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UG

UNITED GUARDIAN INC (UG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 implied revenue was $2.48M and EPS ~$0.11, with sequential declines versus Q3 (revenue $3.06M, EPS $0.19) and year-over-year declines versus Q4 2023 (revenue ~$2.61M, EPS ~$0.16). Full-year 2024 grew 12% to $12.18M with EPS $0.71, driven by cosmetic ingredients and medical lubricants strength .
  • No formal guidance; management declared a $0.35 dividend payable Feb 18, 2025, consistent with July 2024, signaling confidence in cash generation despite micro-cap scale .
  • Management attributes 2024 growth primarily to increased orders from the largest cosmetic distributor (demand recovery in China) and stronger medical lubricants; pharmaceuticals fell 5% due to a late-2023 Renacidin supply disruption that eased by late Q1 2024 .
  • Strategic 2025 focus includes tariff risk monitoring/mitigation (evaluating alternate manufacturing), strengthening Renacidin’s U.S. presence, and late‑stage launches in cosmetic ingredients and sexual wellness; no Q4 earnings call transcript exists, but the May 2025 shareholder/analyst call provides context on FY24 and forward priorities .

What Went Well and What Went Wrong

  • What Went Well

    • FY24 net sales +12% YoY to $12.18M and EPS $0.71, with cosmetics +32% and medical lubricants +16%; management cited stronger orders from the largest distributor and regained share in China. “We are pleased to announce that net sales and net income increased from 2023 to 2024.” — President Donna Vigilante .
    • Renacidin supply constraints from late 2023 were resolved by late March 2024, supporting a recovery path in pharmaceuticals into 2025 .
    • Capital returns continued: $0.35 dividend declared Jan 30, 2025, consistent with July 2024, marking the 30th consecutive year of dividends .

  • What Went Wrong

    • Q4 underwhelmed: revenue ~$2.48M and EPS ~$0.11 declined sequentially vs Q3 revenue $3.06M and EPS $0.19; YoY revenue also declined vs implied Q4 2023 ~$2.61M and EPS ~$0.16, reflecting order timing and product mix normalization following strong mid‑year cosmetics demand .
    • FY24 pharmaceutical sales fell 5% due to Renacidin supply disruption from late 2023 into Q1 2024, weighing on full-year mix and Q4 trajectory despite normalized supply by late March .
    • 2025 macro risk: tariff uncertainty flagged as a “main concern,” with management exploring alternative manufacturing and potential margin trade-offs to preserve share if needed .

Financial Results

  • Quarterly performance vs prior periods and implied YoY (calculated from filed 9M and FY tables; shares basic/diluted 4,594,319 throughout):
MetricQ4 2023Q3 2024Q4 2024
Revenue ($)$2,607,013 (FY23 $10,885,154 – 9M23 $8,278,141) $3,060,113 $2,476,709 (FY24 $12,181,971 – 9M24 $9,705,262)
Net Income ($)$737,439 (FY23 $2,581,370 – 9M23 $1,843,931) $865,484 $503,724 (FY24 $3,250,875 – 9M24 $2,747,151)
Diluted EPS ($)~$0.16 (NI/4,594,319) $0.19 ~$0.11 (NI/4,594,319)
Gross Margin %~53.7% ((2,607,013 – 1,207,523)/2,607,013) ~54.0% ((3,060,113 – 1,408,866)/3,060,113) ~51.8% ((2,476,709 – 1,195,138)/2,476,709)
Operating Margin %~30.3% (OI $791,266/2,607,013) ~31.0% (OI $949,128/3,060,113) ~22.5% (OI $556,376/2,476,709)
Net Margin %~28.3% (737,439/2,607,013) ~28.3% (865,484/3,060,113) ~20.3% (503,724/2,476,709)
Effective Tax Rate %~20.8% (193,486/930,925) ~21.1% (230,801/1,096,285) ~21.4% (137,088/640,812)

  • FY 2024 highlights (from 8‑K/press release):

    • Net sales $12.18M (+12% YoY) and net income $3.25M ($0.71/sh) .
    • Balance sheet: total assets $13.80M; equity $11.88M at 12/31/24 .

  • Segment/category indicators (FY 2024 YoY):

    • Cosmetic ingredients +32%; medical lubricants +16%; pharmaceuticals −5% (Renacidin supply disruption late 2023 into Q1 2024) .

