Salt Lake City, Utah, Jan. 28, 2021 (GLOBE NEWSWIRE) – via NewMediaWire – Utah Medical Products, Inc. (Nasdaq: UTMD) reports financial results for the fourth calendar quarter (4th quarter), confirming a recovery trend the "COVID-19 -Depression ”in the second quarter of 2020 caused by government measures to restrict medical procedures that are classified as“ not essential ”, such as tubal ligation and loop removal of the transformation zone. In this report, UTMD 2020 presents consecutive quarterly comparisons. In summary, Q4 2020 was UTMD's best quarterly revenue of the year, nearly 2% higher than pre-pandemic Q4 2019. Consolidated total worldwide revenue for 2020 was 10% lower than 2019, after having dropped in March 2 Down 26% in Quarter 2020 End-user direct sales, which are driving UTMD's overall profitability, were 14% lower in 2020 after declining 39% in the dismal second quarter of 2020.
Currencies in this version are denoted as $ or USD = US dollars. AUD = Australian dollars; £ or GBP = UK pound sterling; C $ or CAD = Canadian dollars; and € or EUR = Euro. Currency amounts in this report are in thousands, except for amounts per share and where indicated.
Summary of financial results
UTMD management believes that the presentation of quarterly comparative figures for 2020 provides meaningful additional information for both management and investors. Note that results for a given three-month period may vary from the same three-month period last year due to various factors: exchange rates for sales invoiced in foreign currency, inconsistent international distributor and OEM customer order patterns, a result of purchasing large quantities of equipment at the same time and the timing of the ups and downs in government restrictions during the pandemic. The following table shows the percentage changes in quarterly sales in 2020 by distribution channel compared to the same periods in 2019:
|Domestic in the USA (excluding OEM)||+ 14.5%||(29.1%)||(8.0%)||(2.7%)||(7.5%)|
|Subtotal, directly to the end user:||+ 4.2%||(39.1%)||(11.1%)||(8.8%)||(14.3%)|
All other OUS (sales to international distributors)
|US OEM sales||+ 0.7%||+ 9.5%||(8.9%)||(1.3%)||(0.8%)|
|Worldwide revenue||+ 1.6%||(25.8%)||(16.1%)||+ 1.5%||(10.1%)|
US domestic direct sales to end user equipment did not decline as much as OUS direct sales to end user equipment in the second quarter of 2020, up 29% versus 63% in the US and recovering faster. For the year, US domestic end-user asset sales were 8% lower than 30% lower. After a good recovery in Q3 2020, a viral infection resurgence in Q4 2020 slowed the recovery of OUS, but not in the US. The variable significant improvement in OUS in Q4 2020 in Australia was in part due to the fact that UTMD was being sold directly to medical facilities in New Zealand with immediate effect from the plant in Australia rather than by a third party.
The direct domestic sales of the UTMD subsidiary in Canada, Ireland, Great Britain, France, Australia and from the 4th quarter of 2020 in New Zealand were invoiced in foreign currency. Exchange rates for the income statement are transaction-weighted averages. The average rates of the applicable foreign currency to USD in the 4th quarter of 2020 and in 2020 compared to the same periods in 2019 follow:
|4Q 20||4Q 19||change||2020||2019||change|
|British pound||1,320||1.288||+ 2.5%||1,291||1.277||+ 1.1%|
|EUR||1,192||1.108||+ 7.7%||1,146||1,119||+ 2.4%|
The volatility of exchange rates for OUS sales in USD consolidation continues to affect relative financial results from period to period as UTMD has a significant share in foreign currency sales. The effect of the exchange rate in Q4 2020 increased sales by 1.1% compared to the same exchange rate as in Q4 2019 ("Constant Currency"). The impact of the exchange rate in the fourth quarter of 2020 accounted for approximately 70% of UTMD's revenue increase compared to the fourth quarter of 2019. Foreign exchange earnings in the fourth quarter of 2020 increased by $ 135 due to a weaker USD compared to EUR and AUD. For all of 2020, the impact of exchange rates was less significant, adding $ 99 to sales. The share of foreign currency sales in total sales was 23.0% of total sales in the 4th quarter of 2020 and 22.3% of total sales in 2020. UTMD's foreign currency invoiced sales for Q4 2019 and 2019 accounted for 27.2% of total consolidated USD sales in both periods.
A comparison of the fourth quarter and 2020 results with the same period 2019 results under US GAAP will be affected by some adjustments to the income tax provision that are not related to normal business operations: 1) Net income of 4th quarter of 2019 was due to the final adjustments to the tax estimates of the US state of Utah after the US "Tax Cuts and Jobs Act" (TCJA) of December 2017 and 2) in the second quarter of 2020 by USD 582 ( Earnings per share increase by $ 0.165) Net income decreased by $ 225 (Earnings per share decreased by $ 0.061) due to a long-term increase in the deferred tax liability on the balance of Femcare's intangible assets (the amortization of which is not UK tax deductible is) as a result of a change in the UK income tax rate. The UK deferred tax increase of $ 225 over the next six years, under US GAAP, must be booked in the quarter in which the tax change came into effect. The UK decided to stop lowering the corporate tax rate from 19% to 17% as of Q2 2020, as it had already done. UTMD management is of the opinion that the presentation of the results without the unfavorable adjustment of the deferred tax liability to the net result of the second quarter of 2020 and the favorable tax adjustments of the net result of the fourth quarter of 2019 provides meaningful additional information for the management and the investors who more clearly indicate the business activities of UTMD results in 2020 compared to 2019. The exclusion according to US-GAAP only affects earnings and earnings per share. All other income statement categories at and above the EBT line were not affected by the tax provisions.
