United-Guardian (UG) 10-Q 9 Nov 16 2016 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document Information [Line Items]
Entity Registrant Name	UNITED GUARDIAN INC
Entity Central Index Key	101,295
Trading Symbol	ug
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		4,594,319
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Amendment Flag	false

Statements of Income (Unaudited

Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net sales	$ 3,457,633	$ 3,620,365	$ 7,859,374	$ 12,116,849
Costs and expenses:
Cost of sales	1,594,198	1,330,842	3,499,589	4,413,986
Operating expenses	460,401	411,619	1,393,286	1,316,537
Research and development	158,593	184,100	494,054	506,949
Total costs and expenses	2,213,192	1,926,561	5,386,929	6,237,472
Income from operations	1,244,441	1,693,804	2,472,445	5,879,377
Investment income	64,644	74,133	190,862	200,481
Income before income taxes	1,309,085	1,767,937	2,663,307	6,079,858
Provision for income taxes	408,950	550,400	832,700	1,891,300
Net Income	$ 900,135	$ 1,217,537	$ 1,830,607	$ 4,188,558
Earnings per common share (Basic and Diluted) (in dollars per share)	$ 0.20	$ 0.26	$ 0.40	$ 0.91
Weighted average shares – basic and diluted (in shares)	4,594,319	4,596,439	4,594,319	4,596,439

Statements of Comprehensive Inc

Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income	$ 900,135	$ 1,217,537	$ 1,830,607	$ 4,188,558
Other comprehensive income:
Unrealized gain (loss) on marketable securities	88,765	(171,267)	363,250	(214,755)
Income tax (expense) benefit related to other comprehensive income (loss)	(30,180)	58,231	(123,505)	73,017
Total other comprehensive income (loss), net of tax	58,585	(113,036)	239,745	(141,738)
Comprehensive income	$ 958,720	$ 1,104,501	$ 2,070,352	$ 4,046,820

Balance Sheets (Current Period

Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,027,009	$ 1,080,489
Marketable securities	11,073,802	10,719,470
Accounts receivable, net of allowance for doubtful accounts of $8,654 at September 30, 2016 and December 31, 2015	1,827,347	934,754
Inventories (net)	1,271,490	1,293,642
Prepaid expenses and other current assets	148,321	160,533
Prepaid income taxes		95,767
Deferred income taxes	233,305	233,305
Total current assets	15,581,274	14,517,960
Property, plant and equipment:
Land	69,000	69,000
Factory equipment and fixtures	4,299,883	4,175,940
Building and improvements	2,776,602	2,776,602
Total property, plant and equipment	7,145,485	7,021,542
Less: Accumulated depreciation	6,048,374	5,925,429
Total property, plant and equipment, net	1,097,111	1,096,113
Other assets (net)	63,000	74,118
TOTAL ASSETS	16,741,385	15,688,191
Current liabilities:
Accounts payable	110,468	96,815
Accrued expenses	898,546	785,623
Dividend payable	110,070	105,929
Income taxes payable	336,632
Total current liabilities	1,455,716	988,367
Deferred income taxes	241,515	118,010
Commitments and contingencies
Stockholders’ equity:
Common stock $.10 par value, authorized, 10,000,000 shares; 4,594,319 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively.	459,432	459,432
Accumulated other comprehensive income	312,106	72,361
Retained earnings	14,272,616	14,050,021
Total stockholders’ equity	15,044,154	14,581,814
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 16,741,385	$ 15,688,191

Balance Sheets (Current Period5

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounts receivable, allowance for doubtful accounts	$ 8,654	$ 8,654
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	4,594,319	4,594,319
Common stock, shares outstanding (in shares)	4,594,319	4,594,319

