Utah Medical Products (UTMD) 10-Q 11 May 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 10, 2021
Details
Entity Registrant Name	UTAH MEDICAL PRODUCTS INC
Entity Central Index Key	0000706698
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Current Fiscal Year End Date	--12-31
Trading Symbol	UTMD
Entity Tax Identification Number	87-0342734
Entity Common Stock, Shares Outstanding		3,645,798
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-12575
Entity Incorporation, State or Country Code	UT
Entity Address, Address Line One	7043 South 300 West
Entity Address, City or Town	Midvale
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84047
City Area Code	801
Local Phone Number	566-1200
Title of 12(b) Security	Common stock, $0.01 par value
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

UTAH MEDICAL PRODUCTS, INC. CON

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash & Investments	$ 56,033	$ 51,590
Accounts & other receivables, net	4,157	4,104
Inventories	5,975	6,222
Other current assets	451	346
Total current assets	66,616	62,262
Property and equipment, net	10,721	10,949
Operating Lease - Right of Use Assets, net	366	377
Goodwill	14,232	14,164
Other intangible assets	56,490	56,159
Other intangible assets - accumulated amortization	(34,037)	(32,166)
Other intangible assets, net	22,453	23,993
Total assets	114,388	111,745
Current liabilities:
Accounts payable	839	788
Accrued expenses	3,728	3,003
Total current liabilities	4,567	3,791
Deferred tax liability - Femcare IIA	1,995	1,995
Other long term liabilities	2,068	2,151
Operating lease liability	329	335
Deferred income taxes	546	651
Total liabilities	9,505	8,923
Stockholders' equity:
Common stock - $.01 par value; authorized - 50,000 shares; issued and outstanding - March 31, 2021, 3,646 shares and December 31, 2020, 3,643 shares	36	36
Accumulated other comprehensive loss	(8,335)	(8,281)
Additional paid-in capital	245	115
Retained earnings	112,937	110,952
Total stockholders' equity	104,883	102,822
Total liabilities and stockholders' equity	$ 114,388	$ 111,745

UTAH MEDICAL PRODUCTS, INC. C_2

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED BALANCE SHEET - Parenthetical - $ / shares shares in Thousands	Mar. 31, 2021	Dec. 31, 2020
Details
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	50,000	50,000
Common Stock, Shares, Issued	3,646	3,643
Common Stock, Shares, Outstanding	3,646	3,643

UTAH MEDICAL PRODUCTS, INC. C_3

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Details
Sales, net	$ 10,964	$ 10,902
Cost of goods sold	4,017	4,066
Gross profit	6,947	6,836
Operating expense
Selling, general and administrative	2,929	2,838
Research & development	130	135
Total operating expenses	3,059	2,973
Operating income	3,888	3,863
Other income	10	125
Income before provision for income taxes	3,898	3,988
Provision for income taxes	874	848
Net income	$ 3,024	$ 3,140
Earnings per common share (basic)	$ 0.83	$ 0.85
Earnings per common share (diluted)	$ 0.83	$ 0.84
Shares outstanding (basic)	3,644	3,707
Shares outstanding (diluted)	3,655	3,724
Other comprehensive income (loss):
Foreign currency translation net of taxes of $0 in all periods	$ (54)	$ (2,449)
Total comprehensive income	$ 2,970	$ 691

UTAH MEDICAL PRODUCTS, INC. C_4

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENT OF INCOME - Parenthetical - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Details
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	$ 0	$ 0

UTAH MEDICAL PRODUCTS, INC. C_5

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Comprehensive Income	Retained Earnings	Total
Equity Balance, value at Dec. 31, 2019	$ 37	$ 18	$ (9,783)	$ 110,820	$ 101,092
Equity Balance, shares at Dec. 31, 2019	3,722
Common stock issued upon exercise of employee stock options	$ 0	48	0	0	48
Common stock issued upon exercise of employee stock options, shares	1
Stock option compensation expense	$ 0	23	0	0	23
Common stock purchased and retired	$ (1)	(89)	0	(6,336)	(6,426)
Common stock purchased and retired, shares	(80)
Foreign currency translation adjustment	$ 0	0	(2,449)	0	(2,449)
Common stock dividends	0	0	0	(1,042)	(1,042)
Net income	0	0	0	3,140	3,140
Equity Balance, value at Mar. 31, 2020	$ 36	0	(12,232)	106,582	94,386
Equity Balance, shares at Mar. 31, 2020	3,643
Equity Balance, value at Dec. 31, 2020	$ 36	115	(8,281)	110,952	102,822
Equity Balance, shares at Dec. 31, 2020	3,643
Common stock issued upon exercise of employee stock options	$ 0	89	0	0	89
Common stock issued upon exercise of employee stock options, shares	3
Stock option compensation expense	$ 0	41	0	0	41
Foreign currency translation adjustment	0	0	(54)	0	(54)
Common stock dividends	0	0	0	(1,039)	(1,039)
Net income	0	0	0	3,024	3,024
Equity Balance, value at Mar. 31, 2021	$ 36	$ 245	$ (8,335)	$ 112,937	$ 104,883
Equity Balance, shares at Mar. 31, 2021	3,646

