4 2021 - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[357](index=357&type=chunk) - No changes in internal control over financial reporting occurred during Q4 2021 that materially affected, or were reasonably likely to materially affect, the company's internal controls[359](index=359&type=chunk) [Other Information](index=66&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[360](index=360&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=67&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement, with the Code of Ethics available online - This section incorporates information by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders[363](index=363&type=chunk) [Executive Compensation](index=67&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of stockholders - This section incorporates information by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders[365](index=365&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=67&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of stockholders - This section incorporates information by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders[366](index=366&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=67&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of stockholders - This section incorporates information by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders[367](index=367&type=chunk) [Principal Accounting Fees and Services](index=67&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of stockholders - This section incorporates information by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders[369](index=369&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=68&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including corporate governance, employment agreements, and SOX certifications, with financial statement schedules omitted as inapplicable - The documents filed as part of this report are listed, including certifications by the CEO and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[374](index=374&type=chunk) - Financial Statement Schedules have been omitted because they are either not applicable or the required information is already included in the Financial Statements and notes[373](index=373&type=chunk) [Form 10-K Summary](index=69&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - None[377](index=377&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) Utah 87-0342734 (State or other jurisdiction of inc ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) Utah 87-0342734 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC (Exact name of Registrant as specified in its charter) Utah 87-0342734 (State or other jurisdiction of incorpo ...

Part I [Business](index=4&type=section&id=Item%201) The company designs, manufactures, and distributes specialized medical devices for critical care, neonatal, and women's health markets globally - UTMD specializes in medical devices for NICU, L&D, and women's health, focusing on safety and improved patient outcomes[12](index=12&type=chunk) - The company sells directly in the US, Canada, UK, France, Ireland, Australia, and New Zealand, and uses over 230 distributors in other countries[14](index=14&type=chunk) - Products from four key acquisitions accounted for **55% of consolidated sales in 2020**[16](index=16&type=chunk) [Products](index=5&type=section&id=Item%201%20-%20Products) UTMD offers a diverse portfolio of devices for obstetrics, neonatal care, gynecology/urology, and blood pressure monitoring - The Filshie® Clip System, a female surgical contraception device, is a major product, representing **31% of UTMD's total U.S. Dollar denominated sales in 2020**[46](index=46&type=chunk) - The company offers a comprehensive range of neonatal products under the GESCO® brand, including specialized catheters and feeding systems for critically-ill infants[27](index=27&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk) - The LETZ® System is a key product for treating cervical intraepithelial neoplasia (CIN) in a physician's office setting, offering an economical alternative to hospital procedures[40](index=40&type=chunk) - The DELTRAN® Disposable Pressure Transducer (DPT) is a foundational product for blood pressure monitoring, sold as a standalone device and in kits[64](index=64&type=chunk) [Marketing, Competition, and Distribution](index=12&type=section&id=Item%201%20-%20Marketing%2C%20Competition%2C%20and%20Distribution) The marketing strategy emphasizes clinical differentiation against competitors and GPOs, with international sales comprising 39% of 2020 revenue - The primary marketing challenge is communicating the clinical benefits of its differentiated products to