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

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

SALT LAKE CITY, Oct. 24, 2013 (GLOBE NEWSWIRE) -- In the third calendar
quarter (3Q) and first nine months (9M) 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:

                    3Q         9M
                   (July –    (January –
                    September) September)
Sales:              (4%)       (4%)
Gross Profit:       (8%)       (5%)
Operating Income:   (7%)       (3%)
Net Income:         (6%)       -
Earnings Per Share: (7%)       (1%)

Earnings per share for the most recent twelve months (TTM) were $2.71.
Excluding the noncash effects of depreciation, amortization of intangible
assets and stock option expense, TTM consolidated earnings before taxes plus
interest expense were $18,189. Currency amounts throughout this report are in
thousands, except per share amounts and where noted.

UTMD achieved the following profit margins in 3Q 2013 and 9M 2013 compared to
3Q 2012 and 9M 2012:

                              3Q 2013     3Q 2012     9M 2013     9M 2012
                              (Jul – Sep) (Jul – Sep) (Jan – Sep) (Jan – Sep)
Gross Profit Margin (gross     59.3%       61.7%       60.1%       60.8%
profits/ sales):
Operating Profit Margin        36.5%       37.8%       37.1%       36.7%
(operating profits/ sales):
Net Profit Margin (profit      25.6%       25.9%       26.1%       24.9%
after taxes/ sales):

Income Statement Summary.

Due to quarter-to-quarter fluctuation in sales to distributors, the comparison
of 2013 quarterly income statement results with the prior year have varied.
For example, excluding sales to Cooper Surgical, UTMD's distributor of the
Filshie Clip System in the U.S., 3Q 2013 consolidated sales were 1% higher
than in 3Q 2012.Excluding, in addition, the negative impact of a stronger
U.S. Dollar [USD or $] relative to the Australian Dollar [AUD] and the British
Pound [GBP], total consolidated 3Q 2013 sales would have been up 2.4% compared
to 3Q 2012 (in contrast to down 4.4%).

Total consolidated sales in 3Q 2013 were consistent with the prior quarter 2Q
2013, but UTMD's gross profit was $100 less due to a less favorable product
mix, and a substantial decline in the value of the AUD relative to the USD. A
decline in the AUD has a "double-whammy" effect on UTMD's gross profits
because USD-denominated sales decline, while variable direct material costs go
up because Femcare-Australia is a distributor of UTMD finished devices
purchased at fixed USD or British Pound [GBP] prices.

Net income for 9M year-to-date 2013 was slightly higher than for 9M 2012,
because operating profit and net income margins were higher than in the prior
year.

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."

Anticipating that 4Q may be the lowest quarter in 2013 sales, as was the case
in 2012, and based on 9M 2013 actual results, the Company now expects
consolidated sales and gross profits for the 2013 year to be down 4% to 5%
compared to 2012.However, UTMD expects to exceed its 2013 plan for EBT, net
income and EPS.

According to CEO Kevin Cornwell,

  "After an outstanding financial performance year in 2012, UTMD expected a
  slightly negative comparison in 2013 particularly because of a difficult
  environment for medical device companies in the U.S. However, we did not
  factor in a stronger USD in making our projections. After the first nine
  months of 2013, although some sales categories and gross profit margins are
  lagging our beginning projections, profits from excellent operational
  performance are exceeding plan to the point that UTMD management now expects
  to be able to match last year's outstanding net income and EPS, instead of
  being down 3% as initially projected."

Sales.The global consolidated sales comparisons of 3Q 2013 to 3Q 2012 and 9M
2013 to 9M 2012 were substantially affected by the currency exchange impact of
a stronger USD relative to the AUD and the GBP. The AUD was 12% weaker in the
3Q 2013 compared to 3Q 2012, and 5.4% weaker for 9M 2013. The GBP was 2%
weaker in the 3Q 2013 compared to 3Q 2012 and 2.1% weaker for 9M 2013.If the
same AUD and GBP currency exchange rates in 2012 were applied to 3Q and 9M
2013, sales would have been $145 higher in 3Q 2013 and $257 higher in 9M 2013.

In contrast, the Euro was about 5% stronger relative to the USD in 3Q 2013
compared to 3Q 2012, and about 2% stronger for 9M 2013. If Euro currency
exchange rates in 2013 had been the same as in 2012, sales would have been
about $52 lower in 3Q 2013, and about $57 lower in 9M 2013.

At the beginning of 2013, sales of Femcare's Filshie Clip System devices to
Cooper Surgical Inc. for distribution in the U.S. were projected to be $650
lower in 2013.Sales of Femcare's Filshie Clip System devices to Cooper
Surgical Inc. were 49% lower ($540) in 3Q 2013 than in 3Q 2012, and 20% lower
($673) in 9M 2013 than in 9M 2012. Filshie Clip System sales to Cooper were
12% of total domestic sales in 3Q 2013 compared to 22% in 3Q 2012. Filshie
Clip System sales to Cooper were 19% of total domestic sales in 9M 2013
compared to 22% in 9M 2012. Excluding sales of Femcare's Filshie Clip System
devices to Cooper, U.S. domestic sales were 1% lower in 3Q 2013 than in 3Q
2012, and 4% lower in 9M 2013 than in 9M 2012.

