PRESS RELEASE
Utah
Medical Products, Inc.
Reports Financial Performance for
Second Quarter 2007
July
24, 2007
Contact: Paul Richins
(801) 566-1200
Salt Lake City, Utah - In the second calendar
quarter (2Q) of 2007, Utah Medical Products, Inc.’s (Nasdaq: UTMD) changes
in financial results compared to the same time period in the prior calendar
year were as follows:
|
2Q
(April – June) |
1H
(Jan – June) |
Sales: |
(1%) |
- |
Gross Profit: |
(2%) |
(2%) |
Operating
Income: |
+5% |
+3% |
Net Income: |
(4%) |
(4%) |
Earnings
Per Share: |
(2%) |
(3%) |
In 2Q
2007 and 1H 2007, UTMD achieved the following profit margins:
|
2Q
(April – June) |
1H
(Jan – June) |
Gross Profit Margin (gross
profits/ sales): |
55.5% |
55.4% |
Operating Profit Margin
(operating profits/ sales): |
37.7% |
37.7% |
Net Profit Margin (profit
after taxes/ sales): |
27.5% |
27.4% |
Comparing 2Q 2007 sales to 2Q 2006 sales in
product categories, neonatal product sales were up 2%, obstetrics product
sales were down 13%, gynecology/ electrosurgery
product sales were about the same and blood pressure monitoring/ components
sales were up 12%. Domestic sales in 2Q 2007 were down 5%, while
international sales were up 8% compared to 2Q 2006. Trade shipments from
Ireland were up 13% in EURO terms, but up 21% in US Dollar terms because of
a weaker U.S. dollar.
Domestic direct sales excluding obstetrics products were about the same in
2Q 2007 as in 2Q 2006. The domestic obstetrics product sales, which products
are sold to hospitals, were down substantially as a result of loss of market
share due to significant price reductions offered by competitors in 2007,
and the continued trend of administrative arrangements limiting physician
choice of devices used in L&D. The UTMD antidote is the continued
development of unique products that provide significant improvements in
patient safety and effectiveness of care.
In that regard, during 2Q 2007 UTMD introduced the Nutri-Lok™
enteral feeding-only extension sets that mate with, and enhance the safety
of, UTMD’s popular Nutri-Cath® silicone neonatal intensive care long-term
feeding catheters. The important enhancement of patient safety is
accomplished by eliminating the possibility of an inadvertent misconnection
to an IV infusion line. The proprietary locking mechanism also ensures a
secure connection that will not accidentally slip apart, as is common with
standard slip fit connections to feeding syringes.
In addition, in 2Q UTMD received FDA 510(k) regulatory concurrence to market
its new TVUS/HSG-Cath™ saline/contrast media
infusion catheter which is designed to improve the detection and timely
treatment of uterine disease. This product will augment UTMD’s first-line
diagnostic device, the EndoCurette®, which provides a minimally-invasive,
physician in-office biopsy for possible evaluation of abnormal uterine
bleeding. When biopsy results are inconclusive, physicians are increasingly
performing ultrasound or radiographic imaging of the endometrium as a next
step. TVUS/HSG-Cath is a reliable and convenient means to deliver saline or
contrast media needed in those growing number of procedures.
After more than a year of submissions and Japan Ministry of Health review of
information, UTMD has achieved Japan certification of its manufacturing
facilities in both Utah and Ireland, as well as premarketing regulatory
approval for a number of its products. UTMD’s new distributor, Solution/Best
Aid Corporation, expects completion of premarketing approvals under Japan’s
new more stringent regulatory approvals process for most of UTMD’s products
in the near future. Solution placed its first substantial order for OB/Gyn
products in July. UTMD believes that Japan’s advanced health care system has
the potential to generate sales of about 25% of the sales volume that UTMD
presently enjoys from its specialty products in the U.S.
UTMD’s gross profit margin in 2Q 2007 was 55.5% compared to 55.9% in 2Q
2006, primarily because the current quarter’s sales mix was more weighted
toward international shipments at lower than average prices. Even with
slightly lower sales and gross profit margin, 2Q 2007 operating profit grew
because operating expenses declined by $193,000 to 17.9% of sales, compared
to 20.3% of sales in 2Q 2006. Operating expenses are comprised of sales &
marketing (S&M), new product development (R&D) and general and
administrative (G&A) expenses. Compared to the prior year, 2Q 2007 S&M, R&D
and G&A expenses were down $76,000, $106,000 and $12,000, respectively. In
2Q 2006, UTMD had written-off a one time charge to R&D of $130,000 of
intellectual property rights, which were recouped in 3Q 2006.
Even though operating profits were up, net income was down because in 2Q
2007, UTMD did not have the one-time capital gains from investments received
in 2Q 2006. UTMD’s excess cash is now invested in short term money market
instruments, currently yielding about 5.1%.
