Core Insights - Utah Medical Products, Inc. (UTMD) shares increased by 2% following the release of its fourth-quarter and full-year 2025 earnings, outperforming the S&P 500 index's 0.2% growth during the same period [1] - Over the past month, UTMD shares rose by 7.6%, significantly exceeding the S&P 500's 1.5% increase [1] Financial Performance - For Q4 2025, UTMD reported earnings per share (EPS) of 80.2 cents, a decrease of 6.3% from 85.7 cents in Q4 2024 [2] - Revenues for the quarter were $9 million, reflecting a 1.2% decline from $9.2 million in the same period a year ago [2] - Gross profit decreased by 1.1% to $5.26 million, down from $5.32 million in Q4 2024 [3] - Operating income fell 16.7% year over year to $2.4 million from $2.9 million, primarily due to increased operating expenses [3] - Net income was $2.6 million, an 11.6% decline from $2.9 million in the prior-year quarter [3] Key Business Metrics - Gross profit margin remained strong at 58.2%, nearly unchanged from 58.1% in the prior-year quarter [4] - Operating income margin declined to 27% from 32%, and net income margin fell to 28.4% from 31.7% [4] - Adjusted consolidated EBITDA for the quarter was $4 million, down 10% from $4.4 million a year ago, with EBITDA as a percentage of sales declining to 43.8% from 48.1% [4] Sales Performance - Domestic U.S. sales in Q4 declined 4.9% to $5.5 million from $5.7 million, with non-Filshie device sales accounting for most of the drop [5] - OEM sales decreased by 31.5% year over year, while Filshie device sales in the U.S. increased by 21.6% [5] - Outside the U.S. sales rose 4.9% to $3.6 million, largely due to favorable foreign exchange rates, but on a constant currency basis, OUS sales were up only 0.5% [5] Management Commentary - Management indicated that the fourth quarter provided a normalized comparison, with no sales to UTMD's China distributor in either Q4 2025 or Q4 2024, allowing margins to stabilize despite cost pressures [6] - Cost-of-living salary increases and raw material inflation continued to impact results, but effective cost containment helped prevent further deterioration [6] Operating Expenses - Operating expenses increased due to higher general and administrative (G&A) costs, including a $0.2 million charge related to an embezzlement case and a $0.4 million write-off tied to cancellation fees [7] - G&A expenses represented 23.2% of sales in Q4, up from 19.3% in the prior-year quarter [7] Factors Influencing Results - Revenue decline was primarily driven by softness in U.S. sales of non-Filshie medical devices and OEM components, with U.S. Filshie sales growth not sufficient to offset declines in other areas [8] - Favorable foreign exchange rates provided a modest benefit to reported international sales, particularly in Europe [8] Legal and Litigation Costs - Legal costs related to product liability litigation increased slightly to $0.4 million from $0.3 million the previous year, with 14 of 19 pending court cases dismissed by the end of January 2026 [9][10] Full-Year Performance - Full-year sales totaled $38.5 million, a 5.8% year-over-year decline from $40.9 million in 2024, with net income falling 18.7% to $11.3 million [11] - EPS dropped 12.1% year over year to $3.48, and gross margin declined to 57.1% from 59% in 2024 [11] Guidance and Future Outlook - Management expects sales to PendoTECH and the China distributor to remain at zero in 2026, aiming to offset losses with new product introductions and organic growth in Filshie sales [12] - There is substantial uncertainty regarding the recovery [12] Share Repurchase and Financial Position - During Q4 2025, UTMD repurchased 17,951 shares at an average cost of $55.35 per share, totaling $1 million [13] - The company ended the year with $85.8 million in cash and investments, up $2.8 million from the end of 2024, and no debt [14]

Core Insights - Utah Medical Products, Inc. (UTMD) experienced a 3% decline in share price following its earnings report for Q2 2025, contrasting with a 0.6% increase in the S&P 500 index during the same period [1] - The company reported earnings per share (EPS) of 94 cents, a 4% decrease from 98 cents in Q2 2024 [1] Financial Performance - Net sales were $10 million, down 4.3% from $10.4 million in the same quarter last year [2] - Income before tax decreased by 8.9% to $3.8 million, while net income fell 11.7% to $3.1 million compared to $3.5 million in Q2 2024 [2] Sales Trends - Domestic sales increased by 0.6% to $5.9 million, driven by a 10% rise in direct non-Filshie device sales and an 8% increase in Filshie device sales [3] - However, OEM domestic sales plummeted by 38% due to a significant drop in PendoTECH orders [3] - International sales dropped 10.5% to $4.1 million, with direct sales by subsidiaries falling 15.8% [4] Profitability Metrics - Gross profit margin contracted to 56.2% from 60.1% a year earlier, with gross profit declining 10.5% to $5.6 million [5] - Operating income fell 7.1% to $3.2 million, and the operating margin decreased to 32.1% from 33.1% [5] - Net income margin narrowed to 30.6% from 33.2%, influenced by a higher effective tax rate of 20.5% compared to 18% in the previous year [6] Expense Management - Total operating expenses decreased by 14.8% to $2.4 million, with general and administrative expenses dropping 13.6% to $1.7 million [7] - R&D spending saw a significant decline of 47.1% to $0.1 million following the completion of biopharma sensor validation [7] Capital Allocation - The company repurchased 64,988 shares at an average price of $53.67 and paid $1 million in dividends, which accounted for 33% of net income [8] - Cash and investments at the end of the quarter totaled $82.2 million, slightly down from $83 million at the end of 2024 [8] Management Insights - Management attributed revenue decline to the expected drop in PendoTECH sales but highlighted the strength of core direct sales, particularly in the U.S. [9] - Full-year 2025 results are expected to reflect continued weakness in PendoTECH sales, projected to be about $2 million lower than in 2024 [10] - The current trailing twelve-month (TTM) EBITDA stands at $18.6 million, with a target range of $16 million to $18 million for the year [10]