for Solutions - Utah Medical Products, Inc.

U T A H
M e d i c a l
P r o d u c t s ,
I n c .
I n n o v a t i o n
&
R e l i a b i l i t y
for Solutions
i n
S p e c i a l i z e d
C a r e
1999
Annual
Report
1999
Annual
U T A H
M e d i c a l
P r o d u c t s ,
I n c .
Utah Medical Products, Inc. (UTMD), with particular interest in healthcare
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.
40
20
30
15
20
10
10
5
90 91 92 93 94 95 96 97 98 99
90 91 92 93 94 95 96 97 98 99
NET SALES
in millions of dollars
GROSS PROFITS
in millions of dollars
12
8
1.00
9
6
.75
6
4
.50
3
2
.25
90 91 92 93 94 95 96 97 98 99
90 91 92 93 94 95 96 97 98 99
OPERATING PROFITS
in millions of dollars
NET PROFITS
in millions of dollars
90 91 92 93 94 95 96 97 98 99
EARNINGS PER SHARE
in dollars
Report
F i n a n c i a l
H i g h l i g h t s
Five-year
Summar y
of
Operations
(In thousands, except per share data)
1999
1998
1997
1996
1995
$ 29,444
$ 27,677
$ 24,272
$ 38,673
$ 42,038
Net income
5,468
4,858
4,322
8,754
8,354
Total assets
27,756
31,968
31,459
28,916
33,330
5,934
3,093
5,563
–
–
18,789
26,017
22,635
24,383
29,204
Net sales
Long-term debt
Stockholders’ equity
Earnings per
common share (diluted)
$
Cash dividends per share
.76
$
.59
$
.51
$
.93
$
.83
None
None
None
None
None
7,197
8,273
8,495
9,452
10,042
Weighted average
common shares (diluted)
Quarterly
Income
Statement
Summaries
(In thousands, except per share data)
Net
Sales
Gross
Margin
Net
Income
Earnings
Per Share
$ 7,539
$ 4,135
$ 1,433
$ .22
Third Quarter
7,568
4,104
1,487
.22
Second Quarter
7,320
3,870
1,349
.18
First Quarter
7,018
3,687
1,200
.15
$ 7,366
$ 3,846
$ 1,282
$ .16
Third Quarter
7,150
3,720
1,290
.16
Second Quarter
6,786
3,420
1,127
.14
First Quarter
6,375
3,188
1,159
.14
$ 6,979
$ 3,549
$ 1,233
$ .15
Third Quarter
7,019
3,679
1,153
.14
Second Quarter
5,101
2,671
895
.10
First Quarter
5,173
2,708
1,040
.12
1999
Fourth Quarter
1998
Fourth Quarter
1
1997
Fourth Quarter
1 9 9 9
Kevin L. Cornwell, Chairman and CEO
T o
O u r
S t o c k h o l d e r s
Utah Medical Products, Inc. (UTMD)
concluded an exceptional year in 1999. All functional areas of the
Company performed very well. The high points of UTMD’s 1999 financial performance were a 25% increase in operating profits
and a 29% increase in earnings per share. Please refer to the charts and summary data on the preceding pages for an overview of
UTMD’s historical performance.
Sales A ctivity
2
Overall, 1999 sales increased 6% to $29.4 million. International sales rose 17%, including a 28% expansion of UTMD’s specialty
Ob/Gyn and neonatal product sales. U.S. domestic direct sales increased $1.2 million, up 6% from 1998, but not up to our 10%
growth target.
Sales results in 1999 reinforced the fact that day-to-day execution of the Company’s market strategy by its direct sales force is
key to UTMD’s success. For most of our direct sales force, their extraordinary energy, inquisitiveness and willingness to get involved
in the clinical aspects of what our products can accomplish for physicians, nurses and their patients, brought them and the Company
success. Clearly, a small focused company with good solutions for its clinician customers’ needs can very effectively compete in a
consolidating medical device marketplace. Had the lowest performing sales representatives achieved like the top 80%, domestic
direct sales would have grown by more than our targeted 10%. To improve performance in 2000, we are emphasizing training and
management support of our representatives, including detailed sales activity tracking.
Profit Margins and Cash Flow
The average gross profit margin (GPM) for 1999 was 53.6%, a new UTMD record. By contrast, we achieved a 46.4% GPM in
our peak sales year, 1995, when total sales included $15 million in OEM sales to Baxter. Profits from 1999 operations were 28.1%
of sales including goodwill amortization expense of $569,000, about 2% of sales, associated with 1997 and 1998 acquisitions. If
UTMD had used “pooling of interest” accounting, its operating profit margin would have been 30%. Employees in all three UTMD
facility locations deserve to be extremely proud of their 1999 performance.
Although the amortization of goodwill, like depreciation of property and equipment, affects reported income, it does not
negatively impact cash flow. UTMD’s 1999 pre-tax and pre-interest cash flow yielded $11 million, or 38% of revenues. This
cash flow is a powerful financial engine for growth without diluting shareholders’ interest. In 1999, the cash flow was used to
substantially enhance shareholder value by retiring 20% of the shares outstanding.
Marketing Initiatives and New Products
UTMD’s well-accepted obstetrical product line represented
62% of domestic direct sales in 1999. During the year, we
reinforced our market presence with targeted initiatives that
help clinicians understand UTMD’s value in reducing the risk
of complications and negative surprises.
To improve customer access to UTMD’s products, in the
fall of 1999 we signed an intrauterine pressure catheter (IUPC)
sole source supply agreement with Novation, LLC, which
represents about 25% of U.S. hospitals. However, we quickly
learned that having a significant administrative contract didn’t
enhance UTMD’s marketing approach. In UTMD’s case,
contracts ironically lower barriers to competition instead of
raising them, because a customer buying from a contract will
not take time to understand the important clinical advantages
of UTMD’s solutions. Many hospital administrators tend
to limit their purchase consideration just to price, which
represents immediate out-of-pocket cost. They are not able,
or cannot take time, to consider all of the components of
“total delivered cost” associated with the products that their
hospitals employ to achieve an optimal clinical outcome.
Total delivered cost includes (in addition to price): utilization
management, which is the frequency of use required to
achieve a certain outcome; longer term costs such as additional
care associated with higher likelihoods of complications or
unwanted side effects; and environmental/overhead costs such
as training, monitoring results and administration. The value
of the Novation contract experience for UTMD was the
realization of our sales force that they are uniquely positioned
to help our customers understand how the use of UTMD’s
solutions allows minimum total delivered cost.
In last year’s Annual Report, we featured the Fowler
EndoCurette being developed in cooperation with Mayo
Clinic. Because of the time delay of clinical trials required to
satisfy premarketing regulatory requirements, we could not
introduce the product in 1999. We believe the concept has
exciting potential, but the proof of efficacy and timing of
market release remain unpredictable.
After more than five years, we have terminated our internal
research and development efforts of a fetal pH monitoring
system. However, the patented concept remains promising
enough that UTMD is seeking a partner to jointly develop
this potentially revolutionary system.
In 1999, enhancement to the newly acquired Gesco
neonatal product line consumed a large part of our development engineering resources. A separate update, including a
description of product enhancements in our neonatal product
line, is included later in this report.
Acquisitions, as well as licensing and distribution arrangements, remain attractive ways for UTMD to introduce new
products in its marketing focus. This is particularly true when
our active internal development efforts can significantly
augment the products’ clinical value, and we gain a proprietary
advantage through patents. UTMD continues to defend its
patents through on-going litigation. We believe our claims are
meritorious and are encouraged by legal events.
Outlook
As shown by its financial success, UTMD continues to
demonstrate that clinicians, particularly in the areas of our
specialty Ob/Gyn and NICU focus, understand and appreciate
the value they receive from the use of our products. UTMD
will continue to develop new products and improve existing
products, while expanding sales of our current product
portfolio. In 2000, we will focus on the selling process, including more effective use of Internet technology, to demonstrate
how UTMD can help its customers obtain the optimal
clinical outcomes they desire. We also plan to substantially
improve the knowledge and communication skills of our
sales representatives so they can effectively provide the
evidence our customers need to make their medical device
purchase decisions.
I would like to express our gratitude for the recognition
of our customers of UTMD’s contribution to women’s and
children’s health. I would like to thank our employees,
vendors and other business partners for their diligent efforts
in contributing to the Company’s success. Thank you, as a
shareholder, for your belief in our programs and recognition
of UTMD’s value as a publicly-traded company.
