SALT LAKE CITY, UT–(Marketwired – Jan 29, 2015) – Utah Medical Products, Inc. ( NASDAQ : UTMD ) assured addition accomplished banking year in 2014, beyond its projections provided in its 2013 SEC Form 10-K. Admitting cogent contempo adopted bill barter (FX) amount headwinds, fourth division (4Q) sales and operating profits were up.
In 4Q 2014 and year of 2014, UTMD’s changes in U.S. GAAP banking after-effects compared to the aforementioned time periods in the above-mentioned agenda year were as follows:
Currency amounts in this address are in thousands, except per allotment amounts and area noted.
Shareholders may anamnesis that in 4Q 2013, as a aftereffect of the government of Great Britain assuming a law that essentially bargain accumulated assets tax ante attractive forward, UTMD bargain its deferred tax accountability (DTL) on its December 31, 2013 antithesis area that resulted from the lower approaching tax ante over the absolute about 12 years of Femcare identifiable abstract asset amortization. Per US GAAP, the offsetting transaction to the DTL acclimation bargain UTMD’s appear 2013 tax accouterment and added appear net assets by $976 in 4Q 2013.
For the account of clarity, the DTL acclimation alone afflicted UTMD’s assets tax provision, net assets and EPS; not the added assets account categories of sales, gross profits, operating assets or antithesis afore taxes. Without including the aftereffect of abbreviation the assets tax provision, UTMD’s changes in net assets and EPS (on a non-GAAP basis) compared to the aforementioned time periods in the above-mentioned agenda year were as follows:
US GAAP antithesis per allotment (EPS) for the 2014 agenda year were $3.02, the aforementioned as in 2013. Without the DTL adjustment, year 2013 EPS were $2.76. On a non-GAAP base (excluding the 4Q 2013 $976 DTL adjustment), 2014 EPS were $.25 college than in 2013.
Excluding the noncash furnishings of depreciation, acquittal of abstract assets and non-cash banal advantage expense, 2014 circumscribed antithesis afore taxes added absorption amount (EBITDA) were $19,531 compared to $18,136 in 2013, an access of 8%.
Profitability measures compared to the aforementioned time periods in the above-mentioned agenda year were as follows:
According to CEO Kevin Cornwell,
“We are appreciative of UTMD’s 2014 advance in all assets account measures, essentially beyond management’s alpha of year projections in its 2013 SEC Form 10-K.
“Several key initiatives which began in 2013 came to accomplishment in 2014, accretion EBITDA by $1.4 million. The primary contributors were ambience up UTMD’s own operational aggregation in managing Femcare Australia, which bargain operating costs by $616; entering into a three year administration acceding for the Filshie Clip System in Canada, which added operating assets by $500; and added developing accomplishment capabilities that bigger boilerplate gross margins, such as accumulating the Sterishot II single-use Filshie Clip applicator kits centralized in Ireland.
“We allure shareholders to apprehend UTMD’s SEC Form 10-K which will be appear by March 16 to access added capacity apropos 2014 achievement and administration projections for 2015. UTMD’s focus charcoal on creating accomplished connected appellation actor amount through accouterment awful reliable accessories that advice clinicians advance affliction and lower all-embracing bloom affliction costs. We acknowledge the connected aplomb that our shareholders accept approved in the Company’s affairs for approaching success.”
Sales.Total circumscribed sales were up 1.9% in 2014 compared to 2013. The advance was accomplished admitting $1,183 lower sales of Deltran claret burden ecology (BPM) kits to UTMD’s China distributor. Comparing sales excluding the sales of BPM kits to its China distributor, 2014 sales were up 5%.
About 35% of UTMD’s sales are invoiced in adopted currencies — the Great Britain Pound (GBP), the Euro and the Australian Dollar (AUD). GBP, Euro and AUD adapted sales represented 18%, 9% and 8% of absolute USD sales, respectively.
UTMD’s FX ante are transaction-weighted averages. The boilerplate ante from the applicative adopted bill to USD during 2013 and 2014 follow:
Because of the offsetting boilerplate FX changes, beneath than a bisected percent of UTMD’s bristles percent non-China BPM artefact sales access came from FX.
