Sales Performance - Sales increased by approximately 12%, from 12,181,971 in 2024, driven by a 51% increase in sales to the largest distributor, ASI[146]. - Sales of cosmetic ingredients rose by approximately 32%, from 5,438,262 in 2024, primarily due to increased demand in China[147]. - Gross sales of pharmaceutical products, Renacidin and Clorpactin, decreased by approximately 5%, from 5,602,259 in 2024[149]. - Net sales of pharmaceutical products decreased by approximately 5% in 2024 compared to 2023, attributed to a decrease in gross sales and pharmaceutical-related rebates[151]. - Sales of medical lubricants increased by approximately 16% in 2024, rising from 2,028,564 in 2024, driven by demand from a major customer in China[153]. Financial Outlook - The company anticipates beginning manufacturing and revenue generation for the new Natrajel line of sexual wellness ingredients in 2025[121]. - The company discontinued its specialty industrial products line in mid-2023 to focus on higher-value product categories[120]. - The company is facing global supply chain instability, which may impact future gross margins due to potential increases in shipping costs[124]. - The company has a "specified small manufacturer" designation, which is expected to reduce rebate liabilities in 2025 and 2026[135]. - The company plans to enhance its competitive position by investing in new products, particularly in naturally derived products[148]. - The company continues to monitor the impact of tariffs on its operations, particularly those affecting imports from China, Canada, and Mexico[125]. Expenses and Profitability - Gross profit on sales increased to 53% in 2024 from 50% in 2023, primarily due to a 32% increase in cosmetic ingredient sales and a higher percentage of cosmetic product sales[156]. - Operating expenses rose by approximately 13% from 2,356,819 in 2024, mainly due to increased sales and marketing expenses and payroll costs[157]. - Research and development expenses decreased by approximately 2% from 456,779 in 2024, with expectations for a modest increase in 2025[158]. Investment and Cash Flow - Investment income increased by approximately 42% from 434,679 in 2024, driven by higher interest income from longer-term investments[159]. - Net cash used in investing activities was 4,277,577 in 2023, primarily due to increased purchases of longer-term investments[166]. - Dividends paid increased to 0.10 per share in 2023, resulting in net cash used in financing activities of 10,718,457 at December 31, 2023, to 1,566,839 in 2023 to $1,428,455 in 2024, with a receivables turnover of 45 days compared to 50 days in 2023[164].
United-Guardian(UG) - 2024 Q4 - Annual Report