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UFP Technologies Announces Record Q3 2024 Results

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UFP Technologies (UFPT) reported strong Q3 2024 results with net income increasing 40% to $16.4 million and sales growing 44% to $145.2 million compared to Q3 2023. The company's medical market sales rose 52.2% to $132.6 million, while gross margin improved to 28.6%. Organic sales growth was 9.7%, driven by strength in robotic surgery and infection prevention markets. Recent acquisitions performed above expectations, contributing $0.17 to EPS despite $3.1 million in increased interest expenses. The company's adjusted EBITDA increased 61.4% to $31.2 million in Q3 2024.

UFP Technologies (UFPT) ha riportato risultati solidi per il Q3 2024, con un reddito netto che è aumentato del 40% a 16,4 milioni di dollari e vendite che sono cresciute del 44% a 145,2 milioni di dollari rispetto al Q3 2023. Le vendite nel mercato medico dell'azienda sono salite del 52,2% a 132,6 milioni di dollari, mentre il margine lordo è migliorato al 28,6%. La crescita delle vendite organiche è stata del 9,7%, sostenuta dalla forza nei mercati della chirurgia robotica e della prevenzione delle infezioni. Le recenti acquisizioni hanno superato le aspettative, contribuendo con 0,17 dollari all'EPS nonostante un aumento di 3,1 milioni di dollari nelle spese per interessi. L'EBITDA rettificato dell'azienda è aumentato del 61,4% a 31,2 milioni di dollari nel Q3 2024.

UFP Technologies (UFPT) reportó resultados sólidos para el Q3 de 2024, con un ingreso neto que aumentó un 40% a 16,4 millones de dólares y ventas que crecieron un 44% a 145,2 millones de dólares en comparación con el Q3 de 2023. Las ventas en el mercado médico de la compañía aumentaron un 52,2% a 132,6 millones de dólares, mientras que el margen bruto mejoró al 28,6%. El crecimiento de las ventas orgánicas fue del 9,7%, impulsado por la fortaleza en los mercados de cirugía robótica y prevención de infecciones. Las adquisiciones recientes superaron las expectativas, contribuyendo con 0,17 dólares al EPS a pesar de un aumento de 3,1 millones de dólares en los gastos por intereses. El EBITDA ajustado de la compañía aumentó un 61,4% a 31,2 millones de dólares en el Q3 de 2024.

UFP Technologies (UFPT)는 2024년 3분기 강력한 실적을 보고했으며, 순이익이 40% 증가한 1,640만 달러, 매출이 44% 증가한 1억 4,520만 달러에 달했습니다. 회사의 의료 시장 매출은 52.2% 증가하여 1억 3,260만 달러에 이르렀고, 총 마진은 28.6%로 개선되었습니다. 유기적 매출 성장은 9.7%였으며, 로봇 수술 및 감염 예방 시장에서의 강세에 힘입은 바입니다. 최근 인수는 기대 이상으로 실적을 보이며, 310만 달러의 이자 비용 증가에도 불구하고 EPS에 0.17달러를 기여했습니다. 회사의 조정된 EBITDA는 2024년 3분기 동안 61.4% 증가하여 3,120만 달러에 달했습니다.

UFP Technologies (UFPT) a annoncé des résultats solides pour le T3 2024, avec un bénéfice net en hausse de 40% à 16,4 millions de dollars et des ventes en croissance de 44% à 145,2 millions de dollars par rapport au T3 2023. Les ventes de l'entreprise sur le marché médical ont augmenté de 52,2% pour atteindre 132,6 millions de dollars, tandis que la marge brute s'est améliorée à 28,6%. La croissance des ventes organiques a été de 9,7%, soutenue par la dynamique des marchés de la chirurgie robotisée et de la prévention des infections. Les récentes acquisitions ont surpassé les attentes, contribuant à hauteur de 0,17 dollar au BPA malgré une augmentation des charges d'intérêt de 3,1 millions de dollars. L'EBITDA ajusté de l'entreprise a augmenté de 61,4% pour atteindre 31,2 millions de dollars au T3 2024.

