ufpt-20260331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended MARCH 31, 2026

o 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 x No o

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 x No o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

7,736,939 shares of registrant’s Common Stock, $0.01 par value, were outstanding as of April 30, 2026.

UFP Technologies, Inc.

Index


			Page

PART I - FINANCIAL INFORMATION			3
Item 1. Financial Statements			3
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (unaudited)			3
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and March 31, 2025 (unaudited)			4
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026, and March 31, 2025 (unaudited)			5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026, and March 31, 2025 (unaudited)			6
Notes to Interim Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			29
Item 4. Controls and Procedures			29
PART II - OTHER INFORMATION			29
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3. Defaults upon Senior Securities			30
Item 4. Mine Safety Disclosures			30
Item 5. Other Information			30
Item 6. Exhibits			30
Signatures			31

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UFP Technologies, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)


	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	19,976	$	20,301
Receivables, net	98,566		82,914
Inventories	93,983		86,856
Prepaid expenses and other current assets	7,591		5,620
Refundable income taxes	3,990		5,310
Total current assets	224,106		201,001
Property, plant and equipment, net	78,396		79,109
Goodwill	196,648		197,403
Intangible assets, net	137,856		140,849
Non-qualified deferred compensation plan	7,258		7,465
Right of use assets	18,183		18,879
Deferred income taxes	72		-
Equity method investment	6,889		6,927
Other assets	5,276		3,444
Total assets	$	674,684	$	655,077

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	28,433	$	24,289
Accrued expenses	26,219		28,796
Deferred revenue	4,627		4,240
Lease liabilities	5,016		5,037
Income taxes payable	218		—
Current portion of long-term debt	12,500		12,500
Total current liabilities	77,013		74,862
Long-term debt, excluding current installments	125,110		122,955
Deferred income taxes	11,742		9,211
Non-qualified deferred compensation plan	6,743		6,657
Lease liabilities	13,440		13,990
Other liabilities	1,761		3,525
Total liabilities	235,809		231,200
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized; no shares issued	—		—
Common stock, $.01 par value, 20,000,000 shares authorized; 7,766,498 and 7,736,939 shares issued and outstanding, respectively, at March 31, 2026; 7,742,859 and 7,713,300 shares issued and outstanding, respectively, at December 31, 2025	77		77
Additional paid-in capital	45,090		45,865
Retained earnings	392,309		374,814
Accumulated other comprehensive income	1,986		3,708
Treasury stock at cost, 29,559 shares at March 31, 2026 and December 31, 2025	(587)		(587)
Total stockholders’ equity	438,875		423,877
Total liabilities and stockholders' equity	$	674,684	$	655,077

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

Condensed Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	March 31,
	2026		2025
Net sales	$	154,202	$	148,148
Cost of sales	109,840		105,997
Gross profit	44,362		42,151
Selling, general & administrative expenses	21,021		18,725
Acquisition costs	—		37
Change in fair value of contingent consideration	—		263
Gain on disposal of property, plant & equipment	(26)		—
Operating income	23,367		23,126
Interest expense, net	1,737		2,809
Other expense	22		36
Income before income tax expense	21,608		20,281
Income tax expense	4,113		3,097
Net income	$	17,495	$	17,184

Net income per share:
Basic	$	2.27	$	2.24
Diluted	$	2.24	$	2.21
Weighted average common shares outstanding:
Basic	7,721		7,688
Diluted	7,799		7,776


Comprehensive Income
Net income	$	17,495	$	17,184
Other comprehensive (loss) income:
Foreign currency translation (loss) gain	(1,722)		2,325
Other comprehensive (loss) income	(1,722)		2,325
Comprehensive income	$	15,773	$	19,509

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 Months Ended March 31, 2026
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock			Total Stockholders' Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2025	7,713	$	77	$	45,865	$	374,814	$	3,708	30	$	(587)	$	423,877
Share-based compensation	38	—		2,733		—		—		—	—		2,733
Exercise of stock options	3	—		63		—		—		—	—		63
Net share settlement of RSU's	(17)	—		(3,571)		—		—		—	—		(3,571)
Other comprehensive loss	—	—		—		—		(1,722)		—	—		(1,722)
Net income	—	—		—		17,495		—		—	—		17,495
Balance at March 31, 2026	7,737	$	77	$	45,090	$	392,309	$	1,986	30	$	(587)	$	438,875


