Utah Medical Products, Inc. Reports Financial Performance for Second Quarter 2013

Utah Medical Products, Inc. Reports Financial Performance for Second Quarter
2013

SALT LAKE CITY, July 25, 2013 (GLOBE NEWSWIRE) -- In the second calendar
quarter (2Q) and first half (1H) of 2013, 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             1H
                   (April – June) (January – June)
Sales:              -              (4%)
Gross Profit:       -              (4%)
Operating Income:   + 5%           (1%)
Net Income:         + 10%          + 3%
Earnings Per Share: + 8%           + 1%

Earnings per share for the most recent twelve months (TTM) were $2.76.
Excluding the noncash effects of depreciation, amortization of intangible
assets and stock option expense, TTM consolidated earnings before taxes plus
interest expense were $18,544. Currency amounts throughout this report are in
thousands, except per share amounts and where noted.

UTMD achieved the following profit margins in 2Q 2013 and 1H 2013 compared to
2Q 2012 and 1H 2012:

                              2Q 2013    2Q2012     1H2013     1H2012
                              (Apr – Jun) (Apr – Jun) (Jan – Jun) (Jan – Jun)
Gross Profit Margin (gross     60.5%       60.6%       60.5%       60.3%
profits/ sales):
Operating Profit Margin        37.1%       35.4%       37.3%       36.1%
(operating profits/ sales):
Net Profit Margin (profit      26.3%       24.0%       26.3%       24.4%
after taxes/ sales):

Income Statement Summary.

Due to distributor overstocking in 1Q 2012, the comparison of 2013 income
statement results with the prior year started off negative, as sales, gross
profits, operating income, net income and earnings per share were down 7%, 7%,
5%, 2% and 4%, respectively, in 1Q 2013 compared to 1Q 2012, as reported on
April 25, 2013.

Performance in 2Q 2013 was consistent in sales and gross profits with 2Q 2012,
with better operating income, net income and eps. As a result, the comparison
of 1H 2013 with 1H 2012 remains negative, although less so than after 1Q.

As an alternative comparison, the following table compares 1H 2013 quarterly
average income statement results with the average quarterly performance for
the entire year of 2012:

                       1H 2013           2012 Year
                       Quarterly Average Quarterly Average
Sales:              (2%) $ 10,188          $ 10,388
Gross Profit:       (3%) 6,165            6,327
Operating Income:   --   3,802            3,799
Net Income:         +6%  2,684            2,542
Earnings Per Share: +4%  .713             .685

Shareholders may recall UTMD's guidance for 2013 provided in its year-end
December 31, 2012 SEC Form 10-K, as follows:

  "In summary, management expects revenues and net income in 2013 to decline
  about 2%, and gross profit, operating income, EBT and eps to be down about
  3% compared to 2012."

Based on 1H 2013 actual results, the Company is on its plan for sales and
gross profits, and exceeding its plan for other profitability measures.

According to CEO Kevin Cornwell,

  "After an outstanding financial performance year in 2012, UTMD expected a
  slightly negative comparison in 2013 in a difficult economic environment for
  medical device companies. After the first half of 2013, although some sales
  categories are lagging our expectations, profits from excellent operational
  performance are exceeding expectations to the point that UTMD may be able to
  match last year's eps instead of being down 3%, as previously projected."

Sales.The global consolidated sales comparisons of 2Q 2013 to 2Q 2012, and 1H
2013 to 1H 2012, were negatively affected by the currency exchange impact of a
stronger U.S. Dollar (USD or $) relative to the British Pound (GBP) and the
Australian Dollar (AUD). The GBP was about 3% weaker in the 2Q and about 2%
weaker for the 1H.The AUD was about 1% weaker in the 2Q and about 2% weaker
for the 1H.In contrast, the Euro was about 2% stronger in the 2Q and about
the same for the 1H.If currency exchange rates in 2013 had been the same as
in 2012, consolidated sales would have been about $44 higher in 2Q 2013, and
about $103 higher in 1H 2013.

U.S. domestic sales were 2% higher in 2Q 2013 than in 2Q 2012, and 5% lower in
1H 2013 than in 1H 2012.Sales of Femcare's Filshie Clip System devices to
Cooper Surgical Inc. for distribution in the U.S. were 97% higher in 2Q 2013
compared to 2Q 2012, and 6% lower in 1H 2013 compared to 1H 2012. Filshie Clip
System sales to Cooper were 22% of total domestic sales in 2Q 2013 compared to
11% in 2Q 2012.Filshie Clip System sales to Cooper were 22% of total domestic
sales in both 1H 2013 and 1H 2012.