Eps for the most recent 4 calendar quarters were $1.99, compared to $1.91 at
the same time last year.
Financial ratios as of June 30, 2007 which may be of interest to
shareholders follow:
1) Current Ratio = 8.9
2) Days in Receivables (based on 2Q sales activity) = 49
3) Average Inventory Turns (based on 2Q CGS) = 4.0
4) Year-to-Date ROE = 12% (after dividends); 21% (prior to payment of
dividends)
UTMD's dilution from unexercised option shares
added to actual weighted average outstanding shares for purposes of
calculating eps was 59,600 in 2Q 2007 compared to 96,300 in 2Q 2006, and
66,100 in 1H 2007 compared to 106,200 in 1H 2006. The actual number of
outstanding shares at the end of 2Q 2007 was 3,924,000 which included 2Q
option exercises of 1,700 shares and 2Q share repurchases of 23,800. The
average price paid by the Company to repurchase shares in the open market
during 2Q 2007 was $30.50 including commissions. Year-to-date purchases
through 1H 2007 have been 40,700 shares at an average per share cost of
$31.20. The total number of outstanding unexercised employee and outside
director options at June 30, 2007 was 223,100 shares at an average exercise
price of $21.49/ share, including shares awarded but not vested. This
compares to 286,300 unexercised option shares outstanding at the end of 2Q
2006.
Investors are cautioned that this press release may contain forward looking
statements, and that actual results or events may differ from those
projected. Risk factors that could cause results to differ materially from
those projected include clinical acceptance of products, access to the
hospital marketplace that may become restricted at any time by
administrative Group Purchasing Organization agreements, timing of
regulatory approval of new products, regulatory intervention in current
operations, the Company’s ability to efficiently manufacture, market, and
sell its products, among other factors that have been outlined in UTMD's
public disclosure filings with the SEC. The SEC Form 10-Q for 2Q 2007 will
be filed with the SEC by August 9.
Utah Medical Products, Inc., with particular interest in health care for
women and their babies, develops, manufactures, assembles and markets a
broad range of disposable and reusable specialty medical devices designed
for better health outcomes for patients and their care-providers. For more
information about Utah Medical Products, Inc., visit UTMD's
website at www.utahmed.com.
|
Net Sales
Gross Profit
Operating Income
Income Before Tax
Net Income
Earnings Per Share (EPS)
Shares Outstanding (diluted) |
2Q
2007
$7,211
4,005
2,717
3,031
1,985
$0.497
3,995
|
2Q
2006
$7,293
4,077
2,595
3,166
2,059
$0.509
4,043 |
Percent
Change
(1.1%)
(1.7%)
+4.7%
(4.3%)
(3.6%)
(2.4%) |
|
|
Net Sales
Gross Profit
Operating Income
Income Before Tax
Net Income
Earnings Per Share (EPS)
Shares Outstanding (diluted) |
1H
2007
$14,329
7,942
5,408
6,022
3,929
$0.981
4,004
|
1H
2006
$14,396
8,084
5,227
6,212
4,094
$1.010
4,056 |
Percent
Change
(0.5%)
(1.8%)
+3.5%
(3.1%)
(4.0%)
(2.8%) |
|
|
|
(unaudited) |
(unaudited) |
(audited) |
(unaudited) |
|
JUN
30, 2007 |
MAR
31, 2007 |
DEC
31, 2006 |
JUN 30, 2006 |
Assets |
|
|
|
|
Cash &
Investments |
$
21,082 |
$
21,645 |
$
21,049 |
$
18,421 |
Receivables, Net |
4,124 |
4,279 |
3,746 |
3,879 |
Inventories |
3,231 |
3,204 |
3,037 |
3,323 |
Other Current Assets |
658 |
680 |
579 |
661 |
Total Current Assets |
29,095 |
29,808 |
28,411 |
26,284 |
Property & Equipment,
Net |
8,317 |
8,346 |
8,331 |
8,360 |
Intangible Assets, Net |
7,447 |
7,441 |
7,445 |
7,470 |
Total Assets |
$
44,859 |
$
45,595 |
$ 44,187 |
$ 42,114 |
|
|
|
|
|
Liabilities
&
Stockholders’ Equity |
|
|
|
|
A/P
& Accrued Liabilities |
$
2,815 |
$
3,829 |
$
2,940 |
$
2,724 |
Current Portion of Note |
440 |
441 |
441 |
479 |
Payable |
Total Current Liabilities |
3,255 |
4,270 |
3,381 |
3,203 |
Note Payable |
4,041 |
4,223 |
4,383 |
4,834 |
Deferred Income Taxes |
314 |
311 |
308 |
187 |
Stockholders’ Equity |
37,249 |
36,791 |
36,115 |
33,890 |
Total Liabilities
&
|
$ 44,859 |
$ 45,595 |
$ 44,187 |
$ 42,114 |
Stockholders’ Equity |
|