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UnitedGuardian Inc Reports Operating Results (10-Q)

August 10, 2010 | About:

UnitedGuardian Inc (NASDAQ:UG) filed Quarterly Report for the period ended 2010-06-30.

Unitedguardian Inc has a market cap of $58.2 million; its shares were traded at around $11.77 with a P/E ratio of 15.3 and P/S ratio of 4.4. The dividend yield of Unitedguardian Inc stocks is 5.1%. Unitedguardian Inc had an annual average earning growth of 7.7% over the past 10 years. GuruFocus rated Unitedguardian Inc the business predictability rank of 4.5-star.UG is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

In addition to the above changes in sales, net sales allowances decreased $176,474 (94.6%) and $161,573 (152.6%) for the three and six month periods, respectively, ended June 30, 2010, when compared with the corresponding periods in 2009. The decreases were primarily due to decreases in allowances for distribution fees.

On July 20, 2010, the Company terminated its DB Plan. The termination resulted in the Company recognizing a one-time non-cash expense of $518,296, offset by a $179,641 tax benefit associated with recognizing unamortized actuarial losses. In addition, the Company provided for a cash contribution of $337,378, offset by a $116,900 tax benefit, in order to fully fund the DB Plan. The recognition of the non-cash and cash contributions resulted in a before-tax charge of $847,744, and an after-tax charge of $559,133 ($0.11 and $0.12 per share for the six- and three-month periods ended June 30, 2010, respectively). Since the non-cash expense had previously been provided for as a charge to other comprehensive income, the net effect of the termination on stockholders equity was a decrease of $220,478.

The provision for income taxes decreased by $115,474 (12.2%) and $80,999 (21.9%) for the six and three months ended June 30, 2010, respectively, when compared with the comparable periods in 2009. These decreases were primarily due to decreases in income before taxes of $305,778 (10.7%) and $211,906 (18.8%) for the six and three months, respectively, ended June 30, 2010 compared with the comparable periods in 2009.

Working capital decreased by $3,409,311 to $11,326,580 at June 30, 2010 from $14,735,891 at December 31, 2009. The decrease in working capital was primarily due to the acquisition by the Company of 350,000 shares of Company stock from the Company's largest shareholder. The current ratio increased to 7.9 to 1 at June 30, 2010 from 6.0 to 1 at December 31, 2009. The increase in the current ratio was primarily due to the effect of a decrease in dividends payable, partially offset by other changes in working capital items.

Cash provided by investing activities for the six-month period ended June 30, 2010 was $1,555,217, while cash used in investing activities was $220,521 for the six-month period ended June 30, 2009. This increase was primarily due to the redemption of marketable securities and certificates of deposit.

Cash used in financing activities was $6,829,292 and $2,776,663 for the six months ended June 30, 2010 and June 30, 2009, respectively. This increase was mainly due to the acquisition of treasury stock.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 2.0/5 (1 vote)


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