UTAH MEDICAL PRODUCTS, INC. Currency amounts are in thousands except per-share amounts and where noted.
Currencies are abbreviated as follows: the
The following comments should be read in conjunction with the accompanying financial statements.
Overview.
The 2022-year financial results demonstrate
Consolidated Income Statement 2022 2022 Compared to 2021 2021 Worldwide Revenues$ 52,281 +6.6%$ 49,054 Gross Profit 32,196 +4.1% 30,917 Operating Income 19,790 +4.8% 18,880 Earnings Before Income Tax 20,659 +8.4% 19,061 Net Income (US GAAP) 16,473 +11.4% 14,788
Earnings Per Share (US GAAP)
For perspective, 25% of UTMD's total USD consolidated worldwide revenues (sales)
were invoiced in foreign currencies. Translating 2022 foreign currency sales
into USD at the same exchange rates as in 2021 ("constant currency" sales) would
have resulted in a 9.5% increase in 2022 worldwide revenues, with an 18.2%
increase in sales outside the
Although UTMD's sales in 2022 were helped by an approximate 7% average increase in UTMD unit prices, costs of manufacturing increased more than that, resulting in a lower gross profit margin (GPM). Despite an unusual litigation expense year, with better absorption of fixed USD operating costs, notably amortization of identifiable intangible assets, and, in this case, a favorable foreign currency exchange (FX) impact on OUS expenses, UTMD's Operating Income Margin was less diluted than its GPM. Combined with Operating Income, higher non-operating income, predominantly from interest on cash balances, leveraged the increase in Earnings Before Income Tax (EBT) to be greater than UTMD's increase in revenues.
The further leverage in bottom line results (Net Income and Earnings Per Share)
compared to 2021, was the result of an unfavorable adjustment in UTMD's income
tax provision in the prior year, which was not related to normal operations.
According to
Excluding the 2021 deferred tax liability increase and concomitant 2021 income
tax provision increase resulting from the enactment of the
Consolidated Income Statement 2022 2022 Compared to 2021 2021
Net Income (Non-US GAAP)
$4.522 +9.0%$4.147 Key profit margins (profits as a percentage of sales) in 2022 compared to 2021 follow: 2022 2021 Gross Profit Margin (GPM) 61.6% 63.0% Operating Income Margin 37.9% 38.5% Income Before Tax Margin 39.5% 38.9% Net Income Margin before tax adjusts 31.5% 30.9% Net Income Margin per US GAAP 31.5% 30.1%
Measures of the Company's liquidity and overall financial condition improved as
of the end of 2022 compared to the end of 2021 with year-end working capital up
21% and Stockholders' Equity up 7% despite
More specifically, UTMD's cash equivalent balances at the end of 2022 increased
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Productivity of Fixed Assets and Working Capital Assets.
Assets.
Year-end 2022 total consolidated assets were
Current assets increased
Working capital (current assets minus current liabilities) at year-end 2022 was
21% higher at
Manufacturing facilities in
Ending 2022 net consolidated PP&E (depreciated book value of all fixed assets)
declined
The following end-of-year FX rates to USD were applied to assets and liabilities of each applicable foreign subsidiary:
12-31-22 12-31-21
EUR 1.0694 1.1377
GBP 1.2077 1.3536
AUD 0.6805 0.7268
CAD 0.7390 0.7902
The year-end 2022 net book value (after accumulated depreciation) of
consolidated PP&E was 31% of purchase cost. End-of-year PP&E turns (
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Net intangible assets (after accumulated amortization) are comprised of the
capitalized costs of obtaining patents and other intellectual property, as well
as the value of identifiable intangible assets (IIA) and goodwill resulting from
acquisitions. Net intangible assets were
Because the products associated with UTMD's acquisitions of Columbia Medical in
1997, Gesco in 1998,
Liabilities.
As a reminder, payments for the Federal and State repatriation (REPAT) tax
liability which resulted from the
Year-end 2022 current liabilities were
The year-end 2022 Deferred Tax Liability balance created as a result of the
fifteen-year deferred tax consequence of the amortization of Femcare's IIA was
Results of Operations. a)Revenues.
