What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-05-12 · 269 added, 204 removed, 64 unchanged (88% of the section changed)

2 unchanged sentences

(UTMD) manufactures and markets a well-established range of specialty medical devices.

The Company’s Form 10-K Annual Report for the year ended December 31, 2025 provided a detailed description of products, technologies, markets, regulatory issues, business initiatives, resources and business risks, among other details, and should be read in conjunction with this report.

Because of the relatively short span of time, results for any given three-month period in comparison with a previous three-month period may not be indicative of comparative results for the year as a whole.

The Company’s Form 10-K Annual Report for the year ended December 31, 2025 provides a detailed description of products, technologies, markets, regulatory issues, business initiatives, resources and business risks, among other details, and should be read in conjunction with this report.

Because of the relatively short span of time, results for any given three- or six-month period in comparison with a previous three- or six-month period may not be indicative of comparative results for the year as a whole.

Currency amounts in the report are in thousands, except per share amounts or where otherwise noted.

2 unchanged sentences

£ or GBP = UK Pound Sterling;

C$ or CAD = Canadian Dollars;

CAD = Canadian Dollars;

and € or EUR = Euros.

Analysis of Results of Operations

Income statement results in the first quarter (1Q) of 2026 compared to 1Q 2025 were as follows:

Income statement results in second calendar quarter (2Q) and first half (1H) 2026 compared to the same periods of 2025 were as follows:

Operating Income

Income Before Tax

Earnings per Share (diluted)

Profit margins in 1Q 2026 compared to 1Q 2025 follow:

Net Income (US GAAP)

Earnings per Diluted Share

Consolidated total 2Q 2026 revenues were $1,424 (14.3%) lower than in 2Q 2025, with 1H 2026 revenues $2,411 (12.3%) lower than in 1H 2025.

The lower sales in comparison with the prior year’s periods were primarily the result of a lack of sales to UTMD’s two previously largest customers, representing a combined $1,065 loss in 2Q 2025 sales, which was 75% of the 2Q decline;

and representing a combined $1,923 loss in 1H 2025 sales, which was 80% of the 1H decline.

The total 2025 sales to these two former customers were $2,889, which UTMD planned to recover in sales of new products in 2026, mainly to other biopharma OEM customers.

Sales to other biopharma new customers were just $211 in 1H 2026, a slower than expected gain.

Additional period-to-period sales comparisons follow below.

UTMD’s profit margins compared to those of the prior year’s same periods follow:

Gross Profit Margin (Gross Profit/ sales):

Operating Income Margin (Operating Income/ sales):

EBT Margin (Profits before Income Taxes/ sales):

Net Income Margin (Profit after Taxes/ sales):

Consolidated sales in 1Q 2026 were $987 lower than in 1Q 2025.

As expected and previously reported, UTMD did not have any 1Q 2026 sales to its previous largest medical device distributor of blood pressure monitoring kits in China, or to its previous OEM customer, PendoTECH.

The combined sales to those two entities in 1Q 2025 were $857, representing 87% of the lower 1Q 2026 sales.

Although overall domestic sales were about the same in both 1Q 2026 and 2025, sales outside the U.S.

(OUS) excluding the China distributor were another $176 lower, due to lower Filshie Clip System sales OUS.

Using the same foreign currency exchange (FX) rates for sales not invoiced in USD, i.e.

in “constant currency” terms, OUS sales would have been an additional $169 lower because of a weaker USD.

FX rates for income statement purposes are transaction-weighted averages.

The average FX rates from the applicable foreign currency to USD during 1Q 2026 and 1Q 2025 follow:

UTMD’s 1Q 2026 Gross Profit at $5,282 was $256 lower than 1Q 2025 Gross Profit of $5,538.

The 4.6% lower Gross Profit was less than the 10.2% decline in sales as a result of a more favorable product mix and a yearly one-time adjustment to standard costs which increased inventory value.

Historically, sales to UTMD’s largest OUS distributor in China had a significantly lower Gross Profit Margin (GPM), Gross Profit/Revenues, than UTMD’s

Although manufacturing overhead costs were higher, which should lower the GPM when sales are lower, UTMD continues to effectively manage its variable manufacturing expenses.

Consolidated worldwide (WW) Operating Income, which is Gross Profit less Operating Expense (OE), in 1Q 2026 at $2,565 (29.4% of sales) was $588 lower than 1Q 2025 Operating Income of $3,154 (32.5% of sales).

Operating Income was $332 lower in addition to the $256 lower Gross Profit, due to $127 higher litigation expenses, $147 higher employee health care costs in U.S.

General and Administrative (G&A) expense and $65 higher same foreign currency exchange rate of OUS OE due to a weaker USD.

In the aggregate, the components of WW OE in USD terms were Product Development (R&D) expenses about the same, Sales & Marketing (S&M) expenses $19 higher and G&A expenses $314 higher than in 1Q 2025, respectively.

Income Before Tax (EBT) declined more than the $588 lower Operating Income because net non-operating income (NOI) in 1Q 2026 was just $617 compared to $705 in 1Q 2025.

The lower NOI was due to lower interest earned on cash balances.

Combining the $588 lower Operating Income with the about $89 lower NOI yielded 1Q 2026 EBT $677 (17.5%) lower than in 1Q 2025.

UTMD’s EBT Margin (EBT/sales) was 36.5% in 1Q 2026 compared to 39.7% in 1Q 2025.

UTMD’s consolidated income tax provision rate in 1Q 2026 was 18.2% compared to 21.2% in 1Q 2025.

An EBT mix difference among subsidiary sovereignties caused the provision rate difference.

The basic corporate income tax rate for the U.S.

(including Utah state income tax) is 25.45% and for Ireland on EBT from exports is 12.5%.

The lower income tax provision rate offset the 17.5% lower EBT, resulting in 1Q 2026 Net Income that was 14.4% lower than in 1Q 2025.

Fewer outstanding shares as a result of UTMD’s share repurchases further reduced the decline in 1Q 2026 earnings per share (EPS), which is Net Income/diluted number of outstanding shares, to be just 11.0% lower than in 1Q 2025.

During the four calendar quarters following the end of 1Q 2025, UTMD repurchased 96,864 of its shares in the open market.

There was no dilution from outstanding employee stock options for purposes of calculating diluted EPS in either 1Q 2026 or 1Q 2025.

In income statement summary, with revenues declining 10.5% in 1Q 2026 compared to 1Q 2025, EPS declined 11.0%.

UTMD’s March 31, 2026 Balance Sheet, in the absence of debt, remained strong.

After using $9.5 million in cash during the most recent twelve-month period to make share repurchases, pay stockholder dividends and purchase new equipment, UTMD’s March 31, 2026 cash equivalent balances were $4.1 million higher than at March 31, 2025.

Ending 1Q 2026 cash equivalent balances were about $1.7 million higher than three months earlier at December 31, 2025.

Stockholders’ Equity at $120.4 million improved $1.1 million at the end of 1Q 2026 from three months earlier, despite the fact that dividends and share repurchases reduce Stockholders’ Equity.

FX rates for Balance Sheet purposes are the applicable rates at the end of each reporting period.

The FX rates from the applicable foreign currency to USD for assets and liabilities at the end of 1Q 2026 and the end of 1Q 2025 follow:

Income B4 Tax Margin (EBT/ sales):

Net Income Margin (Net Income/ sales):

Despite a more favorable sales mix relative to 2Q 2025, UTMD’s Gross Profit margin in 2Q 2026 contracted somewhat as a result of lower sales than expected without proportionally lowering consolidated manufacturing overhead costs.

