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Jun 30, 2020
Utah Medical Q2 2020 Earnings Report
Utah Medical experienced a decline in financial performance due to the COVID-19 pandemic's impact on elective medical procedures.
Key Takeaways
Utah Medical Products Inc. reported a significant decrease in sales, gross profit, and net income for the second quarter of 2020 compared to the same period in 2019, primarily due to the COVID-19 pandemic's impact on elective medical procedures. Despite the challenges, the company maintained profitability and a solid financial position.
Second quarter sales decreased by 25.8% compared to the prior year due to the COVID-19 pandemic.
Gross profit declined by 34% due to increased manufacturing costs and lower absorption of overhead.
Operating income decreased by 56% due to lower sales and gross profit.
Net income decreased by 62.8% due to lower operating income and a deferred tax liability increase.
Forward Guidance
The company anticipates a potential recovery in OUS sales and focuses on managing costs and maintaining a strong financial position.
Positive Outlook
- Medical need for UTMD's specialized devices has neither decreased nor increased because of the appearance of the corona virus.
- UTMD's financial position is strong.
- Company maintained substantial profitability even during a “shutdown” of certain medical procedures in 2Q 2020.
- UTMD is well-positioned to produce and distribute devices to medical facilities on demand.
- 2Q 2020 EBITDA at 43.2% of sales represents a functionally healthy company.
Challenges Ahead
- The Company’s financial performance in the second calendar quarter (2Q) and first half (1H) of 2020 reflects a substantial negative change relative to the same periods in 2019.
- UTMD just had a bad quarter.
- USD sales in 2020 continued to be hampered by a stronger USD compared to other currencies.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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