UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2023 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from to Commission File Number 001-32982 Atrion Corporation (Exact Name of Registrant as Specified in its Charter) Delaware 63-0821819 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) One Allentown Parkway, Allen, Texas 75002 (Address of Principal Executive Offices) (Zip Code) (972) 390-9800 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common stock, Par Value $0.10 per share ATRI The Nasdaq Global Select Market Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Registration S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Title of Each Class Number of Shares Outstanding at Common stock, Par Value $0.10 per share ATRION CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Financial Statements. ATRION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 (in thousands, except per share amounts) (in thousands, except per share amounts) (in thousands, except per share amounts) (in thousands, except per share amounts) Revenues Cost of goods sold Gross profit Operating expenses: Selling General and administrative Research and development Operating income Interest and dividend income Other investment income/(losses) Other income Interest Expense Income before provision for income taxes Provision for income taxes Net income Net income per basic share Weighted average basic shares outstanding Net income per diluted share Weighted average diluted shares outstanding Dividends per common share The accompanying notes to the condensed consolidated financial statements are an integral part of these statements. ATRION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Assets (in thousands) (in thousands) Current assets: Cash and cash equivalents Short-term investments Accounts receivable Inventories Prepaid expenses and other current assets Long-term investments Property, plant and equipment Less accumulated depreciation and amortization Other assets and deferred charges: Patents and licenses Goodwill Other Total assets Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued liabilities Accrued income and other taxes Line of credit Other non-current liabilities Stockholders’ equity: Common stock, par value $0.10 per share; authorized 10,000 shares, issued 3,420 shares Additional paid-in capital Retained earnings Treasury shares,1,660 at June 30, 2023 and 1,659 at December 31, 2022, at cost Treasury shares,1,660 at September 30, 2023 and 1,659 at December 31, 2022, at cost Total stockholders’ equity Total liabilities and stockholders’ equity The accompanying notes to the condensed consolidated financial statements are an integral part of these statements. ATRION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands) (In thousands) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Deferred income taxes Stock-based compensation Net change in unrealized gains and losses on investments Net change in accrued interest, premiums, and discounts on investments Other Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses Other non-current assets Accounts payable and accrued liabilities Accrued income and other taxes Other non-current liabilities Cash flows from operating activities Cash flows from investing activities: Property, plant and equipment additions Purchase of investments Proceeds from sale of investments Proceeds from maturities of investments Cash flows from investing activities Cash flows from financing activities: Purchase of treasury stock Shares tendered for employees’ withholding taxes on stock-based compensation Dividends paid Proceeds from draw on line of credit Repayment of draw on line of credit Cash flows from financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Cash paid for: Income taxes Non-cash financing activities: Non-cash effect of stock option exercises The accompanying notes to the condensed consolidated financial statements are an integral part of these statements ATRION CORPORATION AND SUBSIDIARIES (Unaudited) For the Three Months Ended Common Stock Treasury Stock Additional For the Three Months Ended Shares Outstanding Amount Shares Amount Paid-in Capital Retained Earnings Total Common Stock Treasury Stock Balances, April 1, 2022 Shares Outstanding Amount Shares Amount Additional Paid-in Capital Retained Earnings Total Balances, July 1, 2022 Net income Stock-based compensation transactions Shares surrendered in stock transactions Purchase of treasury stock Dividends Balances, June 30, 2022 Balances, April 1, 2023 Balances, September 30, 2022 Balances, July 1, 2023 Net income Stock-based compensation transactions Shares surrendered in stock transactions Purchase of treasury stock Dividends Balances, June 30, 2023 Balances, September 30, 2023 The accompanying notes to the condensed consolidated financial statements are an integral part of these statements. ATRION CORPORATION AND SUBSIDIARIES (Unaudited) For the Six Months Ended For the Nine Months Ended Common Stock Treasury Stock Additional Common Stock Treasury Stock Shares Outstanding Amount Shares Amount Paid-in Capital Retained Earnings Total Shares Outstanding Amount Shares Amount Additional Paid-in Capital Retained Earnings Total Balances, January 1, 2022 Net income Stock-based compensation transactions Shares surrendered in stock transactions Purchase of Treasury Stock Dividends Balances, June 30, 2022 Balances, September 30, 2022 Balances, January 1, 2023 Net income Stock-based compensation transactions Shares surrendered in stock transactions Purchase of Treasury Stock Dividends Balances, June 30, 2023 Balances, September 30, 2023 The accompanying notes to the condensed consolidated financial statements are an integral part of these statements. ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1)Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Atrion Corporation and its subsidiaries (collectively referred to herein as “Atrion,” the “Company,” “we,” “our,” or “us”) have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, these statements include all normal and recurring adjustments necessary to present a fair statement of our consolidated results of operations, financial position, and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. Preparation of the Company’s financial statements in conformity with US GAAP requires management to make estimates and assumptions that can have a significant impact on our revenue, operating income, and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheets. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 ("2022 Form 10-K"). (2) Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by using the first-in, first-out method. The following table details the major components of inventories (in thousands): June 30, December 31, September 30, December 31, 2023 2022 2023 2022 Raw materials Work in process Finished goods Total inventories ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (3)Income per share The following is the computation for basic and diluted income per share: Three Months ended June 30, Six Months ended June 30, Three Months ended September 30, Nine Months ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 (in thousands, except per share amounts) (in thousands, except per share amounts) Net income Weighted average basic shares outstanding Add: Effect of dilutive securities Weighted average diluted shares outstanding Earnings per share: Basic Diluted Incremental shares from stock options and restricted stock units were included in the calculation of weighted average diluted shares outstanding using the treasury stock method. Potential dilutive securities have been excluded when their inclusion would be anti-dilutive. (4) Investments As of ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The components of the Company’s cash and cash equivalents and our short- and long-term investments are as follows (in thousands): June 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Cash and cash equivalents: Money market funds Cash deposits Commercial paper Total cash and cash equivalents Short-term investments: Bonds (held-to-maturity) Equity securities (available for sale) Commercial paper (held-to-maturity) Equity securities (available for sale) Allowance for credit losses Total short-term investments Long-term investments: Equity securities (available for sale) Bonds (held-to-maturity) Mutual funds (available for sale) Total long-term investments Total cash, cash equivalents and short and long-term investments We utilize a lifetime “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. During the ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following table summarizes the amortized cost of our held-to-maturity bonds at Held-to-Maturity Bonds Held-to-Maturity Bonds Credit Quality Indicators Fed Govt. Bonds/Notes Municipal Bonds Corporate Bonds Totals AAA/AA/A BBB/BB TOTAL Credit Quality Indicators Fed Govt. Bonds/Notes Corporate Bonds Totals AAA/AA/A BBB/BB TOTAL Our investments are required to be measured for disclosure purposes at fair value on a recurring basis. Our investments are considered Level 1 or Level 2 as detailed in the table below. The fair values of these investments were estimated using recently executed transactions and market price quotations. The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of the dates shown below (in thousands): Gross Unrealized Gross Unrealized Level Cost Gains Losses Fair Value Level Cost Gains Losses Fair Value As of June 30, 2023: As of September 30, 2023: Money market 1 Commercial paper 2 Bonds 2 Mutual funds 1 Equity investments 2 As of December 31, 2022: Money Market 1 Commercial paper 2 Bonds 2 Mutual funds 1 Equity investments 2 The carrying value of our investments is reviewed quarterly for changes in circumstances or the occurrence of events that suggests an investment may not be fully recoverable. The bonds represent investments in various issuers at At ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (5) Patents and Licenses☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended June Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from to July 28,October 27, 20231,759,6501,759,836 2 Table of Contents 3 Table of Contents $ 43,838 $ 48,882 $ 83,831 $ 96,020 $ 41,911 $ 44,631 $ 125,742 $ 140,651 26,584 28,049 51,496 55,943 28,175 26,978 79,671 82,921 17,254 20,833 32,335 40,077 13,736 17,653 46,071 57,730 2,317 2,629 5,045 5,146 2,348 2,306 7,392 7,451 5,951 5,622 12,205 10,723 5,453 4,493 17,658 15,217 1,607 1,553 3,236 2,929 1,869 1,251 5,106 4,180 9,875 9,804 20,486 18,798 9,670 8,050 30,156 26,848 7,379 11,029 11,849 21,279 4,066 9,603 15,915 30,882 127 292 367 429 320 210 687 639 98 (308 ) (623 ) (548 ) (782 ) 764 (1,405 ) 216 29 60 39 85 - 7 39 92 (27 ) - (27 ) - (97 ) - (124 ) - 227 44 (244 ) (34 ) (559 ) 981 (803 ) 947 7,606 11,073 11,605 21,245 3,507 10,584 15,112 31,829 (1,043 ) (1,725 ) (1,557 ) (3,398 ) (568 ) (1,745 ) (2,125 ) (5,143 ) $ 6,563 $ 9,348 $ 10,048 $ 17,847 $ 2,939 $ 8,839 $ 12,987 $ 26,686 $ 3.73 $ 5.21 $ 5.71 $ 9.94 $ 1.67 $ 4.95 $ 7.38 $ 14.89 1,760 1,794 1,761 1,796 1,760 1,786 1,761 1,793 $ 3.73 $ 5.20 $ 5.70 $ 9.91 $ 1.67 $ 4.94 $ 7.37 $ 14.86 1,761 1,798 1,762 1,800 1,761 1,788 1,762 1,796 $ 2.15 $ 1.95 $ 4.30 $ 3.90 $ 2.20 $ 2.15 $ 6.50 $ 6.05 4 Table of Contents $ 309 $ 4,731 $ 658 $ 4,731 5,132 21,152 3,839 21,152 23,693 23,951 23,290 23,951 80,252 65,793 82,946 65,793 6,623 3,770 5,010 3,770 116,009 119,397 115,743 119,397 10,186 8,669 9,474 8,669 281,359 270,642 284,079 270,642 153,652 146,888 157,313 146,888 127,707 123,754 126,766 123,754 1,128 1,185 1,100 1,185 9,730 9,730 9,730 9,730 2,065 1,977 1,996 1,977 12,923 12,892 12,826 12,892 $ 266,825 $ 264,712 $ 264,809 $ 264,712 $ 15,555 $ 18,024 $ 13,915 $ 18,024 873 74 1,351 74 16,428 18,098 15,266 18,098 3,835 - 4,500 - 5,646 7,073 4,861 7,073 342 342 342 342 66,946 66,347 67,165 66,347 380,152 377,682 379,213 377,682 (206,524 ) (204,830 ) (206,538 ) (204,830 ) 240,916 239,541 240,182 239,541 $ 266,825 $ 264,712 $ 264,809 $ 264,712 5 Table of Contents $ 10,048 $ 17,847 $ 12,987 $ 26,686 7,264 6,866 11,090 10,339 (1,249 ) (535 ) (1,931 ) (2,391 ) 1,039 1,321 1,319 1,523 623 475 1,405 (289 ) (111 ) 202 (98 ) 219 - - - - 17,614 26,176 24,772 36,087 258 (6,516 ) 661 (1,015 ) (14,459 ) (3,503 ) (17,153 ) (8,846 ) (3,142 ) (2,201 ) (1,450 ) (575 ) 200 573 191 606 2,637 2,165 1,130 (403 ) 799 1,141 1,277 2,523 (177 ) 502 (280 ) 570 3,730 18,337 9,148 28,947 (16,702 ) (15,247 ) (19,757 ) (25,321 ) (5,644 ) (22,322 ) (5,648 ) (25,544 ) 131 208 172 240 19,503 19,978 20,676 42,426 (2,712 ) (17,383 ) (4,557 ) (8,199 ) (1,650 ) (9,340 ) (1,667 ) (14,430 ) (57 ) (454 ) (57 ) (633 ) (7,568 ) (6,987 ) (11,440 ) (10,824 ) 14,540 - 23,628 - (10,705 ) - (19,128 ) - (5,440 ) (16,781 ) (8,664 ) (25,887 ) (4,422 ) (15,827 ) (4,073 ) (5,139 ) 4,731 32,264 4,731 32,264 $ 309 $ 16,437 $ 658 $ 27,125 $ 2,853 $ 3,952 $ 3,366 $ 5,786 $ - $ 4,008 $ - $ 4,008 6 Table of Contents
NOTES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY1,795 $ 342 1,625 $ (177,985 ) $ 61,560 $ 362,313 $ 246,230 1,788 $ 342 1,632 $ (188,219 ) $ 66,167 $ 368,165 $ 246,455 9,348 9,348 8,839 8,839 3 (3 ) (3,887 ) 4,607 720 1 (1 ) 14 77 91 (1 ) 1 (454 ) (454 ) (179 ) (179 ) (9 ) 9 (5,893 ) (5,893 ) (9 ) 9 (5,090 ) (5,090 ) (3,496 ) (3,496 ) (3,841 ) (3,841 ) 1,788 $ 342 1,632 $ (188,219 ) $ 66,167 $ 368,165 $ 246,455 1,760 $ 342 1,660 $ (205,463 ) $ 66,382 $ 377,380 $ 238,641 1,780 $ 342 1,640 $ (193,474 ) $ 66,244 $ 373,163 $ 246,275 1,760 $ 342 1,660 $ (206,541 ) $ 66,946 $ 380,152 $ 240,899 6,563 6,563 2,939 2,939 1 (1 ) 11 564 575 3 219 222 (35 ) (35 ) - (1 ) 1 (1,037 ) (1,037 ) - (3,791 ) (3,791 ) (3,878 ) (3,878 ) 1,760 $ 342 1,660 $ (206,524 ) $ 66,946 $ 380,152 $ 240,916 1,760 $ 342 1,660 $ (206,538 ) $ 67,165 $ 379,213 $ 240,182 7 Table of Contents
NOTES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY1,801 $342 1,619 $(174,544) $61,174 $357,324 $244,296 1,801 $ 342 1,619 $ (174,544 ) $ 61,174 $ 357,324 $ 244,296 17,847 17,847 26,686 26,686 3 (3) (3,881) 4,993 1,112 4 (4 ) (3,867 ) 5,070 1,203 (1) 1 (454) (454) (1 ) 1 (633 ) (633 ) (15) 15 (9,340) (9,340) (24 ) 24 (14,430 ) (14,430 ) (7,006) (7,006) (10,847 ) (10,847 ) 1,788 $342 1,632 $(188,219) $66,167 $368,165 $246,455 1,780 $ 342 1,640 $ (193,474 ) $ 66,244 $ 373,163 $ 246,275 1,761 $ 342 1,659 $ (204,830 ) $ 66,347 $ 377,682 $ 239,541 1,761 $ 342 1,659 $ (204,830 ) $ 66,347 $ 377,682 $ 239,541 10,048 10,048 12,987 12,987 1 (1 ) 13 599 612 1 (1 ) 16 818 834 (57 ) (57 ) (57 ) (57 ) (2 ) 2 (1,650 ) (1,650 ) (2 ) 2 (1,667 ) (1,667 ) (7,578 ) (7,578 ) (11,456 ) (11,456 ) 1,760 $ 342 1,660 $ (206,524 ) $ 66,946 $ 380,152 $ 240,916 1,760 $ 342 1,660 $ (206,538 ) $ 67,165 $ 379,213 $ 240,182 8 Table of Contents August 8,November 7, 2023, the date of issuance of this Quarterly Report on Form 10-Q. However, these estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. At least quarterly, we evaluate our assumptions, judgments, and estimates, and make changes as we deem necessary.