UTMD Reports Financial Performance for Second Calendar Quarter and First Half 2021

August 5, 2021

Salt Lake City, Utah – The second calendar quarter (2Q) of 2021 financial results were dramatically different from 2Q 2020 because 2Q 2020 results were the low point of Utah Medical Products, Inc.’s (Nasdaq: UTMD) performance during the COVID-19 pandemic, during a time when there were restrictions on so-called nonessential medical procedures. Therefore, UTMD management reports quarterly income statement results compared to the same periods not only in 2021 compared to 2020, but also compared to 2019. The Company’s stated objective in 2021 has been to try to fully recover back to its 2019 financial performance. Please see the income statements for all three years on the last page. 

Currencies in this release are denoted as $ or USD = U.S. Dollars; AUD = Australia Dollars; £ or GBP = UK Pound Sterling; C$ or CAD = Canadian Dollars; and € or EUR = Euros. Currency amounts throughout this report are in thousands, except per share amounts and where noted. 

Overview of Results 

The following summary comparison of 2Q and first half (1H) 2021 with 2Q and 1H 2020 income statement measures demonstrates UTMD’s excellent recovery, despite many new challenges: 

The above increases in NI and EPS according to U.S. Generally Accepted Accounting Principles (US GAAP) were affected by long term deferred tax liability (DTL) increases on the balance of Femcare identifiable intangible assets (IIA) in both 2Q 2020 and 2Q 2021. As stockholders may remember, the DTL was initiated as of the 2011 acquisition of Femcare because the expense from amortizing Femcare IIA, most of which is occurring over a fifteen year time span from the acquisition date, is not tax-deductible in the UK. According to US GAAP, the future tax impact of a change in DTL must be recognized in the quarter in which a tax law change is enacted. In 2Q 2020, a $225 increase in deferred UK taxes over the next six years occurred because the UK decided to not reduce its corporate income tax rate from 19% to 17% beginning in 2Q 2020, as was previously enacted. This year in 2Q 2021, another $390 increase in DTL over the remaining five years occurred because in June 2021, UK parliament ratified the Finance Minister’s plan to increase the UK corporate income tax rate from 19% to 25% beginning on April 1, 2023, which affects the deferred taxes for IIA to be amortized after April 1 2023 until fully amortized as of 1Q 2026. 

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Contact: Crystal Rios (801) 566-1200