Operating Income declined more than the Gross Profit decline due to $213 higher 2Q 2026 U.S.

litigation costs compared to 2Q 2025, and $341 higher 1H 2026 litigation costs than in 1H 2025, which costs are included in Operating Expenses.

Non-operating income in 2Q 2026 was about the same as in 2Q 2025, but $91 lower in 1H 2026 as a result of lower interest rates.

A lower estimated average income tax provision rate helped to decrease the percentage period-to-period declines in Net Income.

Share repurchases during 1H 2026 were minimal compared to the 1H of 2025.

Please see the financial statements on the last page of this report.

UTMD’s June 30, 2026 Balance Sheet continued strong, with no debt.

Ending Cash and Investments were $87.5 million compared to $85.8 million on December 31, 2025, after paying $2.0 million in cash dividends to stockholders, repurchasing $0.2 million of UTMD common stock, increasing non-cash working capital by $1.7 million (including increasing inventories by $1.1 million while reducing current liabilities by $0.5 million) and investing $0.3 million in capital expenditures during 1H 2026.

Foreign currency exchange (FX) rates for Balance Sheet purposes are the applicable rates at the end of each reporting period.

The FX rates from the applicable foreign currency to USD for assets and liabilities at the end of 2Q 2026 compared to the end of calendar year 2025 and the end of 2Q 2025 were as follows:

Terms of sale are established in advance of UTMD’s acceptance of customer orders.

In the U.S., Ireland, UK, Canada, Australia and New Zealand, UTMD generally accepted orders directly from and shipped directly to end user clinical facilities, as well as third party medical/surgical distributors, under UTMD’s Standard Terms and Conditions (T&C) of Sale during both 1Q 2026 and 1Q 2025.

UTMD may have separate discounted pricing agreements with a specific clinical facility or group of affiliated facilities based on volume of purchases.

Pricing agreements which are documented arrangements with clinical facilities, or groups of affiliated facilities, if applicable, are established in advance of orders accepted or shipments made.

In the U.S., Ireland, UK, France, Canada, Australia and New Zealand, UTMD accepts orders directly from and ships directly to end user medical facilities, as well as third party medical/surgical distributors, under UTMD’s Standard Terms and Conditions (T&C) of Sale.

UTMD’s T&C of Sale to end user facilities are substantially the same in the U.S.

UTMD also has standard T&C of Sale for OEM customers, other medical device and non-medical device customers for components manufactured by UTMD, which are substantially the same, except that prices are generally quoted prior to acceptance of each order.

UTMD may have separate discounted pricing agreements with a specific clinical facility, or group of affiliated facilities or large OEM customers based on volume of purchases.

Pricing agreements which are documented arrangements with clinical facilities, or groups of affiliated facilities or OEM customers, if applicable, are established in advance of orders accepted or shipments made.

For existing customers, past actual shipment volumes typically determine the fixed price by part number for the next agreement period of one year.

1 unchanged sentence

Prices are not adjusted after an order is accepted.

For the sake of clarity, the

separate pricing agreements with clinical facilities based on volume of purchases disclosure is not inconsistent with UTMD’s disclosure that the selling price is fixed prior to the acceptance of a specific customer order.

Total consolidated 1Q 2026 UTMD revenues (sales) were $987 (10.2%) lower than in 1Q 2025.

Constant currency sales, which are foreign currency sales converted to USD at 1Q 2025 currency exchange rates, were $1,156 (11.9%) lower.

domestic sales were 0.4% lower, and OUS sales were 23.4% lower.

Domestic sales in 1Q 2026 were almost the same at $5,560 compared to $5,583 in 1Q 2025.

The components of domestic sales include 1) “direct sales” of UTMD’s medical devices to user facilities (and med/surg stocking distributors for hospitals), excluding Filshie device sales, 2) “OEM sales” of components and other products manufactured by UTMD for other medical device and non-medical device companies, and 3) “Filshie device sales”, manufactured by Femcare and distributed in the U.S.

1) Direct medical device sales, representing 61% of total domestic sales, were $503 (12.8%) lower in 1Q 2026 than in 1Q 2025.

Sales were lower in all product categories in what was hopefully just an abnormally weak demand quarter.

2) Total domestic OEM sales in 1Q 2026, representing 11% of all domestic sales, were $13 (2.1%) lower than in 1Q 2025, as the final $69 order backlog to PendoTECH was shipped in 1Q 2025.

3) Domestic Filshie device sales, representing 28% of all domestic sales, were $493 (+47.4%) higher in 1Q 2026 compared to 1Q 2025, which appears to be an abnormally high U.S.

medical facility demand quarter.

For the sake of clarity, the separate pricing agreements based on volume of purchases disclosure is not inconsistent with UTMD’s disclosure that the selling price is fixed prior to the acceptance of a specific customer order.

2Q 2026 Sales

Total consolidated 2Q 2026 UTMD worldwide (WW) sales in USD terms were $8,529 compared to $9,953 in 2Q 2025.

Consistent with the projection in UTMD’s SEC 10-K Report at the beginning of the year, 1) sales of biopharma pressure monitoring devices and accessories to UTMD’s previously largest OEM customer, PendoTECH, were zero in 2Q 2026, which were $196 in 2Q 2025 domestic OEM sales, and 2) sales of blood pressure monitoring kits to UTMD’s previously largest distributor outside the U.S.

(OUS) located in China were also zero, which were $870 in international sales in 2Q 2025.

The combined sales to those two entities, which were zero in 2Q 2026, were $1,066 in 2Q 2025 and $1,007 in 2Q 2024.

Domestic sales are invoiced in USD and obviously not subject to foreign currency conversion (FX) rate fluctuations.

The components of domestic sales include 1) “direct non-Filshie device sales” of UTMD’s medical devices to user facilities (and med/surg stocking distributors for hospitals), 2) “OEM sales” of components and other products manufactured by UTMD for other medical device and non-medical device companies, and 3) “domestic Filshie device sales”.

UTMD separates domestic Filshie device sales from other medical device sales direct to medical facilities because UTMD is simply a distributor for Femcare in the U.S.

In the aggregate, 2Q 2026 domestic sales were 11.9% lower, at just $5,166 compared to $5,865 in 2Q 2025.

Non-PendoTECH domestic OEM sales were $166 higher, $52 of which were higher sales to new domestic biopharma customers.

Domestic sales of the Filshie Clip System at $843 in 2Q 2026 were $263 lower than in 2Q 2025, a weak quarter following unusually strong sales in 1Q 2026.

Domestic direct sales of other devices were $406 lower than in 2Q 2025, about 90% of which were due to lower neonatal device sales.

OUS sales in 2Q 2026 were $725 (17.7%) lower at $3,363 compared to $4,088 in 2Q 2025.

Sales to UTMD’s former distributor in China which were $789 in 1Q 2025 (and zero in 1Q 2026), which explains 82% of the $965 lower OUS sales.

Although Filshie device sales directly to medical facilities in Ireland and the UK were about the same in both periods, direct Filshie device sales to medical facilities in Canada, France and Australia were $230 lower.

OUS foreign currency sales actually benefited $169 from a weaker USD.

On a constant currency basis, 1Q 2026 OUS sales were $1,133 (27.5%) lower than in 1Q 2025.

OUS sales invoiced in foreign currencies in 1Q 2026 were $2,327, which was 74% of all OUS sales, and 27% of total 1Q 2026 UTMD consolidated sales.