International sales in 2Q 2013 were down 2%, and in 1H 2013 were down 3%.
International sales were 51% of total consolidated 2Q 2013 sales, and 52% of
1H 2013 sales.UK subsidiary sales were 40% of total international sales in 2Q
2013, and 41% in 1H 2013.Australia subsidiary sales were 16% of total
international sales in 2Q 2013, and 15% of total international sales in 1H
2013.Ireland subsidiary sales were 21% of total international sales in 2Q
2013, and 22% in 1H 2013.

In product categories, 2Q 2013 blood pressure monitoring device/ components
(BPM) sales were up 1%, neonatal device sales were down 20%, gynecology/
electrosurgery device sales were up 6% and obstetrics device sales were down
5%.For 1H 2013 compared to 1H 2012 global sales in product categories, BPM
sales were up 3%, neonatal device sales were down 12%, gynecology/
electrosurgery device sales were down 4% and obstetrics device sales were down
5%.

Gross Profit.UTMD's consolidated gross profit margin (GPM), gross profits
divided by sales, was 60.5% in both 2Q 2013 and 1H 2013 compared to 60.6% in
2Q 2012 and 60.3% in 1H 2012.

Operating Income. UTMD's 2Q and 1H 2013 operating profit margins (OPMs),
operating income divided by sales, were 37.1% and 37.3% respectively, compared
to 35.4% and 36.1% in the same periods of 2012. Operating expenses in 2Q 2013
were $186 lower than in 2Q 2012.About 72% of the $186 2Q decline was in
general and administrative (G&A) expenses as a result of further consolidation
of overhead resources in the UK and AUS, combined with the weaker GBP and AUD.
In contrast to the negative impact on sales, the currency exchange resulting
from a stronger USD had a positive impact on consolidating operating expenses
from UTMD's UK and Australia subsidiaries.In summary, the higher OPMs in 2013
were due to 1) GPM consistent with the prior year, and 2) improved
productivity of operating resources in the UK and AUS.

Earnings before Tax (EBT).Compared to 2Q 2012, 2Q 2013 EBT improved not only
as a result of $163 higher operating income (despite slightly lower sales),
but also from $58 lower interest expense as a result of repaying the debt
obtained to help acquire Femcare in March 2011. Interest expense in 2Q and 1H
2013 was $113 and $235, respectively, compared to $171 and $360 in the same
periods of 2012. In summary, 2Q and 1H 2013 EBT margins were 36.3% and 36.4%,
respectively, compared to 34.2% and 34.7% in the same periods of 2012. 

Net Income. UTMD's net income increased 10% in 2Q 2013 and 3% in 1H 2013
compared to the same periods in the prior year. Although diluted by the
amortization of intangible assets and interest expense on debt assumed in
completing the Femcare acquisition, 2Q 2013 and 1H 2013 net profit margins
(NPMs), net income divided by sales, remained excellent at 26.3% for both
periods compared to 24.0% and 24.4% for 2Q 2012 and 1H 2012, respectively. As
of April 1, 2013, the UK corporate income tax rate was reduced to 23% from
24%.

Earnings per share (EPS).2Q 2013 EPS increased 5.1 cents (8%) compared to 2Q
2012 as a result of the improved profit margins and lower corporate income tax
rate in the UK. For 1H 2013, EPS increased 2.1 cents (1%) compared to 1H 2012.
Counteracting the profit increase, diluted shares outstanding used to
calculate 2Q 2013 EPS increased to 3,769,588 from 3,710,827 in 2Q 2012.
Diluted shares used to calculate 1H 2013 EPS increased to 3,763,834 from
3,693,590 in 1H 2012. The increases were due to a much higher average share
price in the stock market during 2013 compared to the prior year, and
exercises of employee/ director options. The Company has not repurchased any
of its shares to date in 2013.The same was true in 2012. Notwithstanding, the
Company retains the financial ability for repurchasing its shares when they
seem undervalued. The closing share price at the end of 2Q 2013 was $54.30
compared to $36.05 at the end of calendar year 2012, and $33.53 at the end of
2Q 2012.

Excluding the noncash effects of depreciation, amortization of intangible
assets and stock option expense, 2Q 2013 and 1H 2013 consolidated earnings
before taxes plus interest expense were $4,535 and $9,245 respectively.

UTMD's June 30, 2013 balance sheet compared with its December 31, 2012 balance
sheet demonstrates continued improvement. Debt incurred in March 2011 to help
finance the Femcare acquisition was $26,934. As of June 30, 2013, the
remaining debt balance was $10,543. In just nine calendar quarters, UTMD has
repaid 61% of the acquisition debt. 1H 2013 capital expenditures were $111,
less than depreciation of fixed assets by $197.

