United-Guardian Reports 24% Decline in Q1 2025 Net Sales, Net Income Drops to $560,895

United-Guardian, Inc. reported a significant decline in financial performance for the first quarter of 2025, with net sales totaling $2.48 million, a decrease of approximately 24% from $3.25 million in the same period of 2024. The decline was primarily driven by a substantial drop in sales of the company's Lubrajel® line of cosmetic ingredients, which fell by about 63%. This decrease was partially offset by a 23% increase in net sales of pharmaceutical products, which rose to $1.17 million, and a 43% increase in medical lubricants, which reached $613,671.

The company's total costs and expenses decreased to $1.87 million from $2.23 million year-over-year, primarily due to a reduction in the cost of sales, which accounted for 45% of net sales in Q1 2025 compared to 48% in Q1 2024. Operating expenses increased by approximately 11% to $632,735, attributed mainly to higher sales and marketing costs. Research and development expenses also rose by 11%, reflecting the company's ongoing commitment to innovation in specialty ingredients. Net income for the quarter was $560,895, down from $925,442 in the prior year, resulting in earnings per share of $0.12, compared to $0.20 in Q1 2024.

In terms of strategic developments, United-Guardian entered into a distribution agreement with Brenntag Specialties in October 2023 to market its new Natrajel® line of sexual wellness ingredients across the Americas. Although no sales were reported for this product line in 2024, the company anticipates beginning manufacturing and sales in 2025. Additionally, the company expanded its distribution relationship with Azelis Group NV to include new territories, such as South Korea, and broadened its medical market presence in the UK and Ireland.

Operationally, the company reported a decrease in customer concentration, with three pharmaceutical distributors and one cosmetic ingredient distributor accounting for 67% of gross sales in Q1 2025, down from 83% in the same period of 2024. The company also noted a geographic expansion, with approximately 29% of total sales in Q1 2025 coming from customers outside the United States, compared to 13% in Q1 2024. Despite these changes, the company faces ongoing challenges from global competition, particularly from lower-cost Asian manufacturers, which may impact future sales and market share.

Looking ahead, United-Guardian remains focused on leveraging its expertise in specialty ingredients to capitalize on emerging market opportunities. The company believes its working capital is sufficient to support operations for at least the next twelve months, although it acknowledges that its long-term liquidity will depend on generating sufficient cash flow from profitable operations. The company plans to continue using cash for dividend payments, marketable securities purchases, and potential growth opportunities.