Kevin L. Cornwell
Chairman and CEO
3
P
Obstetrics
Labor & Deliver y
Gynecology
Electrosurger y
Urology
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Products
Description
Business
Intran Plus
Transducer-tipped IUP/amnioinfusion catheters
Delivery management
IUP-075
Fluid-filled IUPs
tools for monitoring
Electrodes &
FM Accessories
Fetal heart rate scalp electrodes,
fetal monitor chart paper, monitor cables, toco belts
fetal and maternal well-
CMI-Vacuum
Assisted Delivery
Systems
Pumps and specialty cups
Arom-Cot, Muc-X
Amniotomy finger cots, meconium aspirators
Cordguard
Umbilical cord management tools
Finesse
Electrosurgical generators
Tools for gynecological
Filtresse
Surgical smoke handlers and filters
office/clinic practices,
Electrosurgical
Tools
Specialty loop, ball, needle and
suction/irrigation/coagulation electrodes
including LETZ,
Epitome
Electrosurgical scalpel
Accessories
Disposable pens and dispersive pads
Fowler EndoCurette
Endometrial tissue sampling device
Lumin &
Other Tools
Uterine manipulation tool, speculums,
retractors, forceps
excision and incision
Liberty
Electrical stimulation device for urinary incontinence
tools; conservative
Pathfinder
Endoscopic irrigation device and tools
urinary incontinence
being, for minimizing
complications and for
ease in performing
delivery procedures
endometrium sampling,
diagnostic laparoscopy,
and other MIS
procedures; specialty
therapy; urology tools
Neonatal
Intensive Care
4
Blood Pressure
Monitoring / Misc.
Disposa-Hood
Disposable infant oxygen hoods
Devices for gaining
Umbili-Cath
Umbilical vessel/artery catheters
vascular access,
Per-Q-Cath
2 French PICC
administering vital
Nutri-Cath
Enteral feeding tubes
fluids, maintaining a
Uri-Cath
Urinary drainage system
neutral thermal
Hemo-Nate
Blood filtration system
environment, and
Myelo-Nate
Spinal fluid sampling device
other specialized tools
Pala-Nate
Oral protection appliance
used in the care of
Dialy-Nate
Pre-assembled peritoneal dialysis system
critically-ill infants
Thora-Cath
Chest drainage catheter
Deltran-Plus
Needleless blood pressure monitoring kits
Deltran,
Deltran-Plus
Disposable pressure transducers,
needleless arterial blood collection system
Deltran Accessories
Monitor cables, calibration device and organizers
Components
Stopcocks, flush devices, high pressure tubing and caps
Subcontract Molding
& Other OEM Products
Erectile dysfunction pumps and other products
Specialized tools for
invasively monitoring
blood pressure on a
continuous basis
with disposable pressure
transducer systems
Developing and commercializing proprietary products that cost-effectively solve
clinical needs is fundamental to Utah Medical Products, Inc.’s strategy for growth.
Customers
Distribution
Competition
Hospital L&D departments
Direct sales force; independent
Tyco/Kendall
distributors internationally
ANSI/Quest Medical
Medex
Clinical Innovations
GE Medical/Marquette/Corometrics
Prism Enterprises
Gynecological practices/clinics, outpatient
Direct sales force; independent
Tyco/U.S. Surgical/Valleylab
clinics, hospitals, specialty centers
distributors internationally
Cooper Surgical
Ellman
Dermatologists, otolaryngologists, plastic,
ConMed
thoracic and vascular surgeons, urologists
J&J
and urogynecologists
MegaDyne
Milex
Hospital NICUs
Direct sales force; independent
Tyco/Kendall
distributors internationally
NeoCare
Becton Dickinson/Luther
Vygon
HDC
Hospital ORs and ICUs;
Direct sales force; other medical
Abbott
other medical device companies
companies including: Medisize, B. Braun,
Baxter Cardiovascular Group
Biosensors International, Pulsion and
Becton Dickinson/Spectramed
Howmedical Hollenstein; international
Argon
distributors; independent manufacturers’
Medex
representatives
5
U
TMD focuses on improving care for mothers and their babies. In the neonatal intensive care unit (NICU), we provide
neonatal critical care products that support a “developmentally-friendly” objective. In labor and delivery (L&D),
we mitigate risk of injury, both to patients and to clinicians. The result of our efforts is to increase the likelihood of
positive outcomes and decrease unwanted surprises.
UTMD is not just selling better products than the competition.
We sell proprietary /differentiated solutions that allow higher
quality care through more effective clinical procedures at a lower
total cost with less complications.
Our distinctive solution-selling approach requires a deliberate
progression. First, we target clinical customers (not hospital
administrators) and /or clinical situations to those most likely to
understand, willing to investigate alternatives and gain value
from UTMD’s ideas. We seek people who feel directly responsible and care deeply for their patients’ welfares. From the formal
targeting process, we develop a specific activity plan for a sales
representative, which we monitor and adjust as needed.
Next, UTMD’s sales representative engages the customer in a
discussion of needs, challenges and desired outcomes, listening
carefully to what the clinician communicates. Then the sales
representative, in conjunction with UTMD marketing and sales
team input, focuses where a particular product’s use will create
a specific, valuable result for the customer.
As a final step, the sales representative provides the clinician
6
with the evidence needed to support UTMD’s claims that enable
a transfer of confidence to the customer. Additional steps may
be required in hospitals where multiple decision-makers are
involved along with administrators.
This process has resulted in a high success rate where we
execute it properly. The key element in the approach is the
knowledge, mental agility, energy and communication skills of
the sales representative.
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n 1999, UTMD enhanced its reputation for providing clinical solutions to challenges in hospital areas that are considered separate
and highly special. Specialty neonatal products sales grew 100% relative to the prior year and comprised 13% of total sales.
The Gesco neonatal products acquired from C. R. Bard in July 1998 were primarily responsible for the sales improvement. In
1999, UTMD successfully modified and augmented the Gesco product line in a number of important ways.
Because of improved care, the size of critically-ill premature
babies in the NICUs has become smaller. In 1999, UTMD
introduced smaller diameter versions of two important silicone
catheter products, Nutri-Cath ® and Uri-Cath.™ Both incorporate
the features and capabilities designed into their larger
counterparts including special tip configurations, insertion depth
markings and luer-hubs. Both are designed for longer-term
placement, avoiding the highly irritating and potentially harmful
side effects associated with repeated removals and replacements
of shorter indwelling /intermittent-use products. The diameter
of the new catheters is slightly larger than the diameter of the
wire of a standard paper clip.
UTMD recognized that a new patented polyurethane material
called Tecoflex® offers many of the flexibility and biocompatibility
advantages of silicone after insertion, but also provides the
greater rigidity of polyurethane preferred by many clinicians for
ease of insertion. As a result, the Company expanded its
umbilical artery /vein catheter product line to include not only
its market-leading silicone catheters, but also three different
8
diameters of both single lumen and double lumen Tecoflex
polyurethane catheters. UTMD is the only medical device
company that provides both material options to clinicians.
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For many years, UTMD has been known as a creative leader
in the development of disposable pressure transducer systems
for invasive blood pressure monitoring. In 1999, we developed
a special configuration for the NICU featuring needleless blood
sampling. The important distinguishing characteristic of the fully
closed system is its ability to limit the critically-ill neonate’s blood
loss to only the sample itself while assuring an uncontaminated
blood sample.
Several Gesco products included latex rubber. To avoid
the use of this potential allergen, UTMD replaced the latex
components, achieving its objective of “Latex Free” Gesco
neonatal products.
UTMD designed a smaller version of its Myelo-Nate™ lumbar
puncture kit used to sample cerebral spinal fluid (CSF) of the
most critically-ill newborns. The needle diameter is about the
width of four stacked pieces of 25% bond paper. This tiny needle
with a short bevel displaces dura mater rather than cutting it,
providing the physician with excellent tactile sensitivity and clear
visualization through the device while maintaining proper CSF
10
flow rates into the sample collection vial.
UTMD expects to improve its existing neonatal products and
add new, differentiated products to the armamentarium that
can help minimize stressful, irritating and disruptive impacts
to critically-ill NICU patients. We expect neonatal products to
continue to lead sales growth in 2000.
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B
y the end of 1999, the results of Ireland operations had justified UTMD’s initial optimism as the foundation for its international operations. Relative to 1998, sales and production were up 23% as European customers, in particular, took advantage
of reduced transportation costs, elimination of customs and duties and the convenience of paying in European currencies
and placing purchase orders. UTMD’s 1999 Ireland operations produced 61% of UTMD’s total international shipments.
Built in 1996, UTMD’s 77,000 square foot Athlone facility
was designed specifically to manufacture and package medical
devices. Pressurized clean rooms provide a well-controlled
assembly environment. The plant layout assures efficient,
controlled material flows, while automated packaging operations
perform to exact dimensions. The operations of this subsidiary,
Utah Medical Products Ltd., are ISO9001/EN46001 certified,
and all products bear the CE mark. The facility also meets
U.S. FDA Quality Standards.
After three years of operation, manufacturing operations
are performed by highly skilled and trained operators. Although
the Republic of Ireland has achieved a “full employment”
economy, production personnel turnover has remained extremely
low by U.S. standards, leveraging the efficiency and quality of
operations. The transfer of expertise from the U.S. to Ireland
was accomplished through extensive efforts by UTMD employees
on both sides of the Atlantic. A continuous exchange of ideas
through close communications regarding manufacturing
requirements has been a key to our success.
12
With the existing Athlone plant substantially below its
capacity, UTMD looks forward to continuing operating leverage
as it expands sales and production in Ireland.
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p r o d u c t i o n
Responsibilities
for
Financial
Reporting
Management is responsible for the consolidated financial statements
and other financial information contained in this Annual Report.
products used in healthcare including claims resulting from the
The financial statements have been prepared in accordance with
improper use of devices and other product liability claims, defense
generally accepted accounting principles considered to fairly present
of the Company’s intellectual property, productive use of assets in
the Company’s financial position, results of operations and cash flows.
generating revenues, management of working capital including
The financial statements include some amounts that are based on
inventory levels required to meet delivery commitments at a minimum
management’s best estimates and judgement.
cost, and timely collection of accounts receivable.
