For quarter ended: June 30, 2011
|
Commission File No. 001-12575 |
UTAH
|
87-0342734
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer o
|
Accelerated filer x
|
Non-accelerated filer o
|
Smaller reporting company o
|
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1.
|
Financial Statements
|
|
Consolidated Condensed Balance Sheets as of
|
||
June 30, 2011 and December 31, 2010
|
1
|
|
Consolidated Condensed Statements of Income for the
|
||
three and six months ended June 30, 2011 and June 30, 2010
|
2
|
|
Consolidated Condensed Statements of Cash Flows for
|
||
the six months ended June 30, 2011 and June 30, 2010
|
3
|
|
Notes to Consolidated Condensed Financial Statements
|
4
|
|
Item 2.
|
Management’s Discussion and Analysis of
|
|
Financial Condition and Results of Operations
|
7
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
13
|
Item 4.
|
Controls and Procedures
|
13
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
14
|
Item 1A.
|
Risk Factors
|
14
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
15
|
Item 6.
|
Exhibits
|
16
|
SIGNATURES
|
16
|
PART I - FINANCIAL INFORMATION
|
Item 1. Financial Statements
|
UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED BALANCE SHEETS AS OF
|
JUNE 30, 2011 AND DECEMBER 31, 2010
|
(in thousands)
|
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
JUNE 30, 2011
|
DECEMBER 31, 2010
|
||||||
Current assets:
|
||||||||
Cash
|
$ | 6,267 | $ | 3,818 | ||||
Investments, available-for-sale
|
83 | 14,718 | ||||||
Accounts & other receivables - net
|
4,965 | 3,164 | ||||||
Inventories
|
5,021 | 3,097 | ||||||
Other current assets
|
728 | 346 | ||||||
Total current assets
|
17,064 | 25,142 | ||||||
Property and equipment - net
|
9,529 | 8,750 | ||||||
Goodwill
|
16,218 | 7,191 | ||||||
Other intangible assets
|
40,723 | 2,165 | ||||||
Other intangible assets - accumulated amortization
|
(2,767 | ) | (2,010 | ) | ||||
Other intangible assets - net
|
37,956 | 155 | ||||||
TOTAL
|
$ | 80,767 | $ | 41,238 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 2,002 | $ | 398 | ||||
Accrued expenses
|
2,389 | 1,290 | ||||||
Current portion of notes payable
|
5,573 | 215 | ||||||
Total current liabilities
|
9,964 | 1,903 | ||||||
Notes payable
|
20,590 | 909 | ||||||
Deferred tax liability - intangible assets
|
8,832 | - | ||||||
Other long term liabilities
|
592 | - | ||||||
Deferred revenue and income taxes
|
793 | 634 | ||||||
Total liabilities
|
40,770 | 3,446 | ||||||
Stockholders' equity:
|
||||||||
Preferred stock - $.01 par value; authorized - 5,000
|
||||||||
shares; no shares issued or outstanding
|
- | - | ||||||
Common stock - $.01 par value; authorized - 50,000
|
||||||||
shares; issued - June 30, 2011, 3,635 shares and
|
||||||||
December 31, 2010, 3,619 shares
|
36 | 36 | ||||||
Accumulated other comprehensive loss
|
(1,131 | ) | (1,275 | ) | ||||
Additional paid-in capital
|
554 | 107 | ||||||
Retained earnings
|
40,538 | 38,924 | ||||||
Total stockholders' equity
|
39,997 | 37,792 | ||||||