UFP Technologies (UFPT) hat starke Ergebnisse für das 3. Quartal 2024 berichtet, mit einem Nettogewinn von 16,4 Millionen Dollar, was einem Anstieg von 40% entspricht, und einem Umsatzwachstum von 44% auf 145,2 Millionen Dollar im Vergleich zum 3. Quartal 2023. Die Umsätze im medizinischen Markt des Unternehmens stiegen um 52,2% auf 132,6 Millionen Dollar, während die Bruttomarge auf 28,6% verbessert wurde. Das organische Umsatzwachstum betrug 9,7%, angetrieben durch die Stärke in den Märkten für robotergestützte Chirurgie und Infektionsprävention. Die kürzlich getätigten Akquisitionen übertrafen die Erwartungen und trugen trotz eines Anstiegs der Zinsaufwendungen um 3,1 Millionen Dollar 0,17 Dollar zum EPS bei. Das angepasste EBITDA des Unternehmens stieg im 3. Quartal 2024 um 61,4% auf 31,2 Millionen Dollar.

Positive
  • Net income increased 40% to $16.4 million in Q3 2024
  • Sales grew 44% to $145.2 million in Q3 2024
  • Medical market sales increased 52.2% to $132.6 million
  • Organic sales growth of 9.7% in Q3
  • Gross margin improved to 28.6% from 27.5%
  • Adjusted EBITDA increased 61.4% to $31.2 million
Negative
  • Interest expenses increased by $3.1 million due to acquisitions
  • Sales to automotive market declined 21.0%
  • SG&A expenses increased 26.6% to $15.8 million

Insights

UFP Technologies delivered an exceptional quarter with impressive growth metrics. Net income surged 40% to $16.4 million, while revenue jumped 44% to $145.2 million. The medical segment, representing 91% of total sales, grew by 52.2%, showcasing strong market positioning in high-value medical device manufacturing.

Key performance indicators are robust: gross margins improved to 28.6%, adjusted EBITDA increased 61.4% to $31.2 million and organic growth reached 9.7%. Recent acquisitions proved immediately accretive, contributing $0.17 to EPS despite $3.1 million in interest expenses. The company's expansion in the Dominican Republic and strategic acquisitions position it well for continued growth in the medical device manufacturing sector.

The strong performance in robotic surgery and infection prevention markets signals UFPT's strategic positioning in high-growth medical device segments. The company's focus on single-use and single-patient devices aligns perfectly with the increasing demand for minimally invasive procedures and stringent infection control protocols. Their role as a critical supply chain partner to major medical device manufacturers provides stable, recurring revenue streams and high barriers to entry.

The expansion of manufacturing capabilities through acquisitions and the Dominican Republic facility demonstrates a well-executed strategy to meet increasing demand while maintaining cost competitiveness. This positions UFPT to capitalize on the growing trend toward outsourced medical device manufacturing and sterile packaging solutions.

NEWBURYPORT, Mass., Nov. 05, 2024 (GLOBE NEWSWIRE) -- UFP Technologies, Inc. (Nasdaq: UFPT), an innovative designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging and other highly engineered custom products, today reported that net income increased 40% to $16.4 million in the third quarter of 2024 from $11.7 million in the third quarter of 2023. Sales for the third quarter increased 44% to $145.2 million compared to 2023 third quarter sales of $100.8 million. Net income increased 28% to $42.6 million for the nine-month period ended September 30, 2024 from $33.3 million in the same period of 2023. Sales for the nine-month period ended September 30, 2024 increased 21% to $360.4 million compared to sales of $298.6 million in the same period in 2023. Throughout this news release, reference is made to Non-GAAP measures including adjusted operating income, adjusted SG&A, adjusted net income, and adjusted EBITDA. Please see “Non-GAAP Financial Information” at the end of this news release.