This report contains certain forward-looking statements and
Additional risk factors that may affect non-operating income
information relating to the Company that are based on the beliefs of
include the continuing viability of the Company’s technology license
management as well as assumptions made by and information currently
agreements, actual cash and investment balances, asset dispositions, and
available to management. When used in this document, the words
acquisition activities that may require unusual funding.
“anticipate,” “believe,” “project,” “estimate,” “expect,” “intend” and similar
The Company’s system of internal controls is designed to provide
expressions, as they relate to the Company or its management, are
reasonable assurance as to the protection of assets against loss from
intended to identify forward-looking statements. Such statements
unauthorized use or disposition, and the reliability of financial records
reflect the current view of the Company respecting future events and
for preparing financial statements and maintaining accountability
are subject to certain risks, uncertainties, and assumptions, including
of assets. The Company’s business ethics policy is the cornerstone
the risks and uncertainties noted below. Although the Company has
of its internal control system. This policy sets forth management’s
attempted to identify important factors that could cause the actual
commitment to conduct business worldwide with the highest ethical
results to differ materially, there may be other factors that cause the
standards. The business ethics policy also requires that the documents
forward statement not to come true as anticipated, believed, projected,
supporting all transactions clearly describe their true nature and that all
expected, or intended. Should one or more of these risks or uncertain-
transactions be properly reported and classified in the financial records.
ties materialize, or should underlying assumptions prove incorrect,
The financial statements have been audited by the Company’s
actual results may differ materially from those described herein as
independent accountants. The purpose of their audit is to indepen-
anticipated, believed, projected, estimated, expected, or intended.
dently express an opinion on the fairness of management’s presentation,
Risk factors that may impact the Company’s revenues include the
14
well as cash flows, include risks inherent to companies manufacturing
in all material respects, of the Company’s financial position, results
market acceptance of competitive products, obsolescence caused by
of operations and cash flows. In connection with their audit, they
new technologies, the possible introduction by competitors of new
study and evaluate the internal accounting controls to the extent they
products that claim to have many of the advantages of UTMD’s prod-
deem necessary.
ucts at lower prices, the timing and market acceptance of UTMD’s own
The adequacy of the Company’s accounting controls and the
new product introductions, UTMD’s ability to efficiently manufacture
accounting principles employed in financial reporting are under the
its products, including the reliability of suppliers, success in gaining
general oversight of the Audit Committee of the Board of Directors.
access to important global distribution channels, budgetary constraints,
This Committee also has responsibility for employing the independent
the timing of regulatory approvals for newly introduced products,
accountants. No member of this Committee is an employee of
third party reimbursement, and other factors set forth in the Company’s
the Company. The independent accountants meet with the Audit
Securities and Exchange Commission filings, including UTMD’s 10-K
Committee, with and without management present, to discuss
for the year ended December 31, 1999.
accounting, auditing and financial reporting matters.
Risk factors, in addition to the risks outlined in the previous
paragraph, that may impact the Company’s assets and liabilities, as
Kevin L. Cornwell
Corporate Secretary
u t a h
m e d i c a l
p r o d u c t s ,
F i n a n c i a l
i n c .
S e c t i o n
Utah Medical Products, Inc. and Subsidiaries
Consolidated
Balance
Sheet
(In thousands)
December 31,
1999
1998
Assets
Current assets:
Cash
647
$ 1,367
Accounts receivable, net (note 2)
$
4,077
4,531
Inventories (note 2)
3,190
4,048
Prepaid expenses and other current assets
165
151
Deferred income taxes (note 6)
459
446
8,538
10,543
11,013
12,489
8,205
8,936
$ 27,756
$ 31,968
$
$
Total current assets
Property and equipment, net (note 3)
Other assets, net (note 2)
Total
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Accrued expenses (note 2)
Deferred revenue
Total current liabilities
Notes payable (note 4)
Deferred income taxes (note 6)
Total liabilities
Commitments and contingencies (notes 5 and 10)
544
525
2,117
1,886
–
2
2,661
2,413
5,934
3,098
372
440
8,967
5,951
–
–
–
–
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 6,453 shares in 1999 and 8,046 shares in 1998
16
64
80
Cumulative foreign currency translation adjustment
(1,250)
Retained earnings
19,975
26,446
18,789
26,017
$ 27,756
$ 31,968
Total stockholders’ equity
Total
S e e a c c o m p a n y i n g n o t e s t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s.
(509)
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis
of Financial Condition and Results of Operations
Productivity of Assets and Working Capital
36
1.7
15
5.2
33
1.5
13.5
4.6
30
1.3
12
4.0
27
1.1
10.5
3.4
24
0.9
9
2.8
21
0.7
7.5
2.2
0.5
6
Total UTMD asset turns (ratio of sales to total assets) improved again
in 1999 because sales increased while average total assets decreased from
the prior year. Year-ending total assets were lower because current assets
declined as a result of significantly reducing levels of cash, inventory
and receivables; net fixed assets declined as a result of depreciation
which exceeded replacement; and net intangible assets declined because
amortization of goodwill and intellectual property exceeded new
acquisitions. 1999 year-end net intangible assets represent 30% of total
assets. Excluding the possibility of new intangible assets from 2000
acquisitions, total asset productivity should continue to improve in 2000
because sales are projected to grow while working capital remains about
the same and net property, plant and equipment (PP&E) assets decline
18
95
as depreciation exceeds the rate of new purchases.
96
97
98
■
■
TOTAL
A SSETS
($ million)
1999 net (after accumulated depreciation) PP&E in Utah and
Oregon decreased $0.6 million, while in Ireland decreased $0.9 million.
1.6
95
99
96
97
98
■
AVERAGE
TURNS
(number of times)
99
■
NET
AVERAGE
PP&E
TURNS
($ million)
(number of times)
Consolidated PP&E asset turns improved to 2.7 based on year-ending
balances. Productivity of PP&E in 2000 should continue to increase since
5.3
6.3
5.0
5.6
4.7
4.9
4.4
4.2
4.1
3.5
3.8
2.8
7
60
6
55
5
50
4
45
sales are expected to increase, and net PP&E decrease, as consolidated
new capital expenditures are expected to be less than one-half of
2000 depreciation.
Inventory turns increased in 1999 due to higher sales together with
21% lower inventory at year-end. Lower inventory balances resulted
from UTMD using inventories previously obtained in its 1998 Gesco
acquisition and continuing to improve its MRP processes. Management
expects to be able to achieve its objective of 4.0 inventory turns in 2000
because sales should continue to increase without the need for a similar
increase in inventories. The 1999 year-ending accounts receivable
(A/R) balances declined 10% despite higher sales activity for the year.
Calculated days in receivables improved to 49, based on 4Q 1999
3.5
2.1
95
shipments’ activity. Aged A/R over 90 days from invoice date decreased
96
97
98
■
to about 3% of total accounts receivable at year end from 9% at the end
of 1998. The decrease in the older receivables balance is due mainly to
95
■
AVERAGE
INVENTORY
($ million)
40
3
99
96
97
98
■
AVERAGE
TURNS
(number of times)
99
■
YEAR-END
A/R
($ million)
A/R
AGING DAYS
(4th quarter base)
resolving the delinquency of one distributor in the Far East.
The working capital decline of $2.3 million in 1999 was the result of
22.5
6.5
20.0
capital growth that is needed to support growth in 2000 sales activity.
Liabilities
the significant reduction in current assets coupled with a modest increase
in current liabilities associated with higher business activity. Through its
10
32
6
9
29
17.5
5.5
8
26
15.0
5
7
23
12.5
4.5
6
20
10.0
4
5
17
3.5
4
14
3
3
excellent profitability, UTMD expects to internally finance any working
At the end of 1999, UTMD’s total debt ratio increased to 32% of
total assets from 19% at the end of 1998. In addition to current liabilities
associated with current production and sales activity, UTMD has a
few lease obligations (see note 5) and an unsecured line-of-credit. The
balance of the revolving line-of-credit increased by $2.8 million in 1999
7.5
because UTMD used its financing facility to aggressively retire about
20% of its outstanding shares at a total cost of $12.1 million. In 2000,
if no new significant acquisitions or repurchases of shares are made, the
remaining revolving line-of-credit balance can be eliminated.
5
95
96
■
YEAR-END
WORKING
C APITAL
($ million)
97
98
99
■
TOTAL
CURRENT
RATIO
11
95
96
■
TOTAL
LIABILITIES
($ million)
97
98
99
■
TOTAL
DEBT RATIO
(% of assets)
17
Utah Medical Products, Inc. and Subsidiaries
Consolidated
Statement
of
Income
(In thousands, except per share amounts)
Years ended December 31,
1999
1998
1997
$ 29,444
$ 27,677
$ 24,272
13,648
13,503
11,666
Gross margin
15,796
14,174
12,606
Selling, general, and administrative
6,795
6,605
6,089
719
946
958
8,282
6,623
5,559
34
58
85
Net sales (notes 9 and 10)
Cost of sales (note 10)
Expenses:
Research and development
Income from operations
Other income (expense):
Dividend and interest income
Royalty income
529
678
732
Interest expense
(296)
(310)
(250)
474
649
8,545
7,523
6,775
(3,077)
(2,665)
(2,453)
Other, net
(4)
Income before income tax expense
Income tax expense (note 6)
Net income
$ 5,468
$ 4,858
$ 4,322
Earnings per common share (basic) (notes 7 and 8)
$
.76
$
.59
$
.51
Earnings per common share (diluted) (notes 7 and 8)
$
.76
$
.59
$
.51
Other comprehensive income—foreign currency
translation net of taxes of $(252), $50 and $(297)
Total comprehensive income
489
98
$ 4,979
$ 4,956
(577)
$ 3,745
S e e a c c o m p a n y i n g n o t e s t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s.
