UFP Technologies Announces Record Q1 2021 Results

Rhea-AI Summary

UFP Technologies (Nasdaq: UFPT) reported Q1 2021 net income of $4.2 million ($0.55/share), up from $3.9 million ($0.52/share) in Q1 2020. Sales rose 0.7% to $48.6 million, with a notable performance in Aerospace & Defense and Consumer markets, growing 68% and 62%, respectively. Medical sales, however, fell by 11.5%. Gross profit margin decreased to 25.9%, while SG&A expenses dropped to 15.0%. The company is optimistic about recovery as elective procedures resume and is focused on strategic initiatives for growth.

Positive

• Net income increased to $4.2 million compared to $3.9 million in Q1 2020.
• Sales rose to $48.6 million, marking the first revenue increase since the pandemic began.
• Strong growth in Aerospace & Defense and Consumer markets at 68% and 62%, respectively.
• Product Development business grew 51% YoY, indicating promising future revenue.

Negative

• Medical sales still below pre-COVID levels, down 11.5% compared to the previous quarter.
• Gross profit percentage decreased to 25.9% from 26.6% in Q1 2020.

NEWBURYPORT, Mass., May 04, 2021 (GLOBE NEWSWIRE) -- UFP Technologies, Inc. (Nasdaq: UFPT), an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market, today reported net income of $4.2 million or $0.55 per diluted common share outstanding for its first quarter ended March 31, 2021, compared to net income of $3.9 million or $0.52 per diluted common share outstanding for the same quarter in 2020. Sales for the first quarter were $48.6 million compared to 2020 first quarter sales of $48.3 million.

"I am very pleased with our Q1 results for a number of reasons,” said R. Jeffrey Bailly, Chairman & CEO. “Our medical market showed notable progress versus the last two quarters of 2020. While medical sales are still below where they were before the Covid pandemic, they improved from a 19.4% decrease in Q4 2020 to an 11.5% decrease in Q1, as patients are again beginning to schedule the elective procedures that are key to our overall medical strategy. Another positive sign is that our Product Development business grew 51% vs. the prior year, which bodes well for future medical manufacturing revenue.”

“Overall, revenue for the quarter exceeded prior year results for the first time since the pandemic began,” Bailly said. “We saw especially strong growth in the Aerospace & Defense and Consumer markets, 68% and 62%, respectively, as we ramped up production on several important new programs.”

“Along with the revenue increase, our reduced cost structure generated improved bottom line results,” Bailly added. “This impact will be amplified as the pandemic diminishes and higher-gross-margin medical sales rebound. In addition, we continued to make progress on our strategic initiatives related to acquisitions, low-cost country manufacturing, and efficiency improvement, all of which leave us bullish about the future.”

Financial Highlights for Q1 2021

• Overall sales grew 0.7% to $48.6 million.
• Sales to the medical market declined 11.5%. Sales to the aerospace & defense and automotive markets increased 68.2% and 1.0%, respectively. All other sales (consumer, electronics, and industrial) increased 31.5%.
• Gross profit as a percentage of sales decreased to 25.9% compared to 26.6% in the first quarter of 2020.
• Selling, general and administrative expenses ("SG&A") as a percentage of sales was 15.0% compared to 16.1% in the first quarter of 2020.
• Operating income was $5.3 million compared to $5.1 million in the first quarter of 2020.
• Net income was $4.2 million compared to $3.9 million in the first quarter of 2020.

About UFP Technologies, Inc.
UFP Technologies is an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market. Utilizing highly specialized foams, films, and plastics, we convert raw materials through laminating, molding, radio frequency welding and fabricating techniques. We are diversified by also providing highly engineered solutions to customers in the aerospace & defense, automotive, consumer, electronics, and industrial markets.

Forward Looking Statements
This news release contains statements relating to expected financial performance and/or future business prospects, events and plans that are forward-looking statements. Such statements include, but are not limited to: statements regarding the anticipated effects on us of the COVID-19 pandemic, including with respect to demand for our products; statements regarding anticipated trends in the different markets in which we compete and expectations regarding customer demand; expectations regarding our liquidity and business opportunities; statements about our growth potential and strategies for growth; and any statements implying that we may be able to sustain or increase sales, earnings and earnings per share or sales, earnings and earnings per share growth rates. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could adversely affect our business and prospects, and otherwise cause actual results to differ materially from those anticipated by such forward-looking statements, or otherwise, including without limitation: the severity and duration of the COVID-19 pandemic and its impact on the markets in which we participate, including its impact on our customers, suppliers and employees, as well as the U.S. and worldwide economies; the timing, scope and effect of further governmental, regulatory, fiscal, monetary and public health responses to the COVID-19 pandemic; risks relating to decreased, including substantially decreased, demand for our products; risks relating to the potential closure of any of our facilities or the unavailability of key personnel or other employees; risks that our inventory or cash reserves may be insufficient; risks relating to the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions and integration of any acquisition candidates; risks and uncertainties associated with increasing sales, earnings and earnings per share, as well as other risks and uncertainties that are detailed in the documents we file with the SEC. Accordingly, actual results may differ materially. Readers are referred to the documents we file with the SEC, specifically the last report on Form 10-K. The forward-looking statements contained herein speak only of our expectations as of the date of this press release. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based.

Consolidated Condensed Statements of Income
(in thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31
		2021				2020
Net sales	$	48,599			$	48,277
Cost of sales		35,990				35,454
Gross profit		12,609				12,823
SG&A		7,309				7,752
Gain on sale of fixed assets		-				(4	)
Operating income		5,300				5,075
Interest expense, net		16				16
Other (income) expense		(10	)			327
Income before income taxes		5,294				4,732
Income taxes		1,131				841
Net income	$	4,163			$	3,891
Net income per share	$	0.55			$	0.52
Net income per diluted share	$	0.55			$	0.52
Weighted average common shares outstanding		7,507				7,457
Weighted average diluted common shares outstanding		7,570				7,538

Consolidated Condensed Balance Sheets
(in thousands)
(Unaudited)

	March 31,				December 31,
		2021				2020
Assets:
Cash and cash equivalents	$	25,377			$	24,234
Receivables, net		30,018				26,428
Inventories		20,016				18,642
Other current assets		2,630				2,560
Net property, plant, and equipment		53,649				53,755
Goodwill		51,838				51,838
Intangible assets, net		19,404				19,718
Other assets		6,248				6,029
Total assets	$	209,180			$	203,204
Liabilities and equity:
Accounts payable		5,977				4,121
Other current liabilities		10,691				11,016
Other liabilities		11,693				11,174
Total liabilities		28,361				26,311
Total stockholders' equity		180,819				176,893
Total liabilities and stockholders' equity	$	209,180			$	203,204

Contact: Ron Lataille
978-234-0926

FAQ

What were UFP Technologies' Q1 2021 earnings results?

In Q1 2021, UFP Technologies reported a net income of $4.2 million, or $0.55 per diluted share.

How did UFP Technologies' sales perform in Q1 2021?

Sales increased 0.7% to $48.6 million in Q1 2021 compared to Q1 2020.

What was the change in medical sales for UFP Technologies in Q1 2021?

Medical sales declined by 11.5% in Q1 2021 compared to the previous quarter.

What markets showed growth for UFP Technologies in Q1 2021?

The Aerospace & Defense and Consumer markets grew by 68% and 62%, respectively.

What is the outlook for UFP Technologies following Q1 2021 results?

The company remains optimistic about recovery as elective procedures resume and is focusing on strategic growth initiatives.