UNITED GUARDIAN INC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
UG$6.71-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001171843-25-003113
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001171843-25-005207
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 45 previous paragraphs and 53 current paragraphs.
16 unchanged; 18 reworded; 18 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
EXECUTIVE OVERVIEW
Current report
With a strong and growing product portfolio, we are now pursuing an active strategy to significantly expand our distribution channels for all our products as well as new market segments globally.
Current report
Net sales for the second quarter of 2025 decreased by $551,980 (16%) when compared with the same period in 2024. Net sales for the first half of 2025 decreased by $1,325,797 (20%) as compared with the corresponding period in 2024. The decrease in sales for the second quarter of 2025 and the first half of 2025 were attributable to changes in sales of the following product lines:
Current report
Cosmetic ingredients**:**
Current report
(a) Second quarter sales: For the second quarter of 2025, sales of our cosmetic ingredients decreased by $522,825 (37%) when compared with the second quarter of 2024. The decrease was due primarily to a net decrease of $556,243 (42%) in sales of the Company’s cosmetic ingredients to ASI when compared with the second quarter of 2024. Based on information provided by ASI, the decrease in sales was due to two main factors: 1) five significant customers in China for the Company’s products experienced softer demand in the second quarter due to concerns regarding trade uncertainty and tariffs. The tariffs imposed on our products entering China have put increased pressure on us to remain competitive in the Asian markets; and 2) Ashland is currently working off excess inventory of some of our products, which reduced their orders from us during the second quarter of 2025.
Current report
Second quarter sales to the Company’s four other distributors, as well as two direct cosmetic ingredient customers, increased by a net of $33,418 (33%) compared with the second quarter of 2024. The increase was attributable to sales increases of $54,547 to the Company’s distributors in France, Italy, and Korea. These increases were partially offset by a decrease in sales of $21,129 to the Company’s distributors in the U.K. and Switzerland, as well as by two direct customers.
Current report
(b) Six-month sales: For the first half of 2025 sales of our cosmetic ingredients decreased by $1,700,310 (52%) when compared with the corresponding period in 2024. This decrease was due primarily to a net decrease in sales to ASI of $1,857,857 (60%) when compared with the first half of 2024. The decrease in sales during the first half of 2025 was due primarily to the softer demand in Asia. This decrease was partially offset with a net increase in sales of $157,277 to the Company’s four other distributors and two direct customers. Sales to the Company’s distributors in the United Kingdom, Korea, France, Italy and two direct customers increased by $158,509 while sales to the Company’s distributor in Switzerland decreased by $1,232.
Current report
Pharmaceuticals**:**
Current report
Because there are fees, rebates and allowances associated with sales of our two pharmaceutical products, Renacidin and Clorpactin® WCS-90, discussion of pharmaceutical sales includes references to bothgross sales (before fees, rebates, and allowances) andnet sales (after fees, rebates, and allowances).
Current report
Gross sales of our pharmaceutical products for the three-month period ended June 30, 2025 increased by $14,647 (less than 1%) compared with the corresponding period in 2024. The increase in gross sales was primarily due to an increase of $6,499 (1%) in gross sales of Renacidin combined with an increase of $8,148 (5%) in gross sales of the Company’s other pharmaceutical product, Clorpactin WCS-90.
Current report
For the six-month period ended June 30, 2025, gross pharmaceutical sales increased by $295,957 (11%) compared with the corresponding period in 2024. This increase was primarily due to one of our larger distributors securing a new customer which increased their order quantity for our pharmaceutical product Renacidin in the second quarter of 2025. During this period, gross sales of Renacidin increased by $347,106 (13%). This increase was partially offset by a decrease in gross sales of Clorpactin WCS-90 of $51,149 (17%), which was attributable to normal fluctuations in ordering patterns.
Current report
Net sales of our pharmaceutical products for the three- and six-month periods ended June 30, 2025 saw a similar pattern, with net sales increasing by $38,015 (3%) and $256,150 (11%), respectively.
Current report
Medical lubricants**:**
Current report
For the three-month period ended June 30, 2025, sales of our medical lubricants decreased by $67,170 (12%) compared with the same period in 2024. The decrease in sales for the three-month period was primarily due to a decrease in orders from one of the Company’s larger customers in India. This customer stated that the decrease in orders was due to excess inventory. For the six-month period ended June 30, 2025, sales of our medical lubricants increased by $118,363 (12%) compared with the same period in 2024. The increase in sales for the six-month period was primarily due to an increase in orders from one of the Company’s larger customers in China.
