Utah Medical Products(UTMD) - 2025 Q4 - Annual Report

Sales and Revenue Performance - UTMD's consolidated sales from acquisitions in 2025 comprised 57% of total sales, highlighting the importance of strategic acquisitions for revenue growth[15]. - In 2025, OUS sales represented 41% of consolidated total USD sales, down from 43% in 2024 and 44% in 2023[82]. - In 2025, UTMD's total consolidated sales were impacted by a significant decline in sales to its largest OEM customer, PendoTECH, which dropped from $11.6 million (22% of total sales) in 2022 to just $0.4 million (1% of total sales) in 2025[89]. - Total worldwide consolidated sales in 2025 were $38,520, a decrease of $2,383 (5.8%) from $40,903 in 2024, attributed to lower OEM sales and other device sales[190]. - Domestic sales in the U.S. in 2025 were $22,761, a decrease of $683 (2.9%) from $23,444 in 2024, with a notable increase in domestic Filshie device sales by 10.8%[192]. - OUS USD-denominated sales in 2025 were $15,758, down $1,700 (9.7%) from $17,458 in 2024, primarily due to zero sales to PendoTECH and lower sales to the China distributor[193]. - Total revenues for 2025 were $38,520, a decrease of 5.8% from $40,903 in 2024, with the largest revenue contributor being Gynecology/Electrosurgery/Urology at $19,719 (51% of total sales)[198]. Profitability and Financial Metrics - Gross profit for 2025 was $22.00 million, reflecting an 8.9% decline from $24.14 million in 2024[159]. - Operating income fell by 16.1% to $11.40 million in 2025, down from $13.59 million in 2024[159]. - Net income decreased by 18.7% to $11.29 million in 2025, compared to $13.87 million in 2024[159]. - Earnings per share (EPS) for 2025 was $3.483, a decrease of 12.1% from $3.961 in 2024[159]. - The Gross Profit Margin (GPM) contracted by 1.9 percentage points in 2025, primarily due to increased fixed manufacturing overhead costs amid declining sales[200]. - Consolidated operating expenses were $10,599, accounting for 27.5% of sales, compared to $10,549 (25.8% of sales) in 2024, with S&M expenses rising to $2,051 (5.3% of sales) from $1,901 (4.6% of sales)[205]. Product Development and Innovation - UTMD's Deltran blood pressure monitoring system was customized for NICU use, featuring a patented closed blood microsampling device introduced in 2025[32]. - The Disposa-Hood, a disposable infant respiratory hood, is designed to maintain a neutral thermal environment while administering oxygen, preventing cross-contamination[30]. - The CVX-Ripe catheter is aimed at improving cervical favorability for labor induction, potentially reducing the time to achieve successful vaginal delivery[26]. - UTMD's VAD Systems include soft silicone birthing cups, which are preferred for their safety in vacuum-assisted deliveries, representing over 90% of cases where VAD is indicated[29]. - The introduction of the ABC TinyDraw device in 2025 aims to reduce the risk of alteration to cerebral blood flow in the tiniest patients[32]. - The Nutri-Lok™ extension set was developed to mitigate safety risks in NICUs, including inadvertent connections and disconnections, and complies with the FDA's ISO 80369-3 standard[39]. - The Dialy-Nate® disposable peritoneal dialysis set is designed for timely implementation in neonates with compromised renal function[41]. - The EndoCurette® was developed in cooperation with Mayo Clinic for uterine endometrial tissue sampling, aimed at ruling out precancerous changes[67]. - The Add-a-Cath™ introducer facilitates safe suprapubic catheterization, which is recognized for having fewer complications compared to urethral catheterization[64]. Shareholder Value and Financial Returns - The company has returned $156 million in share repurchases and $90 million in cash dividends to public stockholders since 1992, demonstrating a commitment to shareholder value[14]. - UTMD repurchased 148,935 shares of its common stock in 2025 for a total cost of $8.36 million, averaging $56.10 per share[153]. - The company paid total cash dividends of $1.22 per share in 2025, up from $1.20 per share in 2024[152]. Market Presence and Distribution - The company has approximately 200 distributors outside the U.S., with 108 purchasing at least $5,000 in medical devices during 2025, indicating strong international market presence[13]. - The company sold to 197 regional distributors and OEMs in over a hundred countries in 2025, with 10% of independent OUS distributors contributing to 75% of indirect OUS sales from 2023 to 2025[90]. - U.S. exports represented 25% of total OUS sales in 2025, reflecting a slight increase from 23% in 2024, indicating a growing reliance on international markets[113]. Legal and Regulatory Matters - The average annual cost of defense for product liability lawsuits was $15 per year over the last thirty years, significantly below the deductible level of product liability insurance policies[118]. - Since 1993, there have been no adverse judgments resulting from claims of defect in UTMD's designs or manufacture of products, despite over 100 million finished devices distributed[123]. - As of March 2026, fifteen out of nineteen lawsuits related to the Filshie Clip System have been dismissed, with three cases pending decisions expected in 2026[120]. - Regulatory burdens and premarketing approval delays may lead to significant revenue loss and increased costs, impacting product development and marketing focus[127]. Cybersecurity and Risk Management - The company has implemented a comprehensive cybersecurity strategy, continuously monitoring its information systems to manage risks[140]. - The governance committee of the Board of Directors oversees the effectiveness of the company's cybersecurity strategy, meeting quarterly to review potential threats[143]. Operational and Financial Stability - Year-end cash and investments increased to $85.76 million in 2025, representing 70% of total assets[169]. - The current ratio improved to 37.6 at the end of 2025 from 25.6 at the end of 2024[166]. - Total consolidated assets at year-end 2025 were $122.54 million, slightly up from $122.54 million at the end of 2024[168]. - Working capital at year-end 2025 was $95,144, a 3% increase from $92,574 at year-end 2024, primarily due to increased cash from profitable operations[170]. - The year-end 2025 Deferred Tax Liability balance was $114, down from $604 at the end of 2024, reflecting changes in FX rates and amortization effects[180].