Summary of financial results
The following table shows the consecutive quarterly percentage changes in results for each income statement category compared to the same periods in 2020 and 2019:
|Consolidated income statement||1Q||2Q||3Q||4Q||year|
|Worldwide revenue||+ 1.6%||(25.8%)||(16.1%)||+ 1.5%||(10.1%)|
|Gross profit||+ 0.9%||(34.0%)||(12.0%)||(7.0%)||(13.3%)|
|Profit before tax||(3.6%)||(56.7%)||(19.3%)||(9.5%)||(22.6%)|
|Net Income (US GAAP)||– –||(62.8%)||(20.8%)||(21.7%)||(26.7%)|
|Earnings per share (US GAAP)||+ 0.4%||(62.0%)||(19.0%)||(19.8%)||(25.4%)|
Without the increase in the deferred tax liability in the 2nd quarter of 2020 and the resulting "one-time" increase in the tax provision as well as the favorable adjustments to the tax provision in the 4th quarter of 2019 in connection with the TCJA, the quarterly percentage changes in net income and earnings per share follow ( EPS) from UTMD to US-GAAP:
|Net Income (not US GAAP)||– –||(56.4%)||(20.8%)||(9.7%)||(22.1%)|
|EPS (non-US GAAP)||+ 0.4%||(55.5%)||(19.0%)||(7.5%)||(20.7%)|
In other words, without taking into account the adjustments to income tax provisions in Q4 2019 and Q2 2020, all categories of the income statement in 2020 after the pandemic decrease in Q2 compared to the same periods in 2019 have changed sequentially improved. In the following summary description of the profit and loss account reference is made to the right two columns in the table above for a comparison of the results of the profit and loss account for the 4th quarter of 2020 and the year 2020 with the same periods in 2019. More details can be found You later in this report.
UTMD profit margins for Q4 2020 and 2020 compared to Q4 2019 and 2019 follow:
| 4Q 2020
(Oct – Dec)
| 4Q 2019
(Oct – Dec)
(Jan – Dec)
(Jan – Dec)
|Gross profit margin (gross profit / sales):||60.5%||66.0%||60.6%||62.8%|
|Operating profit margin (operating profit / sales):||35.6%||39.5%||32.5%||37.6%|
|Net profit margin (earnings after tax / sales) US-GAAP:||28.4%||36.8%||25.6%||31.4%|
|Net Profit Margin (not US GAAP):||28.4%||31.9%||26.1%||30.2%|
Gross profit in Q4 2020 declined despite an increase in revenue primarily due to the comparison with an unusually high gross profit margin (GPM) in Q4 2019. The drop would only have been 2% had the 4th quarter 2019 GPM been the same as it was in 2019 as a whole. A 2% decrease was caused by lower direct labor productivity in both Ireland and the US. UTMD insures its own health insurance plan in the United States, which had an unusually high quarter for employee health care spending. Gross profit in 2020 was 13% lower than in 2019, due to 10% lower sales and a two percentage point lower GPM. In turn, the diluted GPM was due to adverse health care costs in the US, lower direct labor productivity in the Irish manufacturing operations, and slightly lower absorption of the critical mass of manufacturing overheads set by UTMD. Since the lower sales were temporary, the company remains very profitable even with the lower sales during the recent pandemic, and the company has a significant cash reserve relative to its operational needs. Management has not cut major overheads that would affect future capabilities and maintain short-term profit margins.
Operating profit declined more than gross profit in both Q4 2020 and 2020. In Q4 2020, lower operating income was due to lower GPM, as Q4 2020 revenue was higher and Q4 2020 operating expenses were $ 150 lower than Q4 2019. For 2020, the Decrease partly due to a two percentage point lower GPM, but also due to UTMD's non-cash depreciation charge on intangible assets (IIA) related to Femcare and the Filshie clip system, which was included in operating expenses 15.3% of sales in 2020 compared to 13.0% in 2019. The significantly higher IIA expense as a percentage of sales was not only due to the lower sales in 2020 (less absorption of a fixed expense), but also to the difference of GBP exchange rates and the later start of CSI IIA depreciation in 2019.
Earnings before taxes (EBT) fell more than operating income just because UTMD did not receive interest on its cash on hand in 2020 like it did in 2019, even though average cash on hand in 2020 was about 20% higher. The decline in net earnings and earnings per share US GAAP were significantly affected by adjustments to tax provisions in the 4th quarter of 2019 and the 2nd quarter of 2020 due to changes in tax law in the USA and Great Britain. The non-US GAAP net income, which excludes adjustments to tax provisions due to changes in tax law, decreased roughly as much as the EBT. Finally, both US GAAP EPS and non-US GAAP EPS declined less than net income due to the benefit of share buybacks in 2020.
