UTAH MEDICAL PRODUCTS INC 10-Q

Item 1. Financial Statements UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (in thousands) (unaudited) (audited) SEPTEMBER 30, 2025 DECEMBER 31, 2024 ASSETS Current assets: Cash & investments $ 84,267 $ 82,976 Accounts & other receivables, net 3,725 4,094 Inventories 8,118 8,812 Other current assets 422 448 Total current assets 96,532 96,330 Property and equipment, net 10,000 9,763 Goodwill 14,051 13,580 Other intangible assets 55,948 53,772 Other intangible assets - accumulated amortization ( 54,556 ) ( 50,907 ) Other intangible assets, net 1,392 2,865 Total assets $ 121,975 $ 122,538 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 768 $ 696 Accrued expenses 2,243 3,061 Total current liabilities 3,011 3,757 Deferred tax liability - Femcare IIA 248 603 Operating lease liability 241 282 Deferred income taxes 223 469 Total liabilities 3,723 5,111 Stockholders' equity: Common stock - $ 0.01 par value; authorized - 50,000 shares; issued - September 30, 2025, 3,204 shares and December 31, 2024, 3,335 shares 32 33 Accumulated other comprehensive income (loss) ( 9,738 ) ( 11,908 ) Additional paid-in capital - - Retained earnings 127,958 129,302 Total stockholders' equity 118,252 117,427 Total liabilities and stockholders' equity $ 121,975 $ 122,538 see notes to consolidated condensed financial statements 1 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024 (in thousands, except per share amounts - unaudited) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2025 2024 2025 2024 Sales, net $ 9,812 $ 10,005 $ 29,475 $ 31,745 Cost of goods sold 4,208 4,203 12,738 12,925 Gross profit 5,604 5,802 16,737 18,820 Operating expense Selling, general and administrative 2,826 2,287 7,320 7,464 Research & development 167 172 456 692 Total operating expense 2,993 2,459 7,776 8,156 Operating income 2,611 3,343 8,961 10,664 Other income 698 836 2,043 2,524 Income before provision for income taxes 3,309 4,179 11,004 13,188 Provision for income taxes 678 616 2,284 2,216 Net income $ 2,631 $ 3,563 $ 8,720 $ 10,972 Earnings per common share (basic) $ 0.82 $ 1.02 $ 2.68 $ 3.10 Earnings per common share (diluted) $ 0.82 $ 1.02 $ 2.68 $ 3.10 Shares outstanding - basic 3,207 3,478 3,254 3,542 Shares outstanding - diluted 3,207 3,478 3,254 3,542 Other comprehensive income (loss): Foreign currency translation net of taxes of $ 0 in all periods $ ( 376 ) $ 1,432 $ 2,170 $ 769 Total comprehensive income $ 2,255 $ 4,995 $ 10,890 $ 11,741 see notes to consolidated condensed financial statements 2 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024 (in thousands - unaudited) SEPTEMBER 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,720 $ 10,972 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 614 530 Amortization 1,593 1,548 Provision for (recovery of) losses on accounts receivable 395 ( 6 ) Amortization of right of use assets 41 38 Deferred income taxes ( 641 ) ( 417 ) Stock-based compensation expense 262 184 Tax benefit attributable to exercise of stock options - 20 Changes in operating assets and liabilities: Accounts receivable and other receivables ( 97 ) ( 306 ) Inventories 1,009 508 Prepaid expenses and other current assets 52 54 Accounts payable 69 229 Accrued expenses ( 802 ) ( 1,460 ) Total adjustments 2,495 922 Net cash provided by operating activities 11,215 11,894 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures for: Property and equipment ( 262 ) ( 221 ) Intangible assets - ( 5 ) Proceeds from sale of: Property and equipment - 27 Net cash used in investing activities ( 262 ) ( 199 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock - options - 390 Common stock purchased and retired ( 7,361 ) ( 13,259 ) Payment of dividends ( 3,006 ) ( 3,222 ) Net cash used in financing activities ( 10,367 ) ( 16,091 ) Effect of exchange rate changes on cash 705 ( 20 ) Net increase/(decrease) in cash