SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For quarter ended: March 31, 2000 Commission File No. 0-11178
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UTAH MEDICAL PRODUCTS, INC.
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(Exact name of Registrant as specified in its charter)
UTAH 87-0342734
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7043 South 300 West
Midvale, Utah 84047
--------------------------------
Address of principal executive offices
Registrant's telephone number: (801) 566-1200
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and; (2) has been subject to such
filing requirements for the past 90 days. Yes X No
-
The number of shares outstanding of the registrant's common stock as of May
10, 2000: 6,390,011
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UTAH MEDICAL PRODUCTS, INC.
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INDEX TO FORM 10-Q
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PART I - FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of
March 31, 2000 and December 31, 1999 1
Consolidated Condensed Statements of Income for the
three months ended March 31, 2000 and March 31, 1999 2
Consolidated Condensed Statements of Cash Flows for the
three months ended March 31, 2000 and March 31, 1999 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 9
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS AS OF
-------------------------------------------
MARCH 31, 2000 AND DECEMBER 31, 1999
------------------------------------
(in thousands - unaudited)
MARCH 31, 2000 DECEMBER 31, 1999
- ---------------------------------------------------- ---------------- -------------------
ASSETS
- ----------------------------------------------------
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 976 $ 647
Accounts receivable - net. . . . . . . . . . . . . . 3,824 4,077
Inventories. . . . . . . . . . . . . . . . . . . . . 3,566 3,190
Other current assets . . . . . . . . . . . . . . . . 705 624
-------------------
Total current assets . . . . . . . . . . . . . . . . 9,071 8,538
PROPERTY AND EQUIPMENT - NET . . . . . . . . . . . . 10,550 11,013
INTANGIBLE ASSETS - NET. . . . . . . . . . . . . . . 8,087 8,205
---------------- -------------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . $ 27,708 $ 27,756
================ ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ----------------------------------------------------
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . $ 674 $ 544
Accrued expenses . . . . . . . . . . . . . . . . . . 2,165 2,117
Total current liabilities. . . . . . . . . . . . . . 2,839 2,661
NOTES PAYABLE. . . . . . . . . . . . . . . . . . . . 4,841 5,934
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . 354 372
---------------- -------------------
Total liabilities. . . . . . . . . . . . . . . . . . 8,034 8,967
---------------- -------------------
STOCKHOLDERS' EQUITY:
Preferred stock - $.01 par value; authorized - 5,000
shares; no shares issued or outstanding
Common stock - $.01 par value; authorized - 50,000
shares; issued - March 31, 2000, 6,442 shares
December 31, 1999, 6,453 shares. . . . . . . . . . 64 64
Cumulative foreign currency translation adjustment . (1,513) (1,250)
Retained earnings. . . . . . . . . . . . . . . . . . 21,123 19,975
Total stockholders' equity . . . . . . . . . . . . . 19,674 18,789
---------------- -------------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . $ 27,708 $ 27,756
================ ===================
see notes to consolidated condensed financial statements
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UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
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CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE
---------------------------------------------------
THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999
----------------------------------------------------
(in thousands, except per share amounts)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
---------
2000 1999
------ ------
NET SALES . . . . . . . . . . . . . $6,666 $7,018
COST OF SALES . . . . . . . . . . . 2,995 3,331
------ ------
GROSS MARGIN. . . . . . . . . . . . 3,671 3,687
------ ------
EXPENSES:
Selling, general and administrative 1,644 1,712
Research & development. . . . . . . 149 222
------ ------
Total . . . . . . . . . . . . . . . 1,793 1,934
------ ------
INCOME FROM OPERATIONS. . . . . . . 1,878 1,753
OTHER INCOME. . . . . . . . . . . . 38 115
------ ------
INCOME BEFORE INCOME TAX EXPENSE. . 1,916 1,868
INCOME TAX EXPENSE. . . . . . . . . 690 668
------ ------
NET INCOME. . . . . . . . . . . . . $1,226 $1,200
====== ======
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE . . . . . $ 0.19 $ 0.15
====== ======
EARNINGS PER COMMON SHARE
ASSUMING FULL DILUTION. . . . . . $ 0.19 $ 0.15
====== ======
SHARES OUTSTANDING - BASIC. . . . . 6,447 7,939
====== ======
SHARES OUTSTANDING - DILUTED. . . . 6,469 7,939
====== ======
see notes to consolidated condensed financial statements
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UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999
------------------------------------------------------------
(in thousands - unaudited)
MARCH 31,
---------
2000 1999
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,226 $ 1,200
-------- --------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . 571 526
(Recovery of)/Provision for losses on accounts receivable 4 (3)
(Gain)/Loss on disposal of assets . . . . . . . . . . . . (1) 1
Deferred income taxes . . . . . . . . . . . . . . . . . . (34) (39)
Changes in operating assets and liabilities:
Accounts receivable - trade . . . . . . . . . . . . . . . 405 (142)
Accrued interest and other receivables. . . . . . . . . . (191) 216