Three Months Ended March 31, 2025
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders' Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2024	7,677	$	77	$	40,934	$	306,501	$	(4,165)	30	$	(587)	$	342,760
Share-based compensation	42	—		2,212		—		—		—	—		2,212
Exercise of stock options net of shares presented for exercise	6	—		107		—		—		—	—		107
Net share settlement of RSU's	(18)	—		(3,914)		—		—		—	—		(3,914)
Other comprehensive income	—	—				—		2,325		—	—		2,325
Net income	—	—		—		17,184		—		—	—		17,184
Balance at March 31, 2025	7,707	$	77	$	39,339	$	323,685	$	(1,840)	30	$	(587)	$	360,674

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

UFP Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended
	March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	17,495	$	17,184
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,418		2,247
Amortization of intangible assets	2,481		2,387
Gain on disposal of property, plant & equipment	(26)		—
Share-based compensation	2,733		2,212
Change in fair value of contingent consideration	—		263
Equity method investment net earnings	38		(41)
Deferred income taxes	2,565		1,443
Changes in operating assets and liabilities:
Receivables, net	(15,713)		(8,904)
Inventories	(7,215)		(2,204)
Prepaid expenses and other current assets	(1,979)		(790)
Other assets	(929)		(2,334)
Accounts payable	3,929		5,284
Accrued expenses	(2,527)		(1,922)
Deferred revenue	387		124
Income taxes payable	1,530		1,801
Non-qualified deferred compensation plan and other liabilities	(1,983)		(2,940)
Net cash provided by operating activities	3,204		13,810
Cash flows from investing activities:
Additions to property, plant, and equipment	(1,746)		(2,817)



Proceeds from sale of fixed assets	58		—
Net cash used in investing activities	(1,688)		(2,817)
Cash flows from financing activities:
Proceeds from advances on revolving line of credit	33,350		9,000
Payments on revolving line of credit	(28,070)		(12,500)

Principal payments of long-term debt	(3,125)		(3,125)
Payment of contingent consideration	(250)		(250)
Principal payments on finance lease obligations	(16)		(16)
Proceeds from the exercise of stock options	63		107
Payment of statutory withholdings for restricted stock units vested	(3,571)		(3,914)
Net cash used in financing activities	(1,619)		(10,698)
Effect of foreign currency exchange rates on cash and cash equivalents	(222)		283
Net (decrease) increase in cash and cash equivalents	(325)		578
Cash and cash equivalents at beginning of period	20,301		13,450
Cash and cash equivalents at end of period	$	19,976	$	14,028

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

Notes to Interim Condensed Consolidated Financial Statements

(1) Basis of Presentation

The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025, included in the Company's 2025 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission.

The condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, the condensed consolidated statements of comprehensive income for the three months ended March 31, 2026 and 2025, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2026 and 2025, and the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of December 31, 2025 has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm but does not include all of the information and footnotes required for complete annual financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2026.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures.

(2) Acquisitions

Techno Plastics Industries

On July 7, 2025, the Company purchased 100% of the outstanding membership interests of Techno Plastics Industries, Inc. (“TPI”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $4.5 million in cash. The purchase price was subject to adjustment based upon TPI’s estimated working capital at closing. Subsequent purchase accounting opening balance sheet adjustments resulted in a decrease to the purchase price of approximately $0.2 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Securities Purchase Agreement contains representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of five years.

TPI, based in Anasco, Puerto Rico, is a specialty manufacturer of precision thermoplastic injection-molded components.

The following table summarizes the allocation of the total purchase price of approximately $4.3 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):


	Purchase Price Allocation
Cash	$	2,281
Accounts Receivable	1,448
Inventories	1,306
Prepaid expenses	135
PP&E	2,422
Goodwill	1,145
Intangible assets	575
Other assets	18
Total assets acquired	$	9,330
Accounts payable	(429)
Accrued expenses	(1,203)
Deferred revenue	(661)
Deferred income taxes	(461)
Total liabilities assumed	$	(2,754)
Total assets acquired, net of liabilities assumed	6,576
Less: cash acquired	(2,281)
Purchase price, net of cash acquired	$	4,295

Acquisition costs associated with the transaction of approximately $0.2 million were charged to expense during the year ended December 31, 2025. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the condensed consolidated statements of comprehensive income.