Under accounting standards applicable for 2022, the Company believed that revenue should be recognized at the time of shipment as title generally passes to the customer at the time of shipment, or completion of services performed under contract. Revenue recognized by UTMD is based upon documented arrangements and fixed contracts in which the selling price is fixed prior to acceptance and completion of an order. Revenue from product or service sales is generally recognized at the time the product is shipped or service completed and invoiced, and collectability is reasonably assured. Over 99% of UTMD's revenue is recognized at the time UTMD ships a physical device to a customer's designated location, where the selling price for the item shipped was agreed prior to UTMD's acceptance and completion of the customer order. There are no post-shipment obligations which have been or are expected to be material to financial results.
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There are circumstances under which revenue may be recognized when product is not shipped, which have met the criteria of ASC 606: the Company provides engineering services, for example, design and production of manufacturing tooling that may be used in subsequent UTMD manufacturing of custom components for other companies. This revenue is recognized when UTMD's service has been completed according to a fixed contractual agreement.
Terms of sale are established in advance of UTMD's acceptance of customer
orders. In the
UTMD may allow separate discounted pricing agreements with a specific clinical facility or group of affiliated facilities based on volume of purchases.
Pricing agreements which are documented arrangements with clinical facilities, or groups of affiliated facilities, if applicable, are established in advance of orders accepted or shipments made. For existing customers, past actual shipment volumes typically determine the fixed price by part number for the next agreement period. For new customers, the customer's best estimate of volume is usually accepted by UTMD for determining the ensuing fixed prices for the agreement period. Prices are not adjusted after an order is accepted. For the sake of clarity, the separate pricing agreements with clinical facilities based on volume of purchases disclosure is not inconsistent with UTMD's disclosure above that the selling price is fixed prior to the acceptance of a specific customer order.
UTMD's global consolidated trade sales are comprised of domestic and OUS sales.
Domestic sales in 2022 included 1) direct domestic sales, sales of finished
devices to end-user facilities and med/surg distributors in the
The following table shows the 2022 USD-denominated revenues by sales channel
compared to 2021. Because domestic sales in foreign countries were invoiced in
native currencies, the comparison in USD terms includes the change in foreign
currency translation (FX) rates. In other words, just the FX rate relative to
the USD in 2022 compared to 2021, reduced
Revenue [USD denominated] 2022 2022 Compared to 2021 2021 U.S. domestic (excluding OEM)$21,087 -$21,096 Canada domestic 1,294 (6.4%) 1,382 Ireland domestic 445 - 446 UK domestic 2,748 +15.1% 2,388 France domestic 1,235 (13.3%) 1,424 Australia domestic 1,267 (25.7%) 1,705 Subtotal, Direct to End-User:$28,076 (1.3%)$28,441 All Other OUS (Sales to Int'l Distributors) 13,321 +20.6% 11,050 U.S. OEM Sales 10,884 +13.8% 9,563 Worldwide Revenues$52,281 +6.6%$49,054
In summary, UTMD total worldwide (WW) consolidated USD sales in 2022 at
Domestic Sales.
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Domestic Filshie Clip System sales in 2022 were 16% of total
Domestic OEM sales in 2022 were 34% of total
Domestic direct end-user sales excluding the Filshie Clip System (as well as OEM
sales) were 50% of total
Of UTMD's four domestic direct product categories, neonatal products were
OUS Sales.
Sales OUS in 2022 in USD terms were
Because a significant portion of UTMD's OUS sales are invoiced in foreign currencies, changes in FX rates can potentially have a material effect on period-to-period USD-denominated sales. UTMD's FX rates for income statement purposes are transaction-weighted averages. The average rates from the applicable foreign currency to USD during 2022 compared to 2021 follow.
2022 Change 2021
GBP 1.229 (10.7%) 1.376
EUR 1.052 (11.1%) 1.183
AUD 0.693 (7.7%) 0.751
CAD 0.768 (3.7%) 0.798
The total foreign sales-weighted FX rate change impact on 2022 sales compared to
2021 was (9.9%). In other words, consolidated USD sales in 2022 were reduced
Sixty-four percent of (USD denominated) 2022 OUS sales were invoiced in foreign currencies compared to 72% in 2021. As a portion of total USD WW consolidated sales, 25% of UTMD's USD-equivalent sales were invoiced in foreign currencies in 2022 compared to 27% in 2021. The GBP, EUR, AUD and CAD converted sales represented 6%, 14%, 2% and 3% of total 2022 USD sales, respectively. This compares to 6%, 15%, 3% and 3% of total 2021 USD sales.