TOTAL
|
$ | 80,767 | $ | 41,238 | ||||
see notes to consolidated condensed financial statements
|
UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE
|
||||||||||||||||
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND JUNE 30, 2010
|
||||||||||||||||
(in thousands, except per share amounts - unaudited)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30, |
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Sales, net
|
$ | 10,377 | $ | 6,276 | $ | 17,170 | $ | 12,712 | ||||||||
Cost of goods sold
|
4,117 | 3,009 | 7,200 | 6,122 | ||||||||||||
Gross profit
|
6,260 | 3,267 | 9,969 | 6,590 | ||||||||||||
Operating expense
|
||||||||||||||||
Selling, general and administrative
|
2,879 | 977 | 4,330 | 1,916 | ||||||||||||
Research & development
|
148 | 95 | 248 | 190 | ||||||||||||
Total
|
3,027 | 1,072 | 4,579 | 2,106 | ||||||||||||
Operating income
|
3,233 | 2,195 | 5,390 | 4,484 | ||||||||||||
Other income (expense)
|
(281 | ) | 16 | (296 | ) | 35 | ||||||||||
Income before provision for income taxes
|
2,952 | 2,211 | 5,094 | 4,519 | ||||||||||||
Provision for income taxes
|
970 | 744 | 1,776 | 1,525 | ||||||||||||
Net income
|
$ | 1,982 | $ | 1,467 | $ | 3,319 | $ | 2,994 | ||||||||
Earnings per common shares (basic)
|
$ | 0.55 | $ | 0.40 | $ | 0.92 | $ | 0.83 | ||||||||
Earnings per common share (diluted)
|
$ | 0.54 | $ | 0.40 | $ | 0.91 | $ | 0.82 | ||||||||
Shares outstanding - basic
|
3,626 | 3,631 | 3,623 | 3,625 | ||||||||||||
Shares outstanding - diluted
|
3,645 | 3,651 | 3,638 | 3,648 | ||||||||||||
see notes to consolidated condensed financial statements
|
UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND JUNE 30, 2010
|
||||||||
(in thousands - unaudited)
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 3,319 | $ | 2,994 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
1,121 | 299 | ||||||
Gain on investments
|
(6 | ) | (24 | ) | ||||
Provision for losses on accounts receivable
|
8 | 3 | ||||||
(Gain)/Loss on disposal of assets
|
- | 0 | ||||||
Deferred income taxes
|
(174 | ) | - | |||||
Stock-based compensation expense
|
49 | 44 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable - trade
|
429 | 372 | ||||||
Accrued interest and other receivables
|
(40 | ) | (20 | ) | ||||
Inventories
|
(531 | ) | 140 | |||||
Prepaid expenses and other current assets
|
43 | 18 | ||||||
Accounts payable
|
(174 | ) | 56 | |||||
Accrued expenses
|
(26 | ) | (214 | ) | ||||
Deferred revenue
|
(21 | ) | - | |||||
Other liability
|
449 | - | ||||||
Total adjustments
|
1,128 | 675 | ||||||
Net cash provided by operating activities
|
4,447 | 3,669 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital expenditures for:
|
||||||||
Property and equipment
|
(158 | ) | (762 | ) | ||||
Intangible assets
|
(7 | ) | - | |||||
Purchases of investments
|
(500 | ) | (1,200 | ) | ||||
Proceeds from sale of investments
|
15,155 | 2,134 | ||||||
Net cash paid in acquisition
|
(41,084 | ) | - | |||||
Net cash (used in) provided by investing activities