UTAH MEDICAL PRODUCTS, INC. C_6

UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOW - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,024	$ 3,140
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	163	175
Amortization	1,664	1,630
Provision for (recovery of) losses on accounts receivable	2	(14)
Amortization of Right of Use Assets	10	9
Deferred income taxes	(208)	(97)
Stock-based compensation expense	41	23
Tax benefit attributable to exercise of stock options	5	3
Changes in operating assets and liabilities:
Accounts receivable and other receivables	(71)	261
Inventories	207	158
Prepaid expenses and other current assets	(109)	(12)
Accounts payable	51	(31)
Accrued expenses	754	429
Total adjustments	2,509	2,534
Net cash provided by operating activities	5,533	5,674
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment	(10)	(454)
Net cash used in investing activities	(10)	(454)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - options	89	48
Common stock purchased and retired	0	(6,426)
Payment of dividends	(1,038)	(1,042)
Net cash used in financing activities	(949)	(7,420)
Effect of exchange rate changes on cash	(131)	(974)
Net increase (decrease) in cash and cash equivalents	4,443	(3,174)
Cash at beginning of period	51,590	42,787
Cash at end of period	56,033	39,613
Cash paid during the period for income taxes	153	285
Cash paid during the period for interest	$ 0	$ 0

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2021
Notes
Basis of Presentation	(1) The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States. These statements should be read in conjunction with the financial statements and notes included in the Utah Medical Products, Inc. ("UTMD" or "the Company") annual report on Form 10-K for the year ended December 31, 2020. In the opinion of management, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. Currency amounts are in thousands except per-share amounts and where noted.

New Accounting Pronouncements a

New Accounting Pronouncements and Changes in Accounting Principles	3 Months Ended
	Mar. 31, 2021
Notes
New Accounting Pronouncements and Changes in Accounting Principles	(2) Recent Accounting Standards. The Company has determined that recently issued accounting standards will either have no material impact on its consolidated financial position, results of operations or cash flows, or will not apply to its operations.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2021
Notes
Inventories	(3) Inventories at March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Finished goods $ 1,361 $ 1,363 Work-in-process 1,172 1,375 Raw materials 3,442 3,484 Total $ 5,975 $ 6,222

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2021
Notes
Stock-Based Compensation	(4) Stock-Based Compensation. At March 31, 2021, the Company has stock-based employee compensation plans which authorize the grant of stock options to eligible employees and directors. The Company accounts for stock compensation under FASB Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation

Warranty Reserve

Warranty Reserve	3 Months Ended
	Mar. 31, 2021
Notes
Warranty Reserve	(5) Warranty Reserve. The Company’s published warranty is: “UTMD warrants its products to conform in all material respects to all published product specifications in effect on the date of shipment, and to be free from defects in material and workmanship for a period of thirty (30) days for supplies, or twenty-four (24) months for equipment, from date of shipment. During the warranty period UTMD shall, at its option, replace any products shown to UTMD's reasonable satisfaction to be defective at no expense to the Purchaser or refund the purchase price.” UTMD maintains a warranty reserve to provide for estimated costs which are likely to occur. The amount of this reserve is adjusted, as required, to reflect its actual experience. Based on its analysis of historical warranty claims and its estimate that existing warranty obligations were immaterial, no warranty reserve was made at December 31, 2020, or March 31, 2021.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2021
Notes
Revenue Recognition	(6) 1Q 2021 global revenues (USD) by product category: Domestic Outside US Total Obstetrics $ 904 $ 114 $ 1,018 Gynecology/Electrosurgery/Urology 2,614 2,513 5,127 Neonatal 1,173 414 1,587 Blood Pressure Monitoring and Accessories 2,092 1,140 3,232 Total $ 6,783 $ 4,181 $ 10,964