None of the goodwill related to the TPI acquisition is expected to be deductible for tax purposes. Goodwill is primarily attributable to the workforce of TPI and the synergies that have been and are expected to further be realized post-acquisition.

Universal Plastics & Engineering Company

On July 2, 2025, the Company purchased 100% of the outstanding membership interests of Universal Plastics & Engineering Company, Inc. (“UNIPEC”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $7.5 million in cash. The purchase price was subject to adjustment based upon UNIPEC’s estimated working capital at closing. Subsequent purchase accounting opening balance sheet adjustments resulted in an increase to the purchase price of approximately $0.1 million. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses, and liabilities. The Securities Purchase Agreement contains representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of seven years.

UNIPEC, headquartered in Rockville, Maryland, develops and manufactures precision thermoformed and heat-sealed polymer components used primarily for shielding batteries in Class III implantable medical devices.

The following table summarizes the allocation of the total purchase price of approximately $7.6 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):


	Purchase Price Allocation
Cash	$	194
Accounts Receivable	676
Inventories	284
PP&E	432
Goodwill	3,163
Intangible assets	3,175
Total assets acquired	$	7,924
Accounts payable	(4)
Accrued expenses	(106)
Total liabilities assumed	$	(110)
Total assets acquired, net of liabilities assumed	7,814
Less: cash acquired	(194)
Purchase price, net of cash acquired	$	7,620

Acquisition costs associated with the transaction of approximately $0.1 million were charged to expense during the year ended December 31, 2025. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the condensed consolidated statements of comprehensive income.

100% of the goodwill related to the UNIPEC acquisition is expected to be deductible for tax purposes. The goodwill is primarily attributable to the workforce of UNIPEC and the synergies that have been and are expected to further be realized post-acquisition.

AJR Specialty Products and AJR Custom Foam Products

On April 25, 2025, the Company purchased 100% of the outstanding membership interests of AJR Specialty Products, LLC, (“AJR Specialty”) and AJR Custom Foam Products, LLC, (“AJR Custom Foam”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $2.8 million in cash. The purchase price was subject to adjustment based upon AJR’s estimated working capital at closing. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses, and liabilities. The Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of seven years.

AJR Specialty and AJR Custom Foam, are both headquartered in St. Charles, IL. AJR Specialty and AJR Custom Foam provide additional capacity in the growing single-use safe patient handling space, as well as additional expertise in specialty fabrics and foam fabrication.

As the revenues, earnings, balance sheet, and pro forma effects of the AJR Specialty and AJR Custom Foam acquisitions are not, and would not have been, material to the results of operations or financial position of the Company, the Company has elected to not disclose substantially all required disclosures of Accounting Standards Codification 805, Business Combinations, for this acquisition.

Pro-forma Statements

The following table contains an unaudited pro-forma consolidated statement of comprehensive income for the three months ended March 31, 2025 as if the collective acquisitions of TPI and UNIPEC had occurred on January 1, 2025 (in thousands):


	Three Months Ended
	March 31, 2025
	(Unaudited)
Sales	$	151,928
Operating Income	$	23,619
Net Income	$	17,555
Earnings per share:
Basic	$	2.28
Diluted	$	2.26

The above unaudited pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have occurred had all 2025 acquisitions occurred as presented. In addition, future results may vary significantly from the results reflected in such pro forma information. Pro-forma adjustments include depreciation adjustments on fixed asset step up/down; inventory step-up; amortization of intangibles; and estimated interest expense.

(3) Equity Method Investment

On August 23, 2024, in conjunction with the acquisition of AQF, the Company became 50% owners of the equity interest in AQF Asia PTE Ltd., located in Singapore (“AQF Asia”). While the Company owns 50% of the equity interest of AQF Asia and does have significant influence over the entity, the Company has concluded that it does not have control of AQF Asia due to certain veto rights held by the other joint venture partner with regards to management decision making.

