United-Guardian Reports 1st Quarter Increase in Sales

Rhea-AI Summary

United-Guardian, Inc. (NASDAQ: UG) reported a 4% increase in net sales for Q1 2020, totaling $3,322,914 compared to $3,180,318 in Q1 2019. However, net income fell sharply to $790,307 ($0.17 per share) from $1,222,694 ($0.27 per share) in the prior year, primarily due to declines in marketable securities. The company maintained operations as an essential business during the pandemic, with strong sales in April. President Ken Globus noted potential future declines in cosmetic ingredient sales but expressed optimism for pharmaceuticals and medical products.

Positive

• Net sales increased by 4% year-over-year, reaching $3,322,914.
• Income from operations increased from $1,246,352 to $1,310,576.

Negative

• Net income decreased significantly from $1,222,694 to $790,307.
• Earnings per share dropped from $0.27 to $0.17.

News Market Reaction – UG

+3.31%

1 alert

+3.31% News Effect

On the day this news was published, UG gained 3.31%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

HAUPPAUGE, N.Y., May 13, 2020 (GLOBE NEWSWIRE) -- United-Guardian, Inc. (NASDAQ:UG) reported today that net sales for the first quarter of 2020 increased by 4% over the same quarter last year, increasing from $3,180,318 in 2019 to $3,322,914 this year. Net income decreased from $1,222,694 ($0.27 per share) in 2019 to $790,307 ($0.17 per share) this year, which was primarily due to the decrease in value of the company’s marketable securities.

Ken Globus, President of United-Guardian, stated, “Despite the severe impact on the economy of the coronavirus, our first quarter sales remained strong, and continued to be so in April. As an “essential business” we have remained in operation during this coronavirus pandemic, albeit on a reduced and staggered schedule, and we have been able to maintain production and continue to fill orders. The decline in net income was due to the decreased market value of our investments, which resulted from the substantial stock market decline that occurred during the first quarter of 2020. As a result of a change in accounting rules in 2018, companies are now required to include in net income any fluctuations in the market value of their marketable securities, even though no actual gains or losses are experienced. Had it not been for that accounting change, our earnings would have been significantly higher, since our income from operations actually increased from $1,246,352 to $1,310,576. While it is likely that in the coming months we could see a decline in sales of our cosmetic ingredients as the global impact of the coronavirus continues, we are hopeful that sales of our pharmaceutical and medical products will remain strong.”

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

Ken Globus
(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.

RESULTS FOR THE QUARTERS ENDED
MARCH 31, 2020 and MARCH 31, 2019*

STATEMENTS OF INCOME
(UNAUDITED)

		THREE MONTHS ENDED MARCH 31,
			2020			2019
	Net Sales	$	3,322,914		$	3,180,318
	Costs and expenses:
	Cost of sales		1,389,331			1,288,345
	Operating expenses		515,275			546,962
	Research and development		107,732			98,659
	Total costs and expenses		2,012,338			1,933,966
	Income from operations		1,310,576			1,246,352
	Other (expense) income:
	Investment income		44,067			44,167
	Net (loss) gain on marketable securities		(356,595	)		257,194
	Total other (expense) income		(312,528	)		301,361
	Income before provision for income taxes		998,048			1,547,713
	Provision for income taxes		207,741			325,019
	Net income	$	790,307		$	1,222,694
	Earnings per common share (basic and diluted)	$	0.17		$	0.27
	Weighted average shares – basic and diluted		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 net sales for United-Guardian in Q1 2020?

United-Guardian reported net sales of $3,322,914 for Q1 2020.

How did United-Guardian's net income change in Q1 2020?

Net income decreased from $1,222,694 in Q1 2019 to $790,307 in Q1 2020.

What caused the decline in United-Guardian's net income?

The decline was primarily due to decreased market value of the company's marketable securities.

What does United-Guardian expect for future sales?

The company expects potential declines in cosmetic ingredient sales but hopes for strong sales in pharmaceuticals and medical products.

What is the stock symbol for United-Guardian?

The stock symbol for United-Guardian is UG.