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 1,830,607	$ 4,188,558
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	134,063	129,157
Realized loss/(gain) on sale of marketable securities	1,063	(3,714)
Provision for bad debt		(12,326)
(Decrease) increase in cash resulting from changes in operating assets and liabilities:
Accounts receivable	(892,593)	(577,957)
Inventories	22,152	(51,955)
Prepaid expenses and other current and non-current assets	12,214	28,119
Prepaid taxes	95,767	30,643
Accounts payable	13,653	395,968
Accrued expenses and taxes payable	449,555	(19,572)
Net cash provided by operating activities	1,666,481	4,106,921
Cash flows from investing activities:
Acquisition of property, plant and equipment	(123,943)	(33,074)
Proceeds from sale of marketable securities	1,437,832	2,024,752
Purchases of marketable securities	(1,429,979)	(4,603,393)
Net cash used in investing activities	(116,090)	(2,611,715)
Cash flows from financing activities:
Dividends paid	(1,603,871)	(2,298,219)
Net cash used in financing activities	(1,603,871)	(2,298,219)
Net decrease in cash and cash equivalents	(53,480)	(803,013)
Cash and cash equivalents at beginning of period	1,080,489	2,023,383
Cash and cash equivalents at end of period	$ 1,027,009	$ 1,220,370

Note 1 - Nature of Business

Note 1 - Nature of Business	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]	1. Nature of Business United-Guardian, Inc. (the “Company”) is a Delaware corporation that, through its Guardian Laboratories Division, conducts research, product development, manufacturing and marketing of cosmetic ingredients, personal and health care products, pharmaceuticals, medical products, and proprietary specialty industrial products.

Note 2 - Basis of Presentation

Note 2 - Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Basis of Accounting [Text Block]	2. Basis of Presentation Interim financial statements of the Company are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America for interim financial information, pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2016. The interim unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015.

Note 3 - Supplemental Disclosur

Note 3 - Supplemental Disclosure of Non-cash Item	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Cash Flow, Supplemental Disclosures [Text Block]	3. Supplemental Disclosure of Non-cash Item Dividends payable which relate to unconverted shares of one of the Company’s previous corporate entities increased by $4,141 for the nine months ended September 30, 2016. During the nine-month period ended September 30, 2015 the Company increased retained earnings by $21,894 to account for excess prior year dividends returned to the Company which had been held by its transfer agent. See the audited financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015 for additional information.

Note 4 - Investments

Note 4 - Investments	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]	4. Investments The fair values of the Company’s marketable securities are determined in accordance with GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes the three-tier value hierarchy, as prescribed by GAAP, which prioritizes the inputs used in measuring fair value, as follows: • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following available-for-sale securities, which comprise all the Company’s marketable securities, are re-measured to fair value on a recurring basis and are valued using Level 1 inputs, which are quoted prices (unadjusted) for identical assets in active markets: September 30, 2016 (Unaudited) Cost Fair Value Unrealized Gain/(Loss) Available for Sale: Fixed income mutual funds $ 9,986,346 $ 10,326,963 $ 340,617 Equity and other mutual funds 614,568 746,839 132,271 $ 10,600,914 $ 11,073,802 $ 472,888 December 31, 2015 (Audited) Available for Sale: Fixed income mutual funds $ 9,968,948 $ 9,900,587 $ (68,361 ) Equity and other mutual funds 640,884 818,883 177,999 $ 10,609,832 $ 10,719,470 $ 109,638 Proceeds from the sale and redemption of marketable securities amounted to $1,437,832 for the nine months ended September 30, 2016, which included realized losses of $1,063. Proceeds from the sale and redemption of marketable securities amounted to $2,024,752 for the nine months ended September 30, 2015, which included realized gains of $3,714. Investment income consisted principally of realized gains and losses and dividend income from bond funds, mutual funds, and money market funds. Marketable securities include investments in fixed income and equity mutual funds and government securities which are classified as “available-for-sale” securities and are reported at their fair values. Unrealized gains and losses on “available-for-sale” securities are reported as accumulated other comprehensive income (loss) in stockholders’ equity, net of the related tax effects. Investment income is recognized when earned. Realized gains and losses on the sales of investments are determined on a specific identification basis.

Note 5 - Inventories

Note 5 - Inventories	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	5. Inventories September 30, 2016 December 31, 2015 (UNAUDITED) (AUDITED) Inventories consist of the following: Raw materials $ 339,132 $ 334,320 Work in process 65,384 44,836 Finished products 866,974 914,486 $ 1,271,490 $ 1,293,642 Inventories are valued at the lower of cost or current market value. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out ("FIFO") method. Finished product inventories at September 30, 2016 and December 31, 2015 are stated net of a reserve of $20,000 for slow-moving or obsolete inventory.