Management’s
18
Discussion
and
Analysis,
Revenues
Annual consolidated revenues were up 6% in 1999.
UTMD divides its sales channels in the U.S. into “direct sales” which
continued
pressure monitoring (BPM) products were up 14% relative to the
prior year.
Ob/Gyn and neonatal product sales were 23% of 1999 foreign sales,
are sales to end user customers through UTMD’s direct sales force,
compared to 21% in 1998 and 15% in 1997. Foreign sales of Ob/Gyn
independent commissioned sales reps, and specialty distributors, and
and neonatal products increased 29% and totaled $1.3 million for 1999.
“OEM sales” which are sales to other medical device companies where
Ireland operations shipped 61% of foreign sales in 1999, compared to
products are resold as part of a component of a kit or a repackaged
62% in 1998 and 39% in 1997.
stand-alone product. In 1999, U.S. direct sales represented 74% of
UTMD divides its sales into four product-line categories: 1) obstet-
global consolidated sales compared to 74% in 1998 and 68% in 1997.
rics, 2) gynecology/electrosurgery/urology, 3) neonatal, and 4) blood
In the U.S. only, direct sales represented 91% of 1999 sales compared
pressure monitoring/accessories/other. The description of products
to 89% in 1998 and 86% in 1997. As a percentage of total U.S. sales,
included in each of the four areas can be found in the “Product High-
OEM sales represented 9% of 1999 sales, compared to 11% in 1998
lights” table on pages 4 and 5 of this Annual Report. In these four
and 14% in 1997. U.S. OEM sales excluding sales to Baxter declined
categories, UTMD’s primary revenue contributors generally enjoy a
3% in 1999.
dominant market share and typically have important product features
Foreign sales in 1999 were 19% of global consolidated sales
compared to 17% in 1998 and 21% in 1997. Foreign sales of blood
protected by patents.
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis,
Sales in the obstetrics product category decreased 5% in 1999 and
8
represented 47% of total sales. Obstetrics sales (in thousands) were
7
■ 1ST QUARTER
$13,926 in 1999, compared to $14,635 in 1998 and $11,823 in 1997.
■ 2ND QUARTER
■ 3RD QUARTER
continued
Direct sales of the market-leading IUP catheter, Intran® Plus, declined
6
■ 4TH QUARTER
3% under active competition from cheaper, less clinically-effective
5
products. Sales of vacuum-assisted delivery systems (VADS) decreased
14% in 1999, due apparently to a decline in utilization by U.S. hospitals.
4
97
98
UTMD believes that using VADS remains the trained physician’s
99
best choice in most operative deliveries, and will increase educational
QUARTERLY SALES
in millions of dollars
programs in 2000.
Gynecology/electrosurgery/urology product sales grew 7% in
1999, and represented 15% of total revenues. Gyn/ES/Uro sales
(in thousands) were $4,454 in 1999, compared to $4,174 in 1998 and
U.S. SALES BY SALES CHANNEL
$3,859 in 1997. Several products contributed to sales growth, including
■ OEM SALES
14%
86%
11%
■ DIRECT SALES
89%
9%
91%
Epitome ®, Liberty ®, Pathfinder ™, and C-LETZ contoured electrodes.
UTMD looks to continue to develop and market specialized electrosurgical electrodes and other urological devices in 2000. Marketing
this group of products requires multiple sales call points and extensive
clinical training and familiarization time with users, among other
1997
1998
1999
challenges, resulting in continued low adoption growth rates.
Neonatal sales include the neonatal product line of Gesco
International acquired in July 1998. Compared to 1998, UTMD’s
1999 neonatal product sales grew 100%. Neonatal product sales (in
thousands) were $3,807 in 1999, compared to $1,899 in 1998 and
■ BPM
30
$708 in 1997. UTMD expects the neonatal product line to continue
■ NEONATAL
to be a significant contributor to its growth in 2000.
■ GYNECOLOGY
■ OBSTETRICS
BPM and accessories sales represented 25% of consolidated 1999
20
sales, the same portion as the prior year. Sales of BPM products in
25%
13% 15% 47%
1999 (in thousands) were $7,258, compared to $6,970 in 1998 and
$7,882 in 1997. Although a mature product line, UTMD continues
10
to enjoy a stable and significant demand for its well-regarded BPM
products, particularly overseas.
0
97
98
99
GLOBAL SALES
BY PRODUCT LINE
1999 REVENUE
BY PRODUCT LINE
in millions of dollars
percent of sales
19
PRODUCT LINE SALES BY SALES CHANNEL
■ OEM SALES
■ BPM
6
61%
■ NEONATAL
■ GYNECOLOGY
39%
■ DIRECT SALES
41%
59%
BPM & ACC PRODUCTS
■ OBSTETRICS
1999 sales
4
77%
3% 10% 10%
united states
2%
2
98%
international
100%
OBSTETRICS,
GYNECOLOGY AND
NEONATAL PRODUCTS
1999 sales
0
97
98
99
united states
FOREIGN SALES
BY PRODUCT LINE
1999 FOREIGN REVENUE
BY PRODUCT LINE
in millions of dollars
percent of sales
international
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis,
Gross Profit
The average gross profit margin (GPM), the surplus remaining after
subtracting costs of manufacturing products from net revenues, in 1999
was 53.6% compared to 51.2% in 1998 and 51.9% in 1997. Gross
continued
previous year. At the end of 1999, UTMD terminated an exclusive
third party distributor relationship for the states of Hawaii and Alaska,
representing 1% of domestic direct sales.
R&D expenses in 1999 were 2.4% of sales compared to 3.4% of
margins improved successively each quarter in 1999, led by product
sales in 1998, and 3.9% in 1997. The mid-year termination of internal
design improvements, better materials management and better utiliza-
efforts committed to UTMD’s novel fetal pH monitoring project was
tion of overhead costs. Looking forward to 2000, offsetting influences
responsible for the decline in spending. Other 1999 projects included
are expected to result in GPM of about 54%. Expected favorable
the continuing development of the Fowler Endocurette, enhancements
influences include continued growth in sales volume without a similar
to the Gesco neonatal product line, and improvements to UTMD’s
increase in overhead expenses, a larger percentage of total sales from
established products. The improvements in materials and configuration
higher margin products and a continued emphasis on reengineering
of components was evident in UTMD’s improved GPMs. At UTMD
products to reduce costs. Unfavorable influences are expected to be
R&D resources are kept involved in the support of manufacturing
continued competitive pressure on pricing and higher wage rates for
processes, as UTMD finds it makes long-term sense to keep its most
employees. UTMD management believes that consistently achieving
technical people involved with products throughout their life cycles.
an average GPM above 50% is necessary to successfully support
In 2000, UTMD’s R&D expenses to sales ratio is expected to remain
the significant sales and marketing, research and development, and
consistent with 1999.
administrative expenses associated with a growth company in a highly
complex and competitive marketplace.
Non- operating Income
Operating Profit
UTMD’s technology to other companies, but also interest and capital
Non-operating income includes primarily royalties from licensing
Operating profit, or income from operations, is the surplus remaining
gains from investing the Company’s cash offset by interest expenses
after subtracting operating expenses from gross profits. Operating
and bank fees on the revolving line-of-credit, and gains or losses from
expenses are subdivided into sales, general and administrative expenses
the sale of assets. Non-operating income (in thousands) in 1999 was
(SG&A) and research and development expenses (R&D). UTMD
$263, compared to $900 in 1998 and $1,216 in 1997. There were
further divides SG&A into the two categories of sales and marketing
expenses (S&M) and general and administrative expenses (G&A).
Despite only a 6% increase in 1999 total sales, operating profits (in
thousands) increased 25% to $8,282 from $6,623 in 1998 and
52
$5,559 in 1997. Total operating expenses were 25.5% of sales in 1999
compared to 27.3% of sales in 1998, and 29.0% in 1997, demonstrating
48
the operating leverage achievable when sales continue to grow.
SG&A expenses in 1999 decreased to 23.1% of revenues from
44
23.9% of 1998 revenues, although in dollar terms SG&A expenses
increased to $6.8 million in 1999 from $6.6 million in 1998. The G&A
40
expenses portion increased to $3.0 million in 1999 from $2.7 million in
20
1998, due to increased expenses from amortization of goodwill (GWA)
36
90
91
92
associated with the mid-1998 Gesco acquisition. GWA (in thousands)
93
94
95
96
97
98
99
GROSS PROFIT MARGINS
percent of sales
in 1999 was $569 compared to $433 in 1998, and $148 in 1997.
