Utah Medical Products(UTMD) - 2025 Q3 - Quarterly Report

Financial Performance - In Q3 2025, net sales decreased by 1.9% to $9,812,000 compared to Q3 2024, and year-to-date (9M) sales fell by 7.2% to $29,475,000[27] - Gross profit for Q3 2025 was $5,604,000, down 3.4% from Q3 2024, while gross profit for 9M 2025 decreased by 11.1% to $16,737,000[27] - Operating income in Q3 2025 dropped by 21.9% to $2,611,000, and for 9M 2025, it fell by 16.0% to $8,961,000[27] - Net income for Q3 2025 was $2,631,000, a decline of 26.2% compared to Q3 2024, and for 9M 2025, net income decreased by 20.5% to $8,720,000[27] - Earnings per diluted share (EPS) in Q3 2025 were $0.820, down 19.9% from Q3 2024, and for 9M 2025, EPS decreased by 13.5% to $2.680[27] Sales and Revenue - Sales to the China distributor were $395,000 in Q3 2025, down from $781,000 in Q3 2024, and $2,054,000 in 9M 2025 compared to $2,368,000 in 9M 2024[29] - Total consolidated sales for 9M 2025 were $2,271 (7.2%) lower than in 9M 2024, with U.S. domestic sales down 2.3% and OUS sales down 13.3%[46] - OUS sales in 3Q 2025 were $3,953, an 8.5% decrease from $4,318 in 3Q 2024, with a favorable FX impact of $114[43] - OUS sales in 9M 2025 were $12,167, a 13.3% decrease from $14,036 in 9M 2024, with a net favorable FX impact of $244[48] Operating Expenses - Operating expenses in Q3 2025 increased to $2,073,000, representing 21.1% of revenues, compared to 15.2% in Q3 2024[33] - S&M expenses in 3Q 2025 increased by $79, primarily due to higher health plan expenses and fees from U.S. distributors[56] - U.S. G&A expenses increased by $85 in 3Q 2025 compared to 3Q 2024, and by $124 in 9M 2025 compared to 9M 2024, primarily due to higher health plan costs and non-cash stock option expenses[61] - OUS G&A expenses were $1,254 in 3Q 2025 compared to $857 in 3Q 2024, with a total difference of $397 attributed to a $395 bad debt reserve expense and $25 from FX rate changes[62] Profitability Metrics - The gross profit margin for Q3 2025 was 57.1%, down from 58.0% in Q3 2024, and the operating income margin decreased to 26.6% from 33.4%[32] - Operating Income in 3Q 2025 was $2,611, a 21.9% decline from $3,343 in 3Q 2024, and $8,961 in 9M 2025, a 16.0% decline from $10,664 in 9M 2024[54] - Consolidated EBT in 3Q 2025 was $3,309 (33.7% of sales), down from $4,179 (41.8% of sales) in 3Q 2024; for 9M 2025, EBT was $11,004 (37.3% of sales) compared to $13,188 (41.5% of sales) in 9M 2024[68] - Adjusted consolidated EBITDA for 3Q 2025 was $4,170, a 15.9% decrease from $4,958 in 3Q 2024; for 9M 2025, it was $13,493, down 12.7% from $15,447 in 9M 2024[71] Future Outlook - Management now expects total annual 2025 consolidated sales to be about 7% lower compared to 2024, revised from an initial projection of 5%[49] - Annual sales for 2025 are now expected to be 6-7% lower than in 2024, with EPS projected in the range of $3.40-3.50[100] - Management plans to continue investing in new technology and processes, and may consider acquisitions to enhance revenue growth[90] Shareholder Returns - Dividends paid in 3Q 2025 were $988 ($0.305/share), compared to $1,052 ($0.300/share) in 3Q 2024, representing 38% of 3Q 2025 Net Income[81] - Dividends paid in 9M 2025 totaled $3,006, a decrease from $3,222 in 9M 2024, representing 34% of Net Income[84] Balance Sheet and Cash Flow - The balance sheet as of September 30, 2025, showed a stronger current ratio, lower total liabilities, and higher stockholders' equity despite lower sales and earnings[37] - Net cash provided by operating activities was $11,215 in 9M 2025, down from $11,894 in 9M 2024, primarily due to a $2,252 decrease in Net Income[86] - Total consolidated assets decreased by $564 to $121,975 as of September 30, 2025, despite a $201 increase in consolidated current assets[91] - Working capital increased to $93,521 at September 30, 2025, primarily due to a $1,291 increase in cash[94] - UTMD's total debt ratio was 3% as of September 30, 2025, down from 4% at the end of 2024[96] Stock Performance - The closing share price at the end of 3Q 2025 was $62.97, reflecting a 10.6% increase from the previous quarter[85]