Note 6 - Income Taxes

Note 6 - Income Taxes	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	6. Income Taxes The Company’s tax provision is based on its estimated annual effective rate. The Company continues to fully recognize its tax benefits, which are offset by a valuation allowance to the extent that it is more likely than not that the deferred tax assets will not be realized. As of September 30, 2016 and December 31, 2015, the Company did not have any unrecognized tax benefits.

Note 7 - Comprehensive Income

Note 7 - Comprehensive Income	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Comprehensive Income (Loss) Note [Text Block]	7. Comprehensive Income Accumulated other comprehensive income comprises unrealized gains and losses on marketable securities net of the related tax effect. Changes in Accumulated Other September 30, 2016 December 31, 2015 (Unaudited) (Audited) Beginning balance – net of tax $ 72,361 $ 259,869 Unrealized gain/(loss) on marketable securities before reclassifications - net of tax 240,808 (189,903 ) Realized (loss)/gain on sale of securities reclassified from accumulated other comprehensive income (1,063 ) 2,395 Ending balance - net of tax $ 312,106 $ 72,361

Note 8 - Defined Contribution P

Note 8 - Defined Contribution Plan	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	8. Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan ("DC Plan") that provides for a dollar-for-dollar employer matching contribution of the first 4% of each employee's pay that is deferred by the employee. Employees become fully vested in employer matching contributions after one year of employment. In addition, the Company has been accruing $175,000 per year ($43,750 per quarter) toward the payment of a discretionary 401(k) contribution that is apportioned among all employees using a “pay-to-pay” safe harbor formula in accordance with IRS regulations. In each of the three-month periods ended September 30, 2016 and 2015 the Company accrued contributions of $43,750 to the DC Plan, and it accrued a total of $131,250 towards the DC Plan in each of the nine-month periods ended September 30, 2016 and 2015. The Company did not make any discretionary contributions to the DC Plan in the three- and nine-month periods ended September 30, 2016 and 2015.

Note 9 - Related Party Transact

Note 9 - Related Party Transactions	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	9. Related-Party Transactions During the nine-month periods ended September 30, 2016 and September 30, 2015, the Company paid to Bonamassa, Maietta and Cartelli, LLP $10,000 and $8,000, respectively, for accounting and tax services. Lawrence Maietta, a partner in Bonamassa, Maietta and Cartelli, LLP, is a director of the Company.

Note 10 - Other Information

Note 10 - Other Information	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Other Liabilities Disclosure [Text Block]	10. Other Information Accrued Expenses September 30, 2016 December 31, 2015 (UNAUDITED) (AUDITED) Bonuses $ 100,000 $ 250,000 401K plan contributions 131,250 --- Distribution fees 222,332 206,977 Payroll and related expenses 186,871 109,451 Annual report 47,595 66,000 Audit fee 49,568 82,000 Other 160,930 71,195 Total Accrued Expenses $ 898,546 $ 785,623

Note 4 - Investments (Tables)

Note 4 - Investments (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Available-for-sale Securities Reconciliation [Table Text Block]	September 30, 2016 (Unaudited) Cost Fair Value Unrealized Gain/(Loss) Available for Sale: Fixed income mutual funds $ 9,986,346 $ 10,326,963 $ 340,617 Equity and other mutual funds 614,568 746,839 132,271 $ 10,600,914 $ 11,073,802 $ 472,888 December 31, 2015 (Audited) Available for Sale: Fixed income mutual funds $ 9,968,948 $ 9,900,587 $ (68,361 ) Equity and other mutual funds 640,884 818,883 177,999 $ 10,609,832 $ 10,719,470 $ 109,638

Note 5 - Inventories (Tables)

Note 5 - Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	September 30, 2016 December 31, 2015 (UNAUDITED) (AUDITED) Inventories consist of the following: Raw materials $ 339,132 $ 334,320 Work in process 65,384 44,836 Finished products 866,974 914,486 $ 1,271,490 $ 1,293,642