Inventories . . . . . . . . . . . . . . . . . . . . . . . (371) 291
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . (65) (63)
Accounts payable. . . . . . . . . . . . . . . . . . . . . 138 108
Accrued expenses. . . . . . . . . . . . . . . . . . . . . 57 164
Deferred revenue. . . . . . . . . . . . . . . . . . . . . 0 (2)
-------- --------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . 514 1,057
-------- --------
Net cash provided by operating activities . . . . . . . . . . 1,739 2,257
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for:
Property and equipment. . . . . . . . . . . . . . . . . . (125) (178)
Intangible assets . . . . . . . . . . . . . . . . . . . . (100) (1)
Proceeds from sale of property and equipment. . . . . . . . . 0 0
-------- --------
Net cash used in investing activities . . . . . . . . . . . . (225) (179)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock purchased and retired. . . . . . . . . . . . . . (78) (1,455)
Decrease in note payable. . . . . . . . . . . . . . . . . . . (1,093) (1,384)
-------- --------
Net cash used in financing activities . . . . . . . . . . . . (1,171) (2,839)
-------- --------
Effect of exchange rate changes on cash . . . . . . . . . . . (14) (11)
NET INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . 329 (772)
CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . 647 1,367
-------- --------
CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . $ 976 $ 595
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes. . . . . . . . $ 463 $ 375
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . $ 96 $ 40
see notes to consolidated condensed financial statements
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UTAH MEDICAL PRODUCTS, INC.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
(1) The unaudited financial statements presented herein 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 generally accepted accounting
principles. 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, 1999.
Although the accompanying financial statements have not been examined by
independent accountants in accordance with generally accepted auditing
standards, in the opinion of management, such financial statements include all
adjustments (consisting only of normal recurring adjustments) necessary to
summarize fairly the Company's financial position and results of operations.
(2) Inventories at March 31, 2000 and December 31, 1999 (in thousands)
consisted of the following:
March 31, December 31,
2000 1999
-------- ---------
Finished goods $ 1,170 $ 846
Work-in-process 1,000 962
Raw materials 1,396 1,382
----- -----
Total $3,566 $3,190
====== ======
(3) The Company has adopted SFAS No. 130, "Reporting Comprehensive Income."
This standard requires companies to disclose certain changes in equity not
represented in net income such as foreign currency translation adjustments and
unrealized gains/losses on available-for-sale securities. These items are
components of other comprehensive income which, when added to net income,
represent total comprehensive income. The Company translates the currency of
its Ireland subsidiary which comprises the only element of other comprehensive
income. Total comprehensive income for the quarter ending March 31, 2000 was
(in thousands) $962.
(4) In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 137, "Accounting for
Derivative Instruments and Hedging Activities- Deferral of the Effective Date of
FASB Statement No. 133." SFAS 133 establishes accounting and reporting
standards for derivative instruments and requires recognition of all derivatives
as assets or liabilities in the statement of financial position and measurement
of those instruments at fair value. SFAS 133 is now effective for fiscal years
beginning after June 15, 2000. UTMD believes that the adoption of SFAS 133 will
not have a material effect on the financial statements of the Company.
(5) Forward-Looking Information
This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of management
as well as assumptions made by, and information currently available to,
management. When used in this document, the words "anticipate," "believe,"
"should," "project," "estimate," "expect," "intend" and similar expressions, as
they relate to the Company or its management, are intended to identify
forward-looking statements. Such statements reflect the current view of the
Company respecting future events and are subject to certain risks,
uncertainties, and assumptions, including the risks and uncertainties noted
throughout the document. Although the Company has attempted to identify
important factors that could cause the actual results to differ materially,
there may be other factors that cause the forward statement not to come true as
anticipated, believed, projected, expected, or intended. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may differ materially from those described herein as
anticipated, believed, projected, estimated, expected, or intended.
General risk factors that may impact the Company's revenues include
the market acceptance of competitive products, obsolescence caused by new
technologies, the possible introduction by competitors of new products that
claim to have many of the advantages of UTMD's products at lower prices, the
timing and market acceptance of UTMD's own new product introductions, UTMD's
ability to efficiently manufacture its products, including the reliability of
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suppliers, success in gaining access to important global distribution channels,
marketing success of UTMD's distribution and sales partners, budgetary
constraints, the timing of regulatory approvals for newly introduced products,
third party reimbursement, and access to U.S. hospital customers, as that access
is increasingly constrained by group purchasing decisions.
