Utah Medical Products(US:UTMD)2024-08-09 20:06Financial Performance - Total consolidated net sales for 2Q 2024 were $10,400, a decrease of 19.2% compared to $12,866 in 2Q 2023, with 1H 2024 sales at $21,740, down 14.4% from $25,386 in 1H 2023[20]. - Gross profit for 2Q 2024 was $6,253, reflecting a 19.2% decline from $7,739 in 2Q 2023, while 1H 2024 gross profit was $13,018, down 16.4% from $15,581 in 1H 2023[20]. - The decline in sales was primarily attributed to three categories: WW PendoTECH OEM (70% of 2Q decline), China BPM Distributor (21%), and WW Filshie Clip System (16%) contributing to a total decline of $2,639[21]. - UTMD expects a total sales decline of $6 million for the year 2024 compared to 2023 due to reduced sales to its major biopharmaceutical OEM customer[22]. - The gross profit margin for 2Q 2024 remained stable at 60.1%, consistent with 2Q 2023, despite a 19% decrease in sales[22]. - Total consolidated sales in 1H 2024 were $3,646 (14.4%) lower than in 1H 2023, with biopharma pressure monitoring device sales to PendoTECH down $2,788 (57.5%)[33]. - WW consolidated Filshie sales in 1H 2024 were $918 (14.2%) lower than in 1H 2023, with domestic Filshie sales down $362 (14.8%)[34]. - OUS sales in 1H 2024 were $9,718, compared to $11,184 in 1H 2023, reflecting a decline of 13.1%[35]. - Gross Profit in 1H 2024 was $2,563 (16.4%) lower than in 1H 2023, with a Gross Profit Margin of 59.9% compared to 61.4% in 1H 2023[40]. - Operating Income in 2Q 2024 was $3,438, down $987 (22.3%) from $4,425 in 2Q 2023, maintaining a margin of 33.1%[42]. - Consolidated EBT for 2Q 2024 was $4,211 million, representing 40.5% of sales, compared to $5,172 million (40.2% of sales) in 2Q 2023[51]. - Net Income in 2Q 2024 was $3,453 million, a 17.8% decrease from $4,200 million in 2Q 2023, attributed to lower Operating Income[55]. - Diluted EPS in 2Q 2024 were $0.978, down 15.3% from $1.154 in 2Q 2023, reflecting a decrease in Net Income[57]. - Adjusted consolidated EBITDA for 1H 2024 was $10,489 million, a 24.6% decrease from $13,916 million in 1H 2023, primarily due to lower gross profit[52]. Sales and Market Trends - Total OUS sales in 2Q 2024 were $4,569, a decrease of 21.8% from $5,849 in 2Q 2023, with significant declines in sales to distributors in Ireland and China[30]. - Domestic Filshie sales in 2Q 2024 were $165 (13.9%) lower compared to 2Q 2023, indicating challenges in maintaining sales levels[28]. - Domestic U.S. sales in 2Q 2024 were $5,831, down from $7,017 in 2Q 2023, representing a decline of 16.9%[31]. - Direct non-Filshie device sales represented 63% of total domestic sales, remaining relatively stable with only a $8 (0.2%) decrease[31]. - Domestic OEM sales were $1,013 (47.0%) lower, primarily due to a $1,124 decline in U.S. PendoTECH sales[31]. - The company projects 2024 sales to be 20-22% lower than in 2023 due to ongoing weakness in Filshie device sales and lack of orders from its largest OEM customer[38]. Expenses and Investments - Total Operating Expenses in 1H 2024 were $5,697, down from $6,717 in 1H 2023, with S&M expenses increasing to 4.4% of sales[43]. - Total consolidated G&A Operating Expenses in 2Q 2024 were $2,014 million, a decrease of $761 million compared to the same period in 2023[45]. - R&D expenses in 2Q 2024 were $255 million, significantly higher than $133 million in 2Q 2023, due to extensive validation studies required by biopharmaceutical manufacturers[46]. - The total cost of share repurchases in 1H 2024 was $9,393 million, with 138,215 shares repurchased at an average price of $67.96[59]. - Capital expenditures for property, plant, and equipment (PP&E) were $132 in 1H 2024, a decrease of 63.6% from $363 in 1H 2023[63]. Cash Flow and Financial Position - Ending cash and investments as of June 30, 2024, were $89.2 million, down from $92.9 million at the end of 2023, after paying $2.2 million in dividends and repurchasing $9.4 million of common stock[23]. - Net cash provided by operating activities in 1H 2024 was $8,038, down 32.5% from $11,828 in 1H 2023, primarily due to a $1,005 decrease in Net Income[62]. - Working capital was $98,383 at June 30, 2024, down from $101,559 at December 31, 2023, with cash balances comprising 91% of working capital[70]. - Total liabilities decreased by $1,165 to $5,980 as of June 30, 2024, with a total debt ratio of 4.6%[71]. - Total consolidated assets decreased by $5,425 to $130,032 as of June 30, 2024, compared to December 31, 2023[67]. Management and Future Outlook - UTMD's current backlog for WW PendoTECH shipments is approximately $450, with minimal new orders expected for the second half of 2024[26]. - Management plans to introduce high-pressure process control transducer configurations to biopharmaceutical manufacturers and continue product development in 2H 2024[72]. - EPS is expected to benefit from share repurchases, despite lower than projected revenues for the year[73]. - The average age of trade receivables was 32 days at June 30, 2024, compared to 24 days at December 31, 2023, indicating strong collection performance[66]. - UTMD's cash and investments decreased by $3,650 to $89,219, primarily due to cash used for stock repurchases and dividends[66].