“I am extremely pleased with our Q3 results and the performance of our recent acquisitions,” said R. Jeffrey Bailly, Chairman & CEO. “Overall sales grew 44% to $145.2 million. Organic sales grew 9.7%, fueled by continued strength in the robotic surgery and infection prevention markets. Collectively, our four recent acquisitions are operating at volumes well above original expectations. In Q3 they were accretive to EPS by approximately $0.17 after absorbing approximately $3.1 million in increased interest expenses. Gross margins increased to 28.6% despite over $1 million in purchase accounting-related costs associated with our acquisitions. GAAP operating income and net income grew 65% and 40% respectively while adjusted operating income, net income, and EBITDA grew by 69%, 46%, and 61%, respectively.”

“Our strategy of acquiring businesses that increase the value we bring to our market leading client base is proceeding well. With each of our recent acquisitions, we have added capabilities and technologies that support the growth and innovation initiatives of key customers,” Bailly said. “All of these integrations are proceeding well, and we continue to identify new growth opportunities and synergies related to shared best practices. In addition, we continue to expand our Dominican Republic operations to accommodate the growth of our existing business as well as new programs we have won with our low-cost country manufacturing capabilities.”

“Looking forward, we remain bullish about our future,” Bailly said. “We will continue to execute on our growth initiatives, further integrate our recent acquisitions, and strengthen our platform with additional talent and new capabilities that increase our value to customers and position us for future success.”

Financial Highlights for Q3 and YTD 2024

  • Sales for the third quarter increased 44.0% to $145.2 million, from $100.8 million in the same period of 2023.  Year-to-date sales through September increased 20.7% to $360.4 million, from $298.6 million in the same period of 2023. Organic sales growth for the three- and nine-month periods ended September 30, 2024, was 9.7% and 9.1%, respectively.
  • Third quarter sales to the medical market increased 52.2% to $132.6 million. Sales to all other markets decreased 8.2% to $12.5 million, largely due to a 21.0% decline in sales to the automotive market. Year-to-date sales to the medical market increased 23.7% to $318.1 million. Sales to all other markets increased 1.9% to $42.3 million, largely due to a 27.9% increase in sales to the aerospace and defense market.
  • Gross profit as a percentage of sales (“gross margin”) increased to 28.6% for the third quarter, from 27.5% in the same quarter of 2023. Gross margin for the nine-month period ended September 30, 2024, increased to 29.0% from 28.8% in the same period of 2023. Both the three- and nine-month periods of 2024 include approximately $1.1 million in purchase accounting one-time costs associated with the acquisitions.
  • Selling, general and administrative (“SG&A”) expenses increased 26.6% to $15.8 million and 15.4% to $43.6 million for the three- and nine-months periods ended September 30, 2024.    Adjusted SG&A for the third quarter of 2024 increased to $13.8 million, from $11.4 million in the same quarter of 2023. For the nine-month period ended September 30, 2024, Adjusted SG&A increased to $39.4 million from $34.5 million in the same period of 2023.  As a percentage of sales, adjusted SG&A decreased to 9.5% from 11.3% and to 10.9% from 11.5% for the three- and nine-month periods ended September 30, 2024, respectively.
  • Operating income increased 64.6% to $24.8 million, and 30.5% to $58.6 million for the three- and nine-month periods ended September 30, 2024, respectively. Adjusted operating income for the third quarter of 2024 increased 69.3% to $27.7 million from $16.4 million in the same period of 2023. Adjusted operating income for the nine months ended September 30, 2024 increased 26.4% to $65.2 million from $51.6 million in the same period of 2023. .
  • Net income increased 39.9% to $16.4 million, and 27.9% to $42.6 million for the three- and nine-month periods ended September 30, 2024, respectively. Adjusted net income increased 46.5% to $18.6 million in the third quarter of 2024 from $12.7 million in the third quarter of 2023. Adjusted net income increased 24.0% to $47.6 million for the nine months ended September 30, 2024 from $38.4 million in the same period of 2023.
  • Adjusted EBITDA increased 61.4% to $31.2 million in the third quarter of 2024 from $19.3 million in the same period of 2023. Adjusted EBITDA increased 26.0% to $75.9 million for the nine-month period ended September 30, 2024 from $60.2 million in the same period of 2023. 