clinicians, as hospital purchasing is increasingly driven by unit price[70](index=70&type=chunk) - Outside the U.S. (OUS) sales accounted for **39% of consolidated total sales in 2020**, down from 41% in 2019, partly due to COVID-19 restrictions[74](index=74&type=chunk) - The company utilizes a direct sales force of inside representatives and independent consultants, focusing on one-on-one contact with clinical practitioners[79](index=79&type=chunk) [Regulation, Manufacturing, and Other Business Aspects](index=14&type=section&id=Item%201%20-%20Regulation%2C%20Manufacturing%2C%20and%20Other%20Business%20Aspects) The company's operations adhere to extensive global regulations, with a stable workforce and a self-insured product liability strategy - The company's manufacturing facilities in the U.S., UK, and Ireland are certified under **ISO 13485:2016 and the Medical Device Single Audit Program (MDSAP)**[94](index=94&type=chunk)[95](index=95&type=chunk) - As of December 31, 2020, the company had 181 employees, with an **average tenure of fifteen years** for those in the U.S. and Ireland[85](index=85&type=chunk) - UTMD is self-insured for product liability and has **never had a product liability judgment against it** in its 42-year history[106](index=106&type=chunk) Order Backlog | Date | Backlog (Shippable < 90 days) | | :--- | :--- | | Jan 1, 2021 | $3,008 thousand | | Jan 1, 2020 | $1,627 thousand | | Jan 1, 2019 | $3,164 thousand | [Risk Factors](index=18&type=section&id=Item%201A) The company faces risks from healthcare market unpredictability, regulatory burdens, GPO pricing pressure, and foreign currency fluctuations - Legislative interference in U.S. healthcare and restrictions on nonessential medical procedures during pandemics create market unpredictability and can reduce demand[112](index=112&type=chunk) - **Group Purchasing Organizations (GPOs)** are a significant risk, as they restrict market access and focus on unit price, turning differentiated products into commodities[114](index=114&type=chunk) - Fluctuations in foreign currencies relative to the USD can significantly impact financial results, as a strong USD can reduce reported revenue[121](index=121&type=chunk) - The COVID-19 pandemic poses a risk of disrupting the supply chain or interfering with business operations due to loss of employee availability[122](index=122&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B) The company reports that there are no unresolved staff comments from the SEC - None[124](index=124&type=chunk) [Properties](index=20&type=section&id=Item%202) UTMD is a vertically-integrated manufacturer that owns its primary production and office facilities in the U.S, Ireland, and England - The company owns its primary facilities, totaling over 220,000 square feet across the U.S., Ireland, and England, with smaller owned facilities in Australia and Canada[126](index=126&type=chunk) [Legal Proceedings](index=20&type=section&id=Item%203) The company reports that there is currently no litigation or threatened litigation - Presently, there is no litigation or threatened litigation[128](index=128&type=chunk) [Reserved](index=20&type=section&id=Item%204) This item is reserved and contains no information Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205) The company's stock trades on NASDAQ, and in 2020, it paid dividends and repurchased approximately $7.0 million of its common stock 2020 Quarterly Stock Price Range (NASDAQ: UTMD) | Quarter | High | Low | | :--- | :--- | :--- | | 1st Quarter | $109.99 | $75.33 | | 2nd Quarter | $109.00 | $77.27 | | 3rd Quarter | $93.82 | $77.22 | | 4th Quarter | $94.87 | $78.90 | Cash Dividends Paid Per Share | Year | Total Dividends Per Share | | :--- | :--- | | 2020 | $1.120 | | 2019 | $1.100 | - In 2020, UTMD purchased 87,000 shares of its common stock for approximately **$7.0 million** ($6,426k in March and $551k in September)[134](index=134&type=chunk) [Selected Financial Data](index=22&type=section&id=Item%206) The company's five-year data shows decreased sales and net income in 2020, while maintaining zero long-term debt and increasing dividends Selected Financial Data (in thousands, except per share data) | | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net Sales | $42,178 | $46,904 | $41,998 | | Net Income | $10,798 | $14,727 | $18,555 | | Earnings Per Share (Diluted) | $2.94 | $3.94 | $4.95 | | Total Assets | $111,745 | $109,787 | $99,768 | | Long-term Debt | $0 | $0 | $0 | | Cash Dividends Per Share | $1.120 | $1.100 | $1.085 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207) Management attributes a 10.1% revenue decline in 2020 to the COVID-19 pandemic, while highlighting strong liquidity and