USD-denominated trade (excludes intercompany) sales of devices to OUS customers
(excluding
In 2022, UTMD's
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USD-denominated sales of devices to end-users in
UTMD's
UTMD groups its sales into four general product categories: 1) obstetrics, comprised of labor and delivery management tools for monitoring fetal and maternal well-being, for reducing risk in performing difficult delivery procedures and for improving clinician and patient safety; 2) gynecology/ electrosurgery/ urology, comprised of tools for gynecological procedures associated primarily with cervical/ uterine disease including LETZ, endometrial tissue sampling, transvaginal uterine sonography, diagnostic laparoscopy, surgical contraception and other MIS procedures; specialty excision and incision tools; conservative urinary incontinence therapy devices; and urology surgical procedure devices; 3) neonatal critical care, comprised of devices that provide developmentally-friendly care to the most critically ill babies, including providing vascular access, enteral feeding, administering vital fluids, oxygen therapy while maintaining a neutral thermal environment, providing protection and assisting in specialized applications; and 4) blood pressure monitoring/ accessories/ other, comprised of specialized transducers and components as well as molded parts and assemblies sold on an OEM basis to other companies. In these four categories, UTMD's primary revenue contributors enjoy significant brand awareness by clinical users.
Global revenues by product category:
2022 % 2021 %
Obstetrics $4,661 9 $4,675 9
Gynecology/ Electrosurgery/ Urology 21,841 42 21,973 45 Neonatal
7,567 14 6,691 14
Blood Pressure Monitoring and Accessories* 18,212 35 15,715 32 Total:
$52,281 100$49,054 100
OUS revenues by product category:
2022 % 2021 %
Obstetrics $ 676 3 $ 735 4
Gynecology/ Electrosurgery/ Urology 11,603 57 11,053 60 Neonatal
1,517 8 1,347 7
Blood Pressure Monitoring and Accessories* 6,514 32 5,260 29 Total:
$ 20,310 100$ 18,395 100
* includes molded components and finished medical and non-medical devices sold to OEM customers.
Looking forward to 2023 sales, UTMD's largest customer representing almost
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b)Gross Profit (GP).
UTMD's 2022 consolidated GP, the surplus after subtracting costs of
manufacturing, which includes purchasing and transporting raw materials, forming
components, assembling, inspecting, testing, packaging and sterilizing products,
from net revenues, was
The Gross Profit Margin (GPM), which is GP divided by sales, contracted due to the fact that all components of manufacturing cost increased at a rate faster than the increase in revenues which included price increases to customers.
Manufacturing costs in
UTMD's
Femcare
In 2023, UTMD has the objective to manage manufacturing cost pressures to maintain its GPM consistent with 2022.
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c)Operating Income.
Operating Income results from subtracting operating expenses from GP. Operating
Income in 2022 was
Operating expenses include sales and marketing (S&M) expenses, product
development (R&D) expenses and general and administrative (G&A) expenses.
Consolidated WW operating expenses were
2022 2021
S&M expenses $ 1,507 $ 1,414
R&D expenses 493 526
G&A expenses:
a) litigation expense provision 670 22 b) corporate legal 4 1 c) outside directors fees 131 125 d) stock option compensation 183 166 e) profit-sharing bonus accrual 444 448 f) outside accounting audit/tax 184 179 g) Femcare IIA amortization 1,965 2,189 h) CSI IIA amortization 4,421 4,421 i) property & liability insurance premiums 101 99 j)all other G&A expenses 2,304 2,447 G&A expenses - total 10,407 10,097
Total Consolidated Operating Expense:
23.7% 24.5%
Description of Operating Expense Categories:
i) S&M expenses:
S&M expenses in 2022 were
S&M expenses are the costs of communicating UTMD's differences and product
advantages, providing training and other customer service in support of the use
of UTMD's solutions, attending clinical meetings and medical trade shows,
administering customer agreements, advertising, processing orders, shipping, and
paying commissions to outside independent representatives. In markets where UTMD
sells directly to end-users, which in 2021-2022 included the
S&M expenses include all customer support costs including training. In general, training is not required for UTMD's products since they are well-established and have been clinically widely used. Written "Instructions For Use" are packaged with all finished devices. Although UTMD does not have any explicit contracts with customers to provide training, it does provide hospital in-service and clinical training as required and reasonably requested.