and cash equivalents 1,291 ( 4,416 ) Cash at beginning of period 82,976 92,868 Cash at end of period $ 84,267 $ 88,452 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for income taxes $ 2,852 $ 3,713 Cash paid during the period for interest - - see notes to consolidated condensed financial statements 3 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY Three and Nine Months Ended September 30, 2025 and 2024 (In thousands - unaudited) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Retained Stockholders' Shares Amount Capital Income Earnings Equity Balance at June 30, 2025 3,216 $ 32 $ - $ ( 9,362 ) $ 126,862 $ 117,533 Stock option compensation expense - - 95 - - 95 Common stock purchased and retired ( 12 ) - ( 95 ) - ( 558 ) ( 653 ) Foreign currency translation adjustment - - - ( 376 ) - ( 376 ) Common stock dividends - - - - ( 977 ) ( 977 ) Net income - - - - 2,631 2,631 Balance at September 30, 2025 3,204 $ 32 $ - $ ( 9,738 ) $ 127,958 $ 118,252 Balance at December 31, 2024 3,335 $ 33 $ - $ ( 11,908 ) $ 129,302 $ 117,427 Stock option compensation expense - - 262 - - 262 Common stock purchased and retired ( 131 ) ( 1 ) ( 262 ) - ( 7,098 ) ( 7,361 ) Foreign currency translation adjustment - - - 2,170 - 2,170 Common stock dividends - - - - ( 2,966 ) ( 2,966 ) Net income - - - - 8,720 8,720 Balance at September 30, 2025 3,204 $ 32 $ - $ ( 9,738 ) $ 127,958 $ 118,252 Balance at June 30, 2024 3,499 $ 35 $ - $ ( 11,322 ) $ 135,339 $ 124,052 Shares issued upon exercise of employee stock options for cash - - - - - - Stock option compensation expense - - 53 - - 53 Common stock purchased and retired ( 58 ) ( 1 ) ( 53 ) - ( 3,812 ) ( 3,866 ) Foreign currency translation adjustment - - - 1,432 - 1,432 Common stock dividends - - - - ( 1,038 ) ( 1,038 ) Net income - - - - 3,563 3,563 Balance at September 30, 2024 3,441 $ 34 $ - $ ( 9,890 ) $ 134,053 $ 124,197 Balance at December 31, 2023 3,630 $ 36 $ 593 $ ( 10,658 ) $ 138,341 $ 128,313 Shares issued upon exercise of employee stock options for cash 8 - 390 - - 390 Stock option compensation expense - - 184 - - 184 Common stock purchased and retired ( 197 ) ( 2 ) ( 1,168 ) - ( 12,090 ) ( 13,259 ) Foreign currency translation adjustment - - - 769 - 769 Common stock dividends - - - - ( 3,171 ) ( 3,171 ) Net income - - - - 10,972 10,972 Balance at September 30, 2024 3,441 $ 34 $ - $ ( 9,890 ) $ 134,053 $ 124,197 see notes to consolidated condensed financial statements 4 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) (1) The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States. These statements should be read in conjunction with the financial statements and notes included in the Utah Medical Products, Inc. ("UTMD" or "the Company") annual report on Form 10-K for the year ended December 31, 2024. In the opinion of management, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. Currency amounts are in thousands except per-share amounts and where noted. (2) Recent Accounting Standards. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting AUS 2023-09. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. (3) Inventories at September 30, 2025, and December 31, 2024, consisted of the following: September 30, December 31, 2025 2024 Finished goods $ 1,224 $ 1,913 Work-in-process 1,606 1,414 Raw materials 5,288 5,485 Total $ 8,118 $ 8,812 (4) Stock-Based Compensation. At September 30, 2025, the Company has stock-based employee compensation plans which authorize the grant of stock options to eligible employees and directors. The Company accounts for stock compensation under FASB Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation . This statement requires the Company to recognize compensation cost based on the grant date fair value of options granted to employees and directors. In the quarters ended September 30, 2025, and 2024, the Company recognized $ 95 and $ 53 , respectively, in