Current report
Research and development expenses decreased by $3,792 (3%) for the three-month period ended June 30, 2025, and increased by $7,620 (4%) for the six-month period ended June 30, 2025, compared with the same periods in 2024. The decrease in the three-month period was primarily due to a decrease in accrued bonuses, partially offset by an increase in payroll and payroll-related expenses. The increase for the six-month period was primarily due to an increase in payroll and payroll -related expenses.
Current report
Investment income decreased by $29,434 (29%) and $42,820 (22%), respectively, for the three-and six-month periods of 2025 compared with the same periods in 2024. The decreases in both periods were primarily due to a combination of a decrease in interest rates in 2025 compared to 2024 and a decrease in the amount of funds invested.
Current report
Net gain (loss) on Marketable Securities
Current report
OFF BALANCE-SHEET ARRANGEMENTS
Removed paragraphs (10)
Previous report
EXECUTIVE LEVEL OVERVIEW
Previous report
With a refined product portfolio and strategic partnerships, we are well-positioned for future growth, leveraging our expertise in specialty ingredients to capitalize on emerging market opportunities.
Previous report
Net sales for the first quarter of 2025 decreased by $773,817 (approximately 24%) as compared with the first quarter of 2024. The decrease in sales for the first quarter of 2025 was primarily attributable to a decrease in sales of our Lubrajel® line of cosmetic ingredients, which was partially offset by an increase in sales of our pharmaceutical and medical products. The changes in our sales by product line are as follows:
Previous report
Based on information received from ASI, the decrease in sales to ASI was due to (a) an excess of inventory being held in China that had to be worked off, and (b) the timing of product orders. ASI has confirmed that currently there has been no significant loss of business or customers.
Previous report
The Company continues to experience global competition, particularly from Asian companies that manufacture and sell products that are competitive with the Company’s products. These competitive products are usually sold at a lower price than our products; however, they may not compare favorably to the level of performance and quality of our products. The Company expects the Asian market to remain very competitive based on the continuing competition from lower-cost competitors, and for that reason we are concentrating our R&D efforts on developing new and unique products that other companies do not offer.
Previous report
The increase in sales was primarily due to a continued increase in gross sales of Renacidin, which increased from $891,789 in the first quarter of 2024 to $1,232,396 (approximately 38%) in the first quarter of 2025. This increase was primarily due to the fact that in the first quarter of 2024 the Company was not able to fill full orders of Renacidin due to the temporary shutdown of production at our contract manufacturer’s facility, which began in the fourth quarter of 2023. As a result of this shutdown, we were forced to allocate our existing stock of Renacidin in order to maintain sufficient supply levels to fill customer orders. Sales of Renacidin remained on allocation until late March of 2024, when we received product in sufficient quantities to fill customers’ orders in full. The increase in gross sales of Renacidin was offset by a decrease in sales of Clorpactin, which decreased from $194,880 to $135,583 a decrease of approximately 30%.
Previous report
R&D expenses increased by $11,412 (approximately 11%) for the first quarter of 2025 compared with the first quarter of 2024. The increase was primarily due to an increase in payroll and payroll-related expenses.
Previous report
Investment income decreased by $13,386 (approximately 14%) for the first quarter of 2025 compared with the first quarter of 2024. The decrease was primarily due to a decrease in interest income from United States Treasury Bills during the first quarter of 2025 compared with the same period in 2024. This was the result of a combination of lower interest rates in the first quarter of 2025 compared with the same period in 2024, and a decrease in the holdings of U.S. Treasury Bills in the first quarter of 2025 due to increased cash requirements.
Previous report
Net Gain on Marketable Securities
Previous report
**Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET****RISK.
Reworded paragraphs (18)
Previous wording
As part of our strategic focus, in October 2023, we took a significant step toward expanding our presence in the sexual wellness market by partnering with Brenntag Specialties, a global leader in chemicals and ingredients distribution. Under this agreement, Brenntag will market and distribute our new Natrajel line of sexual wellness ingredients across North and South America. While we reported no sales of this product in 2024, we anticipate beginning manufacturing and revenue generation in 2025.
Current wording
As part of our strategic focus, in October 2023, we took a significant step toward expanding our presence in the sexual wellness market by partnering with Brenntag Specialties, a global leader in chemicals and ingredients distribution. Under this agreement, Brenntag began marketing and distributing our new Natrajel line of sexual wellness ingredients in the United States, Canada, Mexico, Central America, and South America. While we reported no sales of this product in 2024, we anticipate beginning manufacturing and revenue generation in the second half of 2025.
Previous wording
We have also expanded our relationship with Azelis Group NV (“Azelis”), our distributor in the United Kingdom (“UK”) and Ireland. We added a new territory, South Korea, for personal care in February of 2025 and expanded the UK and Ireland territories to include the medical market. We have been strategically making changes to expand our presence for our medical lubricants, and this is the first step in that process.
Current wording
We have also expanded our relationship with Azelis Group NV (“Azelis”), our distributor in the United Kingdom (“UK”) and Ireland. The first step was expanding Azelis’s distribution to include our medical products in the UK and Ireland territories. In addditiona, we have added South Korea as a new territory for our personal care product line.
Previous wording
As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the discussion and analysis of our financial condition and results of operations are based on its financial statements, which have been prepared in conformity with US GAAP. The preparation of those financial statements required us to make estimates and assumptions that affect the carrying value of assets, liabilities, revenues, and expenses reported in those financial statements. Those estimates and assumptions can be subjective and complex, and consequently, actual results could differ from those estimates and assumptions. Our most critical accounting policies relate to revenue recognition, concentration of credit risk, investments, inventory, and income taxes. Since December 31, 2024, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.
Current wording
As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in conformity with US GAAP. The preparation of those financial statements required us to make estimates and assumptions that affect the carrying value of assets, liabilities, revenues, and expenses reported in those financial statements. Those estimates and assumptions can be subjective and complex, and consequently actual results could differ from those estimates and assumptions. Our most critical accounting policies relate to revenue recognition, concentration of credit risk, investments, inventory, and income taxes. Since December 31, 2024, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.
Previous wording
The following discussion and analysis covers material changes in our financial condition since the year ended December 31, 2024, and a comparison of the results of operations for the three months ended March 31, 2025 and March 31, 2024. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
The following discussion and analysis cover material changes in our financial condition since the year ended December 31, 2024, and a comparison of the results of operations for the three and six months ended June 30, 2025 and June 30, 2024. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.
Previous wording
The difference in the net sales increase compared with the gross sales increase for these products was due to a combination of 1) a net increase in gross sales of those products, combined with 2) an increase in pharmaceutical sales allowances of $63,176 (approximately 46%), compared with the same period in 2024. The increase in sales allowances was primarily due to an increase in sales discounts and VA chargebacks.
Current wording
The difference between the change in net sales compared with the change in gross sales for these products is due to a combination of the change in gross sales of those products combined with changes in pharmaceutical sales allowances related to these products. Typically, these allowances have a direct relationship with the sales of the Company’s pharmaceutical products.
Previous wording
Refer to Item 1A. “Risk Factors” for more information regarding the impact of potential tariffs on sales our medical lubricants.
Current wording
Refer to Item 1A.“Risk Factors” for more information regarding the impact of potential tariffs on sales of our medical lubricants.
Previous wording
Cost of sales as a percentage of net sales for the first quarter of 2025 decreased to 45%, compared with 48% for the first quarter of 2024. The decrease was due primarily to the fact that in the first quarter of 2024 the cost of sales associated with the products sold carried a higher per-unit overhead rate than the products sold in the first quarter of 2025.
Current wording
Cost of sales as a percentage of net sales increased slightly to 47% in the second quarter of 2025 from 46% in the second quarter of 2024. For the first six months of 2025, cost of sales as a percentage of sales decreased slightly to 46% compared with 47% for the first six months of 2024.
Previous wording
Operating expenses, consisting of selling, general, and administrative expenses, increased by $63,870 (approximately 11%) for the first quarter of 2025 compared with the first quarter of 2024. The increase was mainly due to increases in sales & marketing expenses and payroll and payroll related expenses.
Current wording
Operating expenses, consisting of selling and general and administrative expenses, increased by $91,273 (15%) and $155,143 (13%), respectively, for the three- and six-month periods ended June 30, 2025 compared with the equivalent periods in 2024. The increase in both periods was mainly due to increases in sales and marketing expenses and payroll and payroll-related expenses.
Previous wording
The net gain on marketable securities decreased from $41,496 for the quarter ended March 31, 2024, to $12,350 for the quarter ended March 31, 2025. The decrease was primarily due to a change in the market value of our equity mutual funds of $13,857. Our management team and Board of Directors are continuing to closely monitor our investment portfolio and have made and will continue to make any changes they believe may be necessary or appropriate to minimize the future impact on our financial position that the volatility of the global financial markets may have.
Current wording
The net gain (loss) on marketable securities increased from a loss of $9,501 for the quarter ended June 30, 2024, to a gain of $24,576 for the quarter ended June 30, 2025. The net gain on marketable securities increased from $31,995 for the period ending June 30, 2024 to $36,926 for the period ending June 30, 2025. The Company’s management and Board of Directors are continuing to closely monitor our investment portfolio and have made and will continue to make any changes they believe may be necessary or appropriate to minimize the future impact on our financial position that the volatility of the global financial markets may have.
