UNITED GUARDIAN INC
For the period ended Mar 31, 2026. Filed May 12, 2026.
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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.
Mar 31, 2026 · Filed May 12, 2026
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 2025-09-30; filed 2025-11-06.
0001171843-25-007077
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001171843-26-003276
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 50 previous paragraphs and 42 current paragraphs.
17 unchanged; 9 reworded; 15 added; 24 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 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 (15)
Current report
EXECUTIVE LEVEL OVERVIEW
Current report
In January 2026, we entered into a new distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of our new Natrajel® line of sexual wellness ingredients in the United States, Canada, and Mexico, and the distribution of Lubrajel® and Natrajel products in France. The new agreement provides an opportunity to grow the French market, which is known for innovation in personal care products. Although there have been no sales of our new sexual wellness products yet, the sexual wellness segment is expected to grow at a higher compound annual growth rate (“CAGR”) than other segments such as skin care, personal care and cosmetics. We are ready to begin manufacturing and distribution of this new line of products once orders are received.
Current 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.
Current report
In 2025, we launched an insurance payer outreach program with the goal of having Renacidin, our most important pharmaceutical product, included on additional drug formularies. As a result of this effort, we have received approval from two major Pharmacy Benefit Managers for inclusion on their formularies beginning in 2026. We will continue our insurance payer outreach as we move through 2026 and will also introduce a new outreach program with the focus on increasing awareness among healthcare professionals to grow the market for Renacidin.
Current report
Net sales for the first quarter of 2026 increased by $391,095 (approximately 16%) as compared with the first quarter of 2025. The increase in sales for the first quarter of 2026 were principally due to a significant increase in sales of our pharmaceutical products coupled with a strong increase in sales of our Lubrajel line of cosmetic ingredients. The changes in our sales by product line are as follows:
Current report
The increase in sales was primarily due to a continued increase in gross sales of Renacidin, which increased from $1,232,396 in the first quarter of 2025 to $1,522,326 (approximately 24%) in the first quarter of 2026. The increase in gross sales of Renacidin was combined with an increase in sales of Clorpactin, which increased from $135,583 in the first quarter of 2025 to $171,856 in the first quarter of 2026, an increase of approximately 27%.
Current report
Commensurate with the increase in gross sales of our pharmaceutical products, we experienced an increase in pharmaceutical-related sales allowances of $49,337 (approximately 25%), compared with the same period in 2025. The increase in sales allowances was primarily due to an increase in VA chargebacks and distribution fees.
Current report
We continue to experience global competition from Asian and European companies that manufacture and sell products that are competitive with our 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. We work closely with our network of distributors to price our products as competitively as possible and, when appropriate, to offer additional volume discounts and more aggressive pricing to maintain and increase sales and expand our customer base. We expect that this competitive environment will continue in 2026 and we plan to enhance our competitive position by strengthening our core capabilities and investing in new product development, especially in the area of naturally-derived products. We will continue to provide high-quality products, technical expertise, and the reliability our customers have come to expect from us.
Current report
Cost of sales as a percentage of net sales for the first quarter of 2026 increased to 50%, compared with 45% for the first quarter of 2025. This increase was due to the larger ratio of our pharmaceutical products sales in the first quarter of 2026 compared to 2025. The pharmaceutical products carry higher tolling unit costs relative to our cosmetic and medical products produced in house at lower unit costs.
Current report
R&D expenses increased by $627 (less than 1%) for the first quarter of 2026 compared with the first quarter of 2025.
Current report
Investment income decreased by $14,873 (approximately 18%) for the first quarter of 2026 compared with the first quarter of 2025. The decrease was primarily due to a decrease in interest income from U.S. Treasury Bills during the first quarter of 2026 compared with the same period in 2025. This was the result of lower interest rates compared with the same period in 2025.