As a result, the Company accounts for its ownership interest in AQF Asia following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at fair value and then increased or decreased by recording its percentage of gain or loss in the consolidated statement of comprehensive income and a corresponding change to the carrying value of the asset. The initial fair value of this equity method investment as of August 2024 was approximately $7.0 million. The following table provides a roll-forward of the equity method investment for the three-month periods ended March 31, 2026 and 2025 (in thousands):


	Three Month Periods Ended
	March 31,
	2026		2025
Equity Method Investment - beginning of period	$	6,927	$	6,808
50% share of AQF Asia net (loss) income	(8)		71
Amortization of basis differences	(30)		(30)
Equity Method Investment - end of period	$	6,889	$	6,849

(4) Revenue Recognition

The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC 606 which include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the

contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. The Company recognizes a significant portion of its product sales upon shipment. For tooling and machinery sales, the Company recognizes revenue primarily upon manufacture of the customer's product using the applicable tooling or machinery. If customer acceptance is stipulated within the contract, the Company recognizes revenue from the sale of tooling and machinery when the acceptance is received. The Company recognizes revenue from engineering services, which are primarily product development services, as the services are performed or as otherwise determined based on the substance of the agreement.

Standard payment terms are net 30 days unless contract terms state otherwise. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or after performance, resulting in a significant financing component. The Company does not assess whether a significant financing component exists if the period between when it performs its obligations under the contract and when the customer pays is one year or less. The Company accepts sales returns from customers for defective goods, such amounts being immaterial. The Company warrants that goods sold to customers will conform to agreed-upon specifications and that services will be performed in a reasonable and workmanlike manner. The Company does not provide a service as part this assurance warranty and its customers do not have the opportunity to purchase a warranty separately. Accordingly, any warranty activities are not considered to be a separate performance obligation. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale not as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the goods and are expensed when revenue is recognized. Variable consideration to be included in the transaction price is estimated using either the expected value method or the most likely method based on facts and circumstances. Variable consideration is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company has elected to not disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations, as the Company’s contracts have an original expected duration of one year or less, or revenue has been recognized at the amount for which the Company has the right to invoice for engineering services performed.

Disaggregated Revenue

The following table presents the Company’s revenue disaggregated by the major types of goods and services sold to the Company’s customers (in thousands). (See Note 13 for further information regarding net sales by market):


	Three Months Ended
	March 31,
Net sales of:	2026		2025
Products	$	151,829	$	145,100
Tooling and Machinery	980		1,498
Engineering services	1,393		1,550
Total net sales	$	154,202	$	148,148

Contract Balances

The timing of revenue recognition may differ from the time of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has contract liabilities included within “deferred revenue” on the condensed consolidated balance sheets.

The following table presents opening and closing balances of contract liabilities for the three-month periods ended March 31, 2026 and 2025 (in thousands):


	Contract Liabilities
	Three Month Periods Ended March 31,
	2026		2025
Deferred revenue - beginning of period	$	4,240	$	4,667
Increases due to consideration received from customers	1,865		2,137
Revenue recognized	(1,478)		(2,010)
Deferred revenue - end of period	$	4,627	$	4,794

Revenue recognized during the three months ended March 31, 2026 and 2025 from amounts included in deferred revenue at the beginning of the period were approximately $1.1 million and $1.5 million, respectively.

When invoicing occurs after revenue recognition, the Company has contract assets, which are included within “receivables, net” on the condensed consolidated balance sheets.

The following table presents opening and closing balances of contract assets for the three-month periods ended March 31, 2026 and 2025 (in thousands):


	Contract Assets
	Three Month Periods Ended March 31,
	2026		2025
Unbilled Receivables - beginning of period	$	391	$	192
Increases due to revenue recognized, not invoiced to customers	1,072		1,094
Decreases due to customer invoicing	(1,090)		(637)
Unbilled Receivables - end of period	$	373	$	649

(5) Supplemental Cash Flow Information

Supplemental cash flow information consists of the following (in thousands):


	Three Months Ended
	March 31,
	2026		2025
Cash paid for:
Interest	$	1,709	$	2,796
Income taxes, net of refunds	10		(468)

Non-cash investing and financing activities:
Capital additions accrued but not yet paid	$	183	$	89

(6) Receivables and Allowance for Credit Losses

Receivables consist of the following (in thousands):


	March 31, 2026		December 31, 2025		December 31, 2024
Accounts receivable–trade	$	99,423	$	83,809	$	85,562
Less allowance for credit losses	(857)		(895)		(885)
Receivables, net	$	98,566	$	82,914	$	84,677