stock-based compensation cost. In the nine months ended September 30, 2025, and 2024, the Company recognized $ 262 and $ 184 , respectively, in stock-based compensation cost. (5) Warranty Reserve. The Company’s published warranty is: “UTMD warrants its products to conform in all material respects to all published product specifications in effect on the date of shipment, and to be free from defects in material and workmanship for a period of thirty (30) days for supplies, or twenty-four (24) months for equipment, from date of shipment. During the warranty period UTMD shall, at its option, replace any products shown to UTMD's reasonable satisfaction to be defective at no expense to the Purchaser or refund the purchase price.” UTMD maintains a warranty reserve to provide for estimated costs which are likely to occur. The amount of this reserve is adjusted, as required, to reflect its actual experience. Based on its analysis of historical warranty claims and its estimate that existing warranty obligations were immaterial, no warranty reserve was made at December 31, 2024, or September 30, 2025. 5 (6) Global 3Q 2025 revenues (USD) by product category: Domestic Outside US Total Labor & Delivery $ 869 $ 170 $ 1,039 Gynecology/Electrosurgery/Urology 2,521 2,433 4,954 Neonatal 1,622 554 2,176 Blood Pressure Monitoring and Accessorie s* 847 796 1,643 Total: $ 5,859 $ 3,953 $ 9,812 Global 9M 2025 revenues (USD) by product category: Domestic Outside US Total Labor & Delivery $ 2,519 $ 570 $ 3,089 Gynecology/Electrosurgery/Urology 7,272 7,384 14,656 Neonatal 4,981 1,280 6,261 Blood Pressure Monitoring and Accessories* 2,536 2,933 5,469 Total : $ 17,308 $ 12,167 $ 29,475 *includes assemblies and molded components sold to OEM customers. (7) Earnings Per Share. Basic earnings per share is calculated by dividing net income attributable to the common stockholders of the company by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by assuming the exercise of stock options at the closing price of stock at the end of 3 rd quarter 2025. The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: (in thousands) : Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 Numerator Net income 2,631 3,563 8,720 10,972 Denominator Weighted average shares, basic 3,207 3,478 3,254 3,542 Dilutive effect of stock options - - - - Diluted shares 3,207 3,478 3,254 3,542 Earnings per share, basic 0.82 1.02 2.68 3.10 Earnings per share, diluted 0.82 1.02 2.68 3.10 (8) Segment Information. The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated gross profit margin, operating margin, and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions such as the allocation of budget between cost of sales, sales and marketing, research and development, and general and administrative expenses. 6 The following table presents selected financial information with respect to the Company’s single operating segment for the quarters ended September 30, 2025 and September 30, 2024: Quarter Ended September 30, 2025 2024 Revenues 9,812 10,005 Less: Standard cost of sales 3,359 3,456 Other cost of sales 849 747 Gross Profit 5,604 5,802 Gross Profit Margin 57.1 % 58.0 % Sales & Marketing 516 437 Research & Development 167 171 Litigation Fees 384 426 Amortization 544 525 Other General & Administrative 1,382 900 Operating Income 2,611 3,343 Operating Income Margin 26.6 % 33.4 % Other Income Interest income 719 872 Other income (expense) ( 21 ) ( 36 ) Income before income taxes 3,309 4,179 Provision for income taxes 678 615 Net Income 2,631 3,564 (9) Subsequent Events. UTMD has evaluated subsequent events through the date the financial statements were issued, and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements. After September 30, 2025 through November 10, 2025, the Company made additional repurchases of 500 shares of its stock in the open market for $29, at a price of $57.90 per share. 7