UTMD's exchange rates for accounting purposes are those in effect at the end of each reporting period. The exchange rates from the applicable foreign currency to the USD for assets and liabilities at the end of December 2020 and at the end of December 2019 are as follows:
December 31, 2020 December 31, 2019 Change
GBP 1.366 1.327 + 3.0%
EUR 1.223 1.123 + 8.9%
AUD 0.771 0.703 + 9.7%
CAD 0.784 0.771 + 1.6%
UTMD's balance sheet as of December 31, 2020 remained strong with no debt. Year-end cash rose 21% to $ 51,590 after using cash to pay $ 4,116 in cash dividends to shareholders and an additional $ 6,976 to buy back 87,000 shares of UTMD in the open market. Inventories at the end of 2020 were 10% lower and accounts receivable at the end of the year 13% lower than at the end of 2019, despite a 2% increase in sales in Q4 2020 compared to Q4 2019. Due to the increase in value The foreign currency depreciation of USD 326 and the USD net book value of fixed assets in the UK, Ireland, Australia and Canada increased by USD 449 as of December 31, 2020 compared to December 31, 2019. Over the one year period, UTMD's intangible assets were down $ 6,016, roughly 14%, even though the GBP is up 3%. Total debt at year-end increased $ 243 as customer deposits were $ 259 higher at the end of 2020. Payments are made because, in order to reduce the risk of collection, UTMD obliges many of its international sales customers to prepay for products that they have not ordered or shipped. Although net income in 2020 was not as high as it was in 2019, after reducing equity by a total of $ 11,092 from the payment of shareholder dividends and share buybacks from December 31, 2019, equity increased by $ 1,730 to $ 102,822 as of December 31, 2020, a historic high for UTMD.
Total UTMD consolidated revenue for Q4 2020 was $ 179 (1.5%) higher than Q4 2019. Revenue in constant currencies was $ 44 (0.4%) higher. Total UTMD consolidated revenue in 2020 was $ 4,726, (10.1%) lower than in 2019. Revenue in constant currencies in 2020 was $ 4,825 (10.3%) lower than in 2019.
In the fourth quarter of 2020, US domestic sales were up 2% and OUS sales were up 7% compared to fourth quarter of 2019. For 2020, US domestic sales were 6% lower and OUS sales were 16% lower compared to 2019.
Domestic sales were $ 6,960 for the 4th quarter of 2020 compared to $ 7,127 for the 4th quarter of 2019. Domestic sales for 2020 were $ 25,866 compared to $ 27,493 in 2019. Domestic sales components include 1) "Direct Sales" of the medical Equipment from UTMD to consumer establishments (and medical / surgical inventory distributors for hospitals), excluding sales of Filshie clip systems ("Filshie Devices"), 2) "OEM sales" of components and other products sold by UTMD for other medical device and non-medical device companies were manufactured; and 3). Filshie device sales direct to U.S. medical facilities as of February 2019. Q4 2020 domestic direct sales excluding Filshie devices, which account for 49% of total 4Q domestic sales, were $ 15 (0%) lower than 4Q. 2020 Q4 2020 domestic direct sales excluding Filshie devices, which represent 50% of total domestic sales, were $ 1,092 (8%) lower than 2019. OEM sales in Q4 2020, which is 26% of total domestic sales was $ 24 (1%) below Q4 2019. OEM sales for 2020, r accounting for 25% of total domestic sales, sales of Filshie equipment were direct to domestic end-user establishments in the U.S. 4th Quarter 2020 $ 129, (7%) lower than 4th Quarter 2019. Filshie Device Sales Direct to U.S. Domestic End User Facilities in 2020 were $ 484 (7%) lower than Filshie device sales in the Year 2019. The negative impact The response of the COVID-19 pandemic to Filshie device sales began in March 2020. As Filshie device sales are significant, management believes the table below is a portion of UTMD's domestic business and one from the COVID-19 pandemic on most affected UTMD device to understand the overall impact of the pandemic and recovery trend for 2020:
Filshie Devices Sequential Quarterly Direct Sales in the United States (USD)
Total OUS revenue for Q4 2020 was $ 5,050 compared to $ 4,704 in Q4 2019. Total OUS revenue for 2020 was $ 16,312 compared to $ 19,411 in 2019.
OUS sales billed in GBP, EUR, AUD, and CAD currencies increased $ 135 in the fourth quarter of 2020 and $ 99 in 2020 due to changes in exchange rates. Foreign currency OUS sales in Q4 2020 were $ 2,759, representing 55% of all OUS sales and 23% of total consolidated sales in Q4 2020. By comparison, foreign currency OUS sales in Q4 2019 were $ 3,221, representing 68% of all OUS sales and 27% of total consolidated sales in Q4 2019.
Foreign currency OUS sales for 2020 were $ 9,412, which is 58% of all OUS sales and 22% of total 2020 consolidated sales. In comparison, foreign currency OUS sales for 2019 were $ 12,755, which is 66% of all OUS sales and 27% of total 2019 consolidated sales. Since Filshie device sales are also an integral part of UTMD's OUS business and are an implanted device hardest hit by the COVID-19 pandemic, management believes the table below could help To understand the overall impact of the pandemic and recovery trend in 2020:
Filshie device sequential quarterly sales in USD OUS:
|Total OUS 2020||2.117||1.003||1.559||1.936||6.615|
OUS Filshie device sales were apparently more affected than domestically in the US as a result of the pandemic.