Consolidated international sales in 3Q 2013 were up 2% despite the negative
impact of a stronger USD.For 9M 2013, international sales were down 1%.
International sales were 55% of total consolidated 3Q 2013 sales, and 53% of
9M 2013 sales, compared to 51% in both 3Q 2012 and 9M 2012.UK subsidiary
USD-denominated sales were 40% of total international sales in 3Q 2013
compared to 41% in 3Q 2012, and 41% in 9M 2013 compared to 44% in 9M 2012.
Australia subsidiary USD-denominated sales were 15% of total international
sales in both 3Q 2013 and 9M 2013 compared to 16% in both 3Q 2012 and 9M 2012.
Ireland subsidiary USD-denominated sales were 21% of total international sales
in 3Q 2013 compared to 16% in 3Q 2012, and 21% in 9M 2013 compared to 17% in
9M 2012.

In product categories, 3Q 2013 blood pressure monitoring device/ components
(BPM) sales were up 4%, neonatal device sales were down 1%, gynecology/
electrosurgery device sales were down 7% and obstetrics device sales were down
5%.For 9M 2013 compared to 9M 2012 consolidated global sales in product
categories, BPM sales were up 3%, neonatal device sales were down 8%,
gynecology/ electrosurgery device sales were down 5% and obstetrics device
sales were down 5%.

Gross Profit.UTMD's consolidated gross profit margin (GPM), gross profits
divided by sales, was 2.4 percentage points lower in 3Q 2013 than in 3Q
2012.This was due primarily to two factors: 1) an unfavorable product mix, as
BPM products, which sales were up, have significantly lower GPMs than the
other product categories, which sales were down, and 2) a significantly weaker
AUD compared to the USD.As Femcare-Australia purchases its products from
UTMD's other subsidiaries in their respective currencies, Femcare-Australia's
GPM was down 3.9 percentage points compared to 3Q 2012. UTMD's consolidated
GPM for 9M 2013 was 60.1% compared to 60.8% in 9M 2012.This reduced GPM is
consistent with management's expectation for 2013 described in the 2012 SEC
Form 10-K.

Operating Income. UTMD's 3Q 2013 operating profit margin (OPM) was 1.2
percentage points lower than in 3Q 2012 because of the lower 3Q 2013 GPM. The
year-to-date 9M 2013 OPM, however, improved slightly compared to 9M 2012
because of $650 lower operating expenses in 9M 2013 than in 9M 2012. About 89%
($577) of the 9M operating expense decline was in general and administrative
(G&A) expenses. Operating expenses in 3Q 2013 were $232 lower than in 3Q 2012.
About 94% ($217) of the 3Q decline was in G&A expenses.G&A expenses declined
primarily as a result of 1) further consolidation of overhead resources in the
UK and AUS, 2) lower litigation expenses, and 3) 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 consolidated operating expenses (in
contrast to cost of goods sold) from UTMD's UK and Australia subsidiaries.

Earnings before Tax (EBT).EBT benefited from lower interest expense as a
result of repaying the debt obtained to help acquire Femcare in March 2011.
Interest expense in 3Q and 9M 2013 was $104 and $339, respectively, compared
to $157 and $516 in the same periods of 2012.

Net Income. UTMD's net income decreased $150 in 3Q 2013, and increased $28 in
9M 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, 3Q 2013 and 9M 2013 net profit margins
(NPMs), net income divided by sales, remained excellent at 25.6% and 26.1% for
3Q and 9M 2013, respectively, compared to 25.9% and 24.9% for 3Q 2012 and 9M
2012, respectively. UTMD's consolidated tax provision, as a percentage of EBT,
was 28.1% and 27.8% for 3Q and 9M 2013, respectively, compared to 29.3% and
29.5% for 3Q 2012 and 9M 2012.The lower rates in 2013 were due to a corporate
income tax rate reduction of one percentage point in the UK, and an increase
in profits in Ireland, which has the lowest corporate income tax rate. 

Earnings per share (EPS).UTMD's 3Q 2013 EPS decreased 5.0 cents (7%) compared
to 3Q 2012 primarily as a result of lower operating income. Shares outstanding
used to calculate 3Q 2013 EPS increased to 3,781,389 from 3,725,538 in 3Q
2012.For 9M 2013, EPS decreased 2.9 cents (1%) compared to 9M 2012. Since 9M
2013 net income was slightly higher than in 9M 2012, the 9M 2013 EPS decrease
was due solely to an increase in diluted shares outstanding. Diluted shares
used to calculate 9M 2013 EPS increased to 3,770,886 from 3,705,992 in 9M
2012. The increases in both periods 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 stock 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 3Q 2013 was
$59.44 compared to $36.05 at the end of calendar year 2012, and $33.99 at the
end of 3Q 2012.