Foreign currency OUS sales in 1Q 2025 were $2,944, which was 71% of all OUS sales and 30% of total 1Q 2025 UTMD consolidated sales.

The following table provides USD consolidated sales amounts divided into general product categories for total worldwide sales and the subset of OUS sales.

WW revenues (USD) by product category:

Excluding the $870 lower sales to UTMD’s former China distributor mentioned above, 2Q 2026 OUS sales were $145 higher.

In 2Q 2026, 39% of OUS sales were direct to medical facilities located in Ireland, the UK, France, Canada, Australia and New Zealand, compared to 37% in 2Q 2025.

OUS direct to end-user sales are invoiced in foreign currencies.

There was a negligible foreign currency impact from a slightly weaker USD compared to other invoiced currencies.

Remaining OUS sales to distributors, excluding the China distributor, were $353 higher in 2Q 2026.

These sales included export sales from the U.S.

to OUS distributors invoiced in USD, and shipments to OUS distributors of products manufactured by UTMD subsidiaries in Ireland and the UK invoiced in EUR and GBP.

The timing of

shipments to OUS distributors can cause significant fluctuations in quarterly comparisons since distributors tend to order larger quantities each time in order to minimize transit and other logistical costs.

The portion of OUS sales invoiced in foreign currencies in USD terms was 25% of total WW consolidated 2Q 2026 sales compared to 31% in 2Q 2025.

The average USD FX rates increased 2Q 2026 total consolidated sales $16 for sales invoiced in foreign currencies.

FX rates for income statement purposes are transaction-weighted averages.

The average FX rates from the applicable foreign currency to USD during 2Q 2026 and 2Q 2025 for revenue purposes follow:

The $16 weighted average favorable impact on 2Q 2026 consolidated sales was negligible, about 0.2%.

In constant currency terms, foreign currency sales in 2Q 2026 in USD terms were 30.7% lower than in 2Q 2025.

“Constant currency” sales means exchanging foreign currency sales into USD-denominated sales at the same FX rate as was in the previous period of time being compared.

1H 2026 Sales

Total consolidated 1H 2026 UTMD worldwide (WW) sales in USD terms were 12.3% lower at $17,252 compared to $19,663 in 1H 2025.

Sales of biopharma pressure monitoring devices and accessories to UTMD’s previously largest OEM customer, PendoTECH, were zero in 1H 2026, compared to $265 in domestic OEM sales in 1H 2025.

Sales of blood pressure monitoring kits to UTMD’s previously largest distributor outside the U.S.

(OUS) located in China were also zero in 1H 2026, compared to $1,658 in international sales in 1H 2025.

The combined 1H 2026 zero sales to those two entities were in comparison to $1,923 in 1H 2025 and $2,098 in 1H 2024.

Looking forward, the combined year 2026 sales to those two entities are expected to be zero compared to $2,458 in 2025 and $5,063 in 2024.

In its SEC Form 10-K at the beginning of 2026, UTMD planned to offset the 2025 revenue losses with new product sales in 2026, including sales to other biopharma OEM customers, projecting 2026 consolidated revenues about the same as in 2025.

Unfortunately, in 1H 2026 the new sales did not develop as quickly as expected, so that the beginning plan for 2026 full year revenues is now unlikely.

Management’s current year 2026 sales projection, with continued substantial uncertainty, is a sales decline of 10-13% compared to 2025.

Domestic sales are invoiced in USD and obviously not subject to foreign currency conversion (FX) rate fluctuations.

UTMD separates domestic Filshie device sales from other medical device sales direct to medical facilities because UTMD is simply a distributor for Femcare in the U.S.

In the aggregate, 1H 2026 domestic sales were 6.3% lower, at $10,727 compared to $11,448 in 1H 2025.

Non-PendoTECH OEM sales were $222 higher, $74 of which were higher sales to new domestic biopharma customers.

Domestic sales of the Filshie Clip System at $2,376 in 1H 2026 were $230 (+10.7%) higher than in 1H 2025.

Domestic direct sales of other devices were $909 lower than in 1H 2025, about 70% of which were due to lower neonatal device sales.

OUS sales in 1H 2026 were $1,690 (20.6%) lower at $6,525 compared to $8,215 in 1H 2025.

Excluding the $1,658 lower sales to UTMD’s former distributor mentioned above, 1H 2026 OUS sales were $32 (0.4%) lower than in 2025.

In 1H 2026, 41% of OUS sales were direct to medical facilities located in Ireland, the UK, France, Canada, Australia and New Zealand, compared to 37% in 1H 2025.

OUS direct to end-user sales are invoiced in foreign currencies.

The portion of OUS sales invoiced in foreign currencies in USD terms was 26% of total WW consolidated 1H 2026 sales compared to 31% in 1H 2025.

The average USD FX rates increased 1H 2026 total consolidated sales $185 for sales invoiced in foreign currencies.

FX rates for income statement purposes are transaction-weighted averages.

The average FX rates from the applicable foreign currency to USD during 1H 2026 and 1H 2025 for revenue purposes follow:

The $185 weighted average favorable impact on 1H 2026 consolidated sales was 1.1%.

In constant currency terms, foreign currency sales in 1H 2026 expressed in USD were 28.7% lower than in 1H 2025.

The following table provides USD-denominated sales amounts divided into general product categories for total revenues and the subset of OUS revenues:

Global revenues by product category:

Gynecology/ Electrosurgery/ Urology

Blood Pressure Monitoring and Accessories*

OUS revenues (USD) by product category:

OUS revenues by product category:

Gynecology/ Electrosurgery/ Urology

Blood Pressure Monitoring and Accessories*

*includes molded components sold to OEM customers.

*includes assemblies and molded components sold to OEM customers.

Comments on tariffs

Tariffs on materials received from OUS suppliers are included in manufacturing costs, i.e.

reducing Gross Profit.

The tariffs are simply the equivalent of excise taxes intended to raise revenues for the federal government.

tariffs paid independently by UTMD on certain goods purchased from OUS suppliers have not been significant to date, i.e.

$27 in 1H 2026 compared to $16 in 1H 2025.

However, UTMD’s raw material suppliers both in the U.S.

and OUS continue to increase prices, in some cases citing “tariffs” that they paid on their raw materials as justification.

UTMD cannot estimate what portion of generally increased raw materials prices from its suppliers are due to tariffs, although UTMD does challenge this input.

Due to strict regulatory standards, UTMD can’t easily change suppliers as materials typically needed in its medical devices require substantial validation for use.

In 1H 2026, UTMD paid a more significant tariff on importing the Filshie Clip System devices manufactured in Ireland by its wholly-owned subsidiary, Utah Medical Products, Ltd., for distribution to U.S.

medical facilities.

It is not feasible, economically and otherwise, for these unique devices to be manufactured in the U.S.

The tariffs were $156 in 1H 2026 and $48 in 2Q 2026, compared to zero in 1H 2025, as UTMD had sufficient inventory to cover 2025 U.S.

demand after tariffs were imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) in February 2025.

The 2026 Filshie device tariffs reduced UTMD’s Gross Profit margin by 0.9 percentage points in 1H 2026, and by 0.6 percentage points in 2Q 2026, explaining all of the lower 2Q 2026 Gross Profit margin compared to 2Q 2025.

As investors likely know, the SCOTUS struck down tariffs imposed under IEEPA in February 2026, but following the ruling, the Trump administration issued a new tariff ruling under Section 122 of the Trade Act of 1974 as a replacement.