|
(26,594 | ) | 173 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from issuance of common stock - options
|
375 | 375 | ||||||
Common stock purchased and retired
|
- | (134 | ) | |||||
Tax benefit attributable to exercise of stock options
|
23 | 26 | ||||||
Proceeds from notes payable
|
26,934 | - | ||||||
Repayments of notes payable
|
(1,927 | ) | (180 | ) | ||||
Payment of dividends
|
(851 | ) | (853 | ) | ||||
Net cash used in financing activities
|
24,555 | (766 | ) | |||||
Effect of exchange rate changes on cash
|
41 | (53 | ) | |||||
NET INCREASE IN CASH
|
2,449 | 3,022 | ||||||
CASH AT BEGINNING OF PERIOD
|
3,818 | 410 | ||||||
CASH AT END OF PERIOD
|
$ | 6,267 | $ | 3,432 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for income taxes
|
$ | 1,470 | $ | 1,385 | ||||
Cash paid during the period for interest
|
354 | 13 | ||||||
see notes to consolidated condensed financial statements
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Finished goods
|
$
|
1,623
|
$
|
1,008
|
||||
Work-in-process
|
938
|
757
|
||||||
Raw materials
|
2,460
|
1,332
|
||||||
Total
|
$
|
5,021
|
$
|
3,097
|
Assets Acquired
|
||||
Accounts receivable
|
$
|
2,176
|
||
Prepaid expenses
|
344
|
|||
Inventory
|
1,319
|
|||
Property and equipment
|
606
|
|||
Identifiable intangibles
|
||||
Patents
|
97
|
|||
Non-compete agreements
|
162
|
|||
Trademarks, trade names
|
11,559
|
|||
Customer relationships
|
11,559
|
|||
Regulatory approvals & product certifications
|
15,419
|
|||
Goodwill
|
9,084
|
|||
Total assets acquired
|
52,325
|
|||
Liabilities Assumed
|
||||
Accounts payable
|
1,107
|
|||
Accrued expenses
|
1,049
|
|||
Deferred tax liability
|
9,084
|
|||
Total liabilities assumed
|
11,241
|
|||
Net assets acquired
|
$
|
41,084
|
Beginning Balance, January 1, 2011
|
$
|
0
|
||
Changes in Warranty Reserve during 1H 2011:
|
||||
Aggregate reductions for warranty repairs
|
-
|
|||
Aggregate changes for warranties issued during reporting period
|
-
|
|||
Aggregate changes in reserve related to preexisting warranties
|
32
|
|||
Ending Balance, June 30, 2011
|
$
|
32
|
2Q 2011
|
2Q 2010
|
|||||||
Balance, beginning of period
|
$
|
(178
|
)
|
$
|
(219
|
)
|
||
Realized loss from securities included in beginning balance
|
-
|
5
|
||||||
Gross unrealized holding gains (losses), in equity securities
|
(5
|
)
|
(13
|
)
|
||||
Deferred income taxes on unrealized holding loss
|
2
|
3
|
||||||
Balance, end of period
|
$
|
(181
|
)
|
$
|
(224
|
)
|
Fair Value Measurements Using
|
||||||||||||||||
Description
|
Total Fair Value
at 6/30/2011
|
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3 )
|
||||||||||||
Available-for-sale securities
|
$
|
83
|
$
|
83
|
$
|
0
|
$
|
0
|
2Q 2011 | 2Q 2010 |
change
|
1H 2011 | 1H 2010 |
change
|
|||||||||||||||||||
Net Sales
|
$ | 10,377 | $ | 6,276 | 65.3 | % | $ | 17,170 | $ | 12,712 | 35.1 | % | ||||||||||||
Gross Profit
|
6,260 | 3,267 | 91.6 | % | 9,969 | 6,590 | 51.3 | % | ||||||||||||||||
Operating Income
|
