Shares of Utah Medical Products, Inc. (UTMD Quick QuoteUTMD - Free Report) have declined 4.6% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 0.5% growth over the same time frame. Over the past month, the stock has declined 0.4% compared with the S&P 500’s 2.8% growth.

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For the fourth quarter of 2024, Utah Medical reported earnings per share (EPS) of 86 cents, representing a 27.4% decrease from $1.18 in the fourth quarter of 2023.

Total revenues of $9.2 million reflected a 25.8% decline from $12.3 million in the year-ago quarter. The decrease was driven by weaker sales across key product categories, including a significant drop in revenues from PendoTECH OEM sales and lower sales to outside-the-U.S. (OUS) distributors.

Net income for the quarter was $2.9 million, down 32.3% from $4.3 million in the same period last year. 

For the full year, Utah Medical reported revenues of $40.9 million, an 18.6% decline from $50.2 million in 2023. Net income for 2024 fell 16.6% to $13.9 million from $16.6 million, while EPS dropped 13.4% to $3.96 from $4.57.

Key Business Metrics for UTMD

Despite the decline in revenues, Utah Medical maintained relatively stable gross profit margins. The fourth-quarter gross margin was 58.1%, slightly higher than 57.6% the prior-year period. Full-year gross margin stood at 59%, down slightly from 59.8% in 2023.

Operating income for the fourth quarter declined 25.7% year over year to $2.9 million, while full-year operating income fell 19% to $13.6 million.

Cash and investments totaled $83 million as of Dec. 31, 2024, down from $92.9 million a year earlier.

Management Commentary for UTMD

The company attributed the revenue decline to three primary factors: a $5.9 million drop in PendoTECH sales, lower OUS distributor sales, and a 12% decline in worldwide Filshie Clip System device sales.

Despite additional cost-of-living adjustments for employees and ongoing inflation in raw material costs, Utah Medical managed to sustain its profit margins through efficiency measures, including workforce reductions and the closure of a second production shift in Utah.

Factors Influencing UTMD’s Results

A significant contributor to the revenue decline was a sharp reduction in orders from PendoTECH, which accounted for 64% of the total revenue drop. The company also experienced a $2.1 million decrease in OUS distributor sales, primarily due to reduced shipments of blood pressure monitoring kits to China. Filshie Clip System sales were down 12%, with declines across both domestic and OUS markets.

In addition, Utah Medical faced higher litigation expenses, increased salary costs and the impact of a newly introduced excise tax on share repurchases. Non-operating income was lower year over year, primarily due to the absence of rental income in Ireland, which had contributed significantly in 2023.

UTMD’s Guidance

Management expects total worldwide revenues to decline again in 2025, though at a lower rate than in 2024. While PendoTECH sales are projected to decline further, the company anticipates a slight rebound in OUS distributor sales and Filshie device revenues.

Other Developments for UTMD

During 2024, Utah Medical repurchased more than 301,000 shares at an average price of $66.13 per share, totaling nearly $20 million. The company also increased its quarterly dividend to 30.5 cents per share, effective January 2025.