zero debt 2020 vs. 2019 Financial Performance | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $42,178 | $46,904 | (10.1%) | | Gross Profit (GP) | $25,548 | $29,466 | (13.3%) | | Operating Income | $13,708 | $17,632 | (22.3%) | | Net Income (US GAAP) | $10,798 | $14,727 | (26.7%) | - The financial results were significantly impacted by government restrictions on nonessential medical procedures due to the **COVID-19 pandemic**, particularly in Q2 2020[141](index=141&type=chunk) - The company's cash balance increased by **$8.8 million to $51.6 million** at year-end 2020, and it remained debt-free[151](index=151&type=chunk) [Results of Operations](index=27&type=section&id=Item%207%20-%20Results%20of%20Operations) Consolidated sales fell 10.1% in 2020 due to the pandemic, with OUS sales declining more sharply and gross margin decreasing to 60.6% Global Revenues by Product Category (in thousands) | Category | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Obstetrics | $4,523 | $5,000 | (9.5%) | | Gynecology/ Electrosurgery/ Urology | $20,552 | $25,354 | (18.9%) | | Neonatal | $5,870 | $6,066 | (3.2%) | | Blood Pressure Monitoring & Acc. | $11,233 | $10,484 | +7.1% | - Direct-to-end-user sales, which drive profitability, were **down 14.3%** for the year, with the UK and France experiencing the sharpest declines[142](index=142&type=chunk)[170](index=170&type=chunk) - Gross Profit Margin (GPM) declined to **60.6% from 62.8%** in 2019, attributed to lower absorption of fixed manufacturing overhead and pandemic costs[189](index=189&type=chunk)[191](index=191&type=chunk) - Operating expenses included **$6.5 million in non-cash amortization** of Identifiable Intangible Assets (IIA) from acquisitions, significantly impacting operating income[194](index=194&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Item%207%20-%20Liquidity%20and%20Capital%20Resources) Net cash from operations increased to $20.1 million due to working capital management, funding share repurchases and dividends Cash Flow Summary (in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash from operating activities | $20,137 | $17,056 | | Net cash from investing activities | ($860) | ($21,540) | | Net cash from financing activities | ($10,734) | ($4,227) | | **Net increase (decrease) in cash** | **$8,803** | **($8,325)** | - The company repurchased **87,000 shares for $7.0 million** and paid **$4.1 million in dividends** in 2020[233](index=233&type=chunk)[236](index=236&type=chunk) - Management believes future income and strong working capital management will provide sufficient liquidity for internal growth and capital expenditures[237](index=237&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A) The company's primary market risk stems from foreign currency exchange rate fluctuations, which it manages without using hedging instruments - The company's primary market risk is foreign currency exchange rate fluctuations involving the **USD, EUR, GBP, AUD, and CAD**[250](index=250&type=chunk) [Financial Statements and Supplementary Data](index=42&type=section&id=Item%208) This section includes audited consolidated financial statements, management's report on internal controls, and independent auditor reports - Management concluded that the company maintained **effective internal control** over financial reporting as of December 31, 2020[256](index=256&type=chunk) - The independent auditors, Haynie & Company and Nortons Assurance Limited, issued **unqualified opinions** on the consolidated financial statements[260](index=260&type=chunk)[271](index=271&type=chunk) - The financial statements include the Consolidated Balance Sheets, Statements of Income, Statements of Cash Flow, Statements of Stockholders' Equity, and detailed Notes[253](index=253&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=67&type=section&id=Item%209) The company reports no disagreements with its accountants on accounting principles, practices, or financial statement disclosure - None[355](index=355&type=chunk) [Controls and Procedures](index=67&type=section&id=Item%209A) Management concluded that the company's disclosure controls and procedures were effective as of year-end 2020 - The CEO and Principal Financial Officer concluded that disclosure controls and procedures were **effective** as of December 31, 2020[357](index=357&type=chunk) - **No material changes** to internal control over financial reporting occurred in Q4 2020[359](index=359&type=chunk) [Other Information](index=67&type=section&id=Item%209B) The company reports no other information for this item - None[360](index=360&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=68&type=section&id=Item%2010) Information regarding