UTMD divides sales into the following general product categories: Gynecology / Electrosurgery, Labor & Delivery, Neonates and Others, including blood pressure monitors and accessories and related OEM products.
In the fourth quarter of 2020, global sales of gynecology and electrosurgery equipment were 10% lower compared to the fourth quarter of 2019, global sales of work and delivery equipment were 2% higher, global sales of newborn devices were 6% lower and global sales of blood pressure monitors and related OEM products increased 38%. Devices in the gynecology / electrosurgery category were mostly classified as "not essential" during the pandemic. In the Blood Pressure Monitoring category, UTMD's largest OUS retailer requested early delivery valued at $ 478 as part of a new flat-rate order for 2021.
For 2020, compared to 2019, global sales of gynecology / electrosurgery equipment were 19%, global labor and delivery equipment sales were 10%, global sales of newborn devices were 3%, and global blood pressure monitors were sales and related OEM products 7% lower% higher.
Gross profit is obtained by subtracting the cost of manufacturing and shipping products to customers from sales. Gross profit was $ 549, (7.0%) lower in Q4 2020 than Q4 2019, after being 34% lower in Q2 2020 and 12% lower in Q3 2020 compared to the same period of 2019. The GPM for Q4 2020 was 60.5% compared to 66.0% in Q4 2019, an unusually high GPM quarter for UTMD. Gross profit for 2020 was $ 3,918 (13.3%) lower than 2019, when annual sales were 10.1% lower. Lower direct labor productivity and absorption of fixed overheads, especially in Q2 and Q3, and a 22% increase in self-insured medical expenses in the US were responsible for a larger decline in gross profit than sales. Although UTMD did not accept the U.S. government subsidies provided for in the CARES Act, the company paid its production workers who experienced symptoms of the virus or were exposed to others with symptoms not to work and stay at home during a quarantine period. Additionally, in the second quarter of 2020, UTMD paid a special bonus to U.S. employees who were essential to continuing to manufacture the critical care medical devices they need for work at a time when government officials were advising people to stay home the promise that she would get paid for not working. The average 2020 cost of the UTMD self-funded U.S. health plan increased from $ 10,800 in 2019 to $ 13,200 (not thousands) per employee participating in the plan, and the percentage paid by employees rose from 18% in 2019 15% back in 2020. UTMD expects the cost of the US health plan, as well as direct labor productivity of the skilled workforce in the US and Ireland in general, to return to 2019 levels in 2021.
Despite the 2020 GPM decline, an average GPM of more than 60% for 2020, with international sales and OEM sales accounting for 39% of total consolidated sales at a much lower GPM, met management's long-term profitability target.
The operating result results from the deduction of operating costs from gross profit. Operating expenses, consisting of general and administrative costs (G&A), sales and marketing costs (S&M) and product development costs (R&D), amounted to 24.9% of sales in the 4th quarter of 2020 compared to 26.5% of Sales in the 4th quarter of 2019. Operating expenses were 28.1%% of sales for 2020 compared to 25.2% of sales in 2019.
Q4 2020 revenue was higher than Q4 2019 and operating expenses were lower, resulting in an improvement in Q4 spend as a percentage of Q4 revenue. On the flip side, 2020 sales were significantly lower compared to 2019 and operating costs were about the same, resulting in less favorable costs relative to sales and diluting UTMD's operating profit margin for the full year.
Although the percentage of operating expenses has increased in 2020 due to the short-term pandemic of sales in 2020, management has continued to strictly manage operating expenses without sacrificing the resources necessary for longer-term growth.
|4Q 2020||4Q 2019||2020||2019|
|S&M costs||$ 359||$ 434||$ 1,554||$ 1,738|
|Business expenses:||$ 2,985||$ 3,135||$ 11,840||$ 11,834|
Lower S&M costs were due to the lack of exhibition costs during the pandemic and the decline in Femcare's UK direct sales force from Q3 2020. Consolidated S&M total expenses were 3.0% of sales in Q4 2020 and 3.7% of sales in Q4 2019 S&M expenses were 3 for both 2020 and 2019 , 7% of sales.
The R&D expenses corresponded to the same periods of the previous year and only varied due to specific project expenses. R&D expenditure in the 4th quarter of 2020 was 0.9% of sales compared to 1.1% of sales in the 4th quarter of 2019. R&D expenditure for 2020 was 1.2% of sales compared to 1 , 0% of sales in 2019.
Consolidated G&A expenses were 20.9% of sales in Q4 2020 compared to 21.8% of sales in Q4 2019. Consolidated G&A expenses were 23.2% of sales in 2020 compared to 20.5% of sales in 2019. Again lower expenses and higher sales in 2019. The 4th quarter, but lower sales and higher costs for the previous nine months of the year compared to the same periods in 2019.
G&A expenses included non-cash expenses from the depreciation of IIA, which resulted from 1) the acquisition of Femcare Group Ltd (UK) in March 2011 and 2) the depreciation of IIA from the purchase of Filshie's exclusive equipment distribution rights by CSI USA with effect from February 2019.
