Utah Medical Products (UTMD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 19.2% year-over-year to $10.4M; first half 2024 revenue down 14.4% to $21.7M, mainly due to lower sales in PendoTECH OEM, China BPM distributor, and Filshie Clip System.

• Net income for Q2 2024 was $3.45M, down 17.8% year-over-year; first half net income was $7.41M, down 11.9%.

• Gross, operating, and net income margins all remained above 33% in Q2 2024 despite lower sales.

• Company maintained a strong financial position with $89.2M in cash and no debt at quarter-end.

• Major sales declines were concentrated in three categories: PendoTECH OEM, China BPM distributor, and Filshie Clip System.

Financial highlights

• Q2 2024 operating income was $3.44M, down 22.3% year-over-year; first half operating income was $7.32M, down 17.4%.

• Adjusted EBITDA for Q2 2024 was $4.94M (47.5% margin), down from $7.00M (54.4%) in Q2 2023; 1H 2024 adjusted EBITDA was $10.5M (48.3% of sales), down 24.6%.

• Diluted EPS for Q2 2024 was $0.98, down 15.3% year-over-year; first half diluted EPS was $2.07, down 10.5%.

• Operating cash flow for the first half was $8.04M, down from $11.83M in the prior year.

• Dividends paid in the first half totaled $2.17M; $9.4M was used for share repurchases.

Outlook and guidance

• Full-year 2024 sales now projected to be 20–22% lower than 2023 due to ongoing weakness in key categories.

• Management expects continued revenue declines from the major OEM customer (PendoTECH) in 2H 2024, projecting $6M lower sales for the year.

• 3Q and 4Q 2024 shipments to PendoTECH are expected to be $1.7M lower each quarter year-over-year; 4Q 2024 shipments to the China BPM distributor are scheduled to be $1.2M lower year-over-year.

• Operating profit for the year expected to be consistent with prior projections, supported by strong gross margins and cost controls.

• EPS will benefit from continued share repurchases.