The Company is exposed to credit losses primarily through sales of products and services. The Company’s expected loss allowance methodology is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers' trade accounts receivables. The estimate of the amount of accounts receivable that may not be collected is based on the aging of the accounts receivable balances as well as the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected for the three months ended March 31, 2026 and 2025 (in thousands):


	Allowance for Credit Losses
	Three Months Ended March 31,
	2026		2025
Allowance - beginning of period	$	895	$	885
(Adjustment) provision for expected credit losses	(38)		157

Allowance - end of period	$	857	$	1,042

(7) Fair Value of Financial Instruments

Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC 820, Fair Value Measurements and Disclosures, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:

Level 1

Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2

Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3

Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following table presents the fair value and hierarchical levels, for financial assets that are measured at fair value on a recurring basis (in thousands):


	March 31, 2026		December 31, 2025
Level 3
Purchase price contingent consideration:
Accrued contingent consideration (earn-out)	$	5,000	$	5,250
Present value of non-competition payments	3,395		5,001
Total contingent consideration	$	8,395	$	10,251

In connection with the acquisitions of Welch Fluorocarbon, Inc., (“Welch”) and Marble Medical, Inc., (“Marble”) in 2024, and DAS Medical in 2021, the Company is required to make contingent payments, subject to the entities achieving certain financial performance thresholds. The total potential contingent consideration payments for the Welch, Marble and DAS Medical acquisitions were $6 million, $0.5 million and $20 million, respectively, as of each acquisition date. The fair value of the liability for the contingent consideration payments recognized upon the acquisition as part of the purchase accounting opening balance sheets totaled approximately $0.8 million, $0.4 million and $5.2 million for the Welch, Marble and the DAS Medical acquisitions, respectively, and was estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the initial calculation were management’s financial forecasts, a discount rate and various volatility factors. The ultimate settlement of contingent consideration could deviate from current estimates based on the actual results of these financial measures. Contingent consideration is considered to be a Level 3 financial liability that is re-measured each reporting period. The Company paid $0, $0.25 million, and $0 for contingent consideration payments during the three months ended March 31, 2026 to Welch, Marble, and DAS Medical, respectively. The contingent consideration for the Welch acquisition has no fair value as of March 31, 2026, as Welch did not achieve the EBITDA targets for the years ended December 31, 2024, and 2025. The Company has also determined that it is not probable that Welch will achieve the EBITDA targets for the year ended December 31, 2026. The contingent consideration for the Marble acquisition is $0 as of March 31, 2026. The contingent consideration for the DAS Medical acquisition has a fair value of $5.0 million as of March 31, 2026, and is included within accrued expenses on the face of the condensed consolidated balance sheets and was paid in May 2026. Any change in fair value of contingent consideration for the acquisitions is included in change in fair value of contingent consideration in the condensed consolidated statements of comprehensive income.

The Company entered into Non-Competition Agreements with certain previous owners of DAS Medical and Advant Medical which includes an aggregate of $10.0 million in payments to certain previous owners of DAS Medical over a ten-year period, and an aggregate of €0.4 million in payments to the previous owner of Advant Medical over a three-year period. The Company paid non-competition payments of $1.7 million and $0 during the three months ended March 31, 2026 to DAS Medical and Advant Medical, respectively. The non-competition contingent consideration present value for DAS Medical was approximately $3.2 million at March 31, 2026, and is included within accrued expenses and long-term liabilities with the condensed consolidated balance sheets. The non-competition contingent consideration present value for Advant Medical was approximately $0.2 million at March 31, 2026, and is included within accrued expenses on the face of the condensed consolidated balance sheets. These liabilities are considered to be Level 3 financial liabilities that are re-measured each reporting period.

The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, that are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.

(8) Share-Based Compensation

Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant).

The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements within the Annual Report on Form 10-K for the year ended December 31, 2025. The compensation cost charged against income from those plans is included in selling, general & administrative expenses as follows (in thousands):


	Three Months Ended
	March 31,
Share-based compensation related to:	2026		2025
Common stock grants	$	200	$	100
Stock option grants	—		108
Restricted Stock Unit Awards ("RSUs")	2,533		2,004
Total share-based compensation	$	2,733	$	2,212

The total income tax benefit recognized in the condensed consolidated statements of comprehensive income for share-based compensation arrangements was approximately $0.9 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.

Common Stock Grants

The compensation expense for common stock granted during the three months ended March 31, 2026, was determined based on the market price of the shares on the date of grant.