$ 38,320 $ 33,329 $ 37,890 $ 33,329 15,870 13,618 17,036 13,618 26,062 18,846 28,020 18,846 $ 80,252 $ 65,793 $ 82,946 $ 65,793 9 Table of Contents $ 6,563 $ 9,348 $ 10,048 $ 17,847 $ 2,939 $ 8,839 $ 12,987 $ 26,686 1,760 1,794 1,761 1,796 1,760 1,786 1,761 1,793 1 4 1 4 1 2 1 3 1,761 1,798 1,762 1,800 1,761 1,788 1,762 1,796 $ 3.73 $ 5.21 $ 5.71 $ 9.94 $ 1.67 $ 4.95 $ 7.38 $ 14.89 $ 3.73 $ 5.20 $ 5.70 $ 9.91 $ 1.67 $ 4.94 $ 7.37 $ 14.86 JuneSeptember 30, 2023, we held investments in commercial paper, bonds, money market accounts, mutual funds, and equity securities. The commercial paper and bonds are considered held-to-maturity and are recorded at amortized cost in the accompanying consolidated balance sheets. The money market accounts, equity securities, and mutual funds are recorded at fair value in the accompanying consolidated balance sheets. The fair values of these investments were estimated using recently executed transactions and market price quotations. We consider as current assets those investments which will mature in the next 12 months including interest receivable on the long-term bonds. The remaining investments are considered non-current assets which we intend to hold longer than 12 months. 10 Table of Contents $ 307 $ 2,380 $ 656 $ 2,380 2 603 2 603 - 1,748 - 1,748 $ 309 $ 4,731 $ 658 $ 4,731 $ 4,164 $ 8,597 $ 3,748 $ 8,597 91 330 745 12,227 - 12,227 223 330 - (2 ) - (2 ) $ 5,132 $ 21,152 $ 3,839 $ 21,152 $ 4,506 $ 5,139 $ 3,910 $ 5,139 3,860 3,180 3,839 3,180 1,820 350 1,725 350 $ 10,186 $ 8,669 $ 9,474 $ 8,669 $ 15,627 $ 34,552 $ 13,971 $ 34,552 secondthird quarter of 2023, our allowance for credit losses was immaterial. 11 Table of Contents JuneSeptember 30, 2023 aggregated by credit quality indicator (in thousands):$ 127 $ - $ 4,100 $ 4,227 - - 3,797 3,797 $ 127 $ - $ 7,897 $ 8,024 $ 104 $ 3,693 $ 3,797 - 3,790 3,790 $ 104 $ 7,483 $ 7,587 307 $ - $ - $ 307 1 656 $ - $ - $ 656 745 $ - $ - $ 745 2 - $ - $ - $ - 8,024 $ 2 $ (197 ) $ 7,829 2 7,587 $ 4 $ (144 ) $ 7,447 1,821 $ - $ (1 ) $ 1,820 1 1,781 $ - $ (56 ) $ 1,725 6,054 $ - $ (1,325 ) $ 4,729 2 6,054 $ - $ (2,053 ) $ 4,001 2,380 $ - $ - $ 2,380 1 2,380 $ - $ - $ 2,380 13,975 $ 1 $ (9 ) $ 13,967 2 13,975 $ 1 $ (9 ) $ 13,967 11,777 $ - $ (353 ) $ 11,424 2 11,777 $ - $ (353 ) $ 11,424 466 $ - $ (116 ) $ 350 1 466 $ - $ (116 ) $ 350 6,054 $ - $ (585 ) $ 5,469 2 6,054 $ - $ (585 ) $ 5,469 JuneSeptember 30, 2023. The unrealized losses for some of these bond investments reflect changes in interest rates following their acquisition. As of JuneSeptember 30, 2023, we had sevensix bond investments in a loss position for more than 12 months.JuneSeptember 30, 2023, the length of time until maturity of the commercial paper we owned ranged from less than a month to two months and the length of time to maturity for the bonds we held ranged from less than a month to 2327 months.As of June 30, 2023, there were expenditures of $199 thousand related to property, plant, and equipment included in our accounts payable and accrued liabilities balance. 12 Table of Contents
Patents and license fees paid for the use of other entities’ patents are amortized over the useful life of the patent or license. The following tables provide information regarding patents and licenses (dollars in thousands):
June 30, 2023 |
|
| December 31, 2022 |
| |||||||||||||||||
Weighted Average Original Life (years) |
|
| Gross Carrying Amount |
|
| Accumulated Amortization |
|
| Weighted Average Original Life (years) |
|
| Gross Carrying Amount |
|
| Accumulated Amortization |
| |||||
15.67 |
|
| $ | 13,840 |
|
| $ | 12,712 |
|
|
| 15.67 |
|
| $ | 13,840 |
|
| $ | 12,655 |
|
September 30, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||
Weighted Average Original Life (years) |
|
| Gross Carrying Amount |
|
| Accumulated Amortization |
|
| Weighted Average Original Life (years) |
|
| Gross Carrying Amount |
|
| Accumulated Amortization |
| ||||||
| 15.67 |
|
| $ | 13,840 |
|
| $ | 12,740 |
|
|
| 15.67 |
|
| $ | 13,840 |
|
| $ | 12,655 |
|
Aggregated amortization expense for patents and licenses was $28 thousand and $30 thousand in the three-month period ended JuneSeptember 30, 2023 and June$29 thousand in the three month period ended September 30, 2022, respectively.2022. Aggregated amortization expense for patents and licenses was $57 thousand and $60$85 thousand in the six-monthnine-month period ended JuneSeptember 30, 2023 and June$89 thousand in the nine-month period ended September 30, 2022, respectively.2022.
Estimated future amortization expense for each of the years set forth below ending December 31 is as follows (in thousands):
2024 |
| $ | 113 |
|
2025 |
| $ | 112 |
|
2026 |
| $ | 112 |
|
2027 |
| $ | 108 |
|
2028 |
| $ | 108 |
|
(6) Revenues
We recognize revenue when performance obligations under the terms of a contract with our customer are satisfied. This occurs with the transfer of control of our products to customers when products are shipped. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services. Sales and other taxes we may collect concurrent with revenue-producing activities are excluded from revenue.
