UTMD Reports Financial Performance for Third Calendar Quarter and Nine Months 2022

October 27, 2022

Contact: Crystal Rios
(801) 566-1200

Salt Lake City, Utah – In the third calendar quarter (3Q) of 2022, despite significant cost inflation, supply chain disruption, litigation expenses and negative impact of a stronger U.S. Dollar on foreign currency sales, Utah Medical Products, Inc. (Nasdaq: UTMD) continued to achieve financial results which were better than those anticipated in its beginning of year projections.

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 is a summary comparison of 3Q and first nine months (9M) of calendar 2022 with 3Q and 9M 2021 income statement measures:

The above increases in NI and EPS according to U.S. Generally Accepted Accounting Principles (US GAAP) were affected by a long-term deferred tax liability (DTL) increase in 9M 2021 on the balance of Femcare identifiable intangible assets (IIA) due to a future change enacted during 2Q 2021 in UK income tax rates. 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 2021, a $390 increase in DTL over the remaining five amortization 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. For clarity, the change affects the deferred taxes for IIA to be amortized after April 1, 2023 until fully amortized as of 1Q 2026.

UTMD management believes that the presentation of results excluding the unfavorable deferred tax liability adjustment to its 9M 2021 income tax provision provides meaningful supplemental information to both management and investors that is more clearly indicative of UTMD’s operating results. The non-US GAAP exclusion only affects Net Income and Earnings Per Share.

Excluding the 2Q 2021 deferred tax liability increase and resulting “one-time” tax provision increase due to the UK income tax rate change, the resulting non-US GAAP 9M NI and EPS changes follow:

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