- The initial IIA amount to purchase Femcare UK 2011 was £ 23,998. After 9.75 years of payback, the IIA balance is £ 8,686. The depreciation charge remained constant at £ 399 per calendar quarter in 2020 and 2019. However, the USD depreciation charge in each period varied depending on the USD / GBP exchange rate. In the fourth quarter of 2020, the depreciation charge for the Femcare IIA acquisition was $ 526 compared to $ 513 in the fourth quarter of 2019 with the same GBP depreciation charge in both periods. For 2020, the amortization charge for the Femcare IIA acquisition was $ 2,049 compared to $ 2,037 in 2019.
- The initial IIA amount to acquire the remaining US Filshie exclusive device distribution rights from CSI in February 2019 was $ 21,000. The linear amortization for this IIA is $ 368.4 / month over the remaining 4.75 years of the previous distribution agreement. After 23 months of amortization, the CSI IIA balance as of December 31, 2020 is $ 12,526. The difference in the CSI IIA amortization costs in 2020/2019 is due to the start of amortization in February 2019, i.e. H. 12 months with a monthly expense of $ 368.4 in 2020 versus 11 months in 2019.
Since the two Filshie-related IIA depreciation costs make up a significant portion of UTMD's G&A costs, UTMD provides the following table which separates IIA depreciation costs from all other G&A costs:
|4Q 2020||4Q 2019||2020||2019|
|IIA depreciation expense||$ 1,631||$ 1,618||$ 6,470||6,089 USD|
|All other G&A costs||884||958||3.330||3.524|
|Total costs for G&A:||$ 2,515||$ 2,576||$ 9,800||9,613 USD|
|Percent of sales:||4Q 2020||4Q 2019||2020||2019|
|IIA depreciation expense||13.6%||13.7%||15.3%||13.0%|
|All other G&A costs||7.3%||8.1%||7.9%||7.5%|
|Total costs for G&A:||20.9%||21.8%||23.2%||20.5%|
When the two Filshie-related IIA balances are fully written off, shareholders can of course look forward to a significant increase in EBT. Femcare's IIA amortization charge is an additional 5.25 years and is approximately $ 525 per quarter using the same USD / GBP exchange rate as Q4 2020.
The depreciation charge for the CSI IIA is an additional 3.1 years and is $ 1,105 per quarter. Shareholders will appreciate that after another 2.8 years, annualized reported earnings per share will increase by $ 0.90, although cash flow will not be impacted, based on diluted stocks for Q4 2020 and current ones Income tax rates in the US and Utah. Similarly, after another 5.25 years, annualized earnings per share would be $ 1.33 higher based on the USD / GBP exchange rate for Q4 2020, diluted shares for Q4 2020, and income tax rates unchanged .
In summary, operating income for Q4 2020 was $ 4,280, or 35.6% of sales, compared to $ 4,679, or 39.5% of sales, for Q4, 2019. Operating income for 2020 was $ 13,708, or 32.5% of sales) versus $ 17,633 (37.6% of sales) in 2019. Lower gross profits, further reduced by higher IIA depreciation charges absorbed by lower sales, resulted in a 22% lower operating income for 2020. In any event, UTMD's 2020 operating profit margins were excellent when compared to industry peers.
Earnings before taxes (EBT)
The EBT results from the deduction of the non-operating net expenses or the addition of the non-operating net income from or, if applicable, to the operating result. Consolidated EBT for Q4 2020 was $ 4,286 (35.7% of sales) compared to $ 4,735 (40.0% of sales) in Q4 2019. Consolidated EBT for 2020 was $ 13,840 (32, 8% des Umsatzes) gegenüber 17.884 USD (38,1% des Umsatzes) im Jahr 2019 .
Für UTMD umfassen die nicht betrieblichen Aufwendungen Bankgebühren, Verluste aus der Neubewertung des Werts von EUR-Bankguthaben in Großbritannien und GBP-Barguthaben in Irland in USD sowie Verluste aus der Veräußerung von Anlagevermögen. Das nicht betriebliche Ergebnis umfasst Erträge aus der Miete von nicht genutzten Immobilien; Kapitalerträge; Lizenzgebühren aus der Lizenzierung der UTMD-Technologie an Dritte, Gewinne aus der Neubewertung des Werts von EUR- oder GBP-Bankguthaben, sofern zutreffend; und Gewinne aus der Veräußerung von Anlagevermögen. Das nicht operative Ergebnis ergibt sich aus dem Abzug der nicht operativen Aufwendungen vom nicht operativen Bruttoergebnis. Das nicht operative Ergebnis von UTMD belief sich im 4. Quartal 2020 auf 6 USD gegenüber 56 USD im 4. Quartal 2019. Das nicht operative Ergebnis von UTMD für das Jahr 2020 betrug 132 USD gegenüber 252 USD im Jahr 2019. Das niedrigere nicht operative Ergebnis im Jahr 2020 war im Wesentlichen auf niedrigere Zinssätze zurückzuführen für UTMD-Barguthaben.