Risk factors, in addition to the risks outlined in the previous paragraph
that may impact the Company's assets and liabilities, as well as cash flows,
include risks inherent to companies manufacturing products used in health care
including claims resulting from the improper use of devices and other product
liability claims, defense of the Company's intellectual property, productive use
of assets in generating revenues, management of working capital including
inventory levels required to meet delivery commitments at a minimum cost, and
timely collection of accounts receivable.
Additional risk factors that may affect non-operating income include the
continuing viability of the Company's technology license agreements, actual cash
and investment balances, asset dispositions, and acquisition activities that may
require external funding.
(6) Events subsequent to March 31, 2000
On April 14, 2000, UTMD entered into a new unsecured revolving
line-of-credit agreement with Key Bank N.A. which replaces its prior
line-of-credit. Under the agreement, the Company may borrow up to $14,500,000
at a floating interest rate tied to Prime Rate or LIBOR, at UTMD's election.
Significant financial covenants under the line require the Company to maintain
minimum Current and Total Funded Debt to EBITDA ratios.
-5-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
UTMD manufactures and markets a well-established range of specialty
medical devices. The general characteristics of UTMD's business have not
materially changed over the last several reporting periods. The Company's Form
10-K Annual Report for the year ended December 31, 1999 provides a detailed
description of products, technologies, markets, regulatory issues, business
initiatives, resources and business risks, among other details, and should be
read in conjunction with this report. Because of the relatively short span of
time, results for any given three month period in comparison with a previous
three month period may not be indicative of comparative results for the year as
a whole. Dollar amounts in the report are expressed in thousands, except
per-share amounts and where otherwise noted.
Analysis of Results of Operations
a) First Quarter (1Q) Overview
Sales in 1Q 2000 declined 5% from 1Q 1999, due to lower sales of
obstetrics products in the U.S., and lower sales of OEM products worldwide.
Despite the lower sales, operating profits improved 7% due to record gross
profit margins and tightly controlled operating expenses. Earnings per share
(EPS) were up 25% compared to 1Q 1999 due to share repurchases. With its strong
cash flow, UTMD was able to reduce its long term debt balance by $1.1 million,
allow finished goods inventories to increase by $0.4 million during a period of
softer than expected demand, and repurchase another 11,300 shares of its stock
in 1Q 2000.
b) Revenues
In 1Q 2000, sales to customers outside the U.S. grew 24% while
domestic sales, excluding component sales to Baxter, declined 9%. Sales of
components to Baxter declined 79% to $32 in 1Q 2000 from $148 in 1Q 1999.
In the U.S., obstetrics product sales decreased 12% due to end of
millennium overstocking and increased competition, while electro surgery/
gynecology/ urology product sales and neonatal product sales remained about the
same. Blood pressure monitoring components excluding sales to Baxter/ OEM
molding products declined 20% as a result of fluctuation in customer ordering
patterns, for no apparent reasons.
Foreign sales of obstetrics products, electro surgery/ gynecology products,
neonatal products and blood pressure monitoring (BPM) components and accessories
increased 17%, 92%, 117% and 14% respectively.
Global obstetrics product sales which decreased 11% in 1Q 2000 represented
46% of total sales. Obstetrics sales were $3,041 in 1Q 2000, compared to $3,402
in 1Q 1999. Global gynecology/ electro surgery/ urology product sales which grew
9% in 1Q 2000 represented 17% of total revenues. Gyn/ES/Uro sales were $1,125
in 1Q 2000, compared to $1,036 in 1Q 1999. Neonatal product sales which grew 6%
represented 13% of total sales. Neonatal product sales were $872 in 1Q 2000,
compared to $826 in 1Q 1999. BPM and accessories sales including sales to
Baxter which declined 7% represented 24% of global consolidated 1Q 2000 sales.
Sales of BPM and accessories products in 1Q 2000 were $1,629, compared to $1,753
in 1Q 1999.
c) Gross Profit
UTMD's gross profit margin (GPM) in 1Q 2000 was 55.1% compared to
52.5% in 1Q 1999. Gross margin improvements were led by control of
manufacturing overhead costs and lower direct materials costs. During the rest
of 2000, offsetting influences are expected to result in GPM of about 54%.
