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Utah Medical's Q4 Earnings Hurt by OEM Decline, Fall Y/Y
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Shares of Utah Medical Products, Inc. (UTMD - Free Report) have gained 2% since the company reported its fourth-quarter and full-year 2025 earnings. This outpaced the S&P 500 index’s modest 0.2% growth over the same period. Over the past month, UTMD shares have climbed 7.6%, significantly outperforming the S&P 500’s 1.5% increase.
For the quarter ended Dec. 31, 2025, Utah Medical reported earnings per share (EPS) of 80.2 cents, which dropped 6.3% from 85.7 cents in the year-ago quarter. The year-over-year decline in EPS was less severe than the drop in net income and operating income, primarily due to a reduced number of outstanding shares following significant stock repurchases during the year.
Revenues of $9 million reflected a 1.2% decline from $9.2 million in the same period a year ago.
Gross profit slipped 1.1% to $5.26 million, down slightly from $5.32 million in the fourth quarter of 2024. Operating income fell more sharply, decreasing 16.7% year over year to $2.4 million from $2.9 million, due largely to higher operating expenses. Income before tax declined 14.1% to $3.1 million.
Net income came in at $2.6 million, an 11.6% decline from $2.9 million in the prior-year quarter.
Utah Medical Products, Inc. Price, Consensus and EPS Surprise
While sales were modestly lower, Utah Medical maintained a strong gross profit margin of 58.2%, nearly unchanged from 58.1% in the prior-year quarter. Operating income margin declined to 27% from 32%, and the net income margin fell to 28.4% from 31.7%. The company’s adjusted consolidated EBITDA for the quarter was $4 million, down 10% from $4.4 million a year ago. As a percentage of sales, EBITDA declined to 43.8% from 48.1%.
Domestic U.S. sales in the fourth quarter declined 4.9% to $5.5 million from $5.7 million, with non-Filshie device sales accounting for the majority of the drop. OEM sales were down 31.5% year over year, while Filshie device sales in the U.S. increased 21.6%. Outside the U.S. (OUS) sales rose 4.9% to $3.6 million, largely due to favorable foreign exchange rates. On a constant currency basis, OUS sales were up only 0.5%, with weakness in direct-to-hospital Filshie sales partially offset by stronger distributor shipments.
Management Commentary and Strategic Context
Management noted that the fourth quarter offered a more normalized comparison, as there were no sales to UTMD’s China distributor in either the fourth quarter of 2025 or the fourth quarter of 2024. This allowed margins to stabilize somewhat despite persistent cost pressures. The company emphasized that cost-of-living salary increases and raw material inflation continued to weigh on results, but effective cost containment and margin discipline helped prevent further deterioration.
Operating expenses rose due to increased general and administrative (G&A) costs, which included a $0.2 million charge related to an embezzlement case in the Australian subsidiary and a $0.4 million write-off tied to cancellation fees from the China distributor. Sales and marketing expenses were relatively flat, while R&D expenses increased due to product validation efforts late in the year. G&A expenses represented 23.2% of sales in the fourth quarter, up from 19.3% in the prior-year quarter.
Factors Influencing the Results
The revenue decline in the quarter was driven primarily by softness in U.S. sales of non-Filshie medical devices and OEM components. While U.S. Filshie sales showed strong growth, they were not enough to fully offset declines in other areas. OEM sales in particular were weak, continuing a trend observed throughout 2025 as PendoTECH-related sales diminished. Favorable foreign exchange rates provided a modest benefit to reported international sales, especially in Europe, where the stronger EUR and GBP increased USD-reported revenues.
Legal costs related to product liability litigation increased slightly in the quarter to $0.4 million from $0.3 million the previous year. However, management noted that 14 of 19 pending court cases had already been dismissed by the end of January 2026, and no cases had yet gone to trial. The company expects lower litigation costs in 2026 unless trials are required, which could increase expenses.
Foreign exchange impacts added $0.04 million to operating expenses in the quarter. The net effect of FX on both revenues and costs was modest but favorable, driven primarily by stronger European currencies.
2025 Update
Full-year sales totaled $38.5 million, marking a 5.8% year-over-year decline from $40.9 million in 2024. The dip in revenue translated into reduced profitability. Net income fell 18.7% to $11.3 million. EPS dropped 12.1% year over year to $3.48.
For the full year, the gross margin declined to 57.1% from 59% in 2024, reflecting persistent cost pressures tied to inflation in raw materials and employee compensation.
Guidance
Management reiterated that sales to PendoTECH and to the China distributor are expected to remain at zero in 2026, as they were in the fourth quarter. The company aims to offset these losses with new product introductions, incremental sales to other biopharma customers, and organic growth in both U.S. and international Filshie sales. Management cautioned that substantial uncertainty remains in achieving this recovery.
Other Developments
During the fourth quarter of 2025, Utah Medical repurchased 17,951 shares at an average cost of $55.35 per share, totaling $1 million. This was part of a broader repurchase program under which 148,935 shares were bought back over the year. The company ended the year with 3.2 million diluted shares outstanding, down from 3.3 million a year earlier. Additionally, in October 2025, UTMD issued 23,800 stock options to employees and a new outside director at an exercise price of $58.10 per share.
Despite modest top-line pressure, Utah Medical concluded the quarter with $85.8 million in cash and investments, up $2.8 million from the end of 2024, and no debt. Management reiterated its commitment to shareholder returns, maintaining quarterly dividends and continuing opportunistic share repurchases.