Stock Option Grants

The following is a summary of stock option activity under all plans for the three months ended March 31, 2026:


	Shares Under Options	Weighted Average Exercise Price (per share)		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2025	61,969	$	72.80
Exercised	(2,864)	22.02
Outstanding at March 31, 2026	59,105	$	75.26	4.03	$	7,193
Exercisable at March 31, 2026	59,105	$	75.26	4.03	$	7,193
Vested and expected to vest at March 31, 2026	59,105	$	75.26	4.03	$	7,193

During the three months ended March 31, 2026 and 2025, the total intrinsic value of all options exercised (i.e., the difference between the market price and the price paid by the employees to exercise the options) was approximately $0.5 million and $1.5 million, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $0.1 million and $0.3 million, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the three months ended March 31, 2026, no shares were surrendered. During the three months ended March 31, 2025, 748 shares were surrendered at an average market price of $282.42.

Restricted Stock Unit awards

The following table summarizes information about RSU activity during the three months ended March 31, 2026:


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2025	79,601	$	175.06
Awarded	43,118	267.56
Shares vested	(38,215)	180.95
Shares forfeited	(411)	218.42
Outstanding at March 31, 2026	84,093	$	219.60

At the Company’s discretion, upon vesting, RSU holders are given the option to net-share settle to cover the required minimum withholding tax and the remaining amount is converted into the equivalent number of common shares and issued to the RSU holder. During the three months ended March 31, 2026 and 2025, 17,440 and 18,142 shares were surrendered at an average market price of $204.76 and $215.60, respectively.

As of March 31, 2026, the Company had approximately $14.7 million of unrecognized compensation expense that is expected to be recognized over a period of 3 years.

(9) Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or net realizable value, and consist of the following at the stated dates (in thousands):


	March 31, 2026		December 31, 2025
Raw materials	$	71,600	$	68,075
Work in process	7,154		3,903
Finished goods	15,229		14,878
Total inventory	$	93,983	$	86,856

(10) Property, Plant and Equipment

Property, plant, and equipment consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Land and improvements	$	5,871	$	5,900
Buildings and improvements	38,534		38,602
Leasehold improvements	14,471		12,642
Machinery & equipment	74,849		74,005
Furniture, fixtures, computers & software	10,754		10,361
Construction in progress	9,546		10,941
Property, plant and equipment	$	154,025	$	152,451
Accumulated depreciation and amortization	(75,629)		(73,342)
Net property, plant and equipment	$	78,396	$	79,109

(11) Leases

The Company has operating and finance leases for offices, manufacturing plants, vehicles and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right of use (“ROU”) assets or lease liabilities. These are expensed as incurred and recorded as variable lease expense. The Company determines if an arrangement is a lease at the inception of a contract. Operating and finance lease ROU assets and operating and finance lease liabilities are stated separately in the condensed consolidated balance sheets.

ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments pursuant to the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company's assumed lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets are also adjusted for any deferred or accrued rent. As the Company's leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

ROU assets and lease liabilities consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Operating lease ROU assets	$	18,166	$	18,847
Finance lease ROU assets	17		32
Total ROU assets	$	18,183	$	18,879

Operating lease liabilities - current	$	4,999	$	5,005
Finance lease liabilities - current	17		32
Total lease liabilities - current	$	5,016	$	5,037

Operating lease liabilities - long-term	$	13,439	$	13,988
Finance lease liabilities - long-term	1		2
Total lease liabilities - long-term	$	13,440	$	13,990

The components of lease costs for the three months ended March 31, 2026 and 2025 consist of the following (in thousands):


	Three Months Ended March 31,
	2026			2025
Lease Cost:
Finance lease cost:
Amortization of right of use assets	$	15		$	15
Interest on lease liabilities	—			—
Operating lease cost	1,410			1,097
Variable lease cost	207			79
Short-term lease cost	48			51
Total lease cost	$	1,680		$	1,242

Weighted-average remaining lease term (years):
Finance	1.08			1.29
Operating	5.55			4.03
Weighted-average discount rate:
Finance	2.26		%	2.12		%
Operating	5.53		%	4.97		%

The components of lease income were as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Lease income:
Operating lease income	$	86	$	84
Total lease income	$	86	$	84

The following table provides additional details of cash flow information related to the Company's leases (in thousands):


