Executive Summary

Q1 2025 was a soft quarter: revenue fell to $2.48M (−23.8% YoY), EPS declined to $0.12 (−40% YoY), and net income decreased to $0.56M (−39.4% YoY), driven primarily by a 63% decline in cosmetic ingredients sales tied to distributor inventory in China and timing of orders .
Medical lubricants and pharmaceuticals performed well, up 43% and 23% YoY respectively, partially offsetting cosmetics weakness; gross margin expanded ~250bps YoY to ~54.7% on lower cost of sales ratio despite revenue decline .
No formal guidance was issued; management flagged tariff policy uncertainty as an ongoing risk to operations and financial condition .
The Board declared a $0.35 cash dividend payable February 18, 2025, consistent with July 2024 distributions, signaling continued capital return discipline .
Earnings call transcript was not available, and S&P Global shows no consensus EPS or revenue estimates for Q1 2025, limiting “beat/miss” framing; monitor ASI reorder patterns and China inventory normalization as near-term catalysts .

What Went Well and What Went Wrong

Strong YoY growth in non-cosmetics categories: medical lubricants +43% and pharmaceuticals +23%, showing resilience outside cosmetics .
Gross margin improved to ~54.7% (vs ~52.2% YoY), as cost of sales declined faster than revenue, supporting profitability amidst sales pressure .
Management continues to implement initiatives in global marketing and renewed emphasis on medical and pharma products; governance strengthened with the President added to the Board (May 21) .

Cosmetic ingredients sales dropped 63% YoY, largely due to reduced orders from Ashland Specialty Ingredients (ASI) related to excess inventory in China and order timing—main driver of the quarter’s decline .
Operating income fell to $0.61M (−40.5% YoY) and EPS to $0.12 (−40% YoY), reflecting top-line pressure and higher operating expenses YoY (+11%) .
Management highlighted tariff policy uncertainty as a continuing risk; difficult to assess potential impact on operations/financial condition at this time .

Metric	Q1 2024	Q1 2025	YoY Change
Revenue ($USD)	$3,254,944	$2,481,127	−23.8%
Cost of Sales ($USD)	$1,556,490	$1,123,076	−27.8%
Gross Profit ($USD)	$1,698,454	$1,358,051	−20.0%
Gross Margin (%)	52.2%	54.7%	+250 bps
Operating Expenses ($USD)	$568,865	$632,735	+11.2%
R&D ($USD)	$102,982	$114,394	+11.1%
Operating Income ($USD)	$1,026,607	$610,922	−40.5%
Operating Margin (%)	31.6%	24.6%	−700 bps
Other Income ($USD)	$139,569	$97,037	−30.5%
Income Before Tax ($USD)	$1,166,176	$707,959	−39.3%
Provision for Income Taxes ($USD)	$240,734	$147,064	−38.9%
Effective Tax Rate (%)	20.7%	20.8%	+10 bps
Net Income ($USD)	$925,442	$560,895	−39.4%
EPS (Basic & Diluted) ($)	$0.20	$0.12	−40.0%
Weighted Avg Shares	4,594,319	4,594,319	0.0%

Metric	Q2 2024	Q3 2024	Q1 2025
Revenue ($USD)	$3,390,205	$3,060,113	$2,481,127
Cost of Sales ($USD)	$1,561,090	$1,408,866	$1,123,076
Gross Profit ($USD)	$1,829,115	$1,651,247	$1,358,051
Gross Margin (%)	54.0%	54.0%	54.7%
Net Income ($USD)	$956,225	$865,484	$560,895
EPS ($)	$0.21	$0.19	$0.12

Note: A Q4 2024 quarterly release was not found; the company reported FY 2024 results on March 21, 2025 .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Margins	2025	Not provided	Not provided	Maintained (no formal guidance)
Dividend per Share	Q1 2025 (paid Feb 18, 2025)	Company notes consistency with July 2024 dividend (amount not specified in this release)	$0.35	Maintained
Tariff/Policy Risk	Ongoing	Concern noted in prior communications	Concern reiterated; impact difficult to determine	Maintained

No Q1 2025 earnings call transcript was available.

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q1 2025)	Trend
Cosmetic Ingredients Demand/Distribution	+84% QoQ; strength tied to largest distributor purchases	+8% QoQ; +68% YTD; strength tied to largest distributor	−63% YoY; ASI orders reduced due to China inventory and timing; no significant customer loss per ASI	Softening near term; inventory normalization expected
Medical Lubricants	+15% QoQ; +9% YTD	−2% QoQ; +4% YTD (order pattern variability)	+43% YoY	Resilient/Improving
Pharmaceuticals (Renacidin®)	Production resumed late March; +3% in Q2; −13% YTD due to late-2023 shutdown	−6% QoQ; −11% YTD; recovery expected	+23% YoY	Recovering
Tariffs/Macro	Not highlighted	Not highlighted	Tariff announcements remain a concern; impact uncertain	Elevated risk monitoring
China/Key Accounts	Distributor-driven demand recovery; regaining market share at key accounts (reported later in FY release)	Distributor-driven cosmetics strength	Cosmetics decline linked to excess China inventory at distributor and timing	Mixed: demand vs inventory digestion

“We are experiencing a slow start to 2025 compared to the beginning of 2024. While we saw positive performance from our medical lubricant and pharmaceutical businesses, the main reason for the decrease in sales and earnings was due to a decrease in our cosmetic ingredient business.”
“Cosmetic ingredients sales decreased by 63%…a reduction in orders from Ashland Specialty Ingredients (ASI)…due to excess inventory being held in China…and the timing of product orders. ASI has confirmed that currently there has been no significant loss of business or customers.”
“Tariff announcements…remain a concern…As the situation remains uncertain, it is difficult for us to determine the impact this may have on our operations or financial condition…”
Governance/strategy: “New initiatives…significant changes…in global marketing and distribution of our cosmetic ingredients and renewed emphasis on increasing the sales of our medical and pharmaceutical products.” (on appointment to Board)

No Q1 2025 earnings call transcript or Q&A was available [ListDocuments: earnings-call-transcript not found].

Metric	Q1 2025 Consensus	# of Estimates	Actual	Surprise
EPS ($)	Unavailable*	0*	$0.12	N/A*
Revenue ($USD)	Unavailable*	0*	$2,481,127	N/A*

Values marked with * retrieved from S&P Global; coverage unavailable for UG in Q1 2025.

The quarter’s miss was concentrated in cosmetics due to ASI inventory and order timing; watch reorder cadence and China inventory normalization as primary near-term catalysts .
Non-cosmetics categories showed strength (medical lubricants +43%, pharma +23%), providing diversification; maintain focus on execution in these lines to offset cosmetics volatility .
Margin resilience (gross margin up ~250bps YoY) despite revenue headwinds suggests underlying cost discipline or mix benefits; monitor sustainability if cosmetics rebound .
Absence of formal guidance and limited sell-side coverage (no S&P estimates) mean the stock may trade on company updates and distributor signals; liquidity and volatility should be considered in position sizing .
Tariff policy remains an external risk; any material changes to U.S. trade policy affecting inputs or distribution could impact financials—track policy developments closely .
Capital return continues with a $0.35 dividend; signals confidence in cash generation but align payout expectations with distributor-driven sales variability .
Medium-term, initiatives to improve global marketing/distribution and renewed emphasis on medical/pharma could stabilize growth; validate progress via subsequent quarter releases and distributor metrics .