UTAH MEDICAL PRODUCTS INC 10-Q

Item 1. Financial Statements UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS AS OF MARCH 31, 2026 AND DECEMBER 31, 2025 (in thousands) (unaudited) (audited) MARCH 31, 2026 DECEMBER 31, 2025 ASSETS Current assets: Cash & Investments $ 87,406 $ 85,756 Accounts & other receivables, net 3,636 3,522 Inventories 8,722 7,935 Other current assets 614 529 Total current assets 100,378 97,742 Property and equipment, net 9,721 9,908 Goodwill 13,919 14,052 Other intangible assets 55,298 55,941 Other intangible assets - accumulated amortization ( 54,934 ) ( 55,101 ) Other intangible assets, net 364 840 Total assets $ 124,382 $ 122,542 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,194 $ 911 Accrued expenses 2,311 1,687 Current portion of notes payable - - Total current liabilities 3,505 2,598 Notes payable - - Deferred tax liability - Femcare IIA - 114 Other long term liabilities - - Long-term lease liability 210 225 Deferred income taxes 294 337 Total liabilities 4,009 3,274 Stockholders' equity: Common stock - $ 0.01 par value; authorized - 50,000 shares; issued and outstanding - March 31, 2026, 3,184 shares and December 31, 2025, 3,186 shares 32 32 Accumulated other comprehensive loss ( 9,919 ) ( 9,416 ) Additional paid-in capital - - Retained earnings 130,260 128,652 Total stockholders' equity 120,373 119,268 Total liabilities and stockholders' equity $ 124,382 $ 122,542 see notes to consolidated condensed financial statements 1 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025 (in thousands, except per share amounts) (unaudited) THREE MONTHS ENDED MARCH 31, 2026 2025 Sales, net $ 8,722 $ 9,710 Cost of goods sold 3,440 4,172 Gross profit 5,282 5,538 Operating expense Selling, general and administrative 2,563 2,231 Research & development 154 154 Total operating expenses 2,717 2,385 Operating income 2,565 3,153 Other income 617 705 Income before provision for income taxes 3,182 3,858 Provision for income taxes 578 817 Net income $ 2,604 $ 3,041 Earnings per common share (basic) $ 0.82 $ 0.92 Earnings per common share (diluted) $ 0.82 $ 0.92 Shares outstanding (basic) 3,185 3,310 Shares outstanding (diluted) 3,185 3,310 Other comprehensive income (loss): Foreign currency translation net of taxes of $ 0 in all periods $ ( 503 ) $ 718 Total comprehensive income $ 2,101 $ 3,759 see notes to consolidated condensed financial statements 2 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025 (in thousands - unaudited) MARCH 31, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,604 $ 3,041 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 211 200 Amortization 462 509 Provision for losses on/(recovery of) accounts receivable ( 5 ) ( 9 ) Amortization of Right-of-Use Assets 15 12 Deferred income taxes ( 157 ) ( 209 ) Stock-based compensation expense 120 82 Changes in operating assets and liabilities: Accounts receivable and other receivables ( 130 ) 12 Inventories ( 830 ) 275 Prepaid expenses and other current assets ( 92 ) ( 26 ) Accounts payable 284 217 Accrued expenses 627 360 Total adjustments 505 1,423 Net cash provided by operating activities 3,109 4,464 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures for: Property and equipment ( 130 ) ( 184 ) Net cash provided by/(used in) investing activities ( 130 ) ( 184 ) CASH FLOWS FROM FINANCING ACTIVITIES: Common stock purchased and retired ( 128 ) ( 3,221 ) Payment of dividends ( 989 ) ( 1,017 ) Net cash used in financing activities ( 1,117 ) ( 4,238 ) Effect of exchange rate changes on cash ( 212 ) 307 Net increase in cash and cash equivalents 1,650 349 Cash at beginning of period 85,756 82,976 Cash at end of period $ 87,406 $ 83,325 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for income taxes $ 30 $ 46 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 Months Ended March 31, 2026 and 2025 (In thousands - unaudited) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Retained Stockholders' Shares Amount Capital Income Earnings Equity Balance at December 31, 2025 3,186 $ 32 $ - $ ( 9,416 ) $ 128,652 $ 119,268 Stock option compensation expense - - 120 - - 120 Common stock purchased and retired ( 2 ) ( 0 ) ( 120 ) - ( 8 ) ( 128 ) Foreign currency translation adjustment - - - ( 503 ) - ( 503 ) Common stock dividends - - - - ( 987 ) ( 987 ) Net income - - - - 2,604 2,604 Balance at March 31, 2026 3,184 $ 32 $ - $ ( 9,919 ) $ 130,260 $ 120,373 Balance at December 31, 2024 3,335 $ 33 $ - $ ( 11,908 ) $ 129,302 $ 117,427 Stock option compensation expense - - 82 - - 82 Common stock purchased and retired ( 54 ) ( 1 ) ( 82 ) - ( 3,138 ) ( 3,221 ) Foreign currency translation adjustment - - - 718 - 718 Common stock dividends - - - - ( 1,001 ) ( 1,001 ) Net income - - - - 3,041 3,041 Balance at March 31, 2025 3,281 $ 33 $ - $ ( 11,190 ) $ 128,204 $ 117,047 4 UTAH MEDICAL PRODUCTS, INC. 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, 2025. 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 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. In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. This ASU clarifies and modernizes the accounting for costs related to internal-use software by removing references to prescriptive and sequential software development states and clarifies the threshold entities apply to begin capitalizing costs. Additionally, this ASU specifies that the disclosures in Subtopic 360-10, Property, Plant and Equipment - Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. This ASU is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting ASU 2025-06. (3) Inventories at March 31, 2026 and December 31, 2025 consisted of the following: March 31, December 31, 2026 2025 Finished goods $ 1,560 $ 1,223 Work-in-process 1,848 1,627 Raw materials 5,314 5,085 Total $ 8,722 $ 7,935 (4) Stock-Based Compensation. At March 31, 2026, 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 March 31, 2026 and March 31, 2025, the Company recognized $ 120 and $ 82 , 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, 2025 or March 31, 2026. 5 (6) 1Q 2026 global revenues (USD) by product category: Domestic Outside US Total Obstetrics $ 754 $ 151 $ 905 Gynecology/Electrosurgery/Urology 2,694 2,534 5,228 Neonatal 1,338 232 1,570 Blood Pressure Monitoring and Accessories 774 245 1,019 Total $ 5,560 $ 3,162 $ 8,722 7) Earnings Per Share. Basic earnings per share were calculated by dividing net income attributable to the common stockholders of the company by the weighted average number of common shares outstanding during each applicable period. Diluted earnings per share were calculated by assuming the exercise of stock options at the closing price of stock at the end of first quarter 2026 and 2025, as applicable. The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: Three months ended March 31 (in thousands) 2026 2025 Numerator Net income 2,604 3,041 Denominator Weighted average shares, basic 3,185 3,310 Dilutive effect of stock options - - Diluted shares 3,185 3,310 Earnings per share, basic $ 0.82 $ 0.92 Earnings per share, diluted $ 0.82 $ 0.92 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 March 31, 2026 and March 31, 2025: Quarter Ended March 31, 2026 2025 Revenues 8,722 9,710 Less: Standard cost of sales 2,749 3,656 Other cost of sales 691 516 Gross Profit 5,282 5,538 Gross Profit Margin 60.6 % 57.0 % Sales & Marketing 519 500 Research & Development 154 154 Litigation Fees 441 316 Amortization 462 509 Other General & Administrative 1,141 906 Operating Income 2,565 3,153 Operating Income Margin 29.4 % 32.5 % Other Income Interest income 631 737 Other income (expense) ( 14 ) ( 32 ) Income before income taxes 3,182 3,858 Provision for income taxes 578 817 Net Income 2,604 3,041 (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 March 31, 2026 financial statements. 7