United-Guardian (UG) Posts Y/Y Q2 Earnings & Sales Growth

Core View - United-Guardian, Inc. delivered strong second-quarter 2024 results with notable sales growth and a significant rise in net income, driven by robust demand in cosmetic ingredients and medical lubricants segments [1][3][7] Q2 Results - Earnings per share for Q2 2024 were 21 cents, up from 10 cents in the same quarter last year [3] - Total quarterly sales increased by 28% to $3.39 million from $2.65 million year-over-year [3] - Cosmetic ingredient sales surged by 84% to $1.42 million, attributed to solid purchases from the largest cosmetic distributor [3][4] Disaggregated Sales by Products - Cosmetic Ingredients: Sales rose 84% to $1.42 million from $772,887 in Q2 2023, driven by heightened demand, particularly in China, and reduced competition from lower-cost producers [4] - Pharmaceuticals: Sales grew modestly by 3% to $1.41 million from $1.38 million, supported by restocking of Renacidin after supply constraints [5] - Medical Lubricants: Sales increased by 15% to $0.56 million from $0.48 million, primarily due to higher orders from a significant customer in India [6] - Industrial Products: No sales reported for Q2 2024 as the product line was discontinued, resulting in a decline of $0.18 million from Q2 2023 [6] Profitability - Net income more than doubled to $0.96 million in Q2 2024 from $0.46 million in Q2 2023, supported by higher sales [7] Expenses - Cost of sales amounted to $1.56 million, representing 46% of net sales, down from 54% in Q2 2023, due to a more favorable sales mix [8] - Operating expenses saw a slight increase, with R&D expenses decreasing by 13% year-over-year to $0.11 million, indicating a focused approach to innovation [9] Cash & Debt - As of the end of Q2 2024, cash and cash equivalents were $8.4 million, up from $8.2 million at the end of Q4 2023 [10] - Total liabilities amounted to $1.71 million, including accounts payable and accrued expenses [10] View - The results reflect a challenging operating environment, with profitability pressures due to higher raw material costs and an unfavorable product mix, despite a strong cash position and lack of debt [2][11]