directors, officers, and corporate governance is incorporated by reference from the 2021 proxy statement - Required information is incorporated by reference from the 2021 definitive proxy statement[363](index=363&type=chunk) [Executive Compensation](index=68&type=section&id=Item%2011) Information regarding executive compensation is incorporated by reference from the 2021 proxy statement - Required information is incorporated by reference from the 2021 definitive proxy statement[365](index=365&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=68&type=section&id=Item%2012) Information regarding security ownership is incorporated by reference from the 2021 proxy statement - Required information is incorporated by reference from the 2021 definitive proxy statement[366](index=366&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=68&type=section&id=Item%2013) Information regarding related transactions and director independence is incorporated by reference from the 2021 proxy statement - Required information is incorporated by reference from the 2021 definitive proxy statement[367](index=367&type=chunk) [Principal Accounting Fees and Services](index=68&type=section&id=Item%2014) Information regarding principal accounting fees and services is incorporated by reference from the 2021 proxy statement - Required information is incorporated by reference from the 2021 definitive proxy statement[369](index=369&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=69&type=section&id=Item%2015) This section lists all documents filed with the Form 10-K, including exhibits and required Sarbanes-Oxley certifications - This section contains a list of all exhibits filed with the report, including corporate governance documents, management contracts, and required certifications[374](index=374&type=chunk) - Financial Statement Schedules are omitted because the required information is included within the main financial statements and notes[373](index=373&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated condensed financial statements for Q3 and 9M 2020, showing decreased assets, equity, sales, and net income compared to 2019 [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Total assets decreased to **$107.1 million** by September 30, 2020, from **$109.8 million** at year-end 2019, primarily due to reduced net intangible assets, while cash and investments increased Consolidated Condensed Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$107,072** | **$109,787** | | Cash & investments | $46,294 | $42,787 | | Inventories | $6,304 | $6,913 | | Other intangible assets, net | $24,993 | $30,212 | | **Total Liabilities** | **$8,657** | **$8,694** | | **Total Stockholders' Equity** | **$98,415** | **$101,093** | [Consolidated Condensed Statements of Income](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) Q3 2020 net sales decreased to **$10.5 million** and net income to **$2.9 million**, with similar declines for the nine-month period compared to 2019 Q3 Performance Comparison (in thousands, except per share) | Metric | Q3 2020 | Q3 2019 | | :--- | :--- | :--- | | Sales, net | $10,479 | $12,494 | | Gross profit | $6,497 | $7,379 | | Operating income | $3,587 | $4,371 | | Net income | $2,933 | $3,705 | | Earnings per share (diluted) | $0.80 | $0.99 | Nine-Month Performance Comparison (in thousands, except per share) | Metric | 9M 2020 | 9M 2019 | | :--- | :--- | :--- | | Sales, net | $30,168 | $35,073 | | Gross profit | $18,283 | $21,652 | | Operating income | $9,428 | $12,954 | | Net income | $7,386 | $10,369 | | Earnings per share (diluted) | $2.01 | $2.77 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$14.4 million** for 9M 2020, while financing activities included **$7.0 million** in stock repurchases and **$3.1 million** in dividends Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,359 | $11,415 | | Net cash used in investing activities | ($806) | ($21,252) | | Net cash used in financing activities | ($9,792) | ($3,258) | | **Net increase (decrease) in cash** | **$3,507** | **($13,719)** | - Financing activities in the first nine months of 2020 included **$7.0 million** for stock repurchases and **$3.1 million** for dividend payments[13](index=13&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) Financial statement notes detail inventory, disaggregated revenue by product category, operating leases, and amortization of the Filshie Clip System distribution rights Global 9M 2020 Revenues by Product Category (in thousands) | Product Category | Domestic | Outside US | Total | | :--- | :--- | :--- | :--- | | Obstetrics | $2,739 | $612 | $3,351 | | Gynecology/Electrosurgery/Urology | $7,686 | $6,945 | $14,631 | | Neonatal | $3,266 | $1,169 | $4,435 | | Blood Pressure Monitoring & Accessories | $5,215 | $2,536 | $7,751 | | **Total** | **$18,906** | **$11,262** | **$30,168** | - In February 2019, the company purchased exclusive U.S. distribution rights for the Filshie Clip System for **$21 million**, with this intangible asset being amortized over a remaining life of **3.08 years** as of September 30, 2020[26](index=26&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **COVID-19 pandemic's** significant negative impact on Q3 and 9M 2020 sales, particularly in OUS and gynecology, while maintaining profitability and a strong balance sheet [Overview](index=14&type=section&id=Overview) The company experienced a significant financial downturn in Q3 and 9M 2020 due to **COVID-19**, with double-digit declines in sales and income, yet maintained a strong, debt-free balance sheet Financial Performance vs. Prior Year | Metric | 3Q 2020 vs 3Q 2019 | 9M 2020 vs 9M 2019 | | :--- | :--- | :--- | | Net Sales | (16.1%) | (14.0%) | | Gross Profit | (12.0%) | (15.6%) | | Operating Income | (17.9%) | (27.2%) | | Net Income (NI) | (20.8%) | (28.8%) | | EPS (Diluted) | (19.0%) | (27.6%) | - The company's balance sheet remained strong with no debt, as cash and investments grew to **$46.3 million** at the end of Q3 2020 from **$42.8 million** at year-end 2019, even after paying **$3.1 million** in dividends and repurchasing **$7.0 million** in stock[37](index=37&type=chunk) [Revenues](index=17&type=section&id=Revenues) Q3 2020 consolidated sales decreased **16.1%** to **$10.5 million**, with OUS sales down **28%** and gynecology/electrosurgery sales down **21%**, though Filshie device sales showed Q3 recovery - In Q3 2020, U.S. domestic sales were **8% lower** and OUS sales were **28% lower** compared to Q3 2019, with nine-month U.S. domestic sales **7% lower** and OUS sales **23% lower**[41](index=41&type=chunk) - The gynecology/electrosurgery device category, largely deemed "nonessential" during the pandemic, saw a **21% worldwide sales decline** in Q3 2020 compared to Q3 2019[49](index=49&type=chunk) Filshie Device Sequential Quarterly USD Domestic Sales (in thousands) | Year | 1Q | 2Q | 3Q | 9M | | :--- | :--- | :--- | :--- | :--- | | 2020 | $1,689 | $1,135 | $1,733 | $4,557 | | 2019 | $925 | $1,979 | $2,008 | $4,912 | [Gross Profit](index=20&type=section&id=Gross%20Profit) Q3 2020 gross profit decreased **12.0%** to **$6.5 million**, but gross profit margin improved to **62.0%** due to a favorable sales mix, despite a slight 9M GPM decline - The Q3 2020 Gross Profit Margin (GPM) improved to **62.0%** from **59.1%** in Q3 2019, mainly due to a favorable sales mix, as lower-margin sales to international distributors constituted a smaller portion of total sales[53](index=53&type=chunk) - For the first nine months of 2020, the GPM was **60.6%**, meeting management's long-term objective despite a slight decline from **61.7%** in the same period of 2019[53](index=53&type=chunk) [Operating Income](index=20&type=section&id=Operating%20Income) Q3 2020 operating income decreased to **$3.6 million**, with the operating margin falling to **34.2%**, primarily due to lower gross profits and increased intangible asset amortization - Operating expenses were **27.8% of sales** in Q3 2020, up from **24.1%** in Q3 2019, as management maintained resources for long-term growth despite the short-term sales reduction[54](index=54&type=chunk) Identifiable Intangible Asset (IIA) Amortization Expense (in thousands) | Expense Category | 3Q 2020 | 3Q 2019 | 9M 2020 | 9M 2019 | | :--- | :--- | :--- | :--- | :--- | | IIA amortization expense | $1,621 | $1,597 | $4,839 | $4,471 | | All other G&A expense | $811 | $860 | $2,445 | $2,566 | | **Total G&A Expenses** | **$2,432** | **$2,457** | **$7,284** | **$7,037** | [Net Income and Earnings Per Share (EPS)](index=22&type=section&id=Net%20Income%20and%20EPS) Q3 2020 net income decreased to **$2.9 million** and diluted EPS to **$0.803**, with share repurchases partially mitigating the EPS decline - The average consolidated income tax provision was **higher in 2020** (**18.3% in Q3**, **22.7% in 9M**) compared to 2019 (**16.7% in Q3**, **21.1% in 9M**), partly due to a **$225k tax provision increase** in Q2 2020 related to a UK tax law change[69](index=69&type=chunk)[70](index=70&type=chunk) - Share repurchases helped mitigate the decline in EPS, with diluted shares outstanding at **3.65 million** in Q3 2020, down from **3.74 million** in Q3 2019[72](index=72&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity, with net cash from operations increasing to **$14.4 million** in 9M 2020, while allocating **$7.0 million** to share repurchases and **$3.1 