3,233 | 2,195 | 47.3 | % | 5,390 | 4,484 | 20.2 | % | ||||||||||||||||
Income Before Tax
|
2,952 | 2,211 | 33.5 | % | 5,094 | 4,519 | 12.7 | % | ||||||||||||||||
Net Income
|
1,982 | 1,467 | 35.1 | % | 3,319 | 2,994 | 10.8 | % | ||||||||||||||||
Earnings per Share
|
.544 | .402 | 35.3 | % | .912 | .821 | 11.1 | % |
2Q 2011 | 2Q 2010 | 1H 2011 | 1H 2010 | |||||||||||||
Gross Profit Margin
|
60.3 | % | 52.1 | % | 58.1 | % | 51.8 | % | ||||||||
Operating Profit Margin
|
31.2 | % | 35.0 | % | 31.4 | % | 35.3 | % | ||||||||
Net Income Margin
|
19.1 | % | 23.4 | % | 19.3 | % | 23.6 | % |
Change from
|
Change from
|
|||||||
[Thousand $$]
|
12-31-10 | 3-31-11 | ||||||
Cash & investments
|
$ | (12,186 | ) | $ | (746 | ) | ||
Receivables & inventory
|
3,726 | 313 | ||||||
Property and equipment – net
|
779 | 47 | ||||||
Goodwill
|
9,027 | 5 | ||||||
Other intangible assets – net
|
37,801 | (629 | ) | |||||
Total assets
|
39,529 | (1,136 | ) | |||||
Current portion of notes payable
|
5,358 | (11 | ) | |||||
Notes payable
|
19,681 | (1,736 | ) | |||||
Deferred tax liability
|
8,832 | (163 | ) | |||||
Total liabilities
|
37,324 | (2,740 | ) | |||||
Shareholders’ Equity
|
2,205 | 1,604 |
2Q 2011 | 2Q 2010 | 1H 2011 | 1H 2010 | |||||||||||||
Obstetrics
|
$ | 1,493 | $ | 1,466 | $ | 2,967 | $ | 2,924 | ||||||||
Gynecology/ Electrosurgery/ Urology
|
5,751 | 1,529 | 7,721 | 3,102 | ||||||||||||
Neonatal
|
1,711 | 1,899 | 3,422 | 3,806 | ||||||||||||
Blood Pressure Monitoring and Accessories*
|
1,422 | 1,382 | 3,060 | 2,880 | ||||||||||||
Total:
|
$ | 10,377 | $ | 6,276 | $ | 17,170 | $ | 12,712 |
2Q 2011 | 2Q 2010 | 1H 2011 | 1H 2010 | |||||||||||||
Obstetrics
|
$ | 272 | $ | 178 | $ | 472 | $ | 337 | ||||||||
Gynecology/ Electrosurgery/ Urology
|
4,120 | 525 | 5,071 | 1,125 | ||||||||||||
Neonatal
|
362 | 327 | 644 | 635 | ||||||||||||
Blood Pressure Monitoring and Accessories*
|
931 | 853 | 2,080 | 1,846 | ||||||||||||
Total:
|
$ | 5,685 | $ | 1,883 | $ | 8,267 | $ | 3,943 |
2Q 2011 | 2Q 2010 | 1H 2011 | 1H 2010 | |||||||||||||
S&M Expense
|
$ | 867 | $ | 402 | $ | 1,325 | $ | 773 | ||||||||
R&D Expense
|
148 | 95 | 249 | 190 | ||||||||||||
G&A Expense
|
2,012 | 575 | 3,005 | 1,143 | ||||||||||||
Total Operating Expenses:
|
$ | 3,027 | $ | 1,072 | $ | 4,579 | $ | 2,106 |
2Q 2011 | 2Q 2010 | 1H 2011 | 1H 2010 | |||||||||||||
Earnings Per Share (EPS)
|
$ | .544 | $ | .402 | $ | .912 | $ | .821 | ||||||||
Shares (000), Diluted
|
3,645 | 3,651 | 3,638 | 3,648 |
Exhibit #
|
SEC
Reference #
|
Title of Document
|
1
|
31
|
Certification of CEO pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
2
|
31
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
3
|
32
|
Certification pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
4
|
32
|
Certification pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
5
|
101.INS
|
XBRL Instance
|
6
|
101.SCH
|
XBRL Schema
|
7
|
101.CAL
|
XBRL Calculation
|
8
|
101.DEF
|
XBRL Definition
|
9
|
101.LAB
|
XBRL Label
|
10
|
101.PRE
|
XBRL Presentation
|
UTAH MEDICAL PRODUCTS, INC.