Als Randnotiz für die Klarheit der Ergebnisse der Gewinn- und Verlustrechnung waren das EBT 2020 und 2019 von UTMD sowie alle anderen in der Gewinn- und Verlustrechnung über der EBT-Linie liegenden Maßnahmen in der Gewinn- und Verlustrechnung von Anpassungen der Steuerrückstellungen in den Jahren 2020 und 2019, die sich aus einer Steuer von 2020 ergaben, nicht betroffen Gesetzesänderung in Großbritannien und endgültige Anpassungen für die Steuergesetzänderung in den USA im Jahr 2017. Aus Sicht des Managements sind daher die Vergleiche von Umsatz, Bruttogewinn, Betriebsergebnis und EBT nach US-GAAP für das Jahr 2020 bis 2019 klare Indikatoren für UTMDs finanzielle Leistung, während die Nettoeinkommens- und EPS-Vergleiche nach US-GAAP dies nicht sind.
Das konsolidierte EBT von UTMD war eine Kombination der folgenden Partitionen: Das EBT von Utah Medical Products, Inc. in den USA belief sich im Jahr 2020 auf 9.031 USD gegenüber 11.549 USD im Jahr 2019. Das EBT von Utah Medical Products, Ltd (Irland) im Jahr 2020 betrug 3.728 EUR Das EBT 2020 von Femcare Ltd. in Großbritannien betrug GBP (593) gegenüber 1.566 GBP im Jahr 2019. Das EBT 2020 von Femcare Australia Pty Ltd betrug 857 AUD im Vergleich zu 952 AUD im Jahr 2019. Das EBT 2020 von Utah Medical Products Canada, Inc. (dba Femcare Canada) betrug 798 CAD gegenüber 1.280 CAD im Jahr 2019. Das separate EBT der UTMD-Tochtergesellschaften ist auch eine Funktion von konzerninternen Lieferungen, die bei der Umsatzkonsolidierung eliminiert werden.
Das EBITDA ist eine nicht US-amerikanische GAAP-Kennzahl, die nach Ansicht des UTMD-Managements für Anleger von Interesse ist, da sie sowohl dem Management als auch den Anlegern aussagekräftige Zusatzinformationen liefert, die die Rentabilitätsleistung darstellen, ohne die Auswirkungen von Finanzierungen, Bilanzierungsentscheidungen in Bezug auf nicht zahlungswirksame Aufwendungen, Investitionen oder Investitionen zu berücksichtigen Steuerumgebungen. Obwohl die US-amerikanische Börsenaufsichtsbehörde (Securities and Exchange Commission) mitteilt, dass das EBITDA eine Nicht-GAAP-Kennzahl ist, ist das Nicht-US-GAAP-EBITDA von UTMD die Summe der folgenden Elemente in der folgenden Tabelle, von denen jedes eine US-GAAP-Zahl ist:
|4Q 2020||4Q 2019||2020||2019|
|EBT||4.286 US-Dollar||4.735 US-Dollar||13.840 USD||17.884 USD|
|Amortisationskosten von Femcare IIA||526||513||2,049||2,037|
|CSI IIA Amortisationskosten||1,105||1,105||4,421||4,053|
|Sonstige nicht zahlungswirksame Abschreibungskosten||9||13||45||54|
|Aufwendungen für Aktienoptionskompensation||39||28||160||113|
|Neu gemessene Fremdwährungssalden||(4)||32||(45)||76|
|UTMD-EBITDA nach US-GAAP:||6.121 USD||6.600 US-Dollar||21.125 USD||24.917 US-Dollar|
|Zeitraum zum gleichen Zeitraum ändern:||(7,3%)||(15,2%)|
Zusammenfassend lässt sich sagen, dass das EBITDA von UTMD im 4. Quartal 2020 (nicht US-GAAP) um 7,3% gegenüber einem Rückgang des EBT um 9,5% und das EBITDA (nicht US-GAAP) für das Jahr 2020 um 15,2% gegenüber einem Rückgang des EBT um 22,6% zurückging. Das Management ist der Ansicht, dass der Rückgang des EBITDA um 15% nach US-GAAP eher auf die negativen Auswirkungen der COVID-19-Pandemie auf das Betriebsergebnis 2020 von UTMD hinweist als auf den Rückgang des EBT um 23%. Insgesamt hat das EBITDA von 50,1% (nicht US-GAAP) als Prozentsatz des Umsatzes im Jahr 2020 das langfristige operative Ziel des Managements erreicht und stellt eine hervorragende operative Leistung im Jahr 2020 dar, angesichts geringerer Umsätze aufgrund von Pandemieeinschränkungen bei medizinischen Verfahren weltweit.
Der Nettogewinn im 4. Quartal 2020 betrug 3.412 USD (28,4% des Umsatzes) gegenüber 4.359 USD (36,8% des Umsatzes) pro US-GAAP im 4. Quartal 2019. Der Nettogewinn nach US-GAAP im 4. Quartal 2019 wurde durch eine Reduzierung der Ertragsteuerrückstellung von UTMD um 582 USD unterstützt. Die Aktionäre können sich daran erinnern, dass die günstige Anpassung für das 4. Quartal 2019 aus einer aktualisierten Schätzung des Utah-Teils der Rückführungssteuer resultierte, die sich aus dem vom Kongress im Dezember 2017 erlassenen TCJA, der Anwendung der Utah-Regeln für die Einkommensverteilung und der weiteren Klärung des neuen Auslands ergab -Derived Intangible Income (FDII) -Regime im Zusammenhang mit dem GILTI-Regime als Teil des TCJA.