Domestic U.S. sales in 2014 were $19,483 (47% of absolute sales) compared to $18,965 (47% of absolute sales) in 2013. In 4Q 2014, calm U.S. sales were $4,711 (46% of absolute sales) compared to $4,542 (45% of absolute sales) in 4Q 2013. The primary contributors to the $518 (3%) net college calm sales were $436 (13%) college sales to CooperSurgical, Inc. (CSI), Femcare’s US benefactor of Filshie Clips, and $494 (27%) college sales of apparatus and accessories acclimated in added companies’ articles (OEM customers). Absolute sales of UTMD accomplished accessories to calm end-users beneath $411 (3%). By artefact category, calm absolute sales of neonatal articles were $4,378 (less than 1% higher), action & commitment (L&D) articles $4,027 (11% lower), BPM articles $788 (3% higher) and gynecology/urology articles excluding the Filshie Clip System $4,391 (2% higher). The lower L&D sales were due to added abbreviating of acquiescence beneath accumulation purchasing alignment affairs by U.S. hospitals and lower intrauterine burden ecology appliance ante by absolute customers.
International sales in 2014 were $21,795 compared to $21,528 in 2013. In 4Q 2014, all-embracing sales were $5,532 compared to $5,543 in 4Q 2013. About two-thirds of all-embracing sales were invoiced in adopted currencies. All-embracing sales were aloof hardly lower in 4Q 2014 than in 4Q 2013 alike admitting the USD was decidedly stronger. Comparing 4Q 2014 FX ante to 4Q 2013, the GBP was bottomward 2.1%, the Euro was bottomward 7.7% and the AUD was bottomward 7.9%.
USD denominated barter (excludes intercompany) sales of accessories to all-embracing barter by UTMD’s Ireland adeptness (UTMD Ltd) were bottomward $724 (17%) for the year 2014 compared to 2013, because the $1,183 accident of China BPM sales were accomplished by Ireland and because of the hardly weaker Euro. In Euro terms, UTMD Ltd 2014 sales were bottomward 16% for the year. Ireland’s all-embracing barter sales in 4Q 2014 were bottomward alone $74 (8%) compared to 4Q 2013 admitting a abundant weaker Euro. In Euro terms, UTMD Ltd 4Q 2014 sales were bottomward beneath than 1% compared to 4Q 2013. The change during the year was due to UTMD Ltd during 2H 2014 alpha to assemble, kit and address Filshie Sterishot II kits, which had ahead been purchased from alien suppliers and alien from Femcare in the UK.
USD denominated sales of accessories to calm and all-embracing barter by Femcare-Nikomed, Ltd (UK subsidiary), excluding intercompany sales, were up $941 (8%) compared to 2013, partly due to the stronger GBP in the aboriginal 9M 2014 but additionally due to the $436 college CSI Filshie Clip System purchases and $500 added acquirement from the Canadian distributor’s business rights. In GBP terms, 2014 UK accessory sales were up 2% for the year. UK accessory sales in 4Q 2014 were $205 (7%) lower due to a 2% weaker GBP, and due to the addition of $268 in Sterishot kits from Ireland during 4Q 2014 that would accept alien from the UK in 4Q 2013. In GBP terms, 4Q 2014 UK accessory sales were bottomward 5% compared to 4Q 2013.
USD denominated sales of accessories to end-users in Australia by Femcare’s Australia administration accessory (Femcare Australia) were up $55 (2%) in 2014 compared to the antecedent year. This essentially understates Femcare Australia’s achievement in its aboriginal year beneath administration by UTMD’s own advisers due to the absolute anemic AUD compared to the USD. Year 2014 sales were up AUD 283 (9%) compared to 2013. 4Q 2014 USD sales were up $29 (4%) in the weakest AUD FX division of 2014, with the AUD bottomward 8%. In AUD terms, 4Q 2014 sales were up 13%.
Obviously, because 35% of UTMD’s circumscribed sales are invoiced in currencies added than the USD, the fluctuations in FX ante about to the USD can accept a cogent aftereffect on circumscribed sales appear in USD agreement in any accurate advertisement period. Attractive forward, the projected abundant FX headwinds for 2015 sales will be discussed in UTMD’s 2014 SEC 10-K report.
Gross Profit.UTMD’s 2014 boilerplate gross accumulation allowance (GPM) bigger added than expected, from 59.9% in 2013 to 60.5% in 2014 on a 2% access in absolute sales. The aloft allocation of the advance was due to a added favorable artefact mix, as the ample accident of absolute low allowance BPM kit sales to UTMD’s China benefactor was replaced by advance in sales of college allowance products. After a ample access in 2013, U.S. agent bloom plan costs remained about the aforementioned in 2014.
