Business
Utah Medical Products, Inc. Announces Special Dividend
SALT LAKE CITY, UT / ACCESSWIRE / November 2, 2021 / Utah Medical Products, Inc. (NASDAQ:UTMD) announces that its Board of Directors approved a special cash
About this update from Utah Medical Products, Inc.
[{"type":"text","content":"SALT LAKE CITY, UT / ACCESSWIRE / November 2, 2021 / Utah Medical Products, Inc. (NASDAQ:UTMD) announces that its Board of Directors approved a special cash dividend of two dollars ($2.00) per share of common stock payable on December 29, 2021 to stockholders of record at the close of business on December 15, 2021. This dividend replaces the normal quarterly dividend, and will be paid in December rather than in early 2022.A key long term UTMD business objective has been to maximize returns for its stockholders. In recent years, the annual dividend distributed has been about $4 million per year. In 2019 and in 2021 to date (excluding the 2020 pandemic year in which net income was temporarily depressed), dividends represented about 28% of UTMD's net income (after a provision for corporate income taxes).Chairman Kevin Cornwell states, \"I would like to help explain the rationale for this $7.3 million special dividend:A) UTMD generally endeavors to utilize cash not needed to support normal operations in one or a combination of the following:1) to continue to invest at an opportune time in ways that will enhance future profitability;2) to make additional investments in new technology and/or processes; and/or3) to acquire a product line or another company that will augment revenue and EPS growth, better utilizing UTMD's existing infrastructure.According to its SEC filings, when UTMD has grown cash beyond these three strategic uses, the Company will continue to return cash to stockholders in the form of dividends and share repurchases when the stock appears undervalued.At September 30, 2021 UTMD's cash and investment balances at $64.3 million were $12.7 million higher than at December 31, 2020 despite having previously paid $3.1 million in dividends during the first nine months of 2021. During 2020, in addition to paying $4.1 million in dividends to stockholders, UTMD used $7.0 million of cash to repurchase its shares in the open market, thus improving remaining stockholders' value. Because the Company has not been able to repurchase shares in 2021, the special dividend can be viewed as the Board of Directors returning cash in the form of a dividend in lieu of repurchasing shares.B) For investors subject to income taxes on dividends, a larger and earlier dividend payment should be of benefit given anticipated changes in 2022 U.S. incom...