About UFP Technologies, Inc.
UFP Technologies is an innovative designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products. UFP is an important link in the medical device supply chain and a valued outsource partner to many of the top medical device manufacturers in the world. The Company’s single-use and single-patient devices and components are used in a wide range of medical devices and packaging for minimally invasive surgery, infection prevention, wound care, wearables, orthopedic soft goods, and orthopedic implants.

Consolidated Condensed Statements of Income
(in thousands, except per share data)
(Unaudited)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2024  2023   2024  2023
Net sales$145,165 $100,784  $360,351 $298,575
Cost of sales 103,642  73,034   255,714  212,479
 Gross profit 41,523  27,750   104,637  86,096
SG&A 15,789  12,467   43,601  37,771
Change in fair value of contingent consideration 238  238   714  3,289
Loss on sale of fixed assets -  -   7  108
Acquisition costs 732  -   1,676  -
 Operating income 24,764  15,045   58,639  44,928
Interest expense, net 3,475  933   4,683  2,890
Other expense (income) 70  (29)  30  28
 Income before income taxes 21,219  14,141   53,926  42,010
Income taxes 4,858  2,447   11,320  8,694
 Net income$16,361 $11,694  $42,606 $33,316
Net Income per share$2.13 $1.53  $5.56 $4.37
Net income per diluted share$2.11 $1.52  $5.49 $4.33
Weighted average common shares outstanding 7,674  7,639   7,666  7,619
Weighted average diluted common shares outstanding 7,772  7,709   7,763  7,697
        


Consolidated Condensed Balance Sheets
(in thousands)
(Unaudited)
     
 September 30, December 31, 
  2024  2023 
Assets:    
Cash and cash equivalents$16,356 $5,263 
Receivables, net 89,151  64,449 
Inventories 88,690  70,191 
Other current assets 6,758  4,730 
Net property, plant, and equipment 70,311  62,137 
Goodwill 204,732  113,263 
Intangible assets, net 134,770  64,116 
Other assets 27,740  19,987 
Total assets$638,508 $404,136 
Liabilities and equity:    
Accounts payable$26,268 $22,286 
Current installments, net of long-term debt 12,500  4,000 
Other current liabilities 39,579  31,923 
Long-term debt, excluding current installments 199,500  28,000 
Other liabilities 31,515  31,836 
Total liabilities 309,362  118,045 
Total stockholders' equity 329,146  286,091 
Total liabilities and stockholders' equity$638,508 $404,136 
     

Forward Looking Statements
Certain statements in this press release may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, the reader can identify forward-looking statements by words such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," or similar words. Forward-looking statements relate to expected financial or operating performance and/or future business prospects, events, and plans.  Such statements include, but are not limited to: statements regarding our capital expenditure plans and hiring plans and the anticipated benefits to be realized as a result thereof; statements regarding production expectations and improving our operating efficiencies, customer order activity and capacity; statements regarding human capital; 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.  These risks include, without limitation: risks relating to our ability to realize expected advantages of capital expenditures; risks relating to our ability to maintain increased levels of production, or to continue to increase production rates; risks relating to disruptions and delays in our supply chain; risks relating to onboarding, training and retaining new talent; risks relating to maintaining demand for our products; risks relating to the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions and integration of any acquisition candidates; risks relating to our customer concentration; 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 Securities and Exchange Commission (“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, except as otherwise required by law.