Note 7 - Comprehensive Income (

Note 7 - Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Changes in Accumulated Other September 30, 2016 December 31, 2015 (Unaudited) (Audited) Beginning balance – net of tax $ 72,361 $ 259,869 Unrealized gain/(loss) on marketable securities before reclassifications - net of tax 240,808 (189,903 ) Realized (loss)/gain on sale of securities reclassified from accumulated other comprehensive income (1,063 ) 2,395 Ending balance - net of tax $ 312,106 $ 72,361

Note 10 - Other Information (Ta

Note 10 - Other Information (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	September 30, 2016 December 31, 2015 (UNAUDITED) (AUDITED) Bonuses $ 100,000 $ 250,000 401K plan contributions 131,250 --- Distribution fees 222,332 206,977 Payroll and related expenses 186,871 109,451 Annual report 47,595 66,000 Audit fee 49,568 82,000 Other 160,930 71,195 Total Accrued Expenses $ 898,546 $ 785,623

Note 3 - Supplemental Disclos21

Note 3 - Supplemental Disclosure of Non-cash Item (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Unpaid Dividends	$ 4,141
Investment Income, Dividend		$ 21,894

Note 4 - Investments (Details T

Note 4 - Investments (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Proceeds from Sale and Maturity of Marketable Securities	$ 1,437,832	$ 2,024,752
Marketable Securities, Realized Gain (Loss)	$ (1,063)	$ 3,714

Note 4 - Investments - Availabl

Note 4 - Investments - Available-for-sale Securities (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Fixed Income Securities [Member]
Cost	$ 9,986,346	$ 9,968,948
Fair Value	10,326,963	9,900,587
Unrealized Gain/(Loss)	340,617	(68,361)
Equity And Other Mutual Funds [Member]
Cost	614,568	640,884
Fair Value	746,839	818,883
Unrealized Gain/(Loss)	132,271	177,999
Cost	10,600,914	10,609,832
Fair Value	11,073,802	10,719,470
Unrealized Gain/(Loss)	$ 472,888	$ 109,638

Note 5 - Inventories (Details T

Note 5 - Inventories (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Inventory Valuation Reserves	$ 20,000	$ 20,000

Note 5 - Inventories - Summary

Note 5 - Inventories - Summary of Inventories (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Raw materials	$ 339,132	$ 334,320
Work in process	65,384	44,836
Finished products	866,974	914,486
Total inventories	$ 1,271,490	$ 1,293,642

Note 6 - Income Taxes (Details

Note 6 - Income Taxes (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Unrecognized Tax Benefits	$ 0	$ 0

Note 7 - Comprehensive Income -

Note 7 - Comprehensive Income - Accumulated Other Comprehensive Income (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Beginning balance – net of tax	$ 72,361	$ 259,869
Unrealized gain/(loss) on marketable securities before reclassifications - net of tax	240,808	(189,903)
Realized (loss)/gain on sale of securities reclassified from accumulated other comprehensive income	(1,063)	2,395
Ending balance - net of tax	$ 312,106	$ 72,361

Note 8 - Defined Contribution28

Note 8 - Defined Contribution Plan (Details Textual) - DC Plan [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay			4.00%
Defined Contribution, Discretionary Contribution Plan, Vesting Period			1 year
Defined Contribution Plan, Employer Discretionary Contribution Amount Per Year Authorized			$ 175,000
Defined Contribution Plan, Employer Discretionary Contribution Amount Per Quarter Authorized	$ 43,750
Defined Contribution Plan, Cost Recognized	43,750	$ 43,750	131,250	$ 131,250
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 0	$ 0	$ 0	$ 0

Note 9 - Related Party Transa29

Note 9 - Related Party Transactions (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounting and Tax Services [Member] | Director [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 10,000	$ 8,000

Note 10 - Other Information - A

Note 10 - Other Information - Accrued Expenses (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accrued Annual Report [Member]
Annual report	$ 47,595	$ 66,000
Accrued Audit Fee [Member]
Annual report	49,568	82,000
Bonuses	100,000	250,000
401K plan contributions	131,250
Distribution fees	222,332	206,977
Payroll and related expenses	186,871	109,451
Other	160,930	71,195
Total Accrued Expenses	$ 898,546	$ 785,623