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Utah Medical's Q4 Earnings Hurt by OEM Decline, Fall Y/Y
Shares of Utah Medical Products, Inc. (UTMD - Free Report) have gained 2% since the company reported its fourth-quarter and full-year 2025 earnings. This outpaced the S&P 500 index’s modest 0.2% growth over the same period. Over the past month, UTMD shares have climbed 7.6%, significantly outperforming the S&P 500’s 1.5% increase.
For the quarter ended Dec. 31, 2025, Utah Medical reported earnings per share (EPS) of 80.2 cents, which dropped 6.3% from 85.7 cents in the year-ago quarter. The year-over-year decline in EPS was less severe than the drop in net income and operating income, primarily due to a reduced number of outstanding shares following significant stock repurchases during the year.
Revenues of $9 million reflected a 1.2% decline from $9.2 million in the same period a year ago.
Gross profit slipped 1.1% to $5.26 million, down slightly from $5.32 million in the fourth quarter of 2024. Operating income fell more sharply, decreasing 16.7% year over year to $2.4 million from $2.9 million, due largely to higher operating expenses. Income before tax declined 14.1% to $3.1 million.
Net income came in at $2.6 million, an 11.6% decline from $2.9 million in the prior-year quarter.
Utah Medical Products, Inc. Price, Consensus and EPS Surprise
Utah Medical Products, Inc. price-consensus-eps-surprise-chart | Utah Medical Products, Inc. Quote
Other Key Business Metrics
While sales were modestly lower, Utah Medical maintained a strong gross profit margin of 58.2%, nearly unchanged from 58.1% in the prior-year quarter. Operating income margin declined to 27% from 32%, and the net income margin fell to 28.4% from 31.7%. The company’s adjusted consolidated EBITDA for the quarter was $4 million, down 10% from $4.4 million a year ago. As a percentage of sales, EBITDA declined to 43.8% from 48.1%.
Domestic U.S. sales in the fourth quarter declined 4.9% to $5.5 million from $5.7 million, with non-Filshie device sales accounting for the majority of the drop. OEM sales were down 31.5% year over year, while Filshie device sales in the U.S. increased 21.6%. Outside the U.S. (OUS) sales rose 4.9% to $3.6 million, largely due to favorable foreign exchange rates. On a constant currency basis, OUS sales were up only 0.5%, with weakness in direct-to-hospital Filshie sales partially offset by stronger distributor shipments.
Management Commentary and Strategic Context
Management noted that the fourth quarter offered a more normalized comparison, as there were no sales to UTMD’s China distributor in either the fourth quarter of 2025 or the fourth quarter of 2024. This allowed margins to stabilize somewhat despite persistent cost pressures. The company emphasized that cost-of-living salary increases and raw material inflation continued to weigh on results, but effective cost containment and margin discipline helped prevent further deterioration.
Operating expenses rose due to increased general and administrative (G&A) costs, which included a $0.2 million charge related to an embezzlement case in the Australian subsidiary and a $0.4 million write-off tied to cancellation fees from the China distributor. Sales and marketing expenses were relatively flat, while R&D expenses increased due to product validation efforts late in the year. G&A expenses represented 23.2% of sales in the fourth quarter, up from 19.3% in the prior-year quarter.
Factors Influencing the Results
The revenue decline in the quarter was driven primarily by softness in U.S. sales of non-Filshie medical devices and OEM components. While U.S. Filshie sales showed strong growth, they were not enough to fully offset declines in other areas. OEM sales in particular were weak, continuing a trend observed throughout 2025 as PendoTECH-related sales diminished. Favorable foreign exchange rates provided a modest benefit to reported international sales, especially in Europe, where the stronger EUR and GBP increased USD-reported revenues.
Legal costs related to product liability litigation increased slightly in the quarter to $0.4 million from $0.3 million the previous year. However, management noted that 14 of 19 pending court cases had already been dismissed by the end of January 2026, and no cases had yet gone to trial. The company expects lower litigation costs in 2026 unless trials are required, which could increase expenses.
Foreign exchange impacts added $0.04 million to operating expenses in the quarter. The net effect of FX on both revenues and costs was modest but favorable, driven primarily by stronger European currencies.
2025 Update
Full-year sales totaled $38.5 million, marking a 5.8% year-over-year decline from $40.9 million in 2024. The dip in revenue translated into reduced profitability. Net income fell 18.7% to $11.3 million. EPS dropped 12.1% year over year to $3.48.
For the full year, the gross margin declined to 57.1% from 59% in 2024, reflecting persistent cost pressures tied to inflation in raw materials and employee compensation.
Guidance
Management reiterated that sales to PendoTECH and to the China distributor are expected to remain at zero in 2026, as they were in the fourth quarter. The company aims to offset these losses with new product introductions, incremental sales to other biopharma customers, and organic growth in both U.S. and international Filshie sales. Management cautioned that substantial uncertainty remains in achieving this recovery.
Other Developments
During the fourth quarter of 2025, Utah Medical repurchased 17,951 shares at an average cost of $55.35 per share, totaling $1 million. This was part of a broader repurchase program under which 148,935 shares were bought back over the year. The company ended the year with 3.2 million diluted shares outstanding, down from 3.3 million a year earlier. Additionally, in October 2025, UTMD issued 23,800 stock options to employees and a new outside director at an exercise price of $58.10 per share.
Despite modest top-line pressure, Utah Medical concluded the quarter with $85.8 million in cash and investments, up $2.8 million from the end of 2024, and no debt. Management reiterated its commitment to shareholder returns, maintaining quarterly dividends and continuing opportunistic share repurchases.