The Section 122 (19 USC 2132) tariffs granted the President the authority to impose temporary import restrictions or surcharges when the United States faces fundamental international payments problems.

When applied to UTMD’s Ireland manufacturing subsidiary, this is obviously a red herring.

Thankfully, the Section 122 tariff authority had a hard expiration date of July 24, 2026, and cannot be extended by the President without Congressional action, which UTMD believes is very unlikely.

The administration, not to be deterred, has now indicated that it will continue to impose tariffs utilizing Section 301of the Trade Act of 1974, which allows tariffs on goods imported from countries deemed to produce products with forced labor.

As UTMD believes that medical devices imported from Ireland are not subject to Section 301 tariffs, management does not expect additional Filshie device tariffs in 2H 2026.

However, to the extent that other countries, which remain subject to U.S.

tariffs on their goods imported into the U.S.

are affected, “reciprocal tariffs” charged by other countries’ governments on goods sold by UTMD OUS may continue to negatively impact UTMD’s OUS sales.

c) Gross Profit

UTMD’s 1Q 2026 Gross Profit was $256 (4.6%) lower in 1Q 2026 than in 1Q 2025, driven by 10.2% lower sales.

Gross Profit results from subtracting the costs of manufacturing products, including direct labor, raw materials and manufacturing overhead (MOH) expenses, from revenues.

MOH, which was higher due primarily to cost-of-living adjustments for employees, includes supervision, engineering, quality assurance, outside services, depreciation of manufacturing equipment, purchasing and freight for receiving raw materials from vendors.

Higher MOH expense with lower sales decreases the GPM.

Nevertheless, UTMD’s average GPM in 1Q 2026 was 60.6% compared to 57.0% in 1Q 2025.

Although the lack of low GPM sales to UTMD’s former China distributor helped to improve the average GPM, the margin increase was further leveraged by an annual standard cost adjustment after the end of

2025, which increased the book value of inventories.

As a side note, UTMD in the U.S.

distributes Filshie devices direct to U.S.

medical facilities, which are manufactured by its Ireland subsidiary.

Tariffs paid to the U.S.

government on Filshie devices purchased from UTMD’s own subsidiary “off the top” of intercompany sales were $108 higher in 1Q 2026 compared to 1Q 2025.

Gross Profit results from subtracting the cost of goods sold, comprised of costs of production, manufacturing engineering, depreciation of equipment, maintenance and repairs, quality assurance including regulatory compliance, and purchasing including freight for receiving materials from suppliers, from revenues.

The cost of goods sold is divided into three categories:

direct labor, raw materials and manufacturing overhead (MOH).

Direct labor and raw materials are predominantly variable costs, i.e.

vary directly with revenues.

MOH contains many fixed costs consistent with the Company’s infrastructure, for example, supervision, quality assurance and engineering personnel, and depreciation of fixed assets.

Gross Profit in 2Q 2026 was $837 (15.0%) lower than in 2Q 2025.

Gross Profit in 1H 2026 was $1,093 (just 9.8%) lower than in 1H 2025 when sales were 12.3% lower.

The consolidated 2Q 2026 Gross Profit margin (GPM) was 55.8% compared to 56.2% in 2Q 2025.

The consolidated 1H 2026 GPM was 58.2% compared to 56.6% in 1H 2025.

In addition to Filshie device tariffs, UTMD’s 2Q 2026 GPM was negatively impacted relative to 2Q 2025 because both trade and intercompany shipments from UTMD’s Ireland facility (UTMD Ltd) were substantially lower while the Company retained the staffing that it had to support the former China distributor and will be needed again for projected higher production requirements for new products in 2H 2026.

In contrast, UTMD’s consolidated 1H 2026 GPM was higher than in 1H 2025, as expected, due to a more favorable product mix without $1,658 low Gross Profit sales to the China distributor.

d) Operating Income

Operating Income results from subtracting Operating Expenses (OE) from Gross Profit.

OE are comprised of G&A expenses, S&M expenses and R&D expenses.

Operating Income of $2,565 in 1Q 2026 was $588 (18.7%) lower than the $3,154 Operating Income in 1Q 2025.

Consolidated OE were $2,717 in 1Q 2026 (31.1% of sales) compared to $2,385 in 1Q 2025 (24.6% of sales).

The substantial $332 increase in 1Q 2026 OE came predominantly from a $314 increase in 1Q 2026 G&A expenses.

Consolidated G&A expenses were $2,044 (23.4% of sales) in 1Q 2026 compared to $1,730 (17.8% of sales) in 1Q 2025.

The $314 increase in G&A expenses came from three causes:

G&A employee health care cost, 2) litigation expense, and 3) the effect of a weaker USD when translating foreign currency subsidiary G&A expenses.

Net other G&A expenses were slightly lower.

1) UTMD in the U.S.

self-insures its health care plan, where costs are typically driven by a small portion of employees when a major claim occurs.

G&A heath care costs were $147 higher in 1Q 2026 than in 1Q 2025.

Although not predictable, UTMD expects the remainder of year 2026 experience should be more like 2025.

2) Although UTMD has now won 15 of 19 court case dismissals, a confluence of litigation deadlines in 1Q 2026 necessitated significant legal work in the remaining few.

Although litigation expense in 1Q 2026 was $127 higher than in 1Q 2025, UTMD continues to expect litigation expense for the 2026 year will be less than for the 2025 year.

This of course assumes that, as has been the experience so far, no case goes to trial.

3) Constant currency G&A expenses of foreign subsidiaries were $56 higher due to a weaker USD in 1Q 2026 compared to 1Q 2025.

A $29 portion of that $56 was due to translation of identifiable intangible asset (IIA) amortization expense resulting from the 2011 Femcare acquisition, which was completed in 1Q 2026.

As a side note, the 1Q 2026 IIA amortization expense, which will be zero in ensuing 2026 quarters, was $458.

S&M expenses were $519 (5.9% of sales) in 1Q 2026 compared to $500 (5.1% of sales) in 1Q 2025.

The change in FX rates increased 1Q 2026 OUS S&M expenses by $9.

The remaining increase was due to increases in S&M salaries.

Consequently, more than half of higher S&M expense percentage of sales was due to lower sales.

R&D expenses in 1Q 2026 were $154 (1.8% of sales) compared to $155 (1.6% of sales) in 1Q 2025.

There were no OUS R&D expenses.

A summary comparison of (USD) consolidated Operating Expenses follows:

G&A Expenses:

Femcare IIA amortization

Litigation Expense

All Other G&A Expenses

Total Operating Expenses:

Operating Income results from subtracting Operating Expenses from Gross Profit.

Operating Expenses are comprised of Sales and Marketing (S&M) expenses, General and Administrative (G&A) expenses and Product Development (R&D) expenses.

A lower GPM in 2Q 2026 on 14% lower sales compared to 2Q 2025 combined with $213 higher litigation expenses offset the beneficial impact of lack of intangible asset amortization expense in 2Q 2026, which was $531 in 2Q 2025.

Consolidated Operating Income of $2,649 was $547 (17.1%) lower compared to 2Q 2025 Operating Income of $3,196.

Despite the disappointing decline, UTMD’s 2Q 2026 Operating Income margin (OI as a percentage of sales) remained a healthy 31.1%.

Operating Income in 1H 2026 was $5,215 compared to $6,349 in 1H 2025, a decrease of $1,134 (17.9%), although with a continuing healthy Operating Income margin of 30.2%.

The lower Operating Income was the result of 12% lower sales despite a higher GPM, together with $41 higher Operating Expenses.