|
|
REGISTRANT
|
|
Date: 8/8/11
|
By: /s/ Kevin L. Cornwell
|
Kevin L. Cornwell
|
|
CEO
|
|
Date: 8/8/11
|
By: /s/ Paul O. Richins
|
Paul O. Richins
|
|
Principal Financial Officer
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Sales, net | $ 10,377 | $ 6,276 | $ 17,170 | $ 12,712 |
Cost of goods sold | 4,117 | 3,009 | 7,200 | 6,122 |
Gross profit | 6,260 | 3,267 | 9,969 | 6,590 |
Selling, general and administrative | 2,879 | 977 | 4,330 | 1,916 |
Research and development | 148 | 95 | 248 | 190 |
Total Operating Expense | 3,027 | 1,072 | 4,579 | 2,106 |
Operating income | 3,233 | 2,195 | 5,390 | 4,484 |
Other income (expense) | (281) | 16 | (296) | 35 |
Income before provision for income taxes | 2,952 | 2,211 | 5,094 | 4,519 |
Provision for income taxes | 970 | 744 | 1,776 | 1,525 |
Net income | $ 1,982 | $ 1,467 | $ 3,319 | $ 2,994 |
Earnings per common shares (basic) | $ 0.55 | $ 0.40 | $ 0.92 | $ 0.83 |
Earnings per common share (diluted) | $ 0.54 | $ 0.40 | $ 0.91 | $ 0.82 |
Shares outstanding - basic | 3,626 | 3,631 | 3,623 | 3,625 |
Shares outstanding - diluted | 3,645 | 3,651 | 3,638 | 3,648 |
Document and Entity Information (USD $)
|
3 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 05, 2011
|
|
Document and Entity Information | Â | Â |
Entity Registrant Name | UTAH MEDICAL PRODUCTS INC | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Entity Central Index Key | 0000706698 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Common Stock, Shares Outstanding | Â | 3,634,762 |
Entity Public Float | $ 84,443,888 | Â |
Entity Filer Category | Accelerated Filer | Â |
Entity Current Reporting Status | No | Â |
Entity Voluntary Filers | No | Â |
Entity Well-known Seasoned Issuer | No | Â |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
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Investments, Debt and Equity Securities
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Jun. 30, 2011
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Investments, Debt and Equity Securities | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (Loss) on Investments [Table Text Block] | (8) Investments. As of June 30, 2011, the Companys investments are in Citigroup (C) and General Electric (GE). Changes in the unrealized holding gain/loss on investment securities available-for-sale and reported as a separate component of accumulated other comprehensive income are as follows:
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Equity
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3 Months Ended |
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Jun. 30, 2011
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Equity | Â |
Comprehensive Income (Loss) Note [Text Block] | (4) Comprehensive Income. Comprehensive income for the second quarter (2Q) and first half (1H) of 2011 was $2,041 and $3,410, net of taxes, respectively. The components used to calculate comprehensive income were foreign currency translation adjustments of $62 and $83 in 2Q and 1H 2011, respectively, and unrealized holding gains (losses) of ($3) and $9 in 2Q and 1H 2011, respectively. |
Subsequent Events
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3 Months Ended |
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Jun. 30, 2011
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Subsequent Events | Â |
Subsequent Events [Text Block] | (10) Subsequent Events. UTMD has evaluated subsequent events through the date the financial statements were issued, and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements. |
Fair Value Measures and Disclosures
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Fair Value Measures and Disclosures | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | (9) Fair Value Measurements. The Company follows ASC 820, Fair Value Measurements and Disclosures to determine fair value of its financial assets. The following table provides financial assets carried at fair value measured as of June 30, 2011:
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Inventory
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Inventory | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Text Block] | (2) Inventories at June 30, 2011 and December 31, 2010 consisted of the following:
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Business Combinations
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Mergers, Acquisitions and Dispositions Disclosures [Text Block] | (5) Acquisition. On March 18, 2011, UTMD purchased all of the common shares of Femcare Holdings Ltd (Femcare) of the United Kingdom, and its subsidiaries. Femcare is best known for its leading global brand the Filshie Clip a female surgical contraception device (tubal ligation). UTMD expects the business combination will provide diversification, expansion and integration benefits that each company separately did not have the opportunity to achieve. UTMD anticipates that the acquisition will be accretive to financial performance in 2011 and beyond. The purchase price of $41 million is subject to adjustments. A two-year $3.2 million escrow was set aside from the purchase price to back the warranties and representations of the sellers. UTMD is in the process of finalizing its valuation of certain tangible and intangible assets and residual goodwill acquired in the transaction which may result in a claim against the escrow and adjustment to the purchase price. UTMD intends to complete its purchase price allocation no later than one year from the date of acquisition. If a subsequent adjustment after one year is needed, it will be recorded as an expense or income. The purchase price allocation below may change as more defined analyses are completed and additional information about fair value of assets and liabilities becomes available.