Excluding the noncash effects of depreciation, amortization of intangible
assets and stock option expense, 3Q 2013 and 9M 2013 consolidated earnings
before taxes plus interest expense were $4,479 and $13,723 respectively.

UTMD's September 30, 2013 balance sheet is substantially stronger than one
year earlier. Stockholders' Equity is up $8.4 million (17%) after payment of
another $3.6 million in cash dividends to shareholders.Cash balances are up
$4.6 million after reduction of loan principal by another $4.9 million.Debt
incurred in March 2011 to help finance the Femcare acquisition was $26,934. As
of September 30, 2013, the remaining debt balance was $9,972. In ten calendar
quarters, UTMD has repaid 63% of the acquisition debt. 9M 2013 capital
expenditures were $222, less than depreciation of fixed assets by $237.

Key balance sheet changes as of September 30, 2013 from December 31, 2012
follow:

                        [Million $$]
Cash & Investments:      +5.0
Receivables & Inventory: +0.9
Intangible Assets (net): (2.2)
Notes Payable:           (3.0)
Stockholders' Equity:    +6.1


Financial ratios as of September 30, 2013 follow:
1)Current Ratio (including the current portion of loans) = 2.7
2)Days in Receivables (based on 3Q sales activity) = 39
3) Average Inventory Turns (based on 3Q CGS) = 3.6
4) Year-to-Date ROE = 20% (prior to dividend payments)
= 13% (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 46,347 in 3Q
2013 compared to 36,483 in 3Q 2012, and 46,966 in 9M 2013 compared to 33,917
in 9M 2012.The actual number of outstanding shares at the end of 3Q 2013 was
3,737,700 which included additional shares from 3Q 2013 employee option
exercises of 9,470 shares.The total number of outstanding unexercised options
at September 30, 2013 was 98,100 shares at an average exercise price of
$27.36/ share, including shares awarded but not vested. This compares to
169,000 option shares outstanding at the end of 3Q 2012 at an average exercise
price of $25.84/ 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,
increased 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 3Q 2013 will be filed with the SEC by November 12.

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, Third Quarter (3 months ended September 30)
(in thousands except earnings per share):
                                            
                             3Q 2013  3Q 2012 Percent Change
Net Sales                     $10,032  $10,489 (4.4%)
Gross Profit                  5,949    6,477   (8.1%)
Operating Income              3,665    3,960   (7.4%)
Income Before Tax             3,577    3,849   (7.1%)
Net Income                    2,571    2,721   (5.5%)
Earnings Per Share            $0.68    $0.73   (6.9%)
Shares Outstanding (diluted)  3,781    3,726   
                                            
INCOME STATEMENT, Nine Months (9 months ended September 30)
(in thousands except earnings per share):
                                            
                             9M 2013  9M 2012 Percent Change
Net Sales                     $30,408  $31,719 (4.1%)
Gross Profit                  18,279   19,286  (5.2%)
Operating Income              11,269   11,627  (3.1%)
Income Before Tax             10,991   11,215  (2.0%)
Net Income                    7,938    7,910   +0.4%
Earnings Per Share            $2.11    $2.13   (1.4%)
Shares Outstanding (diluted)  3,771    3,706   

                                                              
BALANCE SHEET                                                  
(in thousands)             (unaudited)  (unaudited)  (audited)    (unaudited)
                          SEP30, 2013 JUN 30, 2013 DEC 31, 2012 SEP 30, 2012
Assets                                                         
Cash & Investments         $13,922      $11,437      $8,913       $9,369
Accounts & Other           4,963        5,673        4,341        5,037
Receivables, Net
Inventories                4,660        4,367        4,353        4,707
Other Current Assets       986          812          928          944
Total Current Assets       24,531       22,289       18,535       20,057
Property & Equipment, Net  8,279        8,155        8,428        8,449
Intangible Assets, Net     47,789       45,985       49,972       50,297
Total Assets               $80,599      $76,429      $76,935      $78,803
                                                              
Liabilities &                                                  
Shareholders' Equity
A/P & Accrued Liabilities  $5,240       $4,773       $3,821       $5,965
Current Portion of Notes   3,989        3,834        4,002        5,450
Payable
Total Current Liabilities  9,229        8,607        7,823        11,415
Notes Payable (excluding   5,983        6,709        9,003        9,415
current portion)
Other LT Liabilities       --           --           363          450
Deferred Tax Liability –   7,433        7,583        7,890        8,053
Intangible
Deferred Income Taxes      878          889          884          760
Shareholders' Equity       57,076       52,641       50,972       48,710
Total Liabilities &        $80,599      $76,429      $76,935      $78,803
Shareholders' Equity

CONTACT: Paul Richins
         (801) 566-1200
 
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