Unexpectedly, G&A Operating Expenses in 1H were about the same in both years despite $574 lower Identifiable Intangible Asset amortization expense because of $341 higher 1H 2026 litigation expenses and $135 higher 1H 2026 U.S.

G&A self-insured health plan expenses.

The following table summarizes Operating Expenses in 2Q and 1H 2026 compared to the same periods in 2025 by Operating Expense (OE) category:

Consolidated S&M expenses as a percentage of sales were higher due primarily to lower sales.

The impact of differences in FX rates on foreign subsidiary S&M expenses added $2 in 2Q 2026 and $11 in 1H 2026.

Excluding the FX rate impact, consolidated 2Q 2026 S&M expenses were the same and consolidated 1H 2026 S&M expenses were just 1% higher due to higher trade show expenses in the U.S.

and higher salary expenses OUS.

G&A expenses dominate UTMD’s Operating Expenses, largely because of expenses of current Filshie litigation in the U.S.

and the former non-cash expenses from the amortization of Identifiable Intangible Assets (IIA) associated with the acquisition of the Filshie Clip System in 2011 which have now been fully-amortized.

A segmentation of USD-denominated G&A expenses follows:

IIA Amort- UK:

Total consolidated G&A expenses in 2Q 2026 were $312 lower than in 2Q 2025, but as a percentage of sales only 0.8 percentage points lower, as a result of lower sales.

In 1H 2026, G&A expenses were about the same as in 1H 2025 despite the lack of IIA amortization expense in 2Q 2026 which was offset by higher litigation expenses and health care plan expenses in the U.S.

Higher 2Q litigation expenses resulted from the conclusion of expert witness fees not previously estimated, which fees should not continue into 2H 2026.

1H litigation expenses resulted from a confluence of summary judgment and other motions, along with expert witness costs, in the remaining four unresolved court cases (out of nineteen total).

Unfortunately, although 2H 2026 litigation expenses should be lower than for 1H 2026, UTMD’s previous estimate that 2026 litigation expenses for the year as a whole would be less than in 2025 is no longer valid.

Litigation expenses in 2025 were $1,355.

Management’s best guess now is that 2026 litigation expenses will be less than $1.6 million.

Foreign currency G&A expenses expressed in USD were increased by FX rate differences by $5 in 2Q 2026 and by $61 in 1H 2026.

In 1H 2026, $29 of the $61 higher G&A expense FX impact was due to the final non-cash identifiable intangible asset amortization–UK expense in 1Q 2026 which resulted from the 2011 acquisition of Femcare.

Other-US G&A expenses were $49 lower in 2Q 2026 compared to 2Q 2025, but $128 higher in 1H 2026 compared to 1H 2025.

The 1H 2026 higher Other-US G&A expenses were primarily due to higher health plan costs for G&A employees in the U.S.

The differences in period-to-period R&D expenses were due to varying project costs and increases in salaries for the same number of people.

Since all new product development work in 2026 was carried out in the U.S., there was no FX rate impact.

The impact of differing FX rates in 2026 compared to 2025 on consolidated Operating Expenses expressed in USD was relatively minor.

The AUD was the primary stronger currency.

Relative to the same periods in 2025, foreign currency Operating Expense in 2Q and 1H 2026 when converted to USD were increased by FX rate differences by a net $7 in 2Q 2026 and $72 in 1H 2026.

The following table summarizes “constant currency” Operating Expense in 2Q and 1H 2026 compared to the same periods in 2025 by Operating Expense (OE) category:

e) Non-operating expense/ Non-operating income

Net Non-operating expense, or net Non-operating income, results from the combination of 1) expenses from loan interest and bank fees;

2) expenses or income from losses or gains from remeasuring the value of EUR cash bank balances in the UK, and GBP cash balances in Ireland, in USD terms;

and 3) income from rent of underutilized property, investment income, royalties received from licensing the Company’s technology and other miscellaneous income.

Non-operating expense includes bank fees and expenses from losses, if applicable, from remeasuring the value of EUR cash bank balances in the UK, and GBP cash balances in Ireland, in USD terms.

Starting in 2024 for UTMD, there was a new excise tax included in Non-operating expense:

a stock repurchase excise tax included in the so-called “Inflation Reduction Act of 2022”.

Non-operating income includes 1) income from rent of underutilized property, 2) investment income (interest on cash balances), 3) royalties received from licensing the Company’s technology, and 4) income from gains, if applicable, from remeasuring the value of EUR cash bank balances in the

UK, and GBP cash balances in Ireland, in USD terms.

Non-operating income or expense can also include gains or losses from the disposition of assets from time to time.

Net non-operating income is Non-operating income minus Non-operating expense during a particular time period.

Net Non-operating income in 2Q 2026 was $637 compared to $640 in 2Q 2025.

The primary difference was $106 lower interest income due to lower interest rates in 1Q 2026 than in 1Q 2025.

Offsetting the lower interest, in 1Q 2026 compared to 1Q 2025, UTMD accrued $31 lower excise tax in Non-operating expense for share

UTMD realized a $7 Non-operating expense in 1Q 2026 compared to a $2 expense at the end of 1Q 2025 from remeasurement of foreign currency bank balances.

Net Non-operating income in 1H 2026 was $1,254 compared to $1,345 in 1H 2025.

Interest on cash balances remained the primary income generator.

Higher cash balances and lower average interest rates in 2026 explain the period-to-period differences.

Other Non-operating income/expense items were minor.

Remeasured foreign currency losses were $2 and $9 in 2Q 2026 and 1H 2026, compared to $5 and $7 in 2Q 2025 and 1H 2025, respectively.

The excise tax on share repurchases in 2Q 2026 and 1H 2026 was $1 and $2 compared to $35 and $67 in 2Q 2025 and 1H 2025, respectively.

The cumulative excise tax on share repurchases since 2024 has been $285.

f) Income Before Income Taxes (EBT)

EBT results from adding net Non-operating income or subtracting net Non-operating expense to or from Operating Income, as applicable.

Consolidated EBT results from adding net Non-operating income to Operating Income.

Consolidated 2Q 2026 EBT was $3,286 (38.5% of sales) compared to $3,835 (38.5% of sales) in 2Q 2025.

The $677 (17.5%) lower 1Q 2026 EBT compared to 1Q 2025 was the result of $588 lower Operating Income combined with $89 lower Net Non-operating income.

The EBT of Utah Medical Products, Inc.

was $2,825 in 1Q 2026 compared to $3,546 in 1Q 2025.

The EBT of Utah Medical Products, Ltd (Ireland) was EUR 1,164 in 1Q 2026 compared to EUR 1,393 in 1Q 2025.

The EBT of Femcare Group Ltd (Femcare Ltd., UK and Femcare Australia Pty Ltd) was GBP (686) in 1Q 2026 compared to GBP (663) in 1Q 2025.

The 1Q 2026 EBT of Utah Medical Products Canada, Inc.

was CAD (37) compared to CAD 107 in 1Q 2025.

The differences in the U.S.

and UK EBT were accentuated by intercompany transfer of litigation expenses which did not affect consolidated results.

Consolidated 1H 2026 EBT was $6,468 (37.5% of sales) compared to $7,694 (39.1% of sales) in 1H 2025.

EBITDA is a non-US GAAP metric that measures profitability performance without factoring in effects of financing, accounting decisions regarding non-cash expenses, capital expenditures or tax environments.

UTMD believes that this is a financial metric of interest to its stockholders.