Guidance Changes

  • No formal quantitative guidance was issued in Q4/FY results or in the subsequent May 2025 shareholder/analyst call; management discussed qualitative priorities and risks (tariffs, pipeline, distributor contract) .
MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY25NoneNoneN/A
MarginsFY25NoneNoneN/A
OpExFY25NoneNoneN/A
Tax rateFY25NoneNoneN/A
Dividend per shareQ1 2025$0.35 (July 2024 reference)$0.35 declared Jan 30, 2025Maintained

Earnings Call Themes & Trends

  • There was no UG Q4 earnings call; the May 15, 2025 shareholder/analyst call provided FY24 review and 2025 priorities. Trend tracking below synthesizes Q2 and Q3 press releases with FY commentary.
TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4/FY 2024 context)Trend
Cosmetic ingredients demand (China/distributor)Q2 cosmetics +84% YoY; strength driven by largest distributor Q3 cosmetics +8% YoY; 9M +68% driven by largest distributor FY24 cosmetics +32% YoY; regained share in China via largest distributor Strong demand moderated into year-end; structural distributor-led recovery
Medical lubricantsQ2 +15% YoY; 6M +9% Q3 −2% YoY (order timing), 9M +4% FY24 +16% YoY Steady growth with quarterly order variability
Pharmaceuticals (Renacidin)Q2 +3% YoY (quarter) but 6M −13% due to late‑2023 shutdown; production resumed late March Q3 −6% (quarter) and 9M −11% FY24 −5% YoY; supply disruption weighed on 2024; expecting normalization in 2025 Recovering post-supply restart; rebuilding through 2025
Tariffs/macro——2025: tariff uncertainty “main concern”; exploring alternative manufacturing; potential margin trade‑offs New headwind to monitor; mitigation plans underway
Distributor/Ashland relationshipLargest distributor drove growth Same driver Contract review ongoing; relationship “very strong” Stable partnership; negotiating terms
R&D pipeline/new products——Sexual wellness launch approvals (Natrajel) targeted; two late‑stage cosmetic ingredients (24‑hour hydration; natural hair hold) Incremental product catalysts into late 2025/2026
Capital allocation——$0.35 dividend declared; buybacks disfavored given small float Emphasis on dividends, reinvestment over buybacks

Management Commentary

  • “Sales of cosmetics ingredients and medical lubricants increased by 32% and 16%, respectively... due to greater demand for our products in China as a result of regaining market share at certain key accounts.” — President Donna Vigilante (FY24 release) .
  • “Pharmaceutical sales decreased by 5% in 2024, due to a supply disruption of Renacidin... Sales began increasing once supply levels resumed” .
  • 2025 focus: “Tariff uncertainty has started to create global instability within supply chains... we’re exploring alternative manufacturing locations... prepared to reduce profit margins to maintain our market share” .
  • Distributor update: “We feel that the relationship with Ashland is very strong... looking at the contract very closely” .
  • Product roadmap: “A customer... approved one of our Natrajel products for production in Q1 of 2026... two new [cosmetic] products in late‑stage development” .

Q&A Highlights

  • Distributor contract timing: Management emphasized a strong Ashland relationship, with contract review taking longer to ensure terms are appropriate for UG .
  • Capital returns: Buybacks are disfavored due to very small public float; priority is product development over “artificial” stock price support .
  • Listing status: Clarified UG is listed on NASDAQ (addressing a shareholder query) .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue appears unavailable for UG (no consensus values returned). As a micro-cap with limited coverage, there were no estimate comparisons to report; investors should anchor on filed results and management commentary (Values retrieved from S&P Global).*

Key Takeaways for Investors

  • Q4 softness caps an otherwise solid FY24: cosmetics and lubricants drove full-year growth, but Q4 revenue ($2.48M) and EPS ($0.11) declined sequentially and YoY, likely reflecting order timing and mix normalization after strong mid‑year demand .
  • Renacidin supply normalization underpins 2025 recovery in pharma; FY24 −5% reflects disruption that ended late Q1 2024, with management planning to strengthen U.S. market presence in 2H25 .
  • Distributor-led China demand recovery remains a core driver; maintaining contract terms and visibility with Ashland is a critical operational priority for sustaining cosmetics momentum .
  • Tariff risk is a new macro variable for 2025; management is proactively evaluating alternate manufacturing and could flex margins to protect share if needed—watch for cost impacts .
  • Margins compressed in Q4 (GM ~51.8%, OM ~22.5%, NM ~20.3%) versus Q3 and Q4’23; monitor whether margins re-expand as pharma normalizes and as product innovation ramps .
  • Continued dividends ($0.35 in Feb 2025) underscore commitment to returns; with buybacks off the table, excess cash likely supports R&D and pipeline commercialization .
  • Near-term trading setup: limited sell-side coverage and absence of guidance mean catalysts will be distributor order updates, Renacidin volume trends, tariff developments, and any pipeline commercialization milestones referenced on future calls/press releases .

Notes on sources and derivations:

  • Q4 2024 and Q4 2023 quarterly figures are derived from FY and 9M tables in company press releases and 8-Ks (revenues, costs, NI, EPS, margins); all calculations use disclosed 9M and FY figures and the constant share count (4,594,319) .
  • No UG Q4-specific earnings call transcript was available; the May 15, 2025 shareholder/analyst meeting transcript was used for FY24 review and forward commentary .

References:

  • FY24 8-K/Press Release (Mar 21, 2025):
  • Q3 2024 PR/8-K (Nov 8, 2024):
  • Q2 2024 PR/8-K (Aug 9, 2024):
  • Q1 2024 8-K (May 10, 2024):
  • Dividend PR (Jan 30, 2025):
  • Shareholder/Analyst Call Transcript (May 15, 2025):

*Estimates disclaimer: Values retrieved from S&P Global.