Looking forward, GWA in 2000 will also be $569, without additional
OPERATING EXPENSES
acquisitions in 2000. Since the result of the acquisitions were
■ S&M
additional new marketable products for UTMD, the GWA expenses
can be regarded as surrogate R&D expenses captured in G&A.
■ G&A
8
32
7
28
customer support of UTMD’s products. Although sales and GPMs
6
24
improve when sales are made through directly employed sales represen-
5
20
tatives in lieu of independent distributors or OEM customers, S&M
4
16
operating expenses increase as an offset. Global sales in 1999 increased
3
12
6% while S&M expenses declined 3%, improving the productivity of
2
8
S&M resources. The majority of UTMD’s S&M expenses pertain to
1
4
the U.S. “direct sales” portion of its business. In 2000, UTMD’s S&M
0
S&M expenses are the costs of promoting, selling and providing
expenses to sales ratio is expected to remain consistent with the
■ R&D
0
97
98
99
in millions of dollars
97
98
99
percent of sales
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis,
continued
unusual payments received in 1998 and 1997 for the use of UTMD’s
respectively. Actual outstanding common shares as of December 31,
pressure monitoring technology, which are subject to a confidentiality
1999 were 6,453. Future EPS can be increased by investing current
agreement, which were nonrecurring in 1999. Royalties received in
net income to increase future net profits through expanded product
1999 (in thousands) were $149 less than in the prior year. In 1997,
offerings and profitable business operations, or by repurchasing
there was also a one-time $200 gain (in thousands) from the sale of a
stock, thereby reducing the number of outstanding shares. UTMD
small real estate property no longer used by the Company. Interest
believes that shareholder value is improved primarily by consistently
expenses and bank fees (in thousands) associated with the line of
increasing EPS.
credit were $307 in 1999, $318 in 1998 and $255 in 1997. Assuming
Although UTMD’s EPS increased 29% in 1999, the price of its
no change in current interest rates and no new borrowing to finance an
stock increased only 3%. In contrast, the Dow Jones Industrial Average
extraordinary capital requirement, 2000 net non-operating income
increased 25%, the S&P 500 Index increased 20%, the NASDAQ
(in thousands) is expected to be about $300. Royalties received vary
Composite Index increased 86%, while the MDDI Index of medical
from period to period depending on the desire and/or success of other
device companies decreased 11%. The low trading volume of micro
companies in selling products licensed by UTMD, and the remaining
cap companies continued to cause a disparity in relative values, and the
life of the patents.
medical device industry, as a sector, was out of favor compared with
Earnings before income taxes (EBT) result from adding UTMD’s
the rest of the stock market in 1999. The ValueLine Index, a widely
non-operating income to its operating profits. 1999 EBT, as a percent-
accepted indicator of broader market values, declined 1%. Percentage
age of sales, was 29.0% compared to 27.2% and 27.9% in 1998 and
institutional ownership of UTMD at the end of 1999, at about 24%,
1997, respectively. These profit margins are extremely high when
was much lower than average institutional ownership of the S&P 500
compared with UTMD’s peers in the medical device industry, or other
at about 60%.
industries. The resulting profit dollars are equivalent to profits generated
Return on shareholders’ equity (ROE) is the portion of net
by well-performing companies with twice or more the sales of UTMD.
income retained by UTMD to internally finance its growth, divided
EBT in 1999 were up 14% relative to 1998 even though sales were up
by average accumulated shareholders’ equity during the period. This
only 6% and non-operating income was down 71%, because operating
ratio determines how fast the Company can afford to grow without
income in 1999 increased 25%. UTMD expects that it can continue its
adding external financing that would dilute shareholder interests. For
excellent overall profit performance in 2000.
example, a 20% ROE will financially support 20% growth in revenues.
In UTMD’s opinion, achieving growth in revenues and EPS without
Net Income, EPS and ROE
Net income is EBT minus income taxes. UTMD’s net income
diluting shareholder interests maximizes shareholders’ value. ROE in
1999 was 24% and has averaged 30% for the last thirteen years.
expressed as a percentage of sales ranks in the top tier of all U.S.
publicly-traded companies at 19%, 18% and 18% for 1999, 1998 and
1997, respectively. Net income in 1999 was up 13%. After income
taxes, 1999 net income (in thousands) was $5,468, compared to
30
40
$4,858 in 1998 and $4,322 in 1997. The effective income tax rate in
1999 was 36.0% compared to 35.4% in 1998 and 36.2% in 1997. Year
to year fluctuations in the tax rate have resulted from 1) the use of a
foreign sales corporation, 2) differing balances in tax-exempt invest-
21
30
ments, 3) amount of exercised employee options which result in a tax
20
benefit to the Company, 4) differences in distribution of state income
taxes, 5) differences in profitability of the Ireland subsidiary which is
taxed at a 10% rate on manufactured products, 6) changes in the
20
amount of non-deductible goodwill expense resulting from an acquisition, and 7) other factors such as R&D tax credits and actual litigation
costs versus accrued expenses. The amortization of goodwill associated
with the 1997 Columbia Medical, Inc. acquisition is not tax deductible.
10
10
Earnings per share (EPS) is net income divided by the number of
shares of stock outstanding (diluted to take effect for stock options
awarded which have exercise prices below the current market value).
Diluted 1999 EPS were up 29% to $.76 compared to $.59 in 1998, and
$.51 in 1997. 1999-ending weighted average number of diluted common shares (the number used to calculate diluted EPS) (in thousands)
were 7,197 compared to 8,273 and 8,495 shares in 1998 and 1997,
0
0
95
96
97
98
99
YEAR-END INSTITUTIONAL
OWNERSHIP
percent of total ownership
95
96
97
98
RETURN ON EQUITY
percent
99
Utah Medical Products, Inc. and Subsidiaries
Consolidated
Statement
of
Cash
Flows
(In thousands)
Years ended December 31,
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
(Recovery of) provision for losses on accounts receivable
(Gain) loss on disposal of assets
Deferred income taxes
Tax benefit attributable to exercise of stock options
(Increase) decrease in:
Accounts receivable
Accrued interest, grant claims, and other receivables
Inventories
Prepaid expenses and other current assets
Increase (decrease) in:
Accounts payable
Accrued expenses
Deferred revenue
$
Cash flows from financing activities:
Proceeds from issuance of common stock
Common stock purchased and retired
Increase (decrease) in note payable
Cash at end of year
Supplemental disclosures of cash flow information:
1998
1997
$ 2,972
$ 2,197
$ 2,307
$
$
$
250
During the year ended December 31, 1998, the Company purchased assets from
Gesco International, Inc. The Company paid cash, and recorded net assets from
the acquisition as follows:
Inventory
Property and equipment
Intangibles
Net cash investment
$
1,515
(35)
(278)
195
27
1
404
903
(14)
55
68
2,317
(43)
514
562
(268)
11
21
221
(2)
(328)
45
(84)
(1,010)
(441)
(136)
(1,134)
(454)
(112)
1,577
9
(7,300)
(685)
(4,962)
(7,414)
98
(12,058)
2,840
58
(1,686)
(2,470)
227
(5,391)
5,563
(9,120)
(4,098)
$
310
2,058
22
438
52
5
(480)
(306)
–
–
12
(4,188)
Net (decrease) increase in cash
Cash at beginning of year
296
$ 4,322
(684)
(2)
–
–
1
–
Net cash (used in) provided by financing activities
Interest
$ 4,858
4,978
Effect of exchange rate changes on cash
Cash paid during the year for:
Income taxes
5,468
9,463
Net cash used in investing activities
1999
1997
9,101
Cash flows from investing activities:
Capital expenditures for:
Property and equipment
Intangible assets
Purchases of investments
Proceeds from sale and maturities of investments
Proceeds from sale of property and equipment
Net cash paid in acquisition
Years ended December 31,
1998
2,192
(16)
(1)
(81)
5
Net cash provided by operating activities
22
1999
635
48
3,505
$ 4,188
13
(51)
(720)
1,367
416
951
(2,088)
3,039
647
$ 1,367
$
951
During the year ended December 31, 1997:
• The Company sold property in exchange for a receivable of $340.
• The Company purchased all of the outstanding common stock of Columbia
Medical, Inc. (Columbia) in a purchase transaction. The Company paid cash
for the common stock and recorded net assets from the acquisition as follows:
Cash
Accounts receivable
Inventory
Prepaids and other
Deferred income taxes
Property and equipment, net
Intangibles
Accounts payable
Accrued expenses
Total cash paid
Less cash received
Net cash investment
S e e a c c o m p a n y i n g n o t e s t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s.