Der US-GAAP-Nettogewinn für das Jahr 2020 betrug 10.798 USD (25,6% des Umsatzes) gegenüber dem US-GAAP-Nettogewinn von 14.727 USD (31,4% des Umsatzes) im Jahr 2019. Der Nettogewinn im Jahr 2020 enthielt eine ungünstige Anpassung der Steuerrückstellung für das britische Einkommen im zweiten Quartal 2020 Steuererhöhung auf künftige nicht abzugsfähige IIA-Abschreibungskosten in den folgenden sechs Jahren. Die britische Steueranpassung musste nach US-GAAP auf einmal in der Gewinn- und Verlustrechnung erfasst werden.
Um es einfach auszudrücken: Es gab eine Reduzierung der geschätzten Steuern für 2019, die das US-GAAP-Nettoeinkommen und die EPS-Ergebnisse für 2019 verbessert haben, und eine Erhöhung der geschätzten Steuern für 2020, die die US-GAAP-Ergebnisse für 2020 verschlechtert haben. UTMD management believes that the presentation of Net Income and EPS results excluding the REPAT/ GILTI/ FDII tax liability estimate adjustments in 2019 and the UK change in the long term deferred tax liability provides meaningful supplemental information to both management and investors that is more clearly indicative of UTMD’s bottom line results when comparing 4Q 2020 and year 2020 to the same periods of time in 2019.
|4Q 2020||4Q 2019||Change||2020||2019||Change|
|Net Income (US GAAP)||$3,412||$4,359||(21.7%)||$10,798||$14,727||(26.7%)|
|Consolidated Tax Rate||20.4%||7.9%||22.0%||17.7%|
|Net Income (Non-GAAP, excluding tax provision adjustments)||$3,412||$3,777||(9.7%)||$11,023||$14,145||(22.1%)|
|Consolidated Non-GAAP Tax Rate||20.4%||20.2%||20.4%||20.9%|
Earnings per share (EPS)
Diluted EPS is Net Income divided by a time-weighted calculation of outstanding shares plus dilution from unexercised employee and director options. Similar to Net Income, UTMD management believes that the non-GAAP EPS presented below are more clearly indicative of comparative results in 2020.
|4Q 2020||4Q 2019||Change||2020||2019||Change|
|EPS (US GAAP)||$0.934||$1.165||(19.8%)||$2.941||$3.939||(25.4%)|
|EPS (Non-GAAP, excluding tax provision adjustments)||$0.934||$1.010||(7.5%)||$3.002||$3.784||(20.7%)|
Diluted shares were 3,652,084 in 4Q 2020 compared to 3,740,458 in 4Q 2019, and 3,671,993 for the year 2020 compared to 3,738,596 in 2019. The lower diluted shares in 2020 were the combined result of 80,000 shares repurchased in 1Q 2020, 7,000 shares repurchased in 3Q 2020, 8,278 employee option exercises during 2020 and an employee option award of 26,300 shares in March 2020.
Outstanding shares at the end of 2020 were 3,643,035 compared to 3,721,757 at the end of calendar year 2019. The difference was due to employee option exercises of 8,278 during 2020 offset by 87,000 shares repurchased in the open market. The number of shares used for calculating diluted EPS was higher than ending shares because of a time-weighted calculation of average outstanding shares plus dilution from unexercised employee and director options. The total number of outstanding unexercised employee and outside director options at December 31, 2020 was 69,036 at an average exercise price of $67.23, including shares awarded but not yet vested. This compares to 51,690 unexercised option shares at the end of 2019 at an average exercise price of $58.50/ share, including shares awarded but not yet vested.
The number of shares added as a dilution factor in 4Q 2020 was 11,091 compared to 19,649 in 4Q 2019. The number of shares added as a dilution factor for the year 2020 was 14,018 compared to 17,728 in 2019. In March 2020, 26,300 option shares were awarded to 48 employees at an exercise price of $77.05 per share. No options were awarded in 2019. UTMD paid $1,018 ($0.280/share) in dividends to stockholders in 4Q 2020 compared to $1,023 ($0.275/ share) paid in 4Q 2019. Dividends paid to stockholders during 4Q 2020 were 30% of 4Q 2020 Net Income. UTMD paid $4,116 ($0.280/share) in dividends to stockholders in the year 2020 compared to $4,096 ($0.275/ share) paid in 2019. Dividends paid to stockholders during 2020 were 38% of 2020 US GAAP Net Income, and 37% of 2020 non-US GAAP Net Income.