A summary of revenue by geographic area, based on shipping destination, for the three and sixnine months ended JuneSeptember 30, 2023 and 2022 is as follows (in thousands):
|
| Three Months Ended |
| Six Months Ended |
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||||||||||||||||
|
| June 30, |
| June 30, |
|
| September 30, |
| September 30, |
| ||||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
United States |
| $ | 27,580 |
| $ | 29,346 |
| $ | 52,448 |
| $ | 56,341 |
|
| $ | 26,146 |
| $ | 27,779 |
| $ | 78,594 |
| $ | 84,121 |
| ||||||
European Union |
| 6,581 |
| 8,142 |
| 14,666 |
| 17,479 |
|
| 6,695 |
| 6,371 |
| 21,361 |
| 23,851 |
| ||||||||||||||
All other regions |
|
| 9,677 |
|
|
| 11,394 |
|
|
| 16,717 |
|
|
| 22,200 |
|
|
| 9,070 |
|
|
| 10,481 |
|
|
| 25,787 |
|
|
| 32,679 |
|
Total |
| $ | 43,838 |
|
| $ | 48,882 |
|
| $ | 83,831 |
|
| $ | 96,020 |
|
| $ | 41,911 |
|
| $ | 44,631 |
|
| $ | 125,742 |
|
| $ | 140,651 |
|
| 13 |
| Table of Contents |
ATRION CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A summary of revenue by product line for the three and sixnine months ended JuneSeptember 30, 2023 and 2022 is as follows (in thousands):
|
| Three Months Ended |
| Six Months Ended |
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||||||||||||||||
|
| June 30, |
| June 30, |
|
| September 30, |
| September 30, |
| ||||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Fluid Delivery |
| $ | 17,287 |
| $ | 21,556 |
| $ | 34,874 |
| $ | 45,670 |
|
| $ | 17,717 |
| $ | 19,303 |
| $ | 52,591 |
| $ | 64,973 |
| ||||||
Cardiovascular |
| 18,733 |
| 18,082 |
| 34,398 |
| 33,385 |
|
| 17,170 |
| 16,780 |
| 51,568 |
| 50,165 |
| ||||||||||||||
Ophthalmology |
| 2,790 |
| 1,804 |
| 4,149 |
| 2,888 |
|
| 2,700 |
| 1,607 |
| 6,849 |
| 4,495 |
| ||||||||||||||
Other |
|
| 5,028 |
|
|
| 7,440 |
|
|
| 10,410 |
|
|
| 14,077 |
|
|
| 4,324 |
|
|
| 6,941 |
|
|
| 14,734 |
|
|
| 21,018 |
|
Total |
| $ | 43,838 |
|
| $ | 48,882 |
|
| $ | 83,831 |
|
| $ | 96,020 |
|
| $ | 41,911 |
|
| $ | 44,631 |
|
| $ | 125,742 |
|
| $ | 140,651 |
|
More than 98 percent of our total revenue in the periods presented herein is pursuant to shipments initiated by a purchase order (our “contract”) and recognized at a single point in time when the performance obligation of the product being shipped is satisfied, rather than recognized over time, and is presented as a receivable on the balance sheet. Payment is typically due within 30 days.
We maintain an allowance for doubtful accounts to reflect estimated losses resulting from the failure of customers to make required payments. We calculate our credit loss allowance for our trade receivables following a lifetime “expected credit loss” measurement objective. An account is written off when we determine the receivable will not be collected. Historically, bad debt has been immaterial.
We have elected to recognize the cost of shipping as an expense in cost of sales when control over the product has transferred to the customer.
We do not make any material accruals for product returns and warranty obligations because our returns and warranty obligations have been very low due to our focus on quality control.
We do not disclose the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount for which we have the right to invoice. We believe that the complexity added to our disclosures by the inclusion of a large amount of insignificant detail in attempting to disclose information about immaterial contracts would potentially obscure more useful and important information.
(7) Recent Accounting Pronouncements
From time to time, new accounting pronouncements applicable to us are issued by the Financial Accounting Standards Board or other standards-setting bodies. We generally adopt these standards as of the specified effective date. Unless otherwise discussed, we believe the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.
| 14 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
We develop and manufacture products primarily for medical applications. We market components to other equipment manufacturers for incorporation in their products and sell finished devices to physicians, hospitals, clinics, and other treatment centers. Our medical products primarily serve the fluid delivery, cardiovascular, and ophthalmology markets. Our other medical and non-medical products include instrumentation and disposables used in valves and inflation devices used in marine and aviation safety products.
Our products are used in a wide variety of applications by numerous customers. We encounter competition in all of our markets and compete primarily on the basis of product quality, price, engineering, customer service, and delivery time.
Our business strategy is to provide hospitals, physicians, and other healthcare providers with the tools they need to improve the lives of the patients they serve. To do so, we provide a broad selection of products in the areas of our expertise. We have diverse product lines serving primarily the fluid delivery, cardiovascular, and ophthalmic markets, and this diversity has served us well as we encounter changing market conditions. Research and development, or R&D, efforts are focused on improving current products and developing highly-engineered products that meet customer needs and serve niche markets with meaningful sales potential. Proposed new products may be subject to regulatory clearance or approval prior to commercialization and the time period for introducing a new product to the marketplace can be unpredictable. We also focus on controlling costs by investing in modern manufacturing technologies and controlling purchasing processes. We have been successful in consistently generating cash from operations and have used that cash to reduce or eliminate indebtedness, to fund capital expenditures, to make investments, to repurchase stock, and to pay dividends.
Our strategic objective is to further enhance our position in our served markets by:
| · | Focusing on customer needs; |
| · | Expanding existing product lines and developing new ones; |
| · | Investing in our future growth, while balancing the need to sensibly control cost; and |
| · | Preserving and fostering a collaborative, entrepreneurial management culture. |
For the three months ended JuneSeptember 30, 2023, we reported revenues of $43.8$41.9 million, down 106 percent, operating income of $7.4$4.1 million, down 3358 percent, and net income of $6.6$2.9 million, down 3067 percent from the three months ended JuneSeptember 30, 2022.