399
(16)
$
860
478
805
27
28
1,062
5,225
(94)
(231)
8,160
(860)
$ 7,300
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis,
Cash Flows and Capital Resources
EBITDA (EBT, adjusted for non-cash depreciation and amortization
continued
equipment and tooling in good working order. In addition to the capital
expenditures, UTMD plans to use cash in 2000 for selective infusions
expenses, asset dispositions, and interest expense and bank fees
of technological, marketing or product manufacturing rights to broaden
associated with the line-of-credit) is a good measure of UTMD’s ability
the Company’s product offerings, for continued share repurchases when
to generate cash. 1999 EBITDA was $11.0 million, or as a ratio of
the price of the stock remains extremely undervalued, and, if available
sales, 38%. EBITDA has averaged 36% of sales over the last five years.
for a reasonable price, acquisitions that strategically fit UTMD’s
The extraordinarily strong cash generation performance resulted from
business and are accretive to performance. UTMD plans to use any
a combination of excellent operating earnings, a substantial non-cash
cash not needed for the above pursuits during the remainder of 2000
charge to earnings from amortization of goodwill and receipt of
to reduce the line-of-credit balance. However, the revolving credit line
payments for the use of UTMD’s technology. Because of EBITDA
will continue to be used for liquidity when the timing of acquisitions
performance in 1999, UTMD was able to purchase $0.7 million in new
or repurchases of stock require a large amount of cash in a short
property and equipment to maintain its facilities, equipment and tooling
period of time.
in good working order and repurchase $12.1 million worth (about 20%)
of its shares, while only increasing its bank revolving line-of-credit
balance by $2.8 million.
Cash (and equivalent) balances were $0.7 million at the end of
1999. UTMD effectively maintains zero-balance “sweep” cash accounts
that minimize the line-of-credit balance, except for amounts held to
16
meet operating requirements in Ireland and separate physical reserves
set aside for litigation expenses and other contractual commitments
where cash has been committed.
Net cash provided by operating activities, including adjustments for
12
depreciation and other non-cash operating expenses, along with changes
in working capital, totaled (in thousands) $9,101 in 1999, compared to
$9,463 in 1998 and $4,978 in 1997.
Financing activities in 1999 provided additional cash (in thousands)
8
of $2,840 through the bank line-of-credit. A total of 1,606,375 shares
of stock were repurchased at an average cost, including commissions, of
$7.51/share, using (in thousands) $12,058 in cash. UTMD received (in
4
thousands) $98 in cash from the sale of 13,950 shares of stock through
employee option exercises at an average price of $7.00 per share.
Management believes that future income from operations and
effective management of working capital will provide the liquidity
needed to finance growth plans. Planned 2000 capital expenditures,
expected to be consistent in magnitude with 1999, will keep facilities,
0
95
96
97
98
99
EBITDA
in millions of dollars
23
Utah Medical Products, Inc. and Subsidiaries
Consolidated
Statement
of
Stockholders’
Equity
Ye a r s e n d e d D e c e m b e r 3 1 , 1 9 9 9 , 1 9 9 8 a n d 1 9 9 7
(In thousands)
Common Stock
Balance Januar y 1, 1997
Shares
Amount
8,786
$ 88
29
–
Additional
Paid-in
Capital
$
Unrealized
Gain on
Investments
Available-forSale, Net of
Tax
–
$ 59
–
227
–
–
–
Cumulative
Foreign
Currency
Translation
Adjustments
$
Retained
Earnings
Total
217
$ 24,019
$ 24,383
–
–
227
–
–
(59)
Shares issued upon exercise of employee
stock options for cash
Change in unrealized gain on investments
available-for-sale
(59)
Tax benefit attributable to appreciation
of stock options
Common stock purchased and retired
–
(510)
–
27
–
–
(5)
(254)
–
–
Foreign currency translation adjustment
–
–
–
–
Net income
–
–
–
–
8,305
83
–
–
8
–
58
–
–
Balance, December 31, 1997
(874)
–
(657)
–
(5,132)
–
27
(5,391)
(874)
4,322
4,322
23,209
22,635
–
58
Shares issued upon exercise of employee
stock options for cash
Tax benefit attributable to appreciation
of stock options
Common stock purchased and retired
–
(267)
–
4
–
–
(3)
(62)
–
–
–
(1,621)
4
(1,686)
Foreign currency translation adjustment
–
–
–
–
148
–
148
Net income
–
–
–
–
–
4,858
4,858
8,046
80
–
–
26,446
26,017
13
–
98
–
–
–
98
–
–
5
–
–
–
5
Balance, December 31, 1998
(509)
Shares issued upon exercise of employee
stock options for cash
Tax benefit attributable to appreciation
of stock options
Common stock purchased and retired
24
(1,606)
(16)
(103)
–
Foreign currency translation adjustment
–
–
–
–
Net income
–
–
–
–
6,453
$ 64
Balance, December 31, 1999
S e e a c c o m p a n y i n g n o t e s t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s.
$
–
$
–
–
(741)
–
$ (1,250)
(11,939)
–
12,058)
(741)
5,468
5,468
$ 19,975
$ 18,789
Utah Medical Products, Inc. and Subsidiaries
Management’s
Discussion
and
Analysis,
Management’s Outlook
Internally generated cash flow directly impacts shareholder value
continued
Internationally, where UTMD must depend on the knowledge,
focus, relationships and energy of independent distributors, manage-
to the extent it can be used to accelerate growth in the business, fund
ment will continue to closely monitor performance and actively recruit
attractive acquisitions, or be returned to investors through dividends
needed new business partners. In 2000, UTMD expects its Ireland
or share repurchases. Therefore, most financial analysts agree that
subsidiary, which shipped 61% of all foreign sales in 1999, to continue
a company’s value is not based on historical sales or earnings but rather
its important contribution to overall performance.
the certainty of its future cash flow. History should be interesting
In 1999, UTMD implemented a Y2K plan to identify and solve
to investors where it can provide insight into what might happen in
potential Y2K problems. UTMD experienced no material adverse
the future.
consequences from the “Year 2000 (Y2K) Problem,” having taken all
In 1999, UTMD again demonstrated a high cash flow performance
appropriate actions to be prepared. The costs associated with the
by achieving EBITDA in excess of 37% of sales. In 1998 and 1997,
efforts were absorbed in 1999 and earlier results. The Company has
EBITDA was 36% and 35% of sales, respectively. Over the last three-
determined that all of the products it sells are Y2K compliant. None
year period, UTMD’s cash flow funded three significant achievements:
of UTMD’s products use or process dates in any form.
a net (after option exercises) repurchase of 2.4 million of its shares at
UTMD’s 1999 ending share price of $6.75 was 8.8 times EPS of
an average cost of $8.03 per share including commissions and other
76¢, which were up 29%. In other words, UTMD’s year-end price to
repurchase costs; two significant acquisitions costing $11.5 million
earnings ratio (PER) was 8.8. The 29% trailing twelve months (TTM)
which accounted for 22% of total sales in 1999; and R&D spending of
EPS growth rate is more than three times the year-end PER expressed
$2.6 million or about 3% of sales.
as a percent. As a value indicator, the ratio of 1999 return on average
In 2000, management expects to be able to extend UTMD’s
shareholder equity (ROE) to PER equals 2.7 times, the highest in
excellent EBITDA performance for another year. In a competitive
UTMD’s history. For reference, the 1995 ending ROE/PER ratio was
marketplace, UTMD has built and continues to successfully defend
1.3 times, while the TTM EPS growth rate of 21% was less than one
a dominant market franchise in the most special areas of hospitals
times the year-ending PER. (UTMD’s 1995 ending share price was
caring for mothers and their babies, with innovative and highly
24 times EPS of 82¢.) These ratio comparisons suggest that from either
effective products.
a “growth” or a “value” perspective, UTMD’s stock may represent an
UTMD’s direct U.S. sales team continues to evolve into a key
uncommon “buy” opportunity.
resource for achieving UTMD’s objectives to help clarify clinician
needs, responsively provide excellent solutions for those needs, and
assure timely support for clinical customers’ use of UTMD’s solutions.
To be successful in its programs, UTMD must provide clinicians with
the information they need to make important judgments about using
certain products in obtaining optimal clinical outcomes, which include
minimizing risk of complications. UTMD must also be able to provide
support for physicians to explain those needs to hospital administrators
who are primarily focused on reducing current operating costs.
Where UTMD has a proprietary advantage, it must actively defend
its patents from infringers and continue to develop new products representing a quantum improvement in care. UTMD remains encouraged
that the federal judicial process will allow a favorable resolution of its
two ongoing Intran IUPC patent infringement lawsuits. The substantial
legal costs of the litigation continue to be absorbed in G&A expenses.
The Company’s gynecology practice tools are intended to leverage
UTMD’s reputation with physicians outside the hospital. The niche
markets for which UTMD’s gynecology/electrosurgery/urology products are targeted have proven to require many and varied marketing
initiatives. They require individual user training together with evidence
of improved outcomes. Sales of newer products are growing slowly and
consistently. UTMD will continue to patiently investigate economic
ways to increase the rate of adoption of its newer products.
25
Utah Medical Products, Inc. and Subsidiaries
Notes
to
Consolidated
Financial
Statements
Ye a r s e n d e d D e c e m b e r 3 1 , 1 9 9 9 , 1 9 9 8 a n d 1 9 9 7
1. Summar y of Significant A ccounting Policies
Intangible Assets — Costs associated with the acquisition of
Organization — Utah Medical Products, Inc. and its wholly
patents, trademarks, goodwill, license rights, and non-compete
owned subsidiaries, principally Utah Medical Products Ltd., which
agreements are capitalized and amortized using the straight-line
operates a manufacturing facility in Ireland, and Columbia Medical,
method over periods ranging from 5 to 17 years.