Excluding the noncash effects of depreciation, amortization of intangible assets and stock option expense, 1Q 2026 consolidated EBT excluding the remeasured bank balance currency gain or loss and interest expense (“adjusted consolidated EBITDA”) were $3,982 compared to $4,652 in 1Q 2025.

UTMD’s trailing twelve-month EBITDA as of March 31, 2026 was $16,788.

Management believes that this operating performance metric provides meaningful supplemental information to both management and investors and confirms UTMD’s ongoing excellent financial operating performance, as well as its ability to sustain high level financial performance during a challenging time.

Excluding the noncash effects of depreciation, amortization of intangible assets and stock option expense, 2Q 2026 consolidated EBT excluding the remeasured bank balance currency gain or loss (“adjusted consolidated EBITDA”) was $3,587 (42.1% of sales) compared to $4,671 (46.9% of sales) in 2Q 2025.

Adjusted consolidated EBITDA was $7,568 (43.9% of sales) in 1H 2026 compared to $9,323 (47.4% of sales) in 1H 2025.

The lower EBITDA in both 2Q and 1H 2026 was due to lower EBT, accentuated by lack of IIA amortization expense in 2Q 2026.

Adjusted consolidated trailing twelve months’ (TTM) EBITDA was $15,704 as of June 30, 2026.

UTMD’s non-US GAAP adjusted consolidated EBITDA is the sum of the elements in the following table, each element of which is a US GAAP number:

7 unchanged sentences

g) Net Income

Net Income is EBT less a provision for income taxes worldwide.

Net Income in 1Q 2026 of $2,604 was $438 (14.4%) lower than the Net Income of $3,041 in 1Q 2025.

UTMD’s Net Income Margin (Net Income divided by consolidated sales) was 29.9% in 1Q 2026 and 31.3% in 1Q 2025.

The smaller Net Income decline (14.4%) compared to the EBT decline (17.5%) was due to average consolidated income tax provision rates (as a % of EBT) in 1Q 2026 of 18.2% and 21.2% in 1Q 2025.

Although basic corporate income tax rates did not change, the consolidated income tax provision can vary from period-to-period depending on the portion of EBT in sovereignties with differing rates, and a periodic true-up when actual tax returns are filed.

Net Income is EBT minus a provision for income taxes.

Net Income in 2Q 2026 of $2,686 (31.5% of sales) was 11.9% lower than the Net Income of $3,048 (30.6% of sales) in 2Q 2025.

The $362 lower 2Q 2026 Net Income was due to $546 lower Operating Income combined with $3 lower net Non-operating income, and a two-percentage point lower estimated average income tax provision rate.

The average consolidated income tax provision rate (as a % of the same period EBT) in 2Q 2026 was 18.3% compared to 20.5% in 2Q 2025.

Net Income in 1H 2026 of $5,290 (30.7% of sales) was 13.1% lower than the Net Income of $6,089 (31.0% of sales) in 1H 2025.

The $799 lower 1H 2026 Net Income was due to $1,135 lower Operating Income combined with $91 lower net Non-operating Income, and a lower estimated average income tax provision rate.

The average consolidated income tax provision rate (as a % of the same period EBT) in 1H 2026 was 18.2% compared to 20.9% in 1H 2025.

The consolidated income tax provision rate varies as the mix in taxable income among U.S.

and foreign subsidiaries with differing income tax rates differs from period to period.

The basic corporate income tax rates in each of the sovereignties were the same as in the prior year.

h) Earnings Per Share (EPS)

EPS are consolidated Net Income divided by the weighted average number of shares of stock outstanding (diluted to take into consideration stock option awards which are “in the money,” i.e., have exercise prices below the applicable period’s weighted average market value).

EPS in 1Q 2026 at $0.818 were 11.0% lower than the $0.919 in 1Q 2025.

UTMD’s smaller decline in EPS relative to NI was a result of 125,265 fewer diluted shares used to calculate EPS in 1Q 2026 compared to 1Q 2025.

EPS are consolidated Net Income divided by the number of shares of stock outstanding (diluted to take into consideration stock option awards which are “in the money,” i.e., have exercise prices below the applicable period’s weighted average market value).

Because the average exercise price of employee and director options was higher than the ending market price of the stock in both 2Q 2026 and 2Q 2025, as well as in 1H 2026 and 1H 2025, the number of shares added as a dilution factor in both years’ 2Q and 1H were zero.

Diluted EPS in 2Q 2026 were $0.844 compared to diluted EPS of $0.939 in 2Q 2025, a 10.1% decrease.

Diluted EPS in 1H 2026 were $1.661 compared to diluted EPS of $1.858 in 1H 2025, a 10.6% decrease.

The percentage decreases in EPS were lower than the decreases in NI as a result of fewer diluted shares.

Diluted shares were 3,183,554 in 2Q 2026 compared to 3,245,979 in 2Q 2025.

Outstanding shares were 3,184,025 at the end of 1Q 2026.

The number of shares used for calculating EPS was higher than ending shares because of a time-weighted calculation of average outstanding shares for shares which were repurchased during the quarter.

There was no dilution from unexercised employee options in either 1Q 2026 or 1Q 2025 as the average option exercise prices were above the period-ending closing stock prices.

The total number of outstanding unexercised employee and

outside director options at March 31, 2026 was 121,085 at an average exercise price of $70.66, including shares awarded but not yet vested.

This compares to 97,779 unexercised option shares at the end of 1Q 2025 at an average exercise price of $73.77/ share, including shares awarded but not vested.

Outstanding shares at the end of 1Q 2026 were 3,184,025 compared to 3,186,221 at the end of calendar year 2025 and 3,280,889 at the end of 1Q 2025.

The difference in outstanding shares at the end of 1Q 2026 compared to the end of 2025 resulted from 2,196 shares repurchased in the open market, with no employee options exercised, during 1Q 2026.

UTMD repurchased 2,196 of its shares at an average price of $58.58 during 1Q 2026.

Because of a time-weighted calculation, the full antidilution impact of the 1Q 2026 repurchases won’t be felt until 2Q 2026.

There were 54,267 share repurchases in 1Q 2025 at an average price of $59.35.

No options were awarded in 1Q 2026 or 1Q 2025.

During the rest of 2025 after 1Q 2025, 13,800 option shares were awarded to 40 employees at an exercise price of $58.10.

Diluted shares were 3,184,265 in 1H 2026 compared to 3,277,936 in 1H 2025.

The lower diluted shares in both periods of 2026 were the result of shares repurchased during 1H 2026.

The number of shares used for calculating EPS in both years was higher than period-ending outstanding shares because of a time-weighted calculation of average outstanding shares.

Outstanding shares at the end of 2Q 2026 were 3,182,818 compared to 3,186,221 at the end of calendar year 2025.

The difference was due to 3,403 shares repurchased in 1H 2026.

Shares repurchased in 2Q 2026 were 1,207 at an average price of $64.10.

Shares repurchased in 1H 2026 were 3,403, at an average price of $60.54.

The total cost of repurchasing shares in 1H 2026 was $206 plus a 1% excise tax.

Outstanding shares one year earlier were 3,215,901 at the end of 2Q 2025.

Outstanding shares at the end of calendar 2024 were 3,335,156.

The total cost of repurchasing 454,299 shares in the ten calendar quarters since the end of 2023 at an average cost of $62.80/ share was $28,529 plus a 1% federal excise tax.

The Company retains the strong desire and financial ability for repurchasing its shares at a price it believes is attractive for remaining stockholders.

