United-Guardian Reports 2022 Financial Results

Rhea-AI Summary

United-Guardian, Inc. (NASDAQ:UG) reported a significant decline in FY 2022, with net income dropping by 45% to $2.57 million ($0.56 per share) from $4.66 million ($1.01 per share) in FY 2021. Net sales also fell by 9%, totaling $12.70 million compared to $13.93 million in the previous year. The company attributed the revenue decline mainly to decreased demand for cosmetic ingredients due to overstocking by contract manufacturers and reduced demand in Asia, particularly China, amid COVID-19 restrictions. Despite these challenges, the pharmaceutical and medical lubricants sectors remained strong, and the company aims for growth through product innovation.

Positive

• Pharmaceutical and medical lubricants business remained strong.
• Potential for growth in cosmetic ingredients through new product development.

Negative

• Net income decreased by 45% to $2.57 million.
• Net sales declined by 9% to $12.70 million.
• Decreased demand for cosmetic ingredients caused by overstocking and market conditions.

HAUPPAUGE, N.Y., March 17, 2023 (GLOBE NEWSWIRE) -- United-Guardian, Inc. (NASDAQ:UG) reported that net income for FY 2022 decreased by 45% compared to FY 2021. Net sales for the year decreased by 9% from $13,929,629 in 2021 to $12,698,503 in 2022, generating net income of $2,569,512 ($0.56 per share) in 2022 compared to $4,658,542 ($1.01 per share) in 2021.

Beatriz Blanco, President of United-Guardian, stated, “The decrease in the Company’s net income was primarily caused by a decrease in revenue of our cosmetic ingredients combined with increased losses from our marketable securities portfolio. The main factors which negatively impacted the sales of our cosmetic ingredients were 1) overstocking by certain contract manufactures in 2021, in an effort to avoid potential supply chain issues in 2022, and 2) lower demand in Asia, especially in China, due to China’s zero-COVID mandate that was in place for much of 2022. Our pharmaceutical and medical lubricants business remained strong in 2022. We believe that there is potential to continue growing our cosmetic ingredients and medical lubricants business through new product development, new product applications, and technical collaboration with our customers and distributors. The cornerstone of United-Guardian is product innovation and we are continuing to focus our efforts on expanding our line of naturally-derived hydrogels in all markets. United-Guardian continues to have a solid foundation of high-quality innovative hydrogel technologies, as well as an outstanding and experienced team at all levels.”

United-Guardian is a manufacturer of cosmetic ingredients, medical lubricants, and pharmaceutical products.

Contact: Beatriz Blanco (631) 273-0900

NOTE: This press release contains both historical and "forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements about the company’s expectations or beliefs concerning future events, such as financial performance, business prospects, and similar matters, are being made in reliance upon the “safe harbor” provisions of that Act. Such statements are subject to a variety of factors that could cause the company’s actual results or performance to differ materially from the anticipated results or performance expressed or implied by such forward-looking statements. For further information about the risks and uncertainties that may affect the company’s business please refer to the company's reports and filings with the Securities and Exchange Commission.

FINANCIAL RESULTS FOR THE YEARS ENDED
DECEMBER 31, 2022, AND DECEMBER 31, 2021

STATEMENTS OF INCOME

		Years ended December 31
		2022			2021
Net sales	$	12,698,503		$	13,929,629
Costs and expenses:
Cost of sales		5,996,376			5,747,931
Operating expenses		2,174,127			2,035,970
Research and development		490,770			478,642
Total costs and expenses		8,661,273			8,262,543
Income from operations		4,037,230			5,667,086
Other (loss) income:
Investment income		236,695			233,857
Net loss on marketable securities		(1,046,245	)		(23,018			)
Total other (loss) income		(809,550	)		210,839
Income before provision for income taxes		3,227,680			5,877,925
Provision for income taxes		658,168			1,219,383
Net income	$	2,569,512		$	4,658,542
Earnings per common share (basic and diluted)	$	0.56		$	1.01
Weighted average shares (basic and diluted)		4,594,319			4,594,319

BALANCE SHEET DATA
(condensed)

			Years ended December 31,
			2022			2021
Current assets		$	9,970,630		$	11,583,390
Deferred income taxes, net			110,544			---
Property, plant, and equipment (net of depreciation)			559,161			658,862
Total assets			10,640,335			12,242,252
Current liabilities			1,373,691			2,337,761
Deferred income taxes (net)			---			83,222
Total liabilities			1,373,691			2,420,983
Stockholders’ Equity			9,266,644			9,821,269
Total liabilities and stockholders’ equity			10,640,335			12,242,252

FAQ

What were United-Guardian's earnings for FY 2022?

United-Guardian reported a net income of $2.57 million for FY 2022, down 45% compared to $4.66 million in FY 2021.

How did net sales change for United-Guardian in FY 2022?

Net sales for United-Guardian decreased by 9% to $12.70 million in FY 2022, down from $13.93 million in FY 2021.

What factors contributed to the revenue decline at United-Guardian?

The revenue decline was primarily due to decreased demand for cosmetic ingredients caused by overstocking and lower demand in Asia due to the COVID-19 pandemic.

What is the future outlook for United-Guardian's business?

United-Guardian aims to grow its cosmetic ingredients and medical lubricants business through new product development and collaboration with customers.