Inc. (the Company) are in the business of producing cost-effective
devices for the healthcare industry. The Company’s broad range of
products includes those used in critical care areas and the labor and
delivery departments of hospitals, as well as outpatient clinics and
physician’s offices. Products are sold in both domestic U.S. and
international markets.
Deferred Revenue — Amounts received in advance from
customers for the sale of product rights and price reductions are
recognized as revenue as the related products are sold considering
the future marketability of the products.
Income Taxes — The Company accounts for income taxes under
Basis of Presentation — Effective July 1, 1997, the Company
acquired Columbia Medical, Inc. (Columbia) in a purchase
transaction. Operations of Columbia have been included in the
consolidated operations since the date of purchase.
SFAS No. 109, “Accounting for Income Taxes,” whereby deferred
taxes are computed under the asset and liability method.
Earnings per Share — The computation of basic earnings per
common share is based on the weighted average number of shares
Principles of Consolidation — The consolidated financial
statements include those of the Company and its subsidiaries.
All intercompany accounts and transactions have been eliminated
outstanding during each year.
The computation of diluted earnings per common share is
based on the weighted average number of shares outstanding during
the year plus the common stock equivalents which would arise
in consolidation.
from the exercise of stock options and warrants outstanding using
Cash and Cash Equivalents — For purposes of the consolidated
the treasury stock method and the average market price per share
statement of cash flows, the Company considers cash on deposit and
during the year.
short-term investments with original maturities of three months or
Translation of Foreign Currencies — Assets and liabilities of the
less to be cash and cash equivalents.
Company’s foreign subsidiary are translated into U.S. dollars at the
Grant Claims Receivable — Grant claims receivable consists of
applicable exchange rates at year-end. Income and expense items
amounts due from the Industrial Development Agency (Ireland)
are translated at the average rate of exchange during the year.
under capital and employment grant agreements for the construc-
Net gains or losses resulting from the translation of the Company’s
tion and operation of the Company’s Ireland manufacturing facility.
assets and liabilities are reflected as a separate component of
stockholders’ equity.
Inventories — Finished products, work-in-process, and raw
materials and supplies inventories are stated at the lower of cost
Concentration of Credit Risk — Financial instruments which
(computed on a first-in, first-out method) or market (see note 2).
potentially subject the Company to concentration of credit risk
26
consist primarily of trade receivables. In the normal course of
Property and Equipment — Property and equipment are stated
at cost. Depreciation and amortization are computed using the
straight-line and units-of-production methods over estimated useful
lives as follows:
Building and improvements
Furniture, equipment, and tooling
business, the Company provides credit terms to its customers.
Accordingly, the Company performs ongoing credit evaluations
of its customers and maintains allowances for possible losses
which, when realized, have been within the range of management’s
30-40 years
3-10 years
expectations.
The Company’s customer base consists primarily of healthcare
providers. Although the Company is directly affected by the
well-being of the medical industry, management does not believe
significant credit risk exists at December 31, 1999.
The Company maintains its cash in bank deposit accounts
which, at times, may exceed federally insured limits. The Company
has not experienced any losses in such accounts and believes it is not
exposed to any significant credit risk on cash and cash equivalents.
Utah Medical Products, Inc. and Subsidiaries
Use of Estimates in the Preparation of Financial Statements —
The preparation of financial statements in conformity with generally
3. Property and Equipment
Property and equipment consists of the following (in thousands):
accepted accounting principles requires management to make
December 31,
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Land
1999
1998
967
$ 1,024
$
Buildings and improvements
Furniture, equipment, and tooling
7,549
7,998
13,300
13,018
161
164
21,977
22,204
Construction-in-progress
Reclassifications — Certain changes to the presentation of the
1998 and 1997 consolidated financial statements have been made
to conform with the 1999 presentation.
Accumulated depreciation
and amortization
$ (10,964)
(9,715)
$ 11,013
2. Detail of Certain Balance Sheet A ccounts
Included in the Company’s consolidated balance sheet are the
December 31,
assets of its manufacturing facilities in Utah, Oregon and Ireland.
1999
1998
$ 4,074
$ 4,134
51
49
5
416
Property and equipment, by location are as follows (in thousands):
Accounts receivable (in thousands):
Trade receivables
Grant claim receivables
Accrued interest and other
doubtful accounts
(53)
$ 4,077
(68)
$ 4,531
Inventories (in thousands):
$
Work-in-process
846
$ 1,041
962
771
1,382
2,236
$ 3,190
$ 4,048
$
621
Oregon
$
–
Ireland
$
346 $
Total
967
improvements
3,817
32
3,700
7,549
11,309
1,253
738
13,300
161
–
–
161
15,908
1,285
4,784
21,977
Furniture, equipment,
and tooling
Total
Accumulated
depreciation and
amortization
(9,648)
(717)
(599)
(10,964)
Property and
Other assets (in thousands):
$ 8,533
$ 8,533
1,744
1,743
Patents
License rights
293
293
Trademarks
224
223
75
75
10,869
10,867
Non-compete agreements
Accumulated amortization
(2,664)
$ 8,205
(1,931)
$ 8,936
equipment, net
$
956
$
$ 6,260
$
568
$ 4,185 $ 11,013
December 31, 1998
Utah
Land
$
621
Oregon
$
–
Ireland
$
403 $
27
Total
1,024
Building and
improvements
3,656
32
4,310
7,998
11,090
1,092
836
13,018
157
7
–
164
15,524
1,131
5,549
22,204
Furniture, equipment,
and tooling
Accrued expenses (in thousands):
Payroll and payroll taxes
Land
Construction-in-progress
Raw materials
Goodwill
December 31, 1999
Utah
Building and
Less allowance for
Finished products
$ 12,489
847
Construction-in-progress
Reserve for litigation costs
477
542
Total
Other
684
497
Accumulated
$ 2,117
$ 1,886
depreciation and
amortization
(8,817)
(397)
(501)
(9,715)
Property and
equipment, net
$ 6,707
$
734
$ 5,048 $ 12,489
Utah Medical Products, Inc. and Subsidiaries
Notes
to
Consolidated
Financial
Statements,
continued
Litigation — The Company is involved in lawsuits which are an
4. Notes Payable
The Company has a bank line-of-credit agreement which allows
expected consequence of its operations and in the ordinary course
the Company to borrow a maximum amount (in thousands) of
of business. The Company believes that pending litigation will not
$12,500 at an interest rate equal to the bank’s LIBOR rate plus
have a materially adverse effect on its financial condition or results
1.45%, or .8% below the bank’s prime rate. The line-of-credit
of operations.
matures on March 25, 2001, is unsecured and had an outstanding
balance of (in thousands) $5,934 and $3,093 at December 31,
1999 and 1998, respectively.
6. Income Taxes
Deferred tax assets (liabilities) consist of the following temporary
In addition, at December 31, 1998 the Company had certain
differences (in thousands):
other long-term obligations which required monthly payments and
December 31,
were secured by equipment. The balance at December 31, 1998
1999
was (in thousands) $5.
Current
Operating Leases — The Company has an operating lease
agreement for land adjoining the Company’s U.S. facilities for
a term of forty years commencing on September 1, 1991. On
September 1, 1996 and subsequent to each fifth lease year, the
and unicap
accounts
and reserves
The Company also leases certain buildings under noncancelable
Depreciation and
amortization
operating lease agreements was approximately (in thousands)
Earnings from subsidiary
$103, $116 and $75 for the years ended December 31, 1999,
Deferred income
taxes, net
1998 and 1997, respectively.
Future minimum lease payments under the operating
lease obligations as of December 31, 1999 were as follows
(in thousands):
61
2001
35
2002
35
2003
35
2004
35
Thereafter
Total minimum lease payments
930
$ 1,131
$
–
$ 95
$
–
18
–
26
250
–
278
–
38
–
47
–
–
–
(210)
–
(246)
–
(162)
–
(194)
$ 459
$ (372)
$ 446
$ (440)
The components of income tax expense are as follows
(in thousands):
Years ended December 31,
Amounts
$
$ 153
Accrued liabilities
Other
operating leases. Rent expense charged to operations under these
28
Long-term
Allowance for doubtful
basic rental is adjusted for published changes in a price index.
2000
Current
Inventory write-down
5. Commitments and Contingencies
Year ending December 31:
1998
Long-term
Current
Deferred
Total
1999
1998
1997
$ 3,158
$ 2,613
$ 2,285
52
168
$ 2,665
$ 2,453
(81)
$ 3,077
Income tax expense differed from amounts computed by
applying the statutory federal rate to pretax income as follows
(in thousands):
Product Liability — The Company is self-insured for product
Years ended December 31,
liability risk.