UTMD’s closing share price at the end of 1Q 2026 was $61.99, up 11% from the $55.96 closing price three months earlier at the end of 2025.

The closing share price at the end of 1Q 2025 was $56.04.

UTMD paid $989 ($0.31/share) in cash dividends to stockholders in 1Q 2026.

UTMD paid $1,017 ($0.305/share) in cash dividends to stockholders in 1Q 2025.

The total number of outstanding unexercised employee and outside director options at June 30, 2026 was 119,086 at an average exercise price of $70.73, including shares awarded but not yet vested.

This compares to 97,685 unexercised option shares at the end of 2Q 2025 at an average exercise price of $73.76/ share, including shares awarded but not vested.

No employee options have been awarded in 2026.

Non-qualified option awards totaling 13,800 shares were made to 40 employees in October 2025 at an exercise price of $58.10.

i) Return on Equity (ROE)

ROE is the portion of Net Income retained by UTMD to internally finance its growth, divided by the average accumulated Stockholders’ Equity for the applicable time period.

Annualized ROE (before stockholder dividends) in 1Q 2026 was 9% and in 1Q 2025 was 10%.

The lower ROE in 1Q 2026 was due to 14% lower Net Income divided by 2% higher average Stockholders’ Equity.

Targeting a higher ROE of 20% remains a key financial target for UTMD management.

ROE can be increased by increasing Net Income, and/or by reducing Stockholders’ Equity by paying cash dividends to stockholders or by repurchasing shares.

ROE is the portion of Net Income retained by UTMD to internally finance its growth, pay dividends and make share repurchases divided by the average accumulated stockholders’ equity for the applicable time period.

Annualized ROE in 1H 2026 (before stockholder dividends) was 9% compared to 10% 1H 2025.

The lower 2026 ROE was due to 13% lower 1H 2026 Net Income (numerator) divided by 3% higher average stockholders’ equity (denominator).

Targeting a high ROE of 20% remains a financial objective for UTMD management.

A 3% increase in average stockholders’ equity occurred even after reductions to stockholders’ equity in 1H 2026 due to paying cash dividends to stockholders and repurchasing shares.

UTMD paid $987 ($0.310/share) in dividends to stockholders in 2Q 2026 compared to $1,001 ($0.305/ share) paid in 2Q 2025.

The dividends paid to stockholders during 2Q 2026 were 37% of Net Income.

UTMD paid $1,976 ($0.310/share) in dividends to stockholders in 1H 2026 compared to $2,018 ($0.305/ share) paid in 1H 2025.

The dividends paid to stockholders during 1H 2026 were 37% of Net Income.

UTMD’s closing share price at the end of 2Q 2026 was $68.98 up 11.3% from the closing price of $61.99 at the end of 1Q 2026, and up 23.3% from the closing price of $55.96 at the end of 2025.

The closing share price one year ago at the end of 2Q 2025 was $56.92.

Liquidity and Capital Resources

j) Cash flows

Net cash provided by operating activities, including adjustments for depreciation and amortization and other non-cash expenses along with changes in working capital, totaled $3,109 in 1Q 2026 compared to $4,464 in 1Q 2025.

Net Income provided $438 less to cash in 1Q 2026 than in 1Q 2025.

Other differences in cash provided during the two periods were a $146 higher source of cash from reduction in accounts receivable along with $334 higher accounts payable and accrued expenses, offset by a $1,104 higher use of cash for higher inventories.

Capital expenditures for property and equipment (PP&E) netting proceeds from disposal were $130 in 1Q 2026 compared to $184 in 1Q 2025.

Depreciation of PP&E was $211 in 1Q 2026 compared to $200 in 1Q 2025 as improvements from previous capital expenditures were put into service.

Cash dividends paid to stockholders in 1Q 2026 were $989 compared to $1,017 in 1Q 2025, despite a $.005/ share higher dividend.

UTMD used $129 in 1Q 2026 to repurchase 2,196 of its shares.

In 1Q 2025, UTMD spent $3,221 to repurchase 54,267 of its shares.

In both 1Q 2026 and 1Q 2025, there were no exercises of employee or director stock options.

Management believes that current cash balances, income from operations and effective management of working capital will provide the liquidity needed to meet the challenges of the current economic environment in achieving operating objectives, to maintain the capability to make opportunistic investments that will provide for growth in future profits and to continue to allocate capital in a way that will maximize stockholder value over time.

During the remainder of 2026, the Company may utilize cash not needed to support normal operations in one or a combination of the following:

Comparing changes in 1H 2026 with changes in 1H 2025 is a second level derivative.

The $2,845 lower increase in cash provided by operating activities included $799 lower Net Income in 1H 2026 along with 1) an $1,130 increase in consolidated inventories in 1H 2026 compared to a $908 decrease in 1H 2025, 2) a $571 smaller amount of cashless amortization expense, and 3) a $56 increase in trade accounts receivable compared to a $409 decrease in 1H 2025.

The foregoing 1H 2026 lower cash contributions from operating activities were offset somewhat by a $1,044 smaller use of cash to reduce accrued expenses and $182 lower reduction in deferred income taxes.

Capital expenditures for property and equipment (PP&E) were $264 in 1H 2026 compared to $235 in 1H 2025.

The capital amount invested in 1H 2026 was $157 less than depreciation expense.

Depreciation of PP&E was $421 in 1H 2026 compared to $405 in 1H 2025, as new equipment was placed in service for biopharma sensor manufacturing.

UTMD made cash dividend payments to stockholders of $1,976 in 1H 2026 compared to $2,018 in 1H 2025.

The difference was due to 1.6% higher dividends paid per share than in the previous year, offset by 3.7% lower number of shares receiving dividends due to share repurchases.

UTMD used $206 cash to repurchase shares in 1H 2026 compared to $6,708 in 1H 2025.

In both 1H 2026 and 1H 2025, there were no employee or director option exercises.

Management believes that current cash balances, income from operations and effective management of working capital will provide the liquidity needed to finance internal growth plans.

The Company intends to utilize cash not needed to support normal operations in one or a combination of the following:

1) in general, to continue to invest at an opportune time in ways that will enhance future profitability;

2) to make additional investments in new technology and/or processes;

and/or 3) to acquire a product line or company that will augment revenue and EPS growth and better utilize UTMD’s existing

infrastructure.

and/or 3) to acquire a product line or company that will augment revenue and EPS growth and better utilize UTMD’s existing infrastructure.

If there are no better strategic uses for UTMD’s cash, the Company will continue to return cash to stockholders in the form of dividends and share repurchases when the stock appears undervalued.

k) Assets and Liabilities

UTMD’s March 31, 2026 Balance Sheet, in the absence of debt, continued to be strong.

At March 31, 2026 compared to three months earlier at the end of 2025, UTMD’s cash and investments increased $1,649 to $87,406, despite use of $129 cash to repurchase shares, pay $989 in stockholder dividends and purchase $130 in additional capital equipment.

Compared to a year earlier at March 31, 2025, cash and investments increased $4,081.

Working capital at the end of 1Q 2026 was $1,730 higher than at the end of 2025, and $4,798 higher than at March 31, 2025.

UTMD’s current ratio improved to 28.6 at March 31, 2026 from 22.3 at March 31, 2025.

The current ratio at the end of 2025 was 37.6 due to low end-of-year current liabilities.

Consolidated Accounts Receivable (net of allowances) increased $115 at March 31, 2026 from the end of 2025, but decreased $307 compared to March 31, 2025 due to lower sales.