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UTMD promises prospective customers that it will provide, at no charge in
reasonable quantities, electronic media and other instructional materials
developed for the use of its products. UTMD provides customer support from
offices in the
ii) R&D expenses:
R&D expenses in 2022 were
iii) G&A expenses:
G&A expenses in 2022 were
The increase in G&A expenses was essentially due to
As stockholders likely remember, the non-cash IIA amortization expense related
to the Filshie Clip System includes IIA from both the 2011 acquisition of
The Femcare IIA amortization expense will continue at the same £397 per calendar
quarter rate ending in 1Q 2026 (or until the value of any remaining IIA becomes
impaired), subject to changes in the FX rate when converted to USD. The early
2019 purchase of CSI exclusive Filshie Clip System
Excluding the non-cash Femcare and CSI IIA amortization expenses, UTMD
consolidated operating expenses were
Maintaining a consistent GPM and tightly controlling operating expenses remains the key to UTMD's excellent profitability and Return on Stockholder Equity (ROE).
d)Non-operating income/Non-operating expense, and Income Before Taxes (EBT).
Non-operating income includes royalties from licensing UTMD's technology, rent
from leasing underutilized property to others, income earned from investing the
Company's excess cash and gains from the sale of assets. Non-operating expense
includes interest on bank loans, bank service fees, excise taxes and losses from
the sale of assets. Also, the period-to-period remeasured value of EUR cash
balances held in the
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Net non-operating income (combination of non-operating income and non-operating
expense) was
1) Interest Expense. There was no interest expense in 2022 or 2021. Absent an acquisition or large repurchase of shares that requires new borrowing, UTMD does not expect any interest expense in 2023.
2) Investment of excess cash. Consolidated investment income (including gains
and losses on sales of investments) was
3) Royalties. Royalties in 2022 were
4) Gains/ losses from remeasured currency in bank accounts. UTMD recognized a
5) Other non-operating income or expense. Income received from renting unused
warehouse space in
EBT results from adding net non-operating income or subtracting net
non-operating expense from Operating Income. Consolidated EBT was
The 2022 EBT of
As a side note for clarity of comparison of financial results, UTMD's 2021 EBT,
as well as all other income statement measures above the EBT line in the 2021
Income Statement, were unaffected by the 2Q 2021 income tax provision adjustment
as a result of a future income tax rate change in the
EBITDA is a non-US GAAP metric that UTMD management believes is of interest to
investors because it provides meaningful supplemental information to both
management and investors that represents profitability performance without
factoring in effects of financing, accounting decisions regarding non-cash
expenses, capital expenditures or tax environments. If the Company were to need
to borrow to pay for a major asset or acquisition, the projected EBITDA metric
would be of primary interest to a lending institution to determine UTMD's credit
worthiness. Although the
2022 2021
EBT $20,659 $19,061
Depreciation Expense 612 636Femcare IIA Amortization Expense 1,965 2,189 CSI IIA Amortization Expense
4,421 4,421
Other Non-Cash Amortization Expense 31 34 Stock Option Compensation Expense 183 166 Remeasured Foreign Currency Balances 20 23
UTMD non-US GAAP EBITDA: $27,891 $26,530 In summary, UTMD's 2022 non-US GAAP EBITDA increased 5.1% compared to 2021.
e)Net Income, Earnings Per Share (EPS) and Return on Equity (ROE).
i) Net Income
Net Income results after subtracting a provision for estimated income taxes from
EBT. UTMD's US GAAP Net Income in 2022 was
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The US GAAP consolidated income tax provision rate for 2022 was 20.3% compared
to 22.4% in 2021. The estimated tax provision adjustment in 2021 increased the
average rate. The non-US GAAP consolidated combined income tax provision rate
for 2021 was 20.4%, about the same as in 2022. For clarity, the
In general, year-to-year fluctuations in the combined average income tax provision rate will result from variation in EBT contribution from subsidiaries in jurisdictions with different corporate income tax rates. Taxes in foreign subsidiaries are based on taxable EBT in those sovereignties, which can be different from the contribution to consolidated EBT per US GAAP. UTMD expects, barring any new tax law changes which are currently unknown, that its combined income tax rate for 2023 will be within the 20.3%-20.5% range.