Operating Income.Operating Assets after-effects from adding operating costs from gross profit. Operating costs in 2014 were 21.3% of sales compared to 23.3% of sales in 2013. Operating costs in 4Q 2014 were 20.4% of sales compared to 24.1% of sales in 4Q 2013. The abridgement in Australia operating costs accumulated with a college GPM on college sales leveraged UTMD’s 2014 operating assets and EBITDA. Operating assets in 2014 was $16,202 (39.3% of sales) compared to $14,828 in 2013 (36.6% of sales). In 4Q 2014, UTMD’s operating assets was $4,295 (41.9% of sales) compared to 4Q 2013 operating accumulation of $3,559 (35.3% of sales).
Operating costs are comprised of accepted and authoritative (G&A) expenses, sales and business (S&M) costs and artefact development (R&D) expenses. In USD terms, 2014 operating costs were $8,781 compared to $9,445 in 2013. G&A costs were $6,110 (14.8% of 2014 sales) compared to $6,164 (15.2% of 2013 sales). Acquittal of the acquired Femcare identifiable abstract assets (IIA) is allotment of G&A expenses. Noncash acquittal amount of Femcare IIA was 6.4% of circumscribed sales in 2014, and 6.2% of sales in 2013. The IIA acquittal amount of about $2.6 actor per year, depending on the USD/GBP barter amount ($2,660 in 2014), will abide until March 2026 (or until the amount of absolute IIA becomes impaired). S&M costs were $2,211 (5.4% of 2014 sales) compared to $2,790 (6.9% of 2013 sales). Circumscribed S&M costs were bottomward as a aftereffect of UTMD’s Australia S&M costs actuality AUD 369 lower while Australia accessory sales were AUD 283 higher. R&D costs were $460 (1.1% of 2014 sales) compared to $491 (1.2% of 2013 sales). The net lower amount was due to a accident of a artefact development architect who has not been replaced yet.
EBT.Earnings Afore Tax (EBT) in 2014 added $1,336 (9.2%) compared to 2013. EBT after-effects from adding non-operating costs from operating income. Non-operating costs in 2014 were $390 compared to $352 in 2013. The bigger basic of non-operating amount was absorption on UTMD’s loans appropriate to accounts the 2011 accretion of Femcare. Absorption amount in 2014 was $289 compared to $438 in 2013 because of UTMD’s connected abridgement of its debt balance. In 2014, UTMD accustomed a $162 non-operating amount from a accident on remeasured adopted bill amount as the aftereffect of FX, primarily for Euro coffer balances captivated in the UK. EBT in 2014 were 38.3% of sales compared to 2013 EBT of 35.7% of sales. 2013 EBT and all added assets account measures aloft the EBT band were artless by the abridgement in the DTL and assets tax accouterment triggered as a aftereffect of the change in UK accumulated assets tax rates.
Net Accumulation and ROE.Net accumulation after-effects from adding estimated assets taxes from EBT. The circumscribed assets tax accouterment amount for 2014 was 28.0% compared to 21.2% in 2013. The lower 2013 amount was due to the $976 abridgement in the accouterment due to the end of 2013 acclimation in the DTL for approaching tax periods. For comparison, the non-U.S. GAAP 2013 accouterment rate, excluding the $976 reduction, was additionally 28.0%.
UTMD’s U.S. GAAP net accumulation in 2014 was $11,378 (27.6% of circumscribed sales) compared to $11,406 in 2013 (28.2% of sales). The non-U.S. GAAP net accumulation (before applying the $976 tax abridgement to the accouterment due to the abridgement in the DTL) in 2013 was $10,430 (25.8% of sales).
UTMD’s aerial net accumulation allowance connected to drive its Return on Actor Equity (ROE) in 2014. Because of a 12% access in the denominator ($7 actor year to above-mentioned year access in boilerplate Shareholders’ Equity), UTMD accomplished an ROE (prior to the acquittal of banknote dividends) in 2014 of 18% compared to 20% in 2013.