Current report
Settlement Income
Current report
Included in net income is monetary consideration agreed upon with the contract manufacturer (“CM”) of our pharmaceutical product Renacidin. The settlement relates to the unexpected shutdown of the CM’s facility during the latter part of 2023 and beginning of 2024. During this time, we were unable to fill complete orders of Renacidin. On October 27, 2023, we notified the CM of our intention to file a claim for damages in connection with the CM’s breach of our supply contract with the CM, and we requested compensation for the loss of sales during the shutdown period. The settlement, which was agreed upon by both parties, calls for the CM to supply us with a specified volume of product at no cost. The majority of the product covered by this agreement was received at our facility in March of 2026 and was valued at $303,133. During the second quarter of 2026, we expect to receive the remaining product covered by the settlement, which is valued at approximately $35,000.
Current report
Cash provided by investing activities for the three months ended March 31, 2026 and 2025 was $30,113 and $679,370, respectively. The decrease was due primarily to an increase in purchases of marketable securities in the first quarter of 2026 compared to the same period in 2025 due to decreased cash requirements.
Current report
Net cash used in financing activities was $1,149,892 and $1,607,893 for the quarters ended March 31, 2026 and 2025, respectively. The decrease in cash used in financing activities was primarily due to the payment of lower dividends in the first quarter of 2026 compared to the same period in 2025. We declared dividends of $0.25 per share in the first quarter of 2026, compared to $0.35 per share in the first quarter of 2025.
Removed paragraphs (24)
Previous report
EXECUTIVE OVERVIEW
Previous report
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. We had expected to begin manufacturing and reporting sales of this new line of products in 2025, but manufacturing has been delayed until 2026 due to customer timeline.
Previous report
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 addition, we have added South Korea as a new territory for them for our personal care product line.
Previous report
With a strong and growing product portfolio, and to better cope with the potential impact of tariffs and other global economic uncertainties on our business, we have expanded our strategy to include additional growth initiatives. These initiatives include closely monitoring our supply chain to control costs, expanding our distribution network to better serve our customers, seeking opportunities to expand our position in healthcare as well as pursuing external opportunities to grow our business.
Previous report
In accordance with ASU-2016-13, we recognize an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset.
Previous report
Net sales for the third quarter of 2025 decreased by $795,852 (26%) when compared with the same period in 2024. Net sales for the first nine months of 2025 decreased by $2,121,649 (22%) as compared with the corresponding period in 2024. The decrease in sales for the third quarter of 2025 and the first nine months of 2025 were attributable to changes in sales of the following product lines:
Previous report
Cosmetic ingredients:
Previous report
Third quarter sales in 2025 to the Company’s four other distributors, as well as to two direct cosmetic ingredient customers, increased by a net of $57,897 (86%) compared with the third quarter of 2024. This sales increase was primarily due to increases in sales to our distributors in France and the United Kingdom.
Previous report
Cosmetic ingredient sales for the first nine months of the year to the Company’s four other cosmetic distributors, as well as to two direct cosmetic customers, increased by a net of $215,175 (74%) compared with the same period in 2024. This sales increase was primarily due to the addition of a new distributor in Korea, combined with increases in sales to our distributors in France and the United Kingdom.
Previous report
Pharmaceuticals:
Previous report
Because there are fees, rebates and allowances associated with sales of the Company’s two pharmaceutical products, Renacidin and Clorpactin®, discussion of the Company’s pharmaceutical sales includes references to bothgross sales (before fees, rebates and allowances) andnet sales (after fees, rebates and allowances).
Previous report
Gross sales of the Company’s pharmaceutical products for the three-and nine-month periods ended September 30, 2025 increased by $146,849 (11%) and $442,805 (11%), respectively. The increase in sales for both periods was due primarily to increases in gross sales of Renacidin of $143,085 (13%) for the three-month period and $490,191 (14%) for the nine-month period.
