Utah Medical Products(UTMD) - 2019 Q4 - Annual Report

Sales and Revenue - UTMD's consolidated sales from acquisitions comprised 59% of total sales in 2019[16] - The company has returned $117.872 million in share repurchases and $58.8 million in cash dividends to public stockholders since 1992[15] - In 2019, OUS sales represented 41% of total consolidated USD sales, down from 50% in 2018, attributed to higher U.S. sales and a stronger USD[70] - In 2019, UTMD sold components and finished devices to 147 other companies in the U.S., leveraging its manufacturing capabilities for OEM sales[68] - Total 2019 trade revenues from customers outside the U.S. were $19,411 million, accounting for 41% of total sales, down from 50% in 2018[97] - U.S. exports represented 22% of total OUS trade sales in 2019, down from 26% in 2018[97] Product Development and Innovation - The company continues to investigate new tools to enhance fetal monitoring techniques, indicating ongoing product development[21] - UTMD plans to continue expanding its neonatal product line to reinforce its reputation for reliable and developmentally-friendly specialty devices[38] - UTMD's current product and process development projects include neonatal intensive care and specialized procedures for cervical/uterine disease[80] - The company has established a strong reputation in the market, leveraging relationships with clinicians to drive product innovation[13] Product Offerings - The DISPOSA-HOOD is designed to maintain a neutral thermal environment for neonates while administering oxygen, preventing cross-contamination[24] - The DELTRAN® PLUS blood pressure monitoring system is tailored for NICU use, eliminating needles and reducing infection risk[25] - UTMD's VAD Systems include the CMI® soft silicone birthing cups, which are preferred for over 90% of vacuum-assisted deliveries[22] - The NUTRI-LOK® extension set addresses safety risks in NICUs by preventing inadvertent connections with IV lines[32] - The DELTRAN® Disposable Pressure Transducer remains the standard for accuracy and reliability in pressure monitoring since its introduction in 1998[61] - The LIBERTY® System offers a cost-effective treatment for urinary incontinence, providing a lower risk alternative to surgery[55] - The EndoCurette™ was developed in cooperation with Mayo Clinic for uterine endometrial tissue sampling, aimed at ruling out precancerous conditions[56] - The Add-a-Cath introducer facilitates safe suprapubic catheterization, introduced in 2013 and now distributed under the trade name "Supra-Foley"[54] Market Strategy and Distribution - UTMD's products are marketed through over 260 distributors globally, with 120 distributors purchasing at least $5,000 in medical devices during 2019[14] - The company operates through over 260 distributors globally, with 120 purchasing at least $5,000 in medical devices during 2019[14] - The company has established direct sales channels and relationships with other medical companies for effective product distribution[17] - UTMD's marketing strategy focuses on clinicians for optimal patient care outcomes, primarily through clinical meetings and trade shows[64] Financial Performance and Legal Matters - UTMD has received $6 million in royalty income during 2019, a decrease from $76 million in 2018[86] - The average annual cost of product liability lawsuits since 2011 for the Filshie Clip System was $8 per year[104] - The Company has been named as a defendant in a total of nine lawsuits over the last twenty-seven years, with no material impact on performance from legal costs[104] - There have been no product liability lawsuits during the last eight years, other than the Filshie Clip System claims[104] Manufacturing and Compliance - UTMD's manufacturing facilities in Utah and Ireland are certified under the ISO13485:2016 standard[92] - The average tenure of UTMD's employees is fifteen years, contributing to high-quality medical device production[81] - The company operates four facilities outside the U.S. to enhance market response and regulatory compliance[96] Product Safety and Efficacy - UTMD completed the replacement of all DEHP plasticizer PVC materials in its Gesco product line in 2006, addressing safety concerns for neonatal patients[33] - The EPITOME® electrosurgical scalpel offers significant improvements in wound healing and minimizes thermal side effects compared to other devices[43] - Filshie Clips have a reported migration rate of 6%, with Dr. Marcus Filshie estimating over 25% of patients may experience migration of one or more clips[50] - The U.S. FDA approved Filshie Clips in 1996 after a clinical trial involving 5,454 women, and the Sterishot applicator was approved in late 2016[52] Backlog and Future Outlook - Backlog shippable in less than 90 days was $1,627 million as of January 1, 2020, compared to $3,164 million as of January 1, 2019[100] - Internal product development expenses are expected to remain in the range of 1-2% of sales[80] - The Company anticipates that actual results may differ materially from forward-looking statements due to various risks and uncertainties[106]