Results for the three months ended JuneSeptember 30, 2023
Consolidated net income totaled $6.6$2.9 million, or $3.73$1.67 per basic and $3.73 per diluted share, in the secondthird quarter of 2023. This is compared with consolidated net income total of $9.3$8.8 million, or $5.21$4.95 per basic and $5.20$4.94 per diluted share, in the secondthird quarter of 2022. The income per basic share computations are based on weighted average basic shares outstanding of 1,760 thousand in the 2023 period and 1,7941,786 thousand in the 2022 period. The income per diluted share computations are based on weighted average diluted shares outstanding of 1,761 thousand in the 2023 period and 1,7981,788 thousand in the 2022 period.
| 15 |
| Table of Contents |
Consolidated revenues of $43.8$41.9 million for the secondthird quarter of 2023 were 10.36.1 percent lower than revenues of $48.9$44.6 million for the secondthird quarter of 2022 Although revenues in each of the first three quarters of 2023 were down from the comparable quarters in 2022, the percentage of the spread has narrowed each quarter as customers cite continuing efforts to bring their inventories to appropriate levels.supply chain shortages have eased. Our secondthird quarter 2023 results were unfavorably impacted by a 19.8%an 8.2 percent decrease in Fluid Delivery revenue and 32.4%a 37.7 percent decrease in Other product line revenue partially offset by a 54.7% increase in Ophthalmic and 3.6% increase in Cardiovascular revenues compared to the secondthird quarter of 2022.
Revenues by product line were as follows (in thousands):
|
| Three Months Ended June 30, |
|
| Three Months Ended September 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Fluid Delivery |
| $ | 17,287 |
| $ | 21,556 |
|
| $ | 17,717 |
| $ | 19,303 |
| ||
Cardiovascular |
| 18,733 |
| 18,082 |
|
| 17,170 |
| 16,780 |
| ||||||
Ophthalmology |
| 2,790 |
| 1,804 |
|
| 2,700 |
| 1,607 |
| ||||||
Other |
|
| 5,028 |
|
|
| 7,440 |
|
|
| 4,324 |
|
|
| 6,941 |
|
Total |
| $ | 43,838 |
|
| $ | 48,882 |
|
| $ | 41,911 |
|
| $ | 44,631 |
|
Cost of goods sold of $26.6$28.2 million for the secondthird quarter of 2023 was 54 percent lowerhigher than our cost of goods sold of $28.0$27.0 million for the secondthird quarter of 2022, primarily due to lower sales volumes.increased manufacturing costs. Our cost of goods sold in the secondthird quarter of 2023 was 60.667.2 percent of revenue compared to 57.460.4 percent of revenue in the secondthird quarter of 2022.
Gross profit of $17.3$13.7 million in the secondthird quarter of 2023 was $3.6$3.9 million or 17.222.2 percent lower than in the comparable 2022 period. Our gross profit percentage in the secondthird quarter of 2023 was 39.432.8 percent of revenues compared with 42.639.6 percent of revenues in the secondthird quarter of 2022. The decrease in gross profit percentage in the 2023 period compared to the 2022 period was related to higher manufacturing costs.
Our secondthird quarter 2023 operating expenses of $9.9$9.7 million were $71 thousand$1.6 million higher than the operating expenses for the secondthird quarter of 2022. This increase was attributable to a $328$959 thousand increase in general and administrative expenses driven by outside services and compensation, as well as a $54$618 thousand increase in R&D expenses, both of which were primarily forrelated to outside services partially offset by a $312and supplies. Selling expenses increased $42 thousand, decrease in selling expenses, primarily forrelated to outside services.
Operating income of $7.4$4.1 million in the secondthird quarter of 2023 represented a $3.7$5.5 million, or 33.157.7 percent, decrease in operating income compared to secondthird quarter 2022 operating income. This decrease was due to lower sales and the gross profit decrease discussed above. Operating income was 16.89.7 percent of revenues for the secondthird quarter of 2023 and 22.621.5 percent of revenues for the secondthird quarter of 2022.
| 16 |
| Table of Contents |
Interest and dividend income in the secondthird quarter of 2023 was $127$320 thousand compared with $292$210 thousand for the same period in the prior year. The decreaseincrease in interest and dividend income was due to dividends received on equity investments in the prior-year period.third quarter of 2023.
Other investment income in the secondthird quarter of 2023 was a $98$782 thousand gainloss compared with Other investment lossgain of $308$764 thousand in the secondthird quarter of 2022. These amounts were attributable to unrealized gains and losses on equity investments resulting from changes in the market values of the investments in each quarter.
Income tax expense was $1.0 million$568 thousand for the secondthird quarter of 2023 compared with $1.7 million for the secondthird quarter of 2022. The effective tax rate for the secondthird quarter of 2023 was 13.716.2 percent compared with 15.616.5 percent for the secondthird quarter of 2022. The decrease in the second quarter 2023 period effective tax rate was primarily related to the impact of the R&D tax credit on lower income before income taxes.
Results for the sixnine months ended JuneSeptember 30, 2023
Consolidated net income totaled $10.0$13.0 million, or $5.71$7.38 per basic and $5.70$7.37 per diluted share, in the first sixnine months of 2023. This is compared with consolidated net income of $17.8$26.7 million, or $9.94$14.89 per basic and $9.91$14.86 per diluted share, in the first sixnine months of 2022. The income per basic share computations are based on weighted average basic shares outstanding of 1,761 thousand in the 2023 period and 1,7961,793 thousand in the 2022 period. The income per diluted share computations are based on weighted average diluted shares outstanding of 1,762 thousand in the 2023 period and 1,8001,796 thousand in the 2022 period.
Consolidated revenues of $83.8$125.7 million for the first sixnine months of 2023 were 12.710.6 percent lower than revenues of $96.0$140.7 million for the first sixnine months of 2022. This decrease in revenue was due to decreased sales volumes of 19.1 percent in our Fluid Delivery and 29.9 percent in Other product lines.lines compared to the first nine months of 2022.