Previous report
The Company typically experiences fluctuations in sales of its pharmaceutical products due to the timing of orders from its distributors. The Company has invested in a payer outreach program with the goal of having Renacidin, our most popular pharmaceutical product, included on additional insurance formularies. This project is underway and we have received positive feedback from the value proposition we have presented. We will continue to broaden the awareness of Renacidin with the goal of growing our market share.
Previous report
Net sales of the Company’s pharmaceutical products for the three- and nine-month periods ended September 30, 2025 saw a similar pattern, increasing by $108,080 (10%) for the three-month period and increasing by $362,480 (10%) for the nine-month period, with those increases due primarily to the reason noted above.
Previous report
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 as well as 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. For the three- and nine-month periods ended September 30, 2025, sales allowances related to the Company’s pharmaceutical products increased by $38,769 (12%) and $80,326 (9%), respectively, which were primarily related to increases in VA rebates and distribution fees.
Previous report
Medical lubricants**:**
Previous report
Sales of the Company’s medical lubricants decreased by $17,746 (3%) for the three-month period ended September 30, 2025, compared with the same period in 2024, while sales for the nine-month period increased by $102,366 (6%), compared with the same period in 2024. The decrease in medical lubricant sales for the three-month period was due to normal ordering patterns. The increase for the nine-month period was primarily attributable to increased orders from two customers in China.
Previous report
Cost of sales as a percentage of sales increased to 58% in the third quarter of 2025, up from 46% in the third quarter of 2024. For the first nine months of 2025, cost of sales as a percentage of sales increased to 50%, up from 47% in 2024. The increases in both periods were the result of the Company’s pharmaceutical sales representing a larger percentage of the Company’s total sales for both the three- and nine-month periods ended September 30, 2025 compared with the same periods in 2024. These products carry a lower gross margin than the Company’s other products. In addition, there were higher per unit overhead costs in 2025, which was the result of decreased production of cosmetic products due to lower demand in 2025 compared to the same periods in 2024.
Previous report
Research and development expenses increased by $6,032 (5%) for the third quarter of 2025, and increased by $13,652 (4%) for the first nine months of 2025 compared with the same periods in 2024. The increases for both periods was primarily due to an increase in payroll and payroll-related expenses.
Previous report
Investment income decreased by $24,769 (25%) and $67,589 (23%) for the three- and nine-month periods, respectively, ending September 30, 2025, compared with the equivalent periods in 2024. The decrease in both periods was primarily due to a decrease in interest income from investments in U. S. Treasury Bills because of lower interest rates in 2025 compared to 2024, combined with a decrease in the average amount invested during 2025 compared to 2024 due to an increase in cash requirements.
Previous report
The Company has completed the upgrade of its building sprinkler system and has incurred costs of $187,961 to date and expects to make final payments in the amount of $7,160 during the fourth quarter of 2025.
Previous report
Cash provided by investing activities for the nine-month period ended September 30, 2025 was $115,577. Cash used in investing activities for the nine-month period ended September 30, 2024 was $6,241,837. The fluctuation was due to the fact that during the first nine months of 2024, the Company’s U.S. Treasury Bills with maturities of three months or less matured. These had been classified as cash and cash equivalents due to their short maturity. The proceeds from these maturities were then used to purchase longer term U.S. Treasury Bills, which were then classified as marketable securities.
Previous report
Cash used in financing activities was $2,766,720 and $2,756,323 for the nine months ended September 30, 2025 and September 30, 2024, respectively. The increase was due a payment made in the second quarter of 2025 in the amount of $10,290, which represented dividends in arrears to shareholders who had either converted their Guardian Chemical shares to United-Guardian, Inc. shares or whose shares had been escheated.
Previous report
OFF BALANCE-SHEET ARRANGEMENTS
Reworded paragraphs (9)
Previous wording
We specialize in manufacturing cosmetic ingredients, pharmaceuticals, medical lubricants, and sexual wellness ingredients through our Guardian Laboratories division. With a long-standing reputation for delivering high-quality specialty products, we are committed to serving diverse markets with innovative solutions.