Expected favorable influences include growth in sales activity without a similar
increase in overhead expenses and a continued emphasis on reengineering products
to reduce costs. Unfavorable influences are expected to be continued
competitive pressure on pricing and higher wage rates and other benefits costs
for production employees. UTMD management believes that consistently achieving
an average GPM above 50% is crucial to successfully support the significant
sales and marketing, research and development, and administrative expenses
associated with an innovative medical device company in a highly complex and
competitive marketplace.
d) Operating Profit
1Q 2000 operating profits increased 7% to $1,878 from $1,753 in 1Q
1999. Total operating expenses, including sales and marketing (S&M) expenses,
research and development (R&D) expenses and general and administrative (G&A)
expenses, were $1,793 or 26.9% of sales in 1Q 2000 compared to $1,934 or 27.6%
-6-
of sales in 1Q 1999. Reducing operating expenses as a percentage of sales with
lower sales is a significant achievement for the quarter.
S&M expenses in 1Q 2000 were $877 or 13.2% of sales compared to $973 or
13.9% of sales in 1Q 1999. S&M expenses are dominated by the costs of
promoting, selling and providing customer support of UTMD's direct sales of
products in the U.S. Although total 1Q 2000 sales decreased 5%, including OEM
and overseas sales where third parties underwrite significant S&M costs of
selling UTMD's products, the U.S. direct sales portion decreased 9%. Total S&M
expenses were reduced 10% in conjunction with managing expenses relative to the
actual performance of UTMD's domestic direct S&M resources.
R&D expenses in 1Q 2000 were $148 or 2.2% of sales compared to $222 or 3.2%
of sales in 1Q 1999. The mid-year 1999 termination of internal efforts
committed to UTMD's fetal pH monitoring project, which represented about half of
R&D spending in 1H 1999, was responsible for the decline. Current R&D projects
include continuing development of the Fowler Endocurette, enhancements to the
Gesco neonatal product line, and improvements to UTMD's other established
products. R&D improvements in materials and configuration of components was
evident in UTMD's improved GPMs. At UTMD, R&D resources are kept involved in
the direct support of manufacturing, as UTMD finds it makes long-term sense to
keep its most technical people involved with products and the processes for
making them throughout their life cycles.
G&A expenses in 1Q 2000 were $767 or 11.5% of sales compared to $739 or
10.5% of 1Q 1999 sales. Year 2000 G&A expenses are expected to be consistent
with 1999, and in 1Q 2000 were within expected limits of normal quarterly
fluctuation.
e) Non-operating income
Royalty income from licensing UTMD's technology to other companies was
partially offset by interest expenses and bank fees on the revolving
line-of-credit in 1Q 2000. Non-operating income in 1Q 2000 was $38, compared to
$115 in 1Q 1999. Royalties received in 1Q 2000 were $44 less than in the prior
year's quarter. Interest expenses and bank fees associated with the
line-of-credit were $98 in 1Q 2000 compared to $43 in 1Q 1999. Assuming a
minimal change in current interest rates and no new borrowing to finance an
extraordinary capital requirement, net non-operating income will increase in
each successive quarter in 2000 as the line-of-credit balance declines.
f) Earnings Before Income Taxes
1Q 2000 earnings before income taxes (EBT) were 28.7% of sales
compared to 26.6% in 1Q 1999. UTMD was able to increase EBT 3% relative to 1Q
1999 even though sales were down 5% because of improvement accomplished in gross
margin combined with tight control of operating expenses. If sales activity
increases, UTMD expects it can increase EBT at a faster rate.
g) Net Income and EPS
UTMD's after tax net income expressed as a percentage of sales was
18.4% for 1Q 2000 compared to 17.1% for 1Q 1999. Net income expressed in
dollars was up 2% at $1,226, compared to $1,200 in 1Q 1999. The effective
income tax rate in 1Q 2000 was 36.0% compared to 35.8% in 1Q 1999.
Diluted 1Q 2000 earnings per share (EPS) were up 25% to $.19 compared to
$.15 in 1Q 1999. 1Q 2000 weighted average number of diluted common shares (the
number used to calculate diluted EPS) were 6,469 compared to 7,939 shares in 1Q
1999. Actual outstanding common shares as of the end of 1Q 2000 were 6,442.
UTMD's trailing twelve months' EPS were $.81, up 35% from the prior twelve month
period of time.
h) Return on Shareholders' Equity (ROE)
ROE in 1Q 2000 was 22% compared to 19% in 1Q 1999.
i) Cash flows
EBITDA is a measure of UTMD's ability to generate cash. First quarter
2000 EBITDA was $2,584, up from $2,438 in 1Q 1999, or as a ratio of sales, 39%
in 1Q 2000 compared to 35% in 1Q 1999. UTMD used EBITDA to allow purchase of
$125 worth of assets to sustain facilities, equipment and tooling in good
working order, investment of $100 in new intangible assets, repurchase $78 worth
of it shares, as well as a decrease in its bank revolving line-of-credit balance
by $1,093 during 1Q 2000.
