United-Guardian Reports Third Quarter Financial Results

Rhea-AI Summary

United-Guardian, Inc. (NASDAQ:UG) reported a net income of $717,532 ($0.16 per share) on sales of $2,336,360 for Q3 2020, a decline from $1,069,871 ($0.23 per share) on $3,317,370 in Q3 2019. Year-to-date, net income stands at $2,694,450 ($0.59 per share) with sales of $8,613,918, compared to $3,371,375 ($0.73 per share) on $9,777,086 in the same period last year. The decline is attributed to the pandemic's impact on consumer demand, particularly in personal care products, while pharmaceutical product demand increased by 9% and 15% for the quarter and year-to-date, respectively.

Positive

• 9% increase in pharmaceutical product demand for Q3 2020.
• 15% increase in pharmaceutical product demand for the first nine months of 2020.

Negative

• Net sales decreased from $3,317,370 in Q3 2019 to $2,336,360 in Q3 2020.
• Net income dropped from $1,069,871 in Q3 2019 to $717,532 in Q3 2020.
• Year-to-date sales fell from $9,777,086 in 2019 to $8,613,918 in 2020.
• Reduced demand for cosmetic ingredients, especially in China, expected to last at least until year-end.

HAUPPAUGE, N.Y., Nov. 10, 2020 (GLOBE NEWSWIRE) -- United-Guardian, Inc. (NASDAQ:UG) today reported net income of $717,532 ($0.16 per share) on net sales of $2,336,360 for the quarter ended September 30, 2020, compared with net income of $1,069,871 ($0.23 per share) on sales of $3,317,370 for last year’s third quarter. For the first nine months of 2020, the company reported net income of $2,694,450 ($0.59 per share) on sales of $8,613,918, compared with net income of $3,371,375 ($0.73 per share) on sales of $9,777,086 for the corresponding period in 2019.

Ken Globus, President of United-Guardian, stated, “As we anticipated, sales and earnings for the third quarter were impacted by the coronavirus pandemic to a greater degree than they were in the first and second quarters, which we believe was primarily due to the overall global decrease in consumer demand for personal care products. In addition to manufacturers cutting back on production, the coronavirus also caused the temporary closing of many manufacturing facilities, all of which reduced the need for our products and resulted in many distributors holding excess inventory that has to be worked off.”

“On a positive note, demand for our pharmaceutical products increased by 9% and 15% for the three and nine months, respectively, continuing the trend we have seen this year. With the coronavirus pandemic not yet under control in the U.S. and abroad, we are anticipating that the reduced demand for our cosmetic ingredients, especially in China, will continue until at least the end of the year, possibly longer, depending on how long it takes for the global economies to recover. Until then, we will continue to work closely with our marketing partners to reduce the inventory overstock situation, and to increase our sales by continuing to introduce new cosmetic ingredients and aggressively promote our current products.”

United-Guardian is a manufacturer of cosmetic ingredients, personal and health care products, pharmaceuticals, and specialty industrial products.

Contact:
Ken Globus                 
Investor Relations
(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 our 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.

STATEMENTS OF INCOME*
FOR THE
THREE AND NINE MONTHS ENDED
SEPTEMBER 30,
2020 and 2019
(UNAUDITED)

		THREE MONTHS ENDED SEPTEMBER 30,					NINE MONTHS ENDED        SEPTEMBER 30,
		2020			2019			2020			2019
Net Sales	$	2,336,360		$	3,317,370		$	8,613,918		$	9,777,086
Costs and expenses:
Cost of sales		974,763			1,386,948			3,634,528			4,142,616
Operating expenses		493,204			544,176			1,520,114			1,593,232
Research and development		114,836			104,800			331,134			297,304
Total costs and expenses		1,582,803			2,035,924			5,485,776			6,033,152
Income from operations		753,557			1,281,446			3,128,142			3,743,934
Other Income:
Investment income		38,932			47,320			131,318			141,428
Net gain on marketable securities		113,248			25,499			143,832			369,542
Total other income		152,180			72,819			275,150			510,970
Income before provision for income taxes		905,737			1,354,265			3,403,292			4,254,904
Provision for income taxes		188,205			284,394			708,842			883,529
Net Income	$	717,532		$	1,069,871		$	2,694,450		$	3,371,375
Earnings per common share   (Basic and Diluted)	$	0.16		$	0.23		$	0.59		$	0.73
Weighted average shares – basic      and diluted		4,594,319			4,594,319			4,594,319			4,594,319

_* Additional financial information can be found at the company’s web site at www.u-g.com.

FAQ

What were the earnings results for United-Guardian in Q3 2020?

United-Guardian reported a net income of $717,532 ($0.16 per share) for Q3 2020.

How did net sales change for United-Guardian in Q3 2020 compared to last year?

Net sales decreased from $3,317,370 in Q3 2019 to $2,336,360 in Q3 2020.

What is the future outlook for United-Guardian's cosmetic ingredient demand?

Demand for cosmetic ingredients is expected to remain low due to the pandemic, particularly in China, until at least year-end.

What was the year-to-date performance for United-Guardian for 2020?

For the first nine months of 2020, United-Guardian reported a net income of $2,694,450 on sales of $8,613,918.