ufpt20240630

ufpt20240630_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended JUNE 30, 2024

☐ 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: 001-12648

UFP Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-2314970
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Hale Street, Newburyport, MA 01950, USA

(Address of principal executive offices) (Zip Code)

(978) 352-2200

(Registrant's telephone number, including area code)

_________________________________________

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	UFPT	The NASDAQ Stock Market L.L.C.

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 Regulation 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, smaller reporting company, or an emerging growth company. See the 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 ☒

7,674,363 shares of registrant’s Common Stock, $0.01 par value, were outstanding as of August 5, 2024.

UFP Technologies, Inc.

Index

		Page

PART I - FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of June 30, 2024, and December 31, 2023 (unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024, and June 30, 2023 (unaudited)	4

	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024, and June 30, 2023 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024, and June 30, 2023 (unaudited)	6

	Notes to Interim Condensed Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II - OTHER INFORMATION		26

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	27

Signatures		27

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UFP Technologies, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	June 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	16,728		$	5,263
Receivables, net		60,985			64,449
Inventories		77,976			70,191
Prepaid expenses and other current assets		4,296			3,433
Refundable income taxes		2,176			1,297
Total current assets		162,161			144,633
Property, plant and equipment, net		63,736			62,137
Goodwill		115,616			113,263
Intangible assets, net		62,382			64,116
Non-qualified deferred compensation plan		5,792			5,323
Right of use assets		12,223			13,588
Deferred income taxes		72			607
Other assets		414			469
Total assets	$	422,396		$	404,136

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,966		$	22,286
Accrued expenses		20,731			22,085
Deferred revenue		4,552			6,616
Lease liabilities		3,280			3,222
Income taxes payable		258			-
Current portion of long-term debt		-			4,000
Total current liabilities		51,787			58,209
Long-term debt, excluding current installments		35,200			28,000
Deferred income taxes		182			428
Non-qualified deferred compensation plan		5,818			5,412
Lease liabilities		9,473			10,815
Other liabilities		9,760			15,181
Total liabilities		112,220			118,045
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized; no shares issued		-			-
Common stock, $.01 par value, 20,000,000 shares authorized; 7,703,922 and 7,674,363 shares issued and outstanding, respectively, at June 30, 2024; 7,669,339 and 7,639,780 shares issued and outstanding, respectively, at December 31, 2023		77			76
Additional paid-in capital		37,418			38,814
Retained earnings		273,765			247,520
Accumulated other comprehensive (loss) income		(497	)		268
Treasury stock at cost, 29,559 shares at June 30, 2024 and 29,559 shares at December 31, 2023		(587	)		(587	)
Total stockholders’ equity		310,176			286,091
Total liabilities and stockholders' equity	$	422,396		$	404,136

The accompanying notes are an integral part of these condensed consolidated financial statements.

UFP Technologies, Inc.

Condensed Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net sales	$	110,177		$	100,037		$	215,186		$	197,790
Cost of sales		77,146			70,392			152,072			139,444
Gross profit		33,031			29,645			63,114			58,346
Selling, general & administrative expenses		13,900			12,299			27,812			25,306
Acquisition costs		943			-			943			-
Change in fair value of contingent consideration		238			198			476			3,051
(Gain) loss on sale of property, plant & equipment		(1	)		106			7			107
Operating income		17,951			17,042			33,876			29,882
Interest expense, net		577			1,089			1,208			1,958
Other expenses (income)		2			(20	)		(39	)		56
Income before income tax expense		17,372			15,973			32,707			27,868
Income tax expense		3,820			4,090			6,462			6,246
Net income	$	13,552		$	11,883		$	26,245		$	21,622

Net income per share:
Basic	$	1.77		$	1.56		$	3.43		$	2.84
Diluted	$	1.75		$	1.55		$	3.38		$	2.81
Weighted average common shares outstanding:
Basic		7,672			7,625			7,662			7,608
Diluted		7,753			7,690			7,756			7,689


Comprehensive Income
Net Income	$	13,552		$	11,883		$	26,245		$	21,622
Other comprehensive income:
Foreign currency translation adjustment		(181	)		41			(764	)		534
Other comprehensive gain (loss)		(181	)		41			(764	)		534
Comprehensive income	$	13,371		$	11,924		$	25,481		$	22,156

The accompanying notes are an integral part of these condensed consolidated financial statements.

UFP TECHNOLOGIES, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

Three and Six Months Ended June 30, 2024
											Accumulated
	Common Stock					Additional Paid-in			Retained		Other Comprehensive			Treasury Stock					Total Stockholders'
	Shares			Amount		Capital			Earnings		Income (Loss)			Shares		Amount			Equity
Balance at December 31, 2023		7,640		$	76	$	38,814		$	247,520	$	268			30	$	(587	)	$	286,091
Share-based compensation		48			1		1,512			-		-			-		-			1,513
Exercise of stock options net of shares presented for exercise		4			-		54			-		-			-		-			54
Net share settlement of RSUs		(22	)		-		(4,751	)		-		-			-		-			(4,751	)
Other comprehensive income		-			-		-			-		(584	)		-		-			(584	)
Net income		-			-		-			12,693		-			-		-			12,693
Balance at March 31, 2024		7,670		$	77	$	35,629		$	260,213	$	(316	)		30	$	(587	)	$	295,016
Share-based compensation		2			-		1,736			-		-			-		-			1,736
Exercise of stock options		2			-		53			-		-			-		-			53
Other comprehensive income		-			-		-			-		(181	)		-		-			(181	)
Net income		-			-		-			13,552		-			-		-			13,552
Balance at June 30, 2024		7,674		$	77	$	37,418		$	273,765	$	(497	)		30	$	(587	)	$	310,176

Three and Six Months Ended June 30, 2023

Accumulated

Common Stock

Additional

Paid-in

Retained

Other Comprehensive

Treasury Stock

Total

Stockholders'

Shares

Amount

Capital

Earnings

Income (Loss)

Shares

Amount

Equity

SEC Form 10-Q filed by UFP Technologies Inc.