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United-Guardian, Inc. (UG - Free Report) delivered strong second-quarter 2024 results, marked by notable sales growth and a significant rise in net income.
The company's performance was fueled by robust demand in its cosmetic ingredients and medical lubricants segments, reflecting its ability to capitalize on market opportunities despite ongoing challenges.
However, despite these gains, United-Guardian faced profitability pressures due to higher raw material costs and an unfavorable product mix, highlighting the complexities of its operating environment.
United-Guardian, Inc. Price, Consensus and EPS Surprise
UG reported second-quarter 2024 earnings per share of 21 cents, increasing from 10 cents in the year-ago quarter.
Total quarterly sales rose 28% to $3.39 million from $2.65 million in the year-ago quarter.
This increase was primarily fueled by an 84% jump in cosmetic ingredient sales, which the company attributed to solid purchases from its largest cosmetic distributor.
Disaggregated Sales by Products
Cosmetic Ingredients: Sales in this segment saw a surge of 84% to $1.42 million in second-quarter 2024 from $772,887 in second-quarter 2023. The surge was largely caused by heightened demand, particularly in China, as well as a reduction in competition from lower-cost producers.
Pharmaceuticals: The pharmaceutical segment reported modest growth of 3%, with sales reaching $1.41 million from $1.38 million in second-quarter 2023. The increase was driven by the restocking of Renacidin, following supply constraints in late 2023 and early 2024, slightly offset by a decline in Clorpactin WCS-90 sales.
Medical Lubricants: This segment also performed well, with sales rising 15% to $0.56 million from $0.48 million in the prior-year quarter. The increase was primarily driven by higher orders from a significant customer in India.
Industrial Products: There were no sales reported in this category for second-quarter 2024, as the product line was discontinued after the second quarter of 2023. This resulted in a decline of $0.18 million from second-quarter 2023.
Profitability
The company’s net income more than doubled from $0.46 million in second-quarter 2023 to $0.96 million in second-quarter 2024. This sharp increase in profitability was supported by a combination of higher sales.
Expenses
The cost of sales for United-Guardian in the second quarter of 2024 amounted to $1.56 million, representing 46% of net sales. This marks an increase from second-quarter 2023, wherein the cost of sales was $1.43 million, or 54% of net sales. The increase in the cost of sales as a percentage of net sales was primarily caused by a more favorable sales mix, with a larger portion of revenues coming from the higher-margin cosmetic ingredients segment in 2024 than the prior year.
Operating expenses saw a slight increase, reflecting ongoing investments in the business.
Notably, research and development (R&D) expenses decreased 13% year over year to $0.11 million in the second quarter, contributing to the overall cost control. The decline in R&D expenses suggests a more focused approach to innovation, possibly streamlining efforts to enhance profitability without sacrificing growth potential.
Cash & Debt
As of the end of second-quarter 2024, United-Guardian had cash and cash equivalents of $8.4 million compared with $8.2 million at the end of fourth-quarter 2023. As of Jun 30, 2024, the company has total liabilities amounting to $1.71 million, which includes accounts payable, accrued expenses, and other current liabilities.
View
United-Guardian's second-quarter 2024 results reflect a challenging operating environment, with declines in both sales and profitability metrics. The company's focus on managing costs has not fully offset revenue pressures, indicating that the near-term outlook may remain challenging without a substantial recovery in end-market demand. The company's strong cash position and lack of debt provide a buffer, but the headwinds in core markets suggest ongoing difficulties.
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United-Guardian (UG) Posts Y/Y Q2 Earnings & Sales Growth
United-Guardian, Inc. (UG - Free Report) delivered strong second-quarter 2024 results, marked by notable sales growth and a significant rise in net income.
The company's performance was fueled by robust demand in its cosmetic ingredients and medical lubricants segments, reflecting its ability to capitalize on market opportunities despite ongoing challenges.
However, despite these gains, United-Guardian faced profitability pressures due to higher raw material costs and an unfavorable product mix, highlighting the complexities of its operating environment.
United-Guardian, Inc. Price, Consensus and EPS Surprise
United-Guardian, Inc. price-consensus-eps-surprise-chart | United-Guardian, Inc. Quote
Q2 Results
UG reported second-quarter 2024 earnings per share of 21 cents, increasing from 10 cents in the year-ago quarter.
Total quarterly sales rose 28% to $3.39 million from $2.65 million in the year-ago quarter.
This increase was primarily fueled by an 84% jump in cosmetic ingredient sales, which the company attributed to solid purchases from its largest cosmetic distributor.
Disaggregated Sales by Products
Cosmetic Ingredients: Sales in this segment saw a surge of 84% to $1.42 million in second-quarter 2024 from $772,887 in second-quarter 2023. The surge was largely caused by heightened demand, particularly in China, as well as a reduction in competition from lower-cost producers.
Pharmaceuticals: The pharmaceutical segment reported modest growth of 3%, with sales reaching $1.41 million from $1.38 million in second-quarter 2023. The increase was driven by the restocking of Renacidin, following supply constraints in late 2023 and early 2024, slightly offset by a decline in Clorpactin WCS-90 sales.
Medical Lubricants: This segment also performed well, with sales rising 15% to $0.56 million from $0.48 million in the prior-year quarter. The increase was primarily driven by higher orders from a significant customer in India.
Industrial Products: There were no sales reported in this category for second-quarter 2024, as the product line was discontinued after the second quarter of 2023. This resulted in a decline of $0.18 million from second-quarter 2023.
Profitability
The company’s net income more than doubled from $0.46 million in second-quarter 2023 to $0.96 million in second-quarter 2024. This sharp increase in profitability was supported by a combination of higher sales.
Expenses
The cost of sales for United-Guardian in the second quarter of 2024 amounted to $1.56 million, representing 46% of net sales. This marks an increase from second-quarter 2023, wherein the cost of sales was $1.43 million, or 54% of net sales. The increase in the cost of sales as a percentage of net sales was primarily caused by a more favorable sales mix, with a larger portion of revenues coming from the higher-margin cosmetic ingredients segment in 2024 than the prior year.
Operating expenses saw a slight increase, reflecting ongoing investments in the business.
Notably, research and development (R&D) expenses decreased 13% year over year to $0.11 million in the second quarter, contributing to the overall cost control. The decline in R&D expenses suggests a more focused approach to innovation, possibly streamlining efforts to enhance profitability without sacrificing growth potential.
Cash & Debt
As of the end of second-quarter 2024, United-Guardian had cash and cash equivalents of $8.4 million compared with $8.2 million at the end of fourth-quarter 2023. As of Jun 30, 2024, the company has total liabilities amounting to $1.71 million, which includes accounts payable, accrued expenses, and other current liabilities.
View
United-Guardian's second-quarter 2024 results reflect a challenging operating environment, with declines in both sales and profitability metrics. The company's focus on managing costs has not fully offset revenue pressures, indicating that the near-term outlook may remain challenging without a substantial recovery in end-market demand. The company's strong cash position and lack of debt provide a buffer, but the headwinds in core markets suggest ongoing difficulties.