On a rolling sales quarter basis, the aging of receivables were 37.5 days at the end of 1Q 2026, compared to 35.0 days at the end of 2025 and 36.6 days at the end of March 2025, all well within management targets.

Consolidated inventories increased $787 at the end of 1Q 2026 compared to December 31, 2025.

Work-in-process and finished goods inventories increased $558 as UTMD sought to maintain productivity on lower sales, expecting higher sales later in 2026.

The $906 higher current liabilities at the end of 1Q 2026 compared to December 31, 2025 resulted from a seasonal year-end low in accounts payable and accrued expenses.

In contrast, compared to a year earlier, 1Q 2026 ending current liabilities were $819 lower.

Long-term liabilities at March 31, 2026 compared to December 31, 2025 declined $172 primarily as a result of $114 reduction in the deferred tax liability for the Femcare Ltd GBP IIA and $42 lower deferred revenue and income taxes.

The Femcare deferred tax liability, which is zero now, was due to the tax effect of the Femcare IIA amortization.

A year earlier at March 31, 2025, it was $494 and on the date of the 2011 acquisition it was $9,084.

UTMD’s total debt ratio (total liabilities/total assets) as of March 31, 2026 was 3.2% compared to 2.7% as of December 31, 2025, and 4.5% on March 31, 2025.

Net fixed assets at March 31, 2026 compared to December 31, 2025 decreased $187 after $130 in 1Q 2026 capital expenditures were offset by $211 in depreciation and the impact of the period-to-period foreign currency exchange (FX) rates for assets OUS.

FX rates for Balance Sheet purposes are the applicable rates at the end of each reporting period.

The FX rates from the applicable foreign currency to USD for assets and liabilities at the end of 1Q 2026 and the end of 2025 follow:

At March 31, 2026, net Intangible Assets declined $610 to 11.5% of total consolidated assets from 12.2% on December 31, 2025, as a result of $462 in amortization leveraged by the FX rate impact of weaker ending currencies OUS.

The decline in net Intangible Assets in USD terms from a year earlier was $1,893.

As of March 31, 2026, Stockholders’ Equity increased $3,325 to $120,373 compared to a year earlier at March 31, 2025, despite a reduction in Stockholders’ Equity from the $9,218 combination of share repurchases and stockholder cash dividends paid during the last twelve months.

During 1Q 2026, Stockholders’ Equity increased $1,105 from the end of 2025 while the company paid $989 in dividends and repurchased $129 in stock, which reduced Stockholders’ Equity.

At June 30, 2026, UTMD’s cash and investments increased $1,772 to $87,528 from $85,756 at the end of 2025 as a result of Net Income of $5,290 less $2,182 in cash used repurchasing UTMD stock and paying shareholder dividends, and changes in working capital.

The working capital differences resulted primarily from $1,068 higher inventories and $528 lower current liabilities at the end of 1H 2026.

At June 30, 2026, net Intangible Assets were 11.5% of total consolidated assets compared to 12.2% on December 31, 2025.

UTMD’s strong 48.6 current ratio at June 30, 2026 was higher than the 37.6 current ratio at December 31, 2025, with 3% higher current assets and 20% lower current liabilities.

The average age of trade receivables was 38 days from date of invoice at June 30, 2026 compared to 35 days at December 31, 2025 based on the most recent calendar quarter of sales.

Average inventory turns declined to 1.7 in 2Q 2026 compared to 2.0 for the last quarter of 2025 due to lower sales activity and a $1,068 increase in inventories.

Both of those inventory turn numbers are below management targets.

June 30, 2026 total consolidated assets were $124,572, an increase of $2,030 from December 31, 2025.

Current assets were $2,897 higher than at December 31, 2025 because of the $1,772 increase in cash and $1,068 increase in inventories.

June 30, 2026 net fixed assets (property, plant and equipment) in Utah decreased $14 from the end of 2025 as depreciation exceeded new acquisitions.

OUS subsidiary net fixed assets decreased $263 from the combination of depreciation which exceeded new acquisitions and a stronger USD against the EUR, GBP and CAD.

For clarity, the net book value of consolidated property, plant and equipment decreased $277 at June 30, 2026 from the end of 2025 due to the net effect on OUS asset values of period-ending changed FX rates, $264 in new asset purchases minus $421 in depreciation.

June 30, 2026 net intangible assets (goodwill plus other intangible assets) declined $590 from the end of 2025 as a result of $478 in amortization and a 1.4% weaker GBP/USD FX rate on UK intangible asset balances.

At June 30, 2026, net intangible assets including goodwill were 11% of total consolidated assets compared to 12% at year-end 2025 and 13% at June 30, 2025.

Working capital (current assets minus current liabilities) was $98,569 at June 30, 2026 compared to $95,144 at December 31, 2025.

Cash balances were 89% of the June 30, 2026 working capital.

Current assets at June 30, 2026 compared to December 31, 2025 were $2,897 higher as the result of the $1,772 increase in cash combined with a $1,068 increase in inventories and a $43 increase in total receivables.

Current liabilities were $528 lower at June 30, 2026 compared to December 31, 2025 as the result of a $493 decrease in accrued liabilities and $35 lower accounts payable.

The $528 lower accrued liabilities resulted mainly from $240 lower accrued profit-sharing bonus after six months in 2026 compared to the accrued balance at the end of the 2025 year, and a $304 lower estimated income tax liability.

Management believes that UTMD’s working capital remains more than sufficient to meet operating needs, new capital expenditures, projected cash dividend payments to stockholders and continued share repurchases.

June 30, 2026 total consolidated liabilities were $2,539, a decline of $736 from December 31, 2025.

Current liabilities were $528 lower than at December 31, 2025.

Long term liabilities were $208 lower, after eliminating the deferred tax liability balance resulting from non-tax deductible Femcare Identifiable Intangible Asset (IIA) amortization expense.

The deferred tax liability balance for Femcare IIA, which were initially $9,084 at the date of the March 2011 acquisition, was zero at June 30, 2026, compared to $114 at December 31, 2025 and $389 at June 30, 2025.

Reduction of the deferred tax liability occurred as the book/tax difference of amortization was eliminated over the remaining useful life of the Femcare IIA, i.e.

as Femcare paid taxes in the UK without the benefit of a deduction for IIA amortization expense.

UTMD’s total debt ratio (total liabilities/ total assets) at June 30, 2026 was 2.0%, and at both December 31, 2025 and June 30, 2025 was 2.7%.

l) Management's Outlook

The first quarter of 2026 results were consistent with management projections for 2026 as described in UTMD’s 2025 Form SEC 10-K filed in March.

The major projected change in 1Q 2026 financial results had to do with the 3Q 2025 loss of UTMD’s largest distributor for blood pressure monitoring devices located in China.

Objectives for 2026 remain to

As outlined in its December 31, 2025 SEC 10-K report, UTMD’s plan for 2026 remains to

1) realize new sales of a line of high-pressure process control transducer configurations directly to biopharmaceutical manufacturers;

5 unchanged sentences

5) continue to achieve excellent overall financial operating performance;

6) utilize positive cash generation to continue providing cash dividends to stockholders and make open market

share repurchases if/ when the UTMD share price seems undervalued;

7) remain vigilant for affordable accretive acquisition opportunities which may be brought about by difficult

economic conditions.

6) utilize positive cash generation to continue providing cash dividends to stockholders and make open market share repurchases if/ when the UTMD share price seems undervalued;

7) remain vigilant for affordable accretive acquisition opportunities which may be brought about by difficult economic conditions.

m) Accounting Policy Changes

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis