UTAH MEDICAL PRODUCTS INC 10-Q

Item 1. Financial Statements UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS AS OF JUNE 30, 2026 AND DECEMBER 31, 2025 (in thousands) (unaudited) (audited) JUNE 30, 2026 DECEMBER 31, 2025 ASSETS Current assets: Cash & Investments $ 87,528 $ 85,756 Accounts & other receivables, net 3,565 3,522 Inventories 9,003 7,935 Other current assets 543 529 Total current assets 100,639 97,742 Property and equipment, net 9,631 9,908 Goodwill 13,956 14,052 Other intangible assets 55,459 55,941 Other intangible assets - accumulated amortization ( 55,113 ) ( 55,101 ) Other intangible assets, net 346 840 Total assets $ 124,572 $ 122,542 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 876 $ 911 Accrued expenses 1,194 1,687 Total current liabilities 2,070 2,598 Deferred tax liability - Femcare IIA - 114 Long-term lease liability 195 225 Deferred income taxes 274 337 Total liabilities 2,539 3,274 Stockholders' equity: Common stock - $ 0.01 par value; authorized - 50,000 shares; issued and outstanding - June 30, 2026, 3,183 shares and December 31, 2025, 3,186 shares 32 32 Accumulated other comprehensive loss ( 9,953 ) ( 9,416 ) Additional paid-in capital - - Retained earnings 131,954 128,652 Total stockholders' equity 122,033 119,268 Total liabilities and stockholders' equity $ 124,572 $ 122,542 see notes to consolidated condensed financial statements 1 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND JUNE 30, 2025 (in thousands, except per share amounts - unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Sales, net $ 8,529 $ 9,953 $ 17,252 $ 19,663 Cost of goods sold 3,771 4,358 7,212 8,530 Gross profit 4,758 5,595 10,040 11,133 Operating expense Selling, general and administrative 1,955 2,264 4,517 4,495 Research & development 154 135 308 289 Total operating expenses 2,109 2,399 4,825 4,784 Operating income 2,649 3,196 5,215 6,349 Other income 637 640 1,254 1,345 Income before provision for income taxes 3,286 3,836 6,469 7,694 Provision for income taxes 600 788 1,179 1,605 Net income $ 2,686 $ 3,048 $ 5,290 $ 6,089 Earnings per common share (basic) $ 0.84 $ 0.94 $ 1.66 $ 1.86 Earnings per common share (diluted) $ 0.84 $ 0.94 $ 1.66 $ 1.86 Shares outstanding - basic 3,184 3,246 3,184 3,278 Shares outstanding - diluted 3,184 3,246 3,184 3,278 Other comprehensive income (loss): Foreign currency translation net of taxes of $ 0 in all periods $ ( 34 ) $ 1,828 $ ( 536 ) $ 2,546 Total comprehensive income $ 2,652 $ 4,876 $ 4,754 $ 8,635 see notes to consolidated condensed financial statements 2 UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND JUNE 30, 2025 (in thousands - unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,290 $ 6,089 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 421 405 Amortization 478 1,048 Provision for (recovery of) losses on accounts receivable ( 12 ) ( 7 ) Amortization of Right-of-Use Assets 30 26 Deferred income taxes ( 178 ) ( 360 ) Stock-based compensation expense 192 168 Tax benefit attributable to exercise of stock options - - Changes in operating assets and liabilities: Accounts receivable and other receivables ( 56 ) 409 Inventories ( 1,130 ) 908 Prepaid expenses and other current assets ( 22 ) 145 Accounts payable ( 34 ) 37 Accrued expenses ( 487 ) ( 1,531 ) Total adjustments ( 798 ) 1,248 Net cash provided by operating activities 4,492 7,337 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures for: Property and equipment ( 264 ) ( 235 ) Net cash used in investing activities ( 264 ) ( 235 ) CASH FLOWS FROM FINANCING ACTIVITIES: Common stock purchased and retired ( 206 ) ( 6,708 ) Payment of dividends ( 1,976 ) ( 2,018 ) Net cash used in financing activities ( 2,182 ) ( 8,726 ) Effect of exchange rate changes on cash ( 274 ) 827 Net increase/(decrease) in cash and cash equivalents 1,772 ( 797 ) Cash at beginning of period 85,756 82,976 Cash at end of period $ 87,528 $ 82,179 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for income taxes $ 1,660 $ 2,327 Cash paid during the period for interest - - see notes to consolidated condensed financial statements 3 UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY Three Months and Six Months Ended June 30, 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 ) - ( 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 Stock option compensation expense - - 72 - - 72 Common stock purchased and retired ( 1 ) - ( 72 ) - ( 5 ) ( 77 ) Foreign currency translation adjustment - - - ( 34 ) - ( 34 ) Common stock dividends - - - - ( 987 ) ( 987 ) Net income - - - - 2,686 2,686 Balance at June 30, 2026 3,183 $ 32 $ - $ ( 9,952 ) $ 131,954 $ 122,034 Balance at December 31, 2024 3,335 $ 36 $ 593 $ ( 11,908 ) $ 129,302 $ 117,427 Shares issued upon exercise of employee stock options for cash - - - - - - 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 Shares issued upon exercise of employee stock options for cash - - - - - - Stock option compensation expense - - 86 - - 86 Common stock purchased and retired ( 65 ) ( 1 ) ( 86 ) - ( 3,402 ) ( 3,488 ) Foreign currency translation adjustment - - - 1,828 - 1,828 Common stock dividends - - - - ( 988 ) ( 988 ) Net income - - - - 3,048 3,048 Balance at June 30, 2025 3,216 $ 32 $ - $ ( 9,362 ) $ 128,862 $ 117,533 see notes to consolidated condensed financial statements 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 June 30, 2026 and December 31, 2025 consisted of the following: June 30, December 31, 2026 2025 Finished goods $ 1,898 $ 1,223 Work-in-process 1,604 1,627 Raw materials 5,501 5,085 Total $ 9,003 $ 7,935 (4) Stock-Based Compensation. At June 30, 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 six months ended June 30, 2026 and June 30, 2025, the Company recognized $ 192 and $ 168 , 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 June 30, 2026. 5 (6) 2Q 2026 global revenues (USD) by product category: Domestic Outside US Total Obstetrics $ 863 $ 203 $ 1,066 Gynecology/Electrosurgery/Urology 2,061 2,219 4,280 Neonatal 1,377 542 1,919 Blood Pressure Monitoring and Accessories 865 399 1,264 Total $ 5,166 $ 3,363 $ 8,529 Global 1H 2026 revenues (USD) by product category: Domestic Outside US Total Obstetrics $ 1,617 $ 355 $ 1,972 Gynecology/Electrosurgery/Urology 4,755 4,753 9,508 Neonatal 2,715 774 3,489 Blood Pressure Monitoring and Accessories 1,640 643 2,283 Total $ 10,727 $ 6,525 $ 17,252 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 2Q 2026 and 2025, as applicable. The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: (in thousands) Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Numerator Net income 2,686 3,048 5,290 6,089 Denominator Weighted average shares, basic 3,184 3,246 3,184 3,278 Dilutive effect of stock options - - - - Diluted shares 3,184 3,246 3,184 3,278 Earnings per share, basic 0.84 0.94 1.66 1.86 Earnings per share, diluted 0.84 0.94 1.66 1.86 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 June 30, 2026 and June 30, 2025: Quarter Ended June 30, 2026 2025 Revenues 8,529 9,953 Less: Standard cost of sales 3,175 3,763 Other cost of sales 596 595 Gross Profit 4,758 5,595 Gross Profit Margin 55.8 % 56.2 % Sales & Marketing 526 525 Research & Development 154 135 Litigation Fees 498 284 Amortization 16 540 Other General & Administrative 915 915 Operating Income 2,649 3,196 Operating Income Margin 31.1 % 32.1 % Other Income Interest income 635 679 Other income (expense) 2 ( 40 ) Income before income taxes 3,286 3,835 Provision for income taxes 600 787 Net Income 2,686 3,048 (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 June 30, 2026 financial statements. 7