-7-
Net cash provided by operating activities, including adjustments for
depreciation and other non-cash operating expenses, along with changes in
working capital, totaled $1,739 in 1Q 2000, compared to $2,257 in 1Q 1999. Net
working capital changes used $28 in 1Q 2000 cash compared to providing $572 in
1Q 1999, with the largest change (adjusted for exchange rate changes) coming
from higher finished goods inventories, which UTMD increased in lieu of cutting
production rates in order to maintain production efficiencies during a period of
temporary soft demand.
Financing activities in 1Q 2000 used cash of $1,093 to reduce the bank
line-of-credit. In addition, 11,300 shares of stock were repurchased at a total
cost of $78. No stock was issued in the first quarter of either 2000 or 1999.
On April 14, 2000, UTMD entered into a new unsecured revolving line-of-credit
agreement with Key Bank N.A. which replaces its prior line-of-credit. Under the
agreement, the Company may borrow up to $14,500,000 at a floating interest rate
tied to Prime Rate or LIBOR, at UTMD's election. Covenants under the line
include maintaining minimum Current and Total Funded Debt to EBITDA ratios.
Management believes that capital spending in 1Q 2000 was at a sufficient
rate to sustain current operations. In addition to sustaining capital
expenditures, UTMD expects to use cash during the rest of 2000 for selective
infusions of technological, marketing or product manufacturing rights to broaden
the Company's product offerings, for continued share repurchases when the price
of the stock remains undervalued, and, if available for a reasonable price,
acquisitions that strategically fit UTMD's business and are accretive to
performance. The revolving credit line will continue to be used for liquidity
when the timing of acquisitions or repurchases of stock require a large amount
of cash in a short period of time.
j) Assets and Liabilities
1Q 2000 ending total assets were essentially the same as at December
31, 1999. Current assets increased as a result of higher inventory and cash
balances while net fixed assets declined because depreciation exceeded
replacement purchases. Net intangible assets declined because amortization of
goodwill and intellectual property exceeded new acquisitions. 1Q 2000 ending
net intangible assets represent 29% of total assets.
Average inventory turns decreased in 1Q 2000 to 3.5 times, compared to 3.8
times in 1999, due to lower sales and higher finished goods inventories.
Inventories were allowed to increase $376 during 1Q 2000 based on UTMD's belief
that the sales decrease was temporary. If sales increase during the remainder
of 2000, management expects to be able to achieve its target of 4.0 inventory
turns. March 31, 2000 accounts receivable (A/R) balances declined 6%, slightly
more than sales. Calculated days in receivables at 49 for 1Q 2000 did not
change from year-end 1999. The working capital increase of $355 was essentially
due to the increase in finished goods inventory.
At the end of 1Q 2000, UTMD's total debt ratio decreased to 29% of total
assets from 32% at the end of 1999, due to the reduction in the line-of-credit
balance.
k) Management's Outlook.
UTMD has built and continues to successfully defend a dominant medical
device market franchise in the most special areas of hospitals caring for
mothers and their babies, with innovative and highly effective products.
UTMD's small but effective direct U.S. sales team continues to evolve as a
key resource for achieving UTMD's objectives to help identify clinician needs,
responsively provide excellent solutions for those needs, and assure timely
support for customers' use of UTMD's solutions. In the remaining part of 2000,
UTMD will investigate ways to expand its U.S. sales coverage through improving
its relationships with national distributors who can access customers in ways
not available to UTMD's direct sales force, through partnering with other
manufacturers where a broader product offering can leverage marketing efforts
and through initiatives to effectively employ Internet technology.
Internationally, UTMD will continue to build on the success of its effective
distribution partners.
Consistent with its view of the nature of the medical device industry as a
whole, UTMD believes it can achieve significant top line growth through
selective acquisitions, and plans to do so without diluting shareholder
interest. In UTMD's case, management does not intend to achieve top line growth
at the expense of bottom line growth. Internal R&D will continue to be used
primarily to improve and augment existing or acquired product lines.
-8-
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
SEC
Exhibit # Reference # Title of Document
- ---------- ------------ -------------------
1 10 Business Loan Agreement, dated April 14, 2000
Between Utah Medical Products, Inc. and Key
Bank National Association
2 27 Financial data schedule
b) Reports on Form 8-K:
During the quarter ended March 31, 2000, the Company filed no reports
on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchanges Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UTAH MEDICAL PRODUCTS, INC.
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REGISTRANT
Date: By:
------------------------------
Kevin L. Cornwell
CEO and CFO
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