Current wording
Through our Guardian Laboratories division, we specialize in manufacturing cosmetic, personal care and sexual wellness ingredients and a line of healthcare products including pharmaceuticals and medical lubricants. With a long-standing reputation for delivering high-quality specialty products, we are committed to serving diverse markets with innovative solutions.
Previous 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 nine months ended September 30, 2025 and September 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.
Current wording
The following discussion and analysis cover material changes in our financial condition since the year ended December 31, 2025, and a comparison of the results of operations for the three months ended March 31, 2026 and March 31, 2025. 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, 2025.
Previous wording
Operating expenses, consisting of selling and general and administrative expenses, increased by $29,846 (5%) for the third quarter of 2025 compared with the equivalent period in 2024 and increased by $184,989 (10%) for the first nine months of 2025, compared with the equivalent period in 2024. The increase in operating expenses for both periods was due primarily to increases in sales and marketing expenses, fees paid to the Company’s Board of Directors, consulting fees and increases in payroll and payroll-related expenses.
Current wording
Operating expenses, consisting of selling, general, and administrative expenses, increased by $34,228 (approximately 5%) for the first quarter of 2026 compared with the first quarter of 2025. The increase was mainly due to increases in sales & marketing expenses and payroll and payroll related expenses.
Previous wording
The net gain on marketable securities decreased from $47,223 to $36,238 for the quarter ended September 30, 2025 compared to the same period in 2024. For the nine-month period ended September 30, 2025, the net gain decreased from $79,218 to $73,164. These decreased gains were due to normal market fluctuations. The Company’s management and Board of Directors continue to closely monitor the Company's investment portfolio and have made, and will continue to make, any changes they believe may be necessary or appropriate to minimize the future impact of global market volatility on the Company’s financial position.”
Current wording
The net gain on marketable securities increased from $12,350 for the quarter ended March 31, 2025, to $17,742 for the quarter ended March 31, 2026. The increase was primarily due to the recognition on a gain from the sale of equity mutual funds in the first quarter of 2026, compared to a loss on those sales in the same period in 2025. Our management team and Board of Directors continue 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 20% for the first nine months of 2025 and 2024. The Company’s tax rate is expected to remain at 20% for the current fiscal year.
Current wording
The Company's effective income tax rate was approximately 21% for the first quarter of 2026 and 2025 and is expected to remain at 21% for the current fiscal year.
Previous wording
Working capital decreased from $10,751,082 at December 31, 2024 to $9,648,984 at September 30, 2025, a decrease of $1,102,098. The current ratio increased from 6.6 to 1 at December 31, 2024 to 7.0 to 1 at September 30, 2025. The decrease in working capital was primarily due to a decrease in cash and cash equivalents and accounts receivable. The increase in the current ratio was primarily due to decreases in accounts payable and accrued expenses.
Current wording
Working capital decreased by $187,320 to $10,344,756 at March 31, 2026, down from $10,532,076 at December 31, 2025. The current ratio increased to 8.1 to 1 at March 31, 2026, up from 7.3 to 1 at December 31, 2025. The decrease in working capital was primarily due to a decrease in cash and cash equivalents. The increase in the current ratio was primarily due to a decrease in accounts payable.
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.
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’s long-term liquidity position will be dependent on its ability to generate sufficient cash flow from profitable operations.
Previous wording
The Company generated cash from operations of $1,636,324 and $3,196,954 for the nine months ended September 30, 2025 and September 30, 2024, respectively. The decrease in cash from operations was primarily due to a decrease in net income, combined with decreases in accounts payable and accrued expenses.
Current wording
The Company generated cash from operations of $604,536 and $322,080 for the three months ended March 31, 2026 and 2025, respectively. The increase was due primarily to an increase in net income.
Previous wording
The Company expects to continue to use its cash to make dividend payments, to purchase marketable securities, and to take advantage of growth opportunities that are in the best interest of the Company and its shareholders.
Current 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.