1999
1998
1997
Federal income tax expense
$ 2,905
$ 2,558
$ 2,303
State income taxes
at the statutory rate
427
376
309
Foreign sales corporation
(75)
(76)
(85)
(180)
(193)
(74)
Other
Total
$ 3,077
$ 2,665
$ 2,453
Utah Medical Products, Inc. and Subsidiaries
Notes
to
Consolidated
Financial
Statements,
continued
7. Stockholders’ Equity
Stock-Based Compensation — The Company has adopted the
Options — The Company has stock option plans which authorize
disclosure-only provisions of Statement of Financial Accounting
the grant of stock options to eligible employees, directors, and
Standards (SFAS) No. 123, “Accounting for Stock-Based Compensa-
other individuals to purchase up to an aggregate 4,700,000 shares
tion.” Accordingly, no compensation cost has been recognized in the
of common stock. All options granted under the plans may be
financial statements. Had compensation cost for the Company’s
exercised between six months and ten years following the
stock option plans been determined based on the fair value at the
date of grant. The plans are intended to advance the interest of
grant date for awards starting in 1995 consistent with the provisions
the Company by attracting and ensuring retention of competent
of SFAS No. 123, the Company’s net earnings and earnings per share
directors, employees, and executive personnel, and to provide
would have been reduced to the pro forma amounts indicated below
incentives to those individuals to devote their utmost efforts to the
(in thousands, except per share amounts):
advancement of the Company.
Years ended December 31,
Changes in stock options were as follows:
Shares
Price Range
Per Share
1999
267,000
Expired or canceled
147,174
6.50 –
14.25
13,950
6.75 –
7.25
Total outstanding at December 31
Total exercisable at December 31
$ 6.50 – $ 7.75
Net income as reported
$ 5,468
$ 4,858
$ 4,322
Net income pro forma
$ 4,888
$ 4,382
$ 3,933
$
.76
$
.59
$
.51
$
.68
$
.53
$
.46
assuming dilution
as reported
Earnings per share
6.50 –
14.25
assuming dilution
665,533
6.50 –
14.25
pro forma
Granted
267,500
Expired or canceled
155,067
6.75 –
14.25
8,000
7.25 –
7.25
Total outstanding at December 31
992,781
6.75 –
14.25
Total exercisable at December 31
478,902
6.75 –
14.25
$ 6.75 – $ 8.06
The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option pricing model with the
following assumptions:
Years ended December 31,
1999
Expected dividend yield
1997
Granted
454,700
Expired or canceled
229,452
6.75 –
14.25
29,500
7.25 –
10.00
Exercised
1997
1,098,657
1998
Exercised
1998
Earnings per share
Granted
Exercised
1999
$ 6.75 – $ 11.50
$
–
1998
$
–
1997
$
–
Expected stock price
volatility
47.5%
49.9%
47.6%
Risk-free interest rate
Total outstanding at December 31
888,348
6.75 –
14.25
(weighted average)
Total exercisable at December 31
355,971
7.25 –
14.25
Expected life of options
4.7%
5.4%
6.3%
3.5 years
3.8 years
3.8 years
29
For the years ended December 31, 1999, 1998 and 1997, the
Company reduced current income taxes payable and increased additional paid-in capital by (in thousands) $5, $5 and $27, respectively,
for the income tax benefit attributable to appreciation of common
stock related to stock options.
The per-share weighted average fair value of options granted
during 1999, 1998 and 1997 is $2.56, $3.20 and $4.10, respectively.
Utah Medical Products, Inc. and Subsidiaries
Notes
to
Consolidated
Financial
Statements,
The following table summarizes information about stock options
outstanding at December 31, 1999:
Options Outstanding
Range of
Exercise
Prices
Options Exercisable
Weighted
Average
Remaining Weighted
Contractual Average
Number
Life
Exercise
Outstanding
(Years)
Price
Number
Exercisable
Weighted
Average
Exercise
Price
$ 6.50 – 8.00
663,363
7.61
$ 6.97
307,235
$ 7.10
9.50 – 14.25
435,294
5.98
11.72
358,893
11.59
$ 6.50 – 14.25
1,098,657
6.97
$ 8.85
666,128
$ 9.52
continued
10. Product Sale and Purchase Commitments
The Company has license agreements for the rights to develop
and market certain products owned by unrelated parties. Under the
terms of such agreements, the Company is required to pay royalties
ranging from 1.5% to 5% of sales, and in one case certain payments
to the developer contingent upon the product achieving certain
annual revenue thresholds.
The Company has license agreements with unrelated companies
to provide exclusive and nonexclusive rights to purchase, market,
distribute, or manufacture the Company’s products, from which
the Company receives royalties and license fees.
11. Employee Benefit Plan
8. Earnings Per Share
The Company has a contributory 401(k) savings plan for
Financial accounting standards require companies to present
employees who work 30 hours or more each week, who are at least
basic and diluted earnings per share (EPS) along with additional
21 years of age, and have a minimum of one year of service with the
informational disclosures. Information related to EPS is as follows
Company. The Company’s contribution is determined annually by
(in thousands, except per share amounts):
the Board of Directors and was approximately (in thousands) $87,
$63 and $54 for the years ended December 31, 1999, 1998 and
Years ended December 31,
1999
1998
1997
1997, respectively.
Basic EPS:
12. Fair Value of Financial Instruments
Net income available to
common stockholders
$ 5,468
$ 4,858
$ 4,322
Weighted average
common shares
Net income per share
None of the Company’s financial instruments are held for trading
purposes. The Company estimates that the fair value of all financial
7,187
$
.76
8,269
$
.59
8,444
$
.51
instruments at December 31, 1999, does not differ materially from
the aggregate carrying values of its financial instruments recorded in
the accompanying balance sheet. The estimated fair value amounts
have been determined by the Company using available market
Diluted EPS:
information and appropriate valuation methodologies. Considerable
Net income available to
common stockholders
$ 5,468
$ 4,858
$ 4,322
7,197
8,273
8,495
develop the estimates of fair value, and, accordingly, the estimates
Weighted average
common shares
Net income per share
judgement is necessarily required in interpreting market data to
$
.76
$
.59
$
.51
are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.
30
13. Recent A ccounting Pronouncements
9. Geographic Sales Information
In June 1999, the FASB issued SFAS No. 137, “Accounting for
The Company had sales in the following geographic areas
Derivative Instruments and Hedging Activities—Deferral of the
(in thousands):
Effective Date of FASB Statement No. 133.” SFAS 133 establishes
Year
United States
Other
1999
$ 23,894
$ 5,550
requires recognition of all derivatives as assets or liabilities in
1998
$ 22,945
$ 4,732
the statement of financial position and measurement of those
1997
$ 19,053
$ 5,219
accounting and reporting standards for derivative instruments and
instruments at fair value. SFAS 133 is now effective for fiscal years
beginning after June 15, 2000. The Company believes that the
adoption of SFAS 133 will not have any material effect on the
financial statements of the Company.
Independent
Auditors’
Report
To the Board of Directors and Stockholders
of Utah Medical Products, Inc.
We have audited the consolidated balance sheet of Utah Medical
Products, Inc. as of December 31, 1999 and 1998, and the related
consolidated statements of income, stockholders’ equity, and cash
flows for the years ended December 31, 1999, 1998 and 1997.
These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position
of Utah Medical Products, Inc. as of December 31, 1999 and 1998,
and the results of their operations and their cash flows for the years
ended December 31, 1999, 1998 and 1997 in conformity with
generally accepted accounting principles.
31
S a l t L a k e C i t y, U t a h
January 14, 2000
Corporate
Information
Board of Directors
Officers
Investor Information
Kevin L. Cornwell
Kevin L. Cornwell
CORPORATE HEADQUARTERS
Chairman and CEO
President and Secretary
Utah Medical Products, Inc.
7043 South 300 West
Midvale, Utah 84047
Stephen W. Bennett, M.D., Dr. P.H.
Paul O. Richins
Retired Senior Health Care Analyst
G. T. Management Ltd.
Vice President and
Chief Administrative Officer
FOREIGN OPERATIONS
Utah Medical Products Ltd.
Garrycastle Industrial Estate
Athlone, County Westmeath
Ireland
Ernst G. Hoyer
Greg A. LeClaire
General Manager
Petersen Precision Engineering Co.
Controller and
Assistant Treasurer
U.S. SUBSIDIARY
Columbia Medical, Inc.
Redmond, Oregon
Barbara A. Payne, Ph.D.
John G. Robert
Consultant
Vice President, Sales
TRANSFER AGENT
Registrar and Transfer Company
10 Commerce Street
Cranford, New Jersey 07016
Paul O. Richins
George Daetz
Chief Administrative Officer
Vice President, Sales
AUDITORS
Tanner + Co.
Salt Lake City, Utah
Russell Brennan Keane
Athlone, Ireland
CORPORATE COUNSEL
Kruse, Landa & Maycock
Salt Lake City, Utah
Arthur Cox, Solicitors
Dublin, Ireland
32
TM
Corporate Stock
The Company’s common stock began trading on the Nasdaq Stock Market (symbol: UTMD) on
March 8, 2000. It previously traded on the New York Stock Exchange (symbol: UM). The following
table sets forth the high and low sales price information as reported by NYSE for the periods indicated.
1999
1998
High
Low
High
Low
First Quarter
7 1/4
5 9/16
8 1/4
6 9/16
Second Quarter
7 15/16
5 13/16
8
7/8
6 13/16
Third Quarter
8 3/16
6 13/16
7 5/8
5
Fourth Quarter
7 3/8
6 1/8
7 1/4
5
For shareholder information contact: Paul Richins, (801) 566-1200
Company news on call: 1-800-758-5804, access #891175
Web site: www.utahmed.com
e-mail: info@utahmed.com
Utah Medical Products Inc.
7043 South 300 West
Midvale, Utah 84047
www.utahmed.com
e-mail: info @ utahmed.com