Leases

Leases	3 Months Ended
	Mar. 31, 2021
Notes
Leases	(7) Leases UTMD has operating leases for a portion of its parking lot at its Midvale facility and an automobile at its Ireland facility. The remaining lease term on the parking lot is 10 years and on the automobile it is 1 year. There are no options to extend or terminate the leases. UTMD has no other leases yet to commence. As neither lease contains implicit rates, UTMD’s incremental borrowing rate, based on information available at adoption date, was used to determine the present value of the leases. The components of lease cost were as follows: Three Months Ended March 31, 2021 Operating Lease Cost ( in thousands $15 Right-of-Use Assets in exchange for new operating lease obligations $0 Other Information Three Months Ended March 31, 2021 Weighted Average Remaining Lease Term – Operating Leases 10 years Weighted Average Discount Rate – Operating Leases 5.4% Operating lease liabilities/ payments ( in thousands Operating lease payments, 2021 $60 Operating lease payments, 2022 $45 Operating lease payments, 2023 $45 Operating lease payments, 2024 $45 Operating lease payments, 2025 $45 Thereafter $254 Reconciliation of operating lease liabilities/ payments to operating lease liabilities ( in thousands Total operating lease liabilities/ payments $481 Operating lease liabilities – current (included in Accrued Expenses) $37 Operating lease liabilities – long term $329 Present value adjustment $115 Maturities of lease liabilities were as follows: ( in thousands Year ending December 31, 2021 $41 2022 $27 2023 $29 2024 $30 2025 $32 Thereafter $218

CSI Distribution Agreement Purc

CSI Distribution Agreement Purchase Disclosure	3 Months Ended
	Mar. 31, 2021
Notes
CSI Distribution Agreement Purchase Disclosure	(8) Distribution Agreement Purchase. UTMD completed the purchase of exclusive U.S. distribution rights for the Filshie® Clip System from CooperSurgical, Inc. (CSI) on February 1, 2019. The $21,000 purchase price represents an identifiable intangible asset which is being straight-line amortized and recognized as part of G&A expenses over the now 2.58 year remaining life of the prior CSI agreement with Femcare.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2021
Notes
Earnings Per Share	(9) Earnings Per Share. Basic earnings per share is calculated by dividing net income attributable to the common stockholders of the company by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by assuming the exercise of stock options at the closing price of stock at the end of first quarter 2021. The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: ( in thousands Three months ended March 31, 2021 2020 Numerator Net income 3,024 3,140 Denominator Weighted average shares, basic 3,644 3,707 Dilutive effect of stock options 11 17 Diluted shares 3,655 3,724 Earnings per share, basic 0.83 0.85 Earnings per share, diluted 0.83 0.84

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2021
Notes
Subsequent Events	(10) Subsequent Events.

New Accounting Pronouncements_2

New Accounting Pronouncements and Changes in Accounting Principles: New Accounting Pronouncements, Policy (Policies)	3 Months Ended
	Mar. 31, 2021
Policies
New Accounting Pronouncements, Policy	The Company has determined that recently issued accounting standards will either have no material impact on its consolidated financial position, results of operations or cash flows, or will not apply to its operations.

Inventories_ Schedule of Invent

Inventories: Schedule of Inventory, Current (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Schedule of Inventory, Current	March 31, 2021 December 31, 2020 Finished goods $ 1,361 $ 1,363 Work-in-process 1,172 1,375 Raw materials 3,442 3,484 Total $ 5,975 $ 6,222

Revenue Recognition_ Schedule O

Revenue Recognition: Schedule Of Revenues By Product Category (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Schedule Of Revenues By Product Category	Domestic Outside US Total Obstetrics $ 904 $ 114 $ 1,018 Gynecology/Electrosurgery/Urology 2,614 2,513 5,127 Neonatal 1,173 414 1,587 Blood Pressure Monitoring and Accessories 2,092 1,140 3,232 Total $ 6,783 $ 4,181 $ 10,964

Leases_ Lease, Cost (Tables)

Leases: Lease, Cost (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Lease, Cost	The components of lease cost were as follows: Three Months Ended March 31, 2021 Operating Lease Cost ( in thousands $15 Right-of-Use Assets in exchange for new operating lease obligations $0 Other Information Three Months Ended March 31, 2021 Weighted Average Remaining Lease Term – Operating Leases 10 years Weighted Average Discount Rate – Operating Leases 5.4%

Leases_ Schedule of Future Mini

Leases: Schedule of Future Minimum Rental Payments for Operating Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Schedule of Future Minimum Rental Payments for Operating Leases	Operating lease liabilities/ payments ( in thousands Operating lease payments, 2021 $60 Operating lease payments, 2022 $45 Operating lease payments, 2023 $45 Operating lease payments, 2024 $45 Operating lease payments, 2025 $45 Thereafter $254

Leases_ Reconciliation of opera

Leases: Reconciliation of operating lease liabilities (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Reconciliation of operating lease liabilities	Reconciliation of operating lease liabilities/ payments to operating lease liabilities ( in thousands Total operating lease liabilities/ payments $481 Operating lease liabilities – current (included in Accrued Expenses) $37 Operating lease liabilities – long term $329 Present value adjustment $115

Leases_ Lessee, Operating Lease

Leases: Lessee, Operating Lease, Liability, Maturity (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Lessee, Operating Lease, Liability, Maturity	Maturities of lease liabilities were as follows: ( in thousands Year ending December 31, 2021 $41 2022 $27 2023 $29 2024 $30 2025 $32 Thereafter $218