	Three Months Ended March 31,
	2026		2025
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	1,282	$	1,086
Financing cash flows from finance leases	16		16
Total operating cash flows	$	1,298	$	1,102

Supplemental non-cash information:
ROU assets obtained in exchange for new lease liabilities	$	463	$	—

Maturities of lease liabilities and receipts as of March 31, 2026 are as follows (in thousands):


	Lease Liabilities				Lease Receipts
	Operating		Finance		Operating
Remainder of 2026	4,020		17		268
2027	5,192		1		363
2028	4,018		—		372
2029	3,155		—		—
2030	1,924		—		—
Thereafter	3,014		—		—
Total lease payments	21,323		18		1,003
Less: Interest	(2,885)		—
Present value of lease liabilities	$	18,438	$	18

(12) Income Per Share

Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.

The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):


	Three Months Ended
	March 31,
	2026	2025
Basic weighted average common shares outstanding	7,721	7,688
Weighted average common equivalent shares due to dilutive restricted stock, stock options and RSUs	78	88
Diluted weighted average common shares outstanding	7,799	7,776

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would be antidilutive. For each of the three months ended March 31, 2026 and 2025, 2,958 shares were excluded from the computation of diluted earnings per share for this reason.

(13) Segment Data

The Company consists of a single operating and reportable segment and uses consolidated net income as its measure of segment profit and loss. The chief operating decision maker of the Company is the Chairman and Chief Executive Officer (CEO). The Chairman and CEO reviews consolidated operating results to make decisions about how to allocate resources to the segment and assess its performance as a whole. The Company has identified the following

significant segment expenses (SSEs) due to their relevance to the overall consolidated operating results (in thousands):


	Three Months Ended March 31,
	2026		2025
Net sales from external customers	$	154,202	$	148,148

Significant segment expenses:
Materials	59,068		61,366
Salaries and Benefits	50,372		43,962
Depreciation and amortization	4,899		4,634
Interest expense, net	1,737		2,809
Other segment items (a)	16,518		15,096
Income before income tax provision	21,608		20,281
Income tax provision	4,113		3,097

Net income	$	17,495	$	17,184

Total assets (b)	$	674,684

(a)Other segment items include (production overhead, stock compensation, professional fees, and other SG&A expenses).

(b)See condensed consolidated balance sheet for details.

Information about Geographic Areas

Net sales shipped to customers outside of the United States comprised approximately 18.5% of the Company’s consolidated net sales for the three months ended March 31, 2026, respectively. Net sales shipped to customers outside of the United States comprised approximately 17.3% of the Company’s consolidated net sales for the three months ended March 31, 2025, respectively. Approximately 36.0% of all long-lived assets are located outside of the United States as of March 31, 2026.

Information about Major Customers

Net sales to two customers comprised approximately 24.8% and 22.1%, respectively, of the Company’s consolidated net sales for the three months ended March 31, 2026. Net sales to two customers comprised approximately 24.0% and 21.4%, respectively, of the Company’s consolidated net sales for the three months ended March 31, 2025.

On March 31, 2026, two customers represented approximately 29.5% and 12.6%, respectively of the Company's gross accounts receivable. On December 31, 2025, one customer represented approximately 32.1% of the Company's gross accounts receivable.

The Company’s products are primarily sold to customers within the Medical and Non-medical markets. Sales by market for the three months ended March 31, 2026 and 2025 are as follows (in thousands):


	Three Months Ended March 31,
	2026			2025
Market	Net Sales		%	Net Sales		%

Medical	$	143,378	93.0%	$	135,416	91.4%
Non-medical	10,824		7.0%	12,732		8.6%
Net Sales	$	154,202	100.0%	$	148,148	100.0%

(14) Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2026 are as follows (in thousands):


	Goodwill

December 31, 2025	$	197,403
Foreign currency translation	(755)
March 31, 2026	$	196,648

The carrying values of the Company’s definite lived intangible assets as of March 31, 2026 are as follows (in thousands, except for weighted-average amortization period):


March 31, 2026	Customer List		Intellectual Property		Tradename & Brand		Non- Compete		Total
Weighted-average amortization period (years)	20.0		12.3		13.3		8.3
Gross amount	$	133,999	$	28,703	$	1,079	$	6,931

SEC Form 10-Q filed by UFP Technologies Inc.