Revenues by product line were as follows (in thousands):
|
| Six Months Ended June 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Fluid Delivery |
| $ | 34,874 |
| $ | 45,670 |
|
| $ | 52,591 |
| $ | 64,973 |
| ||
Cardiovascular |
| 34,398 |
| 33,385 |
|
| 51,568 |
| 50,165 |
| ||||||
Ophthalmology |
| 4,149 |
| 2,888 |
|
| 6,849 |
| 4,495 |
| ||||||
Other |
|
| 10,410 |
|
|
| 14,077 |
|
|
| 14,734 |
|
|
| 21,018 |
|
Total |
| $ | 83,831 |
|
| $ | 96,020 |
|
| $ | 125,742 |
|
| $ | 140,651 |
|
Cost of goods sold of $51.5$79.7 million for the first sixnine months of 2023 was $4.4$3.3 million lower than in the comparable 2022 period. This decrease was mainly due to lower sales volumes.volumes and increased manufacturing costs. Our cost of goods sold in the first sixnine months of 2023 was 61.463.4 percent of revenues compared to 58.259.0 percent of revenues in the first sixnine months of 2022.
| 17 |
| Table of Contents |
Gross profit was $32.3$46.1 million in the first sixnine months of 2023 and $40.1$57.7 million in the first sixnine months of 2022. Our gross profit percentage was 38.636.6 percent of revenues in the first sixnine months in 2023 and 41.741.0 percent in 2022. The decrease in gross profit percentage in the 2023 period compared to the 2022 period was related to higher manufacturing costs.
Operating expenses of $20.5$30.2 million for the first sixnine months of 2023 were $1.7$3.3 million higher than the operating expenses for the first sixnine months of 2022. This increase was attributable to a $1.5$2.4 million increase in general and administrative expenses primarily for compensation related to a one-time retirement-related bonus, and a $307$925 thousand increase in R&D expenses, primarily for compensationdriven by outside services and outside services.compensation. This increase was partially offset by a $101$59 thousand decrease in selling expenses, primarily for outside services.expenses.
Operating income of $11.8$15.9 million for the first sixnine months of 2023 represented a $9.4$15.0 million or 44.348.5 percent decrease in operating income fromas compared to the first sixnine months of 2022. Operating income was 14.112.7 percent of revenues for the first sixnine months of 2023 and 22.222.0 percent of revenues for the first sixnine months of 2022.
Interest and dividend income for the first sixnine months of 2023 was $367$687 thousand, compared with $429$639 thousand for the same period in the prior year. The decreaseincrease in interest and dividend income was primarily duerelated to an increase in dividends received on equity investments in the prior-yearcurrent-year period.
Other investment income for the first sixnine months of 2023 was a $623 thousand$1.4 million loss compared to a $548$216 thousand lossgain in the first sixnine months of 2022. These amounts were attributable to unrealized gains and losses on equity investments resulting from changes in the market values of our investments in each time period.
Income tax expense was $1.6$2.1 million for the first sixnine months in 2023 and $3.4$5.1 million for the first sixnine months in 2022. The effective tax rate for the first sixnine months of 2023 was 13.414.1 percent, compared with 16.016.2 percent for the first sixnine months of 2022. The decrease in the 2023 period effective tax rate was primarily related to the impact of the R&D tax credit on lower income before income taxes.
Liquidity and Capital Resources
As of JuneSeptember 30, 2023, we had a $75.0 million revolving credit facility with a money center bank pursuant to which the lender is obligated to make advances until February 28, 2024. The credit facility is secured by substantially all of our inventories, equipment, and accounts receivable. Interest under the credit facility is assessed at 30-day, 60-day, or 90-day Adjusted Term SOFR, as selected by us, plus 1.0 percent, and is payable monthly. We had outstanding borrowings under the credit facility at JuneSeptember 30, 2023 of $3.8$4.5 million, and we were in compliance with all financial covenants.
At JuneSeptember 30, 2023, we had a total of $15.6$14.0 million in cash and cash equivalents, short-term investments, and long-term investments. At December 31, 2022, cash and cash equivalents, short-term investments, and long-term investments totaled $34.6 million.
| 18 |
| Table of Contents |
Cash flows from operating activities of $3.7$9.1 million for the sixnine months ended JuneSeptember 30, 2023 were primarily comprised of net income plus the net effect of non-cash expenses and an increase in inventory and prepaid expenses. During the first sixnine months of 2023, we used $16.7$19.8 million for the addition of property and equipment, $7.6$11.4 million for dividends, and $5.6 million for the purchase of investments, and $1.7 million for the purchase of treasury stock.investments. During the same period, our maturities and sales of investments generated $19.5$20.8 million in cash, and our cash borrowings under our credit facility at JuneSeptember 30, 2023 were $3.8$4.5 million. For the sixnine months ended JuneSeptember 30, 2022, cash flows from operating activities of $18.3$28.9 million were primarily comprised of net income plus the net effect of non-cash expenses and an increase in accounts payable.inventory. During the first sixnine months of 2022, we used $22.3$25.5 million for the purchase of investments, $15.2$25.3 million for the addition of property and equipment, $7.0$10.8 million for dividends, and $9.3$14.4 million for the purchase of treasury stock. During the same period, maturities and sales of investments generated $20.2$42.7 million in cash.
At JuneSeptember 30, 2023, we had working capital of $99.6$100.5 million, including $309$658 thousand in cash and cash equivalents and $5.1$3.8 million in short-term investments, compared to working capital of $101.3 million at December 31, 2022. The $1.7 million$822 thousand decrease in working capital during the first sixnine months of 2023 was primarily related to a decrease in cash and short-term investments, partially offset by an increase in inventory and prepaid expenses.
