SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 22, 2003
Commission File No. 0-11178
-------
UTAH MEDICAL PRODUCTS, INC.
---------------------------
(Exact name of Registrant as specified in its charter)
UTAH 87-0342734
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7043 South 300 West
Midvale, Utah 84047
---------------------
Address of principal executive offices
Registrant's telephone number: (801) 566-1200
--------------
--------------------------------------------------------------------------------
ITEM 9. REGULATION FD DISCLOSURE
--------------------------------------------------------------------------------
On April 22, 2003 the Company announced, by press release, the following:
Salt Lake City, Utah - Utah Medical Products, Inc. (Nasdaq:UTMD) reports that
all primary income statement measures of financial performance in First Quarter
(1Q) 2003 increased compared to 1Q 2002. Sales, gross profits, operating
profits, earnings before taxes (EBT), net income and earnings per share (eps)
were up 3%, 4%, 8%, 6%, 4% and 16%, respectively.
The increase in consolidated global sales was led by a 19% increase in UTMD's
foreign sales. Shipments from UTMD's Ireland facility were up 47% in U.S. dollar
terms and up 20% in EURO terms. In product family categories, the sales increase
was led by an 13% increase in blood pressure monitoring product sales and a 5%
increase in neonatal product sales.
1Q 2003 gross profit margins improved 0.9 percentage points compared to 1Q 2002
as a result of better utilization of manufacturing overhead, particularly in
Ireland and Oregon manufacturing facilities, and a reduction in materials
consumption due to lower scrap rates. In 1Q 2003, UTMD's operating profit margin
at 39.4% and net profit margin at 26.0% compared favorably to 37.6% and 25.5%,
respectively in 1Q 2002. Operating expenses were down 2% overall due primarily
to continued improvement in sales productivity. Resulting operating expenses
were 18.4% of sales compared to 19.3% of sales in 1Q 2001.
Non-operating income in 1Q 2003 was $80,000 compared to $113,000 in 1Q 2002, as
a result of interest cost on the Company's higher line of credit balance
incurred to repurchase shares. The average line of credit balance for 1Q 2003
was $4.0 million compared to $1.7 million in 1Q 2002. Offsetting this, diluted
shares for 1Q 2003 were 550,000 lower than in 1Q 2002, leading to a 16% increase
in earnings per share. The March 31, 2003 line of credit balance was $3.0
million, compared to $5.0 million three months earlier on December 31, 2002.
UTMD management anticipates bringing the line of credit balance to zero in 3Q
2003, unless additional share repurchases or an acquisition become available
under favorable conditions.
The growth in net profits was retarded slightly by an increase in UTMD's
estimated income tax rate from 35% in 1Q 2002 to 36% in 1Q 2003. UTMD's tax rate
for the year of 2003 may be slightly higher or lower than in 2002 depending
largely on the exercise of employee options, since a short term gain realized by
the employee is tax deductible to the Company. In addition, the portion of
earnings generated in Ireland versus the U.S. has an impact on the consolidated
tax rate because the income tax rate on value-added in Ireland is lower than the
rate in the U.S.
The Company's increase in stock price also had a retarding effect on eps growth,
as a result of dilution from option exercises and calculation for unexercised
options with exercise prices below the current market value. UTMD's dilution
from shares added to actual weighted
average outstanding shares for purposes of calculating eps were 371,000 in 1Q
2003 compared to 344,000 in 1Q 2002. The diluted number of shares used to
calculate 1Q 2003 eps was 4,815,600 compared to 5,366,200 for 1Q 2002. The
actual number of outstanding shares at the end of 1Q 2003 was 4,452,900
including employee option exercises of 22,200 shares. In order to help offset
option dilution, UTMD repurchased 12,500 shares at a cost of $0.2 million during
1Q 2003. Management will continue to be mindful of the dilution effect of its
option programs. The total number of outstanding unexercised options at March
31, 2003 was about 1.0 million shares at an average exercise price of $9.86/
share, including shares awarded but not vested. This compares to 1.1 million
option shares outstanding at the end of 1Q 2002.
Diluted 1Q 2003 eps increased to $.37 compared to 1Q 2002 eps of $.32, yielding
UTMD's twenty-first consecutive quarter of higher eps compared with the same
quarter in the prior year. During that 5 1/4 year time span, eps have grown at
an annually compounded rate of 21%. Eps for the most recent four calendar
quarters (TTM) were $1.41, a company record for four consecutive calendar
quarters. Last December, the Company projected $1.55 eps for calendar 2003.
UTMD's 2003 plan is driven by realizing increased U.S. sales of the patented
obstetrics tool Intran(R) Plus as a result of new agreements with hospital group
purchasing organizations (GPOs) completed after a favorable patent infringement
judgment in late 2002. As sales of Intran Plus actually declined 1% in 1Q 2003
relative to 1Q 2002, increased domestic sales of Intran Plus have yet to
materialize. However, UTMD exceeded its plan for 1Q 2003 eps through
substantially higher foreign sales than expected.
Investors are cautioned that this press release contains forward looking
statements and that actual events may differ from those projected. Risk factors
that could cause results to differ materially from those projected include
market acceptance of products, timing of regulatory approval of new products,
UTMD's ability to efficiently manufacture, market, and sell its products, among
other factors that have been outlined in UTMD's public disclosure filings with
the SEC. The 2003 1Q 10-Q will be filed with the SEC by May 15.
Utah Medical Products, Inc., with particular interest in health care for women
and their babies, develops, manufactures, assembles and markets a broad range of
disposable and reusable specialty medical devices designed for better health
outcomes for patients and their care- providers. For more information about Utah
Medical Products, Inc., visit UTMD's website at www.utahmed.com.
Utah Medical Products, Inc.
INCOME STATEMENTS
(in thousands except per share data - unaudited)
First Quarter ended March 31
Percent Change 2003 2002
-------------- ---- ----
Net Sales +2.6% $ 6,877 $ 6,705
Gross Profit +4.2% 3,977 3,816
Operating Income +7.6% 2,712 2,521
Income Before Tax +6.0% 2,793 2,634
Net Income +4.4% $ 1,788 $ 1,712
Diluted Earnings Per Share +16.3% $ .371 $ .319
Shares Outstanding (diluted) 4,816 5,366
BALANCE SHEETS
(in thousands)
(unaudited) (audited) (unaudited)
March 31, December 31, March 31,
--------- ------------ ---------
2003 2002 2002
---- ---- ----
Assets
Accounts Receivable, net $ 3,349 $ 3,093 $ 3,687
Inventories 3,633 3,478 3,295
Other Current Assets 1,160 1,186 895
Total Current Assets 8,142 7,757 7,877
Property and Equipment - net 8,905 8,890 8,749
Intangible Assets - net 6,721 6,740 6,801
Total Assets $23,768 $23,387 $23,427
Liabilities and Stockholders' Equity
Total Current Liabilities $ 2,784 $ 2,319 $ 2,765
Note Payable 2,958 4,956 900
Deferred Income Taxes 395 390 302
Stockholders' Equity 17,631 15,722 19,460
Total Liabilities and Stockholders' Equity $23,768 $23,387 $23,427
--------------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchanges Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UTAH MEDICAL PRODUCTS, INC.
---------------------------
REGISTRANT
Date: 4/22/03 By: /s/ Kevin L. Cornwell
--------------------- ------------------------
Kevin L. Cornwell
CEO