Earnings Per Share_ Schedule of

Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)	3 Months Ended
	Mar. 31, 2021
Tables/Schedules
Schedule of Earnings Per Share, Basic and Diluted	The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: ( in thousands Three months ended March 31, 2021 2020 Numerator Net income 3,024 3,140 Denominator Weighted average shares, basic 3,644 3,707 Dilutive effect of stock options 11 17 Diluted shares 3,655 3,724 Earnings per share, basic 0.83 0.85 Earnings per share, diluted 0.83 0.84

Inventories_ Schedule of Inve_2

Inventories: Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Details
Finished goods	$ 1,361	$ 1,363
Work-in-process	1,172	1,375
Raw materials	3,442	3,484
Total	$ 5,975	$ 6,222

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Details
Allocated Share-based Compensation Expense	$ 41	$ 23

Warranty Reserve (Details)

Warranty Reserve (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Details
Standard and Extended Product Warranty Accrual	$ 0	$ 0

Revenue Recognition_ Schedule_2

Revenue Recognition: Schedule Of Revenues By Product Category (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Sales, net	$ 10,964	$ 10,902
Obstetrics
Sales, net	1,018
Gynecology/Electrosurgery/Urology
Sales, net	5,127
Neonatal
Sales, net	1,587
Blood Pressure Monitoring and Accessories
Sales, net	3,232
DomesticUsMember
Sales, net	6,783
DomesticUsMember | Obstetrics
Sales, net	904
DomesticUsMember | Gynecology/Electrosurgery/Urology
Sales, net	2,614
DomesticUsMember | Neonatal
Sales, net	1,173
DomesticUsMember | Blood Pressure Monitoring and Accessories
Sales, net	2,092
OutsideUsMember
Sales, net	4,181
OutsideUsMember | Obstetrics
Sales, net	114
OutsideUsMember | Gynecology/Electrosurgery/Urology
Sales, net	2,513
OutsideUsMember | Neonatal
Sales, net	414
OutsideUsMember | Blood Pressure Monitoring and Accessories
Sales, net	$ 1,140

Leases (Details)

Leases (Details)	Mar. 31, 2021
Details
Lessee Operating Lease for Parking Lot Term of Contract	10 years
Lessee Operating Lease for Automobile Term of Contract	1 year

Leases_ Lease, Cost (Details)

Leases: Lease, Cost (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)
Details
Operating Lease, Cost	$ 15
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 0
Operating Lease, Weighted Average Remaining Lease Term	10 years
Operating Lease, Weighted Average Discount Rate, Percent	5.40%

Leases_ Schedule of Future Mi_2

Leases: Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Dec. 31, 2020USD ($)
Details
Operating Leases, Future Minimum Payments Due, Next Twelve Months	$ 60
Operating Leases, Future Minimum Payments, Due in Two Years	45
Operating Leases, Future Minimum Payments, Due in Three Years	45
Operating Leases, Future Minimum Payments, Due in Four Years	45
Operating Leases, Future Minimum Payments, Due in Five Years	45
Operating Leases, Future Minimum Payments, Due Thereafter	$ 254

Leases_ Reconciliation of ope_2

Leases: Reconciliation of operating lease liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Details
Lessee, Operating Lease, Liability, to be Paid	$ 481
Operating Lease, Liability, Current	37
Operating lease liability	329	$ 335
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	$ 115

Leases_ Lessee, Operating Lea_2

Leases: Lessee, Operating Lease, Liability, Maturity (Details) $ in Thousands	Dec. 31, 2020USD ($)
Details
Lessee, Operating Lease, Liability, to be Paid, Year One	$ 41
Lessee, Operating Lease, Liability, to be Paid, Year Two	27
Lessee, Operating Lease, Liability, to be Paid, Year Three	29
Lessee, Operating Lease, Liability, to be Paid, Year Four	30
Lessee, Operating Lease, Liability, to be Paid, Year Five	32
Lessee, Operating Lease, Liability, to be Paid, after Year Five	$ 218

CSI Distribution Agreement Pu_2

CSI Distribution Agreement Purchase Disclosure (Details) - CooperSurgical Inc $ in Thousands	Mar. 31, 2021	Mar. 31, 2019USD ($)
Finite-lived Intangible Assets Acquired		$ 21,000
Remaining years of exclusive U.S. distribution rights for Femcare's Filshie Clip System	2.58

Earnings Per Share_ Schedule _2

Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Details
Net income	$ 3,024	$ 3,140
Weighted average shares, basic	3,644	3,707
Dilutive effect of stock options	11	17
Diluted shares	3,655	3,724
Earnings per share, basic	$ 0.83	$ 0.85
Earnings per share, diluted	$ 0.83	$ 0.84