We believe that our $15.6$14.0 million in cash, cash equivalents, short-term investments, and long-term investments, along with cash flows from operations and available borrowings of up to $71.2$70.5 million under our credit facility, will be sufficient to fund our cash requirements for at least the foreseeable future. We believe that our strong financial position would allow us to access equity or debt financing should that be necessary.
COVID-19 Impact
We believe the impact of COVID-19 on our business has largely diminished at this time; however, uncertainties continue, particularly around disruptions to the global economy, supply chains, and healthcare systems. Even with the public health actions that have been taken to date, the disease may pose future risks with the emergence of new variants. We will continue to monitor COVID-19 as well as resulting legislative and regulatory changes to manage our response and assess and seek to mitigate potential adverse impacts on our business. For additional discussion regarding COVID-19 and our related risks, see Part I, Item 1A, “Risk Factors” included in our 2022 Form 10-K.
| 19 |
| Table of Contents |
Forward-Looking Statements
Statements in this Management’s Discussion and Analysis and elsewhere in this Quarterly Report on Form 10-Q that are forward-looking are based upon current expectations, and actual results or future events may differ materially. Therefore, the inclusion of such forward-looking information should not be regarded as a representation by us that our objectives or plans will be achieved. Such statements include, but are not limited to, our ability to fund our cash requirements for the foreseeable future with our current assets, long-term investments, cash flow, and borrowings under theour credit facility, and our access to equity and debt financing. Words such as “expects,” “believes,” “anticipates,” “intends,” “should,” “plans,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements contained herein involve numerous risks and uncertainties, and there are a number of factors that could cause actual results or future events to differ materially, including, but not limited to, the following: the risk that COVID-19 leads to further material delays and cancellations of, or reduced demand for, procedures in which our products are utilized; curtailed or delayed capital spending by hospitals and other healthcare providers; disruption to our supply chain; closures of our facilities; delays in training; delays in gathering clinical evidence; diversion of management and other resources to respond to COVID-19; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that COVID-19 further disrupts local economies and causes economies in our key markets to enter prolonged recessions; changing economic, market and business conditions; acts of war or terrorism; the effects of governmental regulation; the impact of competition and new technologies; slower-than-anticipated introduction of new products or implementation of marketing strategies; implementation of new manufacturing processes or implementation of new information systems; our ability to protect our intellectual property; changes in the prices of raw materials; changes in product mix; intellectual property and product liability claims and product recalls; the ability to attract and retain qualified personnel; and the loss of, or any material reduction in sales to, any significant customers. In addition, assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic review which may cause us to alter our marketing, capital expenditures or other budgets, which in turn may affect our results of operations and financial condition. The forward-looking statements in this Quarterly Report on Form 10-Q are made as of the date hereof, and we do not undertake any obligation, and disclaim any duty, to supplement, update or revise such statements, whether as a result of subsequent events, changed expectations or otherwise, except as required by applicable law.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For the quarter ended JuneSeptember 30, 2023, we did not experience any material changes in market risk exposures that affect the quantitative and qualitative disclosures presented in our 2022 Form 10-K.
Item 4. Controls and Procedures.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of JuneSeptember 30, 2023. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting for the quarter ended JuneSeptember 30, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
| Table of Contents |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We have no pending legal proceedings of the type described in Item 103 of Regulation S-K.
Item 1A. Risk Factors.
As of the date of this Report, there has been no material change in the risk factors described in our 2022 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The table below sets forth information with respect to our purchasesIssuer Purchases of our common stock during each month in the three-month period ended June 30, 2023.Equity Securities
Period |
| Total Number of Shares Purchased |
|
| Average Price Paid per Share |
|
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
| Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) |
| ||||
4/1/2023 to 4/30/2023 |
|
| 51 |
|
| $ | 605.67 |
|
|
| 51 |
|
|
| 130,536 |
|
5/1/2023 to 5/31/2023 |
|
| 1,783 |
|
| $ | 564.44 |
|
|
| 1,783 |
|
|
| 128,753 |
|
6/1/2023 to 6/30/2023 |
|
| -- |
|
|
| -- |
|
|
| -- |
|
|
| 128,753 |
|
Total |
|
| 1,834 |
|
| $ | 565.59 |
|
|
| 1,834 |
|
|
| 128,753 |
|
(1) On May 21, 2015, our Board of Directors approved a stock repurchase program pursuant to which we can repurchase up to 250,000 shares of our common stock from time to time in open market or privately-negotiated transactions. At June 30, 2023, we had repurchased 121,247 shares of our common stock authorized under the program approved in May 2015. Our stock repurchase program has no expiration date but may be terminated by our Board of Directors at any time. No repurchases of our stock were made during the three months ended September 30, 2023. As of September 30, 2023, we had repurchased 121,247 shares of our common stock authorized under the program and the number of shares still available for repurchase under the program was 128,753.
| Table of Contents |
Item 6. Exhibits.
Exhibit Index
Exhibit Number | Description | |
| Sarbanes-Oxley Act Section 302 Certification of Chief Executive Officer | |
|
|
|
| Sarbanes-Oxley Act Section 302 Certification of Chief Financial Officer | |
|
|
|
| ||
|
|
|
| ||
|
|
|
101.INS |
| XBRL Instance Document |
|
|
|
101.SCH |
| XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Atrion Corporation (Registrant) | |||
| Date: | By: | ||
|
| David A. Battat | |
President and
| |||
| Chief Executive Officer | |||
Date: | By: | /s/ Cindy Ferguson |
|
|
| Cindy Ferguson |
|
|
| Vice President and | |
Chief Financial Officer | |||
(Principal Accounting and Financial Officer) |
| ||