Previous wording
The Company's effective income tax rate was approximately 21% for the first quarter of 2025 and 2024 and is expected to remain at 21% for the current fiscal year.
Current wording
The Company's effective income tax rate was 21% for the first half and second quarter of both 2025 and 2024. The Company’s tax rate is expected to remain at 21% for the current fiscal year.
Previous wording
Working capital decreased by $987,304 to $9,763,778 at March 31, 2025, down from $10,751,082 at December 31, 2024. The current ratio decreased to 6.1 to 1 at March 31, 2025, down from 6.6 to 1 at December 31, 2024. The decreases in working capital and the current ratio were primarily due to a decrease in cash, cash equivalents and marketable securities.
Current wording
Working capital decreased from $10,751,082 at December 31, 2024 to $10,613,457 at June 30, 2025, a decrease of $137,625. The current ratio increased from 6.6 to 1 at December 31, 2024 to 6.7 to 1 at June 30, 2025. The decrease in working capital was primarily due to a decrease in cash and cash equivalents and marketable securities. The increase in the current ratio was primarily due to a decrease in accrued expenses.
Previous wording
The Company believes that its working capital is, and will continue to be, sufficient to support its operating requirements for at least the next twelve months. The Company’s long-term liquidity position will be dependent on its ability to generate sufficient cash flow from profitable operations.
Current wording
The Company believes that its working capital is, and will continue to be, sufficient to support its operating requirements for at least the next twelve months. The Company intends to utilize its available cash and assets primarily for its continued organic growth and potential future strategic transactions, as well as to mitigate the potential impact of inflation on the Company's business.
Previous wording
The Company is in the final stages of upgrading its building sprinkler system and has incurred costs of $184,298 to date and expects to incur additional costs of $10,814 during the second quarter of 2025. The project is expected to be completed during the second quarter of 2025.
Current wording
The Company has completed the upgrade of its building sprinkler system and has incurred costs of $184,298 to date and expects to make final payments in the amount of $10,814 during the third quarter of 2025.
Previous wording
The Company generated cash from operations of $322,080 and $644,120 for the three months ended March 31, 2025 and 2024, respectively. The decrease was due primarily to a decrease in net income.
Current wording
The Company generated cash from operations of $625,323 and $1,968,250 for the first half of 2025 and 2024, respectively. The decrease from 2024 to 2025 was primarily due to a decrease in net income.
Previous wording
Cash provided by investing activities for the three months ended March 31, 2025 was $679,370. Cash used in investing activities for the three months ended March 31, 2024 was $665,478. The increase was primarily due to an increase in net proceeds from the sale of marketable securities in the first quarter of 2025 compared with the first quarter of 2024. The dividend payment we made in the first quarter of 2025 required the liquidation of some of our CD’s and U.S. Treasury Bills.
Current wording
Net cash provided by investing activities was $885,686 for the first half of 2025. Net cash used in investing activities was $657,533 in the first half of 2024. The increase in cash was due to excess proceeds from the sale of marketable securities compared to the purchases of marketable securities for the six-month period ended June 30, 2025 compared to the same period in 2024.
Previous wording
Net cash used in financing activities was $1,607 893 and $1,148,468 for the quarters ended March 31, 2025 and 2024, respectively. The increase in cash used in financing activities was due to the payment of higher dividends in the first quarter of 2025 compared to the same period in 2024. We declared dividends of $0.35 per share in the first quarter of 2025, compared to $0.25 per share in the first quarter of 2024.
Current wording
Net cash used in financing activities increased from $1,148,468 for the first half of 2024 to $1,618,183 for the same period in 2025. The increase was due to two factors: 1) an increase in dividends declared from $0.25 per share in the first half of 2024 to $0.35 per share in the first half of 2025; and 2) the payment of accrued dividends to shareholders whose shares of Guardian Chemical were converted to United-Guardian shares and shares that were escheated during the period.
Previous wording
We expect to continue to use our cash to make dividend payments, purchase marketable securities, and take advantage of growth opportunities that may arise that are in the best interest of the Company and its shareholders.
Current wording
The Company expects to continue to use its cash to make dividend payments, purchase marketable securities, and take advantage of growth opportunities that are in the best interest of the Company and its shareholders.
Previous wording
The Company has no off balance-sheet transactions that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Current wording
The Company has no off-balance sheet transactions that have, or are reasonably likely to have, a current or future impact on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The following discussion and analysis cover material changes in the financial condition of the Company since the year ended December 31, 2024, and a comparison of the results of operations for the second quarter of 2025 and 2024 and the first half of 2025 and 2024. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. All references in this quarterly report to “sales” or “Sales” shall mean “net sales” unless specifically identified as “gross sales.”
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.