United‑Guardian reported its third‑quarter and nine‑month 2025 results on November 6 2025, showing a 21.8% decline in revenue to $7.58 million and a 47% drop in net income to $1.46 million compared with the same periods in 2024.
For the quarter ended September 30, 2025, sales fell 26% to $2.26 million from $3.06 million in Q3 2024, while net income dropped 69% to $268,441 from $865,484. The sharp decline in the cosmetic‑ingredient segment—driven by a 69% reduction in orders from Ashland Specialty Ingredients—offset gains in the company’s pharmaceutical and medical product lines, which grew 10% and 6% respectively.
Margin compression was a key driver of the earnings miss. Cost of sales rose to 58% of revenue in Q3 2025 from 46% in the prior year, and the nine‑month cost of sales percentage increased to 50% from 47%. The higher cost mix reflects lower‑margin pharmaceutical volumes and the loss of high‑margin cosmetic‑ingredient sales, eroding profitability despite the modest growth in other segments.
Management highlighted that the decline in cosmetic‑ingredient sales was largely due to tariff‑related headwinds in China and a shift by customers toward lower‑cost local products. The company’s president, Donna Vigilante, noted that while the pharmaceutical and medical product lines are gaining traction, the concentration risk with Ashland Specialty Ingredients remains a concern. She also emphasized optimism around the expansion of Renacidin’s formulary inclusion and new marketing agreements for personal‑care products, which could provide a rebound in future quarters.
Looking ahead, United‑Guardian faces ongoing pricing pressure in the cosmetic‑ingredient market and the need to diversify its customer base. The company’s focus on strengthening its pharmaceutical and medical product portfolio, coupled with cost‑control measures, signals a strategic pivot to more resilient revenue streams. However, the concentration risk with its largest marketing partner and the uncertainty surrounding tariff impacts in China continue to pose significant risks to the company’s near‑term performance.
The results underscore a challenging environment for United‑Guardian’s core cosmetic‑ingredient business, while highlighting growth opportunities in its pharmaceutical and medical segments. The company’s ability to manage cost pressures and broaden its customer base will be critical to reversing the downward trend in revenue and earnings in the coming quarters.
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