With respect to the assets acquired from Femcare, UTMD will amortize the patents and non-compete agreements over 10 and 5 years, respectively. The other $38,537 in identifiable intangibles will be amortized over 15 years. The $9,084 in deferred tax liability and goodwill results from the difference between the book basis and tax basis of the accumulated amortization of identifiable intangible assets. The deferred tax liability will decline to zero over 15 years as the tax basis of the intangibles declines. The goodwill, which is not deductible for income tax purposes, will not be amortized, but will be written down if and when the value becomes impaired. The Company incurred $35 towards acquisition related expenses, all of which are categorized under General and Administrative expenses in the Consolidated Condensed Statements of Income for the three months ended June 30, 2011, and $285 for the six months ended June 30, 2011. |
Debt
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Jun. 30, 2011
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Debt | Â |
Debt Disclosure [Text Block] | (6) Notes payable. On March 17, 2011, UTMD obtained a $14,000 loan from JPMorgan Chase Bank, N.A. (Chase), to help finance the purchase price of Femcare. The terms and conditions of the loan require UTMD to a) repay the loan in equal monthly payments over 5 years, b) pay interest based on the 30-day LIBOR rate plus a margin starting at 2.80% and ranging from 2.00% to 3.75%, depending on the ratio of its funded debt to EBITDA (Leverage Ratio), c) pledge 65% of all foreign subsidiaries stock, d) provide first priority liens on all domestic business assets, e) maintain its Interest Coverage Ratio at 1.15 to 1.00 or better, f) maintain its Tangible Net Worth (TNW) above a minimum threshold 20% below UTMDs TNW at closing on March 18, and g) maintain its Leverage Ratio at 2.75 to 1.00 or less. On March 18, 2011, Femcare obtained an £8,000 ($12,934) loan from JP Morgan Chase, London Branch, to help refinance its debt as part of UTMDs purchase of Femcare. Terms and conditions of the loan are the same as those listed above for the $14,000 U.S. loan. |
Commitment and Contingencies
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Product Warranty Disclosure [Text Block] | (7) Warranty Reserve. The Companys published warranty is: UTMD warrants its products to conform in all material respects to all published product specifications in effect on the date of shipment, and to be free from defects in material and workmanship for a period of thirty (30) days for supplies, or twenty-four (24) months for equipment, from date of shipment. During the warranty period UTMD shall, at its option, replace any products shown to UTMD's reasonable satisfaction to be defective at no expense to the Purchaser or refund the purchase price.
UTMD maintains a warranty reserve to provide for estimated costs which are likely to occur. The amount of this reserve is adjusted, as required, to reflect its actual experience. Based on its analysis of historical warranty claims and its estimate that existing warranty obligations are immaterial, no warranty reserve was made at January 1, 2011. Femcare had an established reserve at the time of acquisition by UTMD, which is shown as an increase in the reserve in the table below. The following table summarizes changes to UTMDs warranty reserve during 1H 2011:
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Organization, Consolidation and Presentation of Financial Statements
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3 Months Ended |
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Jun. 30, 2011
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Organization, Consolidation and Presentation of Financial Statements | Â |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | (1) The unaudited financial statements have been prepared in accordance with the instructions to form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States. These statements should be read in conjunction with the financial statements and notes included in the Utah Medical Products, Inc. ("UTMD" or "the Company") annual report on form 10-K for the year ended December 31, 2010. In the opinion of management, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. Currency amounts are in thousands except per-share amounts, and where noted. |
Compensation Related Costs, Share Based Payments
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3 Months Ended |
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Jun. 30, 2011
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Compensation Related Costs, Share Based Payments | Â |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | (3) Stock-Based Compensation. At June 30, 2011, the Company has stock-based employee compensation plans which authorize the grant of stock options to eligible employees and directors. The Company accounts for stock compensation under FASB Accounting Standards Codification (ASC) 718, Stock Compensation. This statement requires the Company to recognize compensation cost based on the grant date fair value of options granted to employees and directors. In the quarters ended June 30, 2011 and 2010, the Company recognized $25 and $19, respectively, in stock-based compensation cost. In the six months ended June 30, 2011 and 2010, the Company recognized $49 and $44, respectively, in stock-based compensation cost. |