million** to dividends - Net cash from operations **increased by $2.9 million** in 9M 2020 compared to 9M 2019, largely due to a **$3.8 million positive change** from decreased receivables and inventories[76](index=76&type=chunk) - In the first nine months of 2020, the company repurchased **87,000 shares** for **$7.0 million** and paid **$3.1 million** in dividends[78](index=78&type=chunk) [Assets and Liabilities](index=24&type=section&id=Assets%20and%20Liabilities) Total assets decreased to **$107.1 million** due to a **$5.4 million** decline in net intangible assets, while working capital improved to **$53.6 million** and the debt ratio remained low - Working capital **increased to $53.6 million** at September 30, 2020, from **$51.4 million** at December 31, 2019, as a **$3.5 million increase in cash** more than offset a decrease in receivables and inventories[83](index=83&type=chunk) - Net intangible assets, including goodwill, **declined to 36% of total assets** at the end of Q3 2020, down from **40%** at year-end 2019[84](index=84&type=chunk) [Management's Outlook](index=24&type=section&id=Management's%20Outlook) Management's 2020 outlook focuses on integrating operations, marketing the Filshie Clip System, new product development, and returning cash to shareholders while seeking acquisitions - The company's 2020 plan focuses on integrating operations, direct marketing of the Filshie Clip System, new product development, and maintaining financial performance[86](index=86&type=chunk)[87](index=87&type=chunk) - UTMD will continue to use cash for dividends and share repurchases, while also seeking potential acquisitions[86](index=86&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces foreign currency exchange rate risk from international operations and manages it through operational strategies rather than hedging transactions - The company has operations denominated in USD, EUR, GBP, AUD, and CAD, making it subject to foreign exchange rate risk[89](index=89&type=chunk) - UTMD manages currency risk without using hedging instruments, instead relying on operational strategies like invoicing in local currencies and optimizing liquidity management[89](index=89&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal controls over financial reporting - As of September 30, 2020, the CEO and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective[90](index=90&type=chunk) - No material changes were made to internal controls over financial reporting during the nine months ended September 30, 2020[91](index=91&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any litigation, though it may participate in incidental legal proceedings as part of normal business - As of the filing date, the company is not involved in any litigation[94](index=94&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) Key risks include healthcare reform unpredictability, government-mandated procedure shutdowns, increasing regulatory burdens, GPO dominance, reliance on distributors, and foreign currency fluctuations - Government-mandated shutdowns of "nonessential" medical procedures, as seen during the pandemic, have the potential to substantially reduce demand for the company's devices[96](index=96&type=chunk) - Increasing regulatory burdens and the dominance of Group Purchasing Organizations (GPOs) add costs, weaken marketing efforts, and create competitive disadvantages for smaller companies like UTMD[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) - A significant portion of sales are invoiced in foreign currencies, exposing the company to financial risk from fluctuations in exchange rates relative to the USD[104](index=104&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In 9M 2020, the company repurchased **87,000 shares** for **$6.977 million**, significantly more than the **5,000 shares** for **$398,000** in 9M 2019 Share Repurchase Activity | Period | Shares Purchased | Cost (in thousands) | | :--- | :--- | :--- | | 9M 2020 | 87,000 | $6,977 | | 9M 2019 | 5,000 | $398 | [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and iXBRL financial statements - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and iXBRL financial data (101, 104)[106](index=106&type=chunk) SIGNATURES [Signatures](index=28&type=section&id=Signatures) The report was signed and authorized by CEO Kevin L. Cornwell and Principal Financial Officer Brian L. Koopman on November 6, 2020 - The Form 10-Q was signed on November 6, 2020, by CEO Kevin L. Cornwell and Principal Financial Officer Brian L. Koopman[108](index=108&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-12575 UTAH MEDICAL PRODUCTS INC Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required ...