Non-GAAP Financial Information

This news release includes non-generally accepted accounting principles (“GAAP”) performance measures. Management considers Adjusted Operating Income, Adjusted Net Income, EBITDA and Adjusted EBITDA, and Adjusted SG&A non-GAAP measures. The Company uses these non-GAAP financial measures to facilitate management's financial and operational decision-making, including evaluation of the Company’s historical operating results. The Company’s management believes these non-GAAP measures are useful in evaluating the Company’s operating performance and are similar measures reported by publicly listed U.S. competitors, and regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting the Company’s business. By providing these non-GAAP measures, the Company’s management intends to provide investors with a meaningful, consistent comparison of the Company’s performance for the periods presented. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The Company's definition of these non-GAAP measures may differ from similarly titled measures of performance used by other companies in other industries or within the same industry.


 

 

Table 1: Adjusted Operating Income Reconciliation
(in thousands)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2024  2023  2024  2023
Operating Income (GAAP)$24,764 $15,045 $58,639 $44,928
Adjustments:       
Acquisition costs 732  -  1,676  -
Change in fair value of contingent consideration 238  238  714  3,289
Amortization of intangible assets 2,005  1,099  4,203  3,304
Loss on disposal of fixed assets -  -  7  108
Adjusted Operating Income (Non-GAAP)$27,739 $16,382 $65,239 $51,629
        


Table 2: Adjusted Selling General and Administrative Expenses (SG&A)
(in thousands)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2024   2023   2024   2023 
SG&A (GAAP)$15,789  $12,467  $43,601  $37,771 
Adjustments:       
Amortization of intangible assets (2,005)  (1,099)  (4,203)  (3,304)
Adjusted SG&A (Non-GAAP)$13,784  $11,368  $39,398  $34,467 
        


Table 3: Adjusted Net Income and Diluted Common Share Outstanding Reconciliation
(in thousands, except per share data)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2024   2023   2024   2023 
Net income (GAAP)$16,361  $11,694  $42,606  $33,316 
Adjustments (net of taxes):       
Acquisition costs 732   -   1,676   - 
Change in fair value of contingent consideration 238   238   714   3,289 
Loss on disposal of fixed assets -   -   7   108 
Amortization of intangile assets 2,005   1,099   4,203   3,304 
Taxes on adjustments (736)  (331)  (1,634)  (1,659)
Adjusted net income (Non-GAAP)$18,600  $12,700  $47,572  $38,358 
        
Adjusted net income per diluted share outstanding (Non-GAAP)$2.39  $1.65  $6.13  $4.98 
Weighted average diluted common shares outstanding 7,772   7,709   7,764   7,697 
        


Table 4: EBITDA and Adjusted EBITDA Reconciliation
(in thousands)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2024  2023  2024  2023
Net income (GAAP)$16,361 $11,694 $42,606 $33,316
Income tax expense 4,858  2,447  11,320  8,694
Interest expense, net 3,475  933  4,683  2,890
Depreciation 2,022  1,741  5,855  5,142
Amortization of intangible assets 2,005  1,099  4,203  3,304
EBITDA (Non-GAAP)$28,721 $17,914 $68,667 $53,346
Adjustments:       
   Share based compensation 1,540  1,197  4,787  3,450
Acquisition costs 732  -  1,676  -
Change in fair value of contingent consideration 238  238  714  3,289
Loss on disposal of fixed assets -  -  7  108
Adjusted EBITDA (Non-GAAP)$31,231 $19,349 $75,851 $60,193
        
        

Q3 2024 EARNINGS RELEASE

Contact: Ron Lataille
978-234-0926


FAQ

What was UFP Technologies (UFPT) revenue growth in Q3 2024?

UFPT reported Q3 2024 sales of $145.2 million, representing a 44% increase compared to $100.8 million in Q3 2023.

How much did UFPT's medical market sales grow in Q3 2024?

UFPT's medical market sales increased 52.2% to $132.6 million in Q3 2024.

What was UFPT's net income for Q3 2024?

UFPT reported net income of $16.4 million in Q3 2024, a 40% increase from $11.7 million in Q3 2023.

What was UFPT's organic sales growth in Q3 2024?

UFPT achieved organic sales growth of 9.7% in Q3 2024, driven by strength in robotic surgery and infection prevention markets.

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Medical Devices
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