In March 2020, UTMD repurchased 80,000 of its shares in the open market at $80.32/ share. In September 2020, UTMD repurchased 7,000 of its shares in the open market at $78.67/ share. The total 87,000 shares repurchased in 2020 were at an average price of $80.19/ share. In May 2019, UTMD repurchased 5,000 shares at $79.52/ share. No other shares were repurchased in 2019. 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 share price at the end of 2020 closed at $84.30, down 22% from the $107.90 closing price at the end of 2019. This compares unfavorably to the major stock market indices in 2020, all of which appreciated: The DJIA was up 7%, S&P500 up 16% and NASDAQ (where UTMD is traded) up 44%. The UTMD stock price has declined during a calendar year only 5 other times in the last 22 years. The average compounded appreciation in UTMD stock value for the last 22 years, including the 2020 decline, was 12.3% per year, outpacing all of the major indices. Adding dividends, UTMD stockholder value increased at an annually compounded rate of 13.2% over the last 22 years.
At December 31, 2020 compared to the end of 2019, UTMD cash and investments increased $8.8 million to $51.6 million after using $4.1 million cash for dividends to stockholders and $7.0 million cash to repurchase 87,000 UTMD shares. At December 31, 2020, working capital was $58.5 million compared to $51.4 million at the end of 2019. Net Intangible Assets were 34.1% of total consolidated assets on December 31, 2020 compared to 40.2% on December 31, 2019. Even with lower demand as a result of the COVID-19 pandemic, UTMD was able to reduce inventories $0.7 million at December 31, 2020 from December 31, 2019. Consolidated Accounts Receivable (net of allowances) declined $0.6 million at December 31, 2020 compared to December 31, 2019. UTMD was able to reduce the aging of trade receivables at the end of 2020 to 31 days, compared to aging of 36 days at the end of 2019, despite increased financial stress of hospitals and international distributors during the pandemic.
Stockholders’ Equity at December 31, 2020 increased $1.7 million from the end of 2019, despite being reduced by $11.1 million from combining $4.1 million in cash dividends and $7.0 million in stock repurchases.
Financial ratios as of December 31, 2020 which may be of interest to stockholders follow:
1) Current Ratio = 16.4
2) Days in Trade Receivables (based on 4Q 2020 sales activity) = 31
3) Average Inventory Turns (based on 4Q 2020 CGS and average inventories) = 3.0
4) 2020 YTD ROE (before dividends) = 11%
Investors are cautioned that this press release contains forward-looking statements and that actual events may differ from those projected. Risk factors that could cause results to differ materially from those projected include global economic conditions, market acceptance of products, regulatory approvals of products, regulatory intervention in current operations, government intervention in healthcare in general, tax reforms, the Company’s ability to efficiently manufacture, market and sell products, cybersecurity and foreign currency exchange rates, among other factors that have been and will be outlined in UTMD’s public disclosure filings with the SEC.
Utah Medical Products, Inc., with particular interest in health care for women and their babies, develops, manufactures and markets a broad range of disposable and reusable specialty medical devices recognized by clinicians in over one hundred countries around the world as the standard for obtaining optimal long term outcomes for their patients. For more information about Utah Medical Products, Inc., visit UTMD’s website at www.utahmed.com.
Utah Medical Products, Inc.
INCOME STATEMENT, Fourth Quarter (3 months ended December 31)
(in thousands except earnings per share):
|4Q 2020||4Q 2019||Percent Change|
|Net Sales||$ 12,010||$ 11,831||+ 1.5%|
|Income Before Tax||4,286||4,735||(9.5%)|
|Net Income (US GAAP)||3,412||4,359||(21.7%)|
|Net Income (non-US GAAP)||3,412||3,777||(9.7%)|
|Dilutes EPS (US GAAP)||$ .934||$1.165||(19.8%)|
|Diluted EPS (non-US GAAP)||$ .934||$1.010||(7.5%)|
|Shares Outstanding (diluted)||3,652||3,740|
INCOME STATEMENT, Year (12 months ended December 31)
(in thousands except earnings per share):
|Net Sales||$ 42,178||$ 46,904||(10.1%)|
|Income Before Tax||13,840||17,884||(22.6%)|
|Net Income (US GAAP)||10,798||14,727||(26.7%)|
|Net Income (non-US GAAP)||11,023||14,145||(22.1%)|
|Diluted EPS (US GAAP)||$ 2.941||$ 3.939||(25.4%)|
|Diluted EPS (non-US GAAP)||$ 3.002||$ 3.784||(20.7%)|
|Shares Outstanding (diluted)||3,672||3,739|
|(in thousands)|| (audited)
DEC 31, 2020
SEP 30, 2020
DEC 31, 2019
|Cash & Investments||$51,590||$46,294||$42,787|
|Accounts & Other Receivables, Net||4,104||4,277||4,742|
|Other Current Assets||346||385||444|
|Total Current Assets||62,262||57,260||54,886|
|Property & Equipment, Net||11,326||11,036||10,728|
|Intangible Assets, Net||38,157||38,776||44,173|
|Liabilities & Stockholders’ Equity|
|REPAT Tax Payable||79||79||101|
|Other Accrued Liabilities||2,924||2,897||2,249|
|Total Current Liabilities||$3,791||$3,627||$3,448|
|Deferred Tax Liability – Intangible Assets||2,151||2,132||2,239|
| Long Term Lease Liability
Long Term REPAT Tax Payable
|Deferred Income Taxes||651||557||521|
|Total Liabilities & Stockholders’ Equity||$111,745||$107,072||$109,787|
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