Key balance sheet changes as of June 30, 2013 from the end of 2012 follow:

                          [Million $$]
Cash & Investments:        + 2.5
Receivables & Inventory:   + 1.3
Intangible Assets (net):   (4.0)
Total Current Liabilities: + 0.8
Notes Payable:             (2.5)
Shareholders' Equity:      + 1.7

Financial ratios as of June 30, 2013 follow:

1)Current Ratio (including the current portion of loans) = 2.6

2)Days in Receivables (based on 2Q sales activity) = 46

3) Average Inventory Turns (based on 2Q CGS) = 3.6

4) Year-to-Date ROE = 21% (prior to dividend payments)

  = 14% (after accrual of shareholder dividends)

UTMD's dilution from unexercised option shares added to actual weighted
average outstanding shares for purposes of calculating eps was 44,511 in 2Q
2013 compared to 32,825 in 2Q 2012, and 45,567 in 1H 2013 compared to 30,099
in 1H 2012.The actual number of outstanding shares at the end of 2Q 2013 was
3,728,300 which included 2Q 2013 employee option exercises of 6,400
shares.The total number of outstanding unexercised options at June 30, 2013
was 109,400 shares at an average exercise price of $27.01/ share, including
shares awarded but not vested. This compares to 183,500 option shares
outstanding at the end of 2Q 2012 at an average exercise price of $25.89/
share. No option shares have been awarded to date in 2013. 

Risk factors that could cause results to differ materially in future quarters
include clinical acceptance of products, timing of regulatory approvals of new
products and of distributing existing products in new geographical areas,
government intervention in the health care marketplace, distribution
restrictions by anticompetitive hospital administrative agreements, foreign
currency exchange rates, the Company's ability to efficiently manufacture,
market, and sell its products globally, among other factors that have been
outlined in UTMD's public disclosure filings with the SEC. The SEC Form 10-Q
for 2Q 2013 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 and markets a broad range of
disposable and reusable specialty medical devices recognized by clinicians in
hundreds of countries around the world as the standard for obtaining optimal
long term outcomes for their patients.For more information about Utah Medical
Products, Inc., visit UTMD's website at www.utahmed.com.

Utah Medical Products, Inc.
INCOME STATEMENT, Second Quarter (3 months ended June 30)
(in thousands except earnings per share):
                                          
                            2Q 2013 2Q 2012 Percent Change
Net Sales                    $10,002 $10,025 (0.2%)
Gross Profit                 6,048   6,071   (0.4%)
Operating Income             3,715   3,552   + 4.6%
Income Before Tax            3,627   3,430   + 5.7%
Net Income                   2,632   2,401   + 9.6%
Earnings Per Share           $0.698  $0.647  + 7.9%
Shares Outstanding (diluted) 3,770   3,711   
                                          
INCOME STATEMENT, First Half (6 months ended June 30)
(in thousands except earnings per share):
                                          
                            1H 2013 1H 2012 Percent Change
Net Sales                    $20,376 $21,230 (4.0%)
Gross Profit                 12,329  12,809  (3.7%)
Operating Income             7,605   7,667   (0.8%)
Income Before Tax            7,414   7,367   + 0.6%
Net Income                   5,368   5,190   + 3.4%
Earnings Per Share           $1.426  $1.405  + 1.5%
Shares Outstanding (diluted) 3,764   3,694   

BALANCE SHEET
                                                              
(in thousands)             (unaudited) (unaudited) (audited)    (unaudited)
                          JUN 30, 2013 MAR 31, 2013 DEC 31, 2012 JUN 30, 2012
Assets                                                         
Cash & Investments        $11,437      $10,918      $8,913       $7,984
Accounts & Other          5,673        5,363        4,341        5,089
Receivables, Net
Inventories               4,367        4,406        4,353        4,834
Other Current Assets      812          910          928          745
Total Current Assets      22,289       21,597       18,535       18,652
Property & Equipment, Net  8,155        8,203        8,428        8,532
Intangible Assets, Net     45,985       46,562       49,972       49,696
Total Assets              $76,429      $76,362      $76,935      $76,880
                                                              
Liabilities &                                                  
Shareholders' Equity
A/P & Accrued Liabilities $4,773       $5,193       $3,821       $5,345
Current Portion of Notes  3,834        3,831        4,002        5,406
Payable
Total Current Liabilities 8,607        9,024        7,823        10,751
Notes Payable (excluding   6,709        7,663        9,003        11,154
current portion)
Other LT Liabilities       --           339          363          438
Deferred Tax Liability –   7,583        7,733        7,890        8,216
Intangible
Deferred Revenue and       889          887          884          773
Income Taxes
Shareholders' Equity       52,641       50,716       50,972       45,548
Total Liabilities &       $76,429      $76,362      $76,935      $76,880
Shareholders' Equity

CONTACT: Paul Richins
         (801) 566-1200
 
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