The
ii) Earnings Per Share (EPS)
EPS are Net Income divided by the number of shares of stock outstanding (diluted
to take into consideration stock option awards which are "in the money," i.e.,
have exercise prices below the applicable period's weighted average market
value). US GAAP diluted EPS in year 2022 were
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UTMD management believes the presentation of Net Income and EPS results excluding the tax liability estimate adjustment in 2021 provides meaningful supplemental information to both management and investors that is more clearly indicative of UTMD's bottom line results for comparison purposes.
US GAAP:
2022 2021
Net Income $16,473 $14,788
Net Income Margin 31.5% 30.1%
EPS $ 4.522 $ 4.041 Non-US GAAP (excluding the 2021 UK DTL change):
2022 2021
Net Income $16,473 $15,178
Net Income Margin 31.5% 30.9%
EPS $ 4.522 $ 4.147 Note: The 2021 tax provision adjustment only affected UTMD's income tax provision, Net Income and EPS, not consolidated revenues (sales), GP, Operating Income or EBT.
The non-US GAAP financial measures indicate that the 2022 growth in Net Income and EPS compared to 2021 was more modest, and facilitate management's internal comparisons for purposes of planning future performance. The non-US GAAP financial measures disclosed by UTMD should not be considered a substitute for or superior to financial measures calculated in accordance with US GAAP, and the financial results calculated in accordance with US GAAP and reconciliations to those financial statements should be carefully evaluated.
Looking forward to 2023, UTMD believes that sales to its medical device
end-users will remain stable. This might be partly offset, however, if the USD
on the average is stronger, reducing the USD value of approximately 25% of
UTMD's revenues invoiced in foreign currencies. In recent years, UTMD's sales
to its largest OEM customer have grown rapidly, culminating in 22% of UTMD's
consolidated WW revenues in 2022. Projections of demand from this customer have
not been reliable in the past, and its signals for 2023 are currently mixed
despite year-to-date orders which are higher. Given the abatement of vaccine
production for COVID-19, UTMD anticipates a near term lessening of
pharmaceutical control device demand, perhaps reducing UTMD's revenues in 2023
relative to 2022 from this customer. Therefore, management believes it is
reasonable to project 2023 revenues in the range of
iii) ROE
Maintaining a high ROE remains a key management objective for UTMD in order to grow without diluting stockholder interest. ROE is the quotient of Net Income divided by average Stockholders' Equity, but more specifically it is the product of the Net Income margin, productivity of assets and financial leverage. Although UTMD's high Net Income margin is the primary factor that continues to drive its ROE, cash dividends to stockholders and repurchase of shares help in lowering average Stockholders' Equity, reducing the denominator in calculating ROE. UTMD's 2022 ROE before stockholder dividends was 14.9%. In comparison, 2021 ROE was 14.1%.
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The higher 2022 ROE compared to 2021 was the result of 11.4% higher US GAAP Net
Income coupled with 5.4% higher average Stockholders' Equity. Average
Stockholders' Equity was
Maintaining a high ROE with the dilutive effect of rapidly growing Average Stockholders' Equity (despite reductions from dividends and stock repurchases), while maintaining excellent Net Income results, suggests an excellent increase in stockholder value. UTMD's average ROE over the last 30 years was 24%.
Liquidity and Capital Resources
Cash Flows.
Net cash provided by operating activities in 2022 totaled
The additional inventory increase was a hedge against supply chain disruption
emanating from the COVID-19 pandemic. Other changes were a function of normal
business activity, e.g. 1) a
In investing activities, during 2022 UTMD used
In 2022, UTMD received
Option exercises in 2022 were at an average price of
In comparison, in 2021 UTMD received
Option exercises in 2021 were at an average price of
UTMD did not borrow in the years 2021 and 2022. Cash dividends paid to
stockholders were
Management believes that future income from operations and effective management of working capital will continue to provide the liquidity needed to finance internal growth plans. In an uncertain economic environment, UTMD's cash balances allow management to operate with the long-term best interest of stockholders in mind. Planned 2023 capital expenditures for ongoing operations are expected to be about the same in magnitude as depreciation of PP&E, although additional capital expenditure opportunities are being considered.
