However, among some of America's elite is Atrion Corporation (Nasdaq:ATRI), a Texas-based micro cap that produces niche medical products. Atrion, along with Biglari Holdings (NYSE:BH), are the only micro-caps among the group of 19 stocks. Atrion will give any of these big companies a run for their money.
In 1994, it began acquiring medical products businesses. First, it acquired Atrion Medical Products in April 1994, then it bought Halkey-Roberts in May 1996, and finally, in January 1998, it purchased QMI Medical, the cardiovascular and intravenous fluid division of Quest Medical Inc.
At the same time, it sold all of its natural gas businesses for about $38.2 million in 1997. From 1998 onward, it's been strictly a medical products business, making money for 14 straight years. In that time, revenues have grown from $30.3 million at the end of 1997 to an estimated $119 million in 2011, or 10.3% compounded annually.
Not a huge grower, its niche position allows it to make good money. In 1997, as mentioned previously, it lost $2 million on continuing operations. In 2011, operating income will be around $38 million with earnings per share of $12.84.(To know more about income statements, read Understanding The Income Statement.)
In 2010, shareholders received the motherlode, as it paid not one, but two special dividends. In January 2010, it paid a $6 special dividend and then, in time for Christmas, it paid a second $3 special dividend. That's $9 in cash that went out the door and it barely blinked finishing 2010 with $41.7 million in cash and investments.
As of the third quarter ended Sept. 30, 2011, its level of cash and investments was up 27% from the end of 2010 to $52.7 million. Considering the two special dividends amounted to an expense of $18 million in cash, it could easily afford to do the same thing in 2012. I doubt it will, but it could.
The most consistent product line in terms of revenue growth is its fluid delivery valves, which have seen revenue increases in each of the last six fiscal years and 2011 appears be no different. It's not flashy about what it does and that's what's so attractive about it. Proponents of "Made in America" policies will like the fact its products are produced exclusively in Florida, Alabama and Texas, with no offshore production.
With the exception of Novartis (NYSE:NVS), which accounts for 14% of its sales, no other organization represents more than 10% of revenue. It's sufficiently diversified, both in terms of product and customer mix. Most importantly, Atrion's revenues outside of the U.S. and Canada represent almost a quarter of its overall business and are rising at a moderate pace. Overall, its business appears very sound.
At the time of writing, Will Ashworth did not own shares in any of the companies mentioned in this article.