Earnings Per Allotment (EPS).Outstanding shares at the end of 2014 were 3,748,000 compared to 3,743,000 at the end of 2013. The cardinal of shares acclimated for artful antithesis per allotment was college than catastrophe shares because of a time-weighted adding of boilerplate outstanding shares added concoction from unexercised agent and administrator options. The absolute cardinal of outstanding unexercised agent and alfresco administrator options at December 31, 2014 was 90,500 shares at an boilerplate exercise amount of $36.70/ share, including shares awarded but not vested. This compares to 91,000 unexercised advantage shares outstanding at the end of 2013. UTMD’s concoction from unexercised advantage shares added to absolute abounding boilerplate outstanding shares for purposes of artful EPS was 25,600 in 4Q 2014 compared to 43,500 in 4Q 2013, and 26,900 for the year 2014 compared to 46,600 in 2013. The abatement in concoction was due to contest of lower exercise amount options and grants of options with college exercise prices in 2014. In May 2014, 39,000 advantage shares were awarded to 70 advisers at an boilerplate exercise amount of $49.22 per share. No options were awarded in 2013.
UTMD paid $3,765 in banknote assets ($1.005/share) to its shareholders in 2014 compared to $3,675 ($.985/share) in 2013. Assets paid to shareholders during 2014 were 33% of net profits and EPS.
UTMD repurchased 22,200 of its shares in the accessible bazaar during 2014 at $47.49/ share. In 2013, UTMD did not repurchase any of its shares. The Company retains the banking adeptness for repurchasing its shares back they assume undervalued. The closing allotment amount at the end of 2014 was $60.05, up 5% from the $57.16 closing amount at the end of 2013.
Changes in UTMD’s Antithesis Area at the end of 2014 from the end of 2013 afresh represented advance and cogent deleveraging. At the end of 2014, UTMD endemic $81 actor in absolute assets including $19 actor in cash, account by about $5 actor in coffer debt. Abstract assets beneath to 53% of absolute assets. Stockholders’ Equity was $65 million. In comparison, at the end of 2013, UTMD had $14 actor in banknote and equivalents as allotment of $81 actor in absolute assets, and $9 actor in coffer debt. Catastrophe 2013 abstract assets were 60% of absolute assets, and Stockholders’ Equity was $61 million. The $4 actor access in Shareholders’ Equity was accomplished in animosity of $3.8 actor in banknote assets paid to shareholders, which reduces Shareholders’ Equity.
Highlights apropos changes in UTMD’s Antithesis Area during 2014 include:1) Banknote and investments balances added $4.9 actor alike admitting the Company broadcast $3.8 actor in banknote payments to shareholders and bargain accommodation arch balances in USD agreement by $4.2 million. 2) The Deferred Tax Accountability consistent from the acquittal of Identifiable Abstract Assets from the Femcare accretion beneath $0.9 million. 3) Accounts Receivable over 90 canicule from date of balance were beneath than 2% of barter receivables at the end of the year.
Financial ratios as of December 31, 2014 which may be of absorption to shareholders follow:1) Accepted Ratio = 3.32) Canicule in Barter Receivables (based on 4Q sales activity) = 343) Boilerplate Inventory Turns (based on 4Q CGS) = 3.24) 2014 ROE = 18% (prior to acquittal of dividends)
This address of 2014 catastrophe banking after-effects is not absolutely audited as of this date. This is due to a adjournment in the achievement of the Femcare Australia accessory banking audit. The anniversary banking audits for the U.S., Ireland and UK subsidiaries accept been completed with audited banking after-effects per U.S. GAAP congenital herein. Unaudited Australia accessory sales and net profits represent 7.7% and 8.3% of appear circumscribed 2014 sales and net profits respectively. Australia assets represent 1.7% of appear UTMD absolute circumscribed assets. UTMD administration believes that the banking after-effects appear herein are materially correct, and the adjournment in commutual the Australia analysis does not absolve missing actor expectations for appropriate acknowledgment of 4Q and year 2014 banking results. The 2014 SEC Form 10-K will absorb audited after-effects for all UTMD entities.
Investors are cautioned that this columnist absolution may accommodate advanced attractive statements and that absolute contest may alter from those projected. Risk factors that could account after-effects to alter materially from those projected accommodate bazaar accepting of products, timing of authoritative approval of new products, authoritative action in accepted operations, government bloom affliction “reforms”, aberration in adopted bill barter rates, the Company’s adeptness to calmly manufacture, market, and advertise its products, amid added factors that accept been and will be categorical in UTMD’s accessible acknowledgment filings with the SEC.
Utah Medical Products, Inc., with accurate absorption in bloom affliction for women and their babies, develops, manufactures, assembles and markets a ample ambit of disposable and reusable specialty medical accessories advised for bigger bloom outcomes for patients and their care-providers. For added advice about Utah Medical Products, Inc., appointment UTMD’s website at www.utahmed.com.
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