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Management plans to utilize cash not needed to support normal operations in one or a combination of the following: 1) in general, to continue to invest at opportune times in ways that will enhance future profitability; 2) to make additional investments in new technology and/or processes; and/or 3) to acquire a product line or company that will augment revenue and EPS growth and better utilize UTMD's existing infrastructure. If there are no better strategic uses for UTMD's cash, the Company will continue to return cash to stockholders in the form of dividends and share repurchases when the stock appears undervalued.
Management's Outlook.
UTMD remains relatively small compared to many other companies, but its employees are experienced and remain diligent in their work. UTMD's passion is in providing differentiated clinical solutions that will help improve the outcomes of medical procedures and reduce health risks, particularly for women and their babies.
The safety, reliability and performance of UTMD's medical devices are consistently high and represent significant clinical benefits while providing minimum total cost of care. UTMD will continue to leverage its reputation as a device innovator and reliable manufacturer which will responsively take on challenges to work with clinicians who use its specialty devices. In doing so, UTMD will continue to differentiate itself, especially from its commodity-oriented competitors. In 2023, UTMD again plans to
1) leverage distribution and manufacturing synergies by further integrating capabilities and resources in its multinational operations;
2) expand manufacturing capacity at a time when resources are scarce;
3) focus on effectively differentiating the benefits of the Filshie Clip System
in the
4) introduce additional products helpful to clinicians through product development;
5) continue to achieve excellent overall financial operating performance;
6) utilize positive cash generation to continue providing cash dividends to stockholders and make open market share repurchases if/when the UTMD share price seems undervalued; and
7) remain vigilant for affordable accretive acquisition opportunities which may be brought about by difficult burdens on small, innovative companies.
The Company has a fundamental focus to do an excellent job in meeting
clinicians' and patients' needs, while providing stockholders with excellent
returns. In the combined form of cash dividends and share repurchases, UTMD
"returned"
In 2022, the value of UTMD's stock increased, albeit less than 1%, ending the
year at
In comparison, in 2021, the value of UTMD's stock improved 19%, ending the year
at
The average annually compounded appreciation in UTMD stock value for the last 24 years was 12.0% per year, substantially outpacing all of the major indices. Adding dividends, UTMD stockholder value increased at an annually compounded rate of 12.9% over the last 24 years since 1998.
Combining share price appreciation as a result of a long-term financial performance and a capital allocation strategy that includes opportunistic share repurchases with steadily growing quarterly cash dividends paid to stockholders since 2004, longer term UTMD stockholders have experienced excellent returns. Management is committed to continue that performance.
Off Balance Sheet Arrangements
None
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Contractual Obligations
The following is a summary of UTMD's significant contractual obligations and
commitments as of
Contractual Obligations and Total 2023 2024-2025 2026-2027 2028 and thereafter Commitments Long-term debt obligations $ - $ - $ - $ -
$ -
Operating lease obligations 444 64 105 97 178
Purchase obligations 4,798 4,769 29 - -
Total $ 5,242 $ 4,833 $ 134 $ 97 $ 178 Critical Accounting Policies and Estimates
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the reported amounts of revenues and expenses during the reporting period.
Management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. This forms the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Management has identified the following as the Company's most critical accounting policies which require significant judgment and estimates. Although management believes its estimates are reasonable, actual results may differ from these estimates under different assumptions or conditions.
·Allowance for doubtful accounts: The majority of the Company's receivables are with healthcare facilities and medical device distributors. Although the Company has historically not had significant write-offs of bad debt, the possibility exists, particularly with foreign distributors where collection efforts can be difficult or in the event of widespread hospital bankruptcies.
·Inventory valuation reserves: The Company strives to maintain inventory to 1) meet its customers' needs and 2) optimize manufacturing lot sizes while 3) not tying-up an unnecessary amount of the Company's capital increasing the possibility of, among other things, obsolescence. The Company believes its method of reviewing actual and projected demand for its existing inventory allows it to arrive at a fair inventory valuation reserve. While the Company has historically not had significant inventory write-offs, the possibility exists that one or more of its products may become unexpectedly obsolete for which a reserve has not previously been created. The Company's historical write-offs have not been materially different from its estimates.
Accounting Policy Changes
The Company's management has evaluated the recently issued accounting pronouncements through the filing date of these financial statements and has determined that the application of these pronouncements will not have a material impact on the Company's financial position and results of operations.
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