Utah Medical Products, Inc.

What they do

UTMD manufactures and sells medical devices for critical care areas, primarily the neonatal intensive care unit (NICU), labor and delivery (L&D) and women's health centers, plus devices for outpatient clinics and physician offices. It sells directly to end-user facilities and stocking distributors in the U.S., Canada, UK, France, Ireland, Australia and New Zealand, and through about 200 OUS distributors elsewhere, of which 108 bought at least $5,000 of devices in 2025. It also manufactures components and finished devices on a subcontract basis for other medical device companies, and products from four acquisitions (Columbia Medical, the Gesco neonatal line, Abcorp and Femcare) represented 57% of 2025 consolidated sales.

Revenue drivers

• Filshie Clip System — Worldwide Filshie revenues were $10.1M in 2025 (about 26% of $38.5M total sales), split between $4.5M domestic direct, $4.5M OUS direct and $1.1M OUS distributors.
• Biopharma OEM / PendoTECH — Pressure monitoring devices and accessories sold to PendoTECH fell from $2.7M in 2024 to $0.4M in 2025, and sales to this previously largest OEM customer were zero in 2Q 2026.
• Deltran blood pressure monitoring kits — Sales to the China distributor were $2.1M in 2025 versus $2.4M in 2024, with a non-cancellable 2025 order unexpectedly cancelled before final shipment in 3Q 2025 and $0.4M written off as uncollectible.
• Other specialty devices and OEM components — Direct non-Filshie device sales, fetal monitoring belts and component manufacturing for other device and non-medical companies make up the remainder of the portfolio and distribution.

Recent performance

2Q 2026 revenue was $8,529, down 14.3% from $9,953 in 2Q 2025, and 1H 2026 revenue was $17,252, down 12.3% from $19,663 a year earlier. The company said the loss of its two previously largest customers accounted for 75% of the 2Q decline and 80% of the 1H decline, with combined 2Q 2025 sales to those two customers of $1,066 and 1H 2025 sales of $1,923. 2Q 2026 gross margin was 55.8% versus 56.2% a year earlier, and operating income fell 17.1% to $2,649 as U.S. litigation costs rose $213 in the quarter. Net income was $2,686, or $0.844 per diluted share, and cash and investments stood at $87.5M at June 30, 2026 with no debt.

Strategy

UTMD's stated formula is to design or acquire cost-effective devices differentiated by safety and patient outcomes, win premarket regulatory clearance, manufacture reliably, and sell through its own direct channels where it has critical mass plus third-party distributors elsewhere. It has an Ireland manufacturing subsidiary serving OUS customers and direct sales operations in Canada, the UK, France, Ireland, Australia and New Zealand. Management planned to replace $2,889 of 2025 sales to its two former largest customers with 2026 sales of new products mainly to other biopharma OEM customers, but reported only $211 of such sales in 1H 2026. Capital deployment has been conservative: $2.0M of dividends and $0.2M of buybacks in 1H 2026, versus $8.4M of buybacks for 4.5% of shares in 2025.

Risks

• Customer concentration loss — Sales to two former largest customers dropped to zero and represented 75-80% of the 2025-to-2026 revenue declines, while replacement biopharma OEM sales reached only $211 in 1H 2026.
• Filshie litigation — U.S. Filshie clip litigation costs are recorded in G&A and ran $213 higher in 2Q 2026 and $341 higher in 1H 2026 than in the comparable 2025 periods.
• Distributor and receivable risk — The China Deltran distributor cancelled a non-cancellable 2025 order and $0.4M of the $2.1M of 2025 sales to that distributor was written off as an uncollectible receivable.
• Foreign currency and cost inflation — OUS G&A was $100 higher in 2025 due to a stronger EUR and GBP against the USD, and the company attributed lower gross margin to cost-of-living raises and raw material inflation.

Outlook

Management has not restored the lost PendoTECH and China distributor revenue: 2Q 2026 sales to both were zero, and new biopharma OEM sales were only $211 in 1H 2026 against $2,889 of 2025 sales to the two former customers. The company continues to describe its balance sheet as strong, with no debt, $87.5M of cash and investments, and $2.0M of dividends paid in 1H 2026. UTMD cautions that results for any three- or six-month period are not indicative of the year as a whole.