NEWBURYPORT, Mass., Feb. 21, 2024 (GLOBE NEWSWIRE) — UFP Technologies, Inc. (NASDAQ:UFPT), a designer and custom manufacturer of engineered solutions primarily for the medical market, today reported net income of $44.9 million or $5.83 per diluted common share outstanding for its year ended December 31, 2023, compared to net income of $41.8 million or $5.45 per diluted common share outstanding for 2022. Net sales for 2023 were $400.1 million, 13.1% higher than 2022 sales of $353.8 million.
For its fourth quarter ended December 31, 2023, the Company reported net income of $11.6 million or $1.51 per diluted common share outstanding, compared to $8.5 million or $1.10 per diluted common share outstanding in the same period of 2022. Sales for the fourth quarter 2023 were $101.5 million, 11.2% higher than 2022 fourth quarter sales of $91.2 million.
“I am very pleased with our fourth quarter and full year 2023 results,” said R. Jeffrey Bailly, Chairman & CEO. “Sales for the quarter and the year grew 11.2% and 13.1%, respectively. Organic growth for the year was even stronger at 15.7% and adjusted net income per diluted share for the fourth quarter and full year grew by an impressive 33.0% and 41.0%, respectively.”
“We continue to make great progress strengthening our platform and further integrating our three most recent acquisitions,” Bailly added. “We’ve captured synergies by sharing best practices, moving business to best-fit manufacturing locations, and standardizing systems for information technology, quality, and safety. We have also increased our production capacity significantly, adding new clean rooms in Ireland, Costa Rica, and most notably the Dominican Republic. In that location, our investments in infrastructure, equipment, and talent have increased our capacity to service robotic surgery customers by 70%. During this process, we added 450 new associates, primarily direct labor and technical resources.”
“Our revenue growth was strong despite some softening in demand in the latter part of the year due to excess inventory held by some of our customers,” Bailly said. “However, they are indicating that the rightsizing of inventory will be short-term in nature and releases will return to normal levels in the near future. Given our growing pipeline of new opportunities, ample capacity for internal growth, and a strong balance sheet with available capital for new acquisitions, we remain very bullish about our future.”
Financial Highlights:
Sales for the fourth quarter increased 11.2% to $101.5 million, from $91.2 million in the same period of 2022. Sales for the full year of 2023 increased 13.1% to $400.1 million from $353.8 million in the same period of 2022.
Fourth quarter MedTech sales increased 14.9% to $89.3 million. Sales to all other markets decreased 9.5% to $12.2 million. Full year MedTech sales increased 21.0% to $346.4 million while sales to all other markets decreased 20.6% to $53.7 million.
Gross profit as a percentage of sales (“gross margin”) increased to 25.7% for the fourth quarter, from 25.5% in the same quarter of 2022. Gross margin for the full year of 2023 increased to 28.1%, from 25.5% in the same period of 2022.
Selling, general and administrative expenses (“SG&A”) for the fourth quarter increased 10.3% to $13.1 million compared to $11.9 million in the same quarter of 2022. Full year 2023 SG&A increased 11.1% to $50.9 million, from $45.8 million in the same period of 2022. As a percentage of sales, SG&A decreased to 12.7% in 2023 from 12.9% in 2022.
For the fourth quarter, adjusted operating income increased 14.2% to $13.0 million, from $11.4 million in the same quarter of 2022. Full year 2023 adjusted operating income increased 37.9% to $61.3 million, from $44.5 million in the same period of 2022. See the reconciliation provided in Table 1. Adjusted Operating Income is a financial measure not presented in accordance with generally accepted accounting principles (“GAAP”) (a “Non-GAAP Financial Measure”). Please see “Non-GAAP Financial Information” at the end of this news release.
Adjusted net income in the fourth quarter increased 33.5% to $11.8 million, from $8.8 million in the same period of 2022. Full year 2023 adjusted net income increased 41.6% to $47.7 million, from $33.7 million in the same period of 2022. See the reconciliation provided in Table 2. Adjusted Net Income is a financial measure not presented in accordance with generally accepted accounting principles (“GAAP”) (a “Non-GAAP Financial Measure”). Please see “Non-GAAP Financial Information” at the end of this news release.
Adjusted EBITDA for the year ended December 31, 2023, increased 29.6% to $77.3 million from $59.6 million. See the reconciliation provided in Table 3. Adjusted EBITDA is a Non-GAAP Financial Measure. Please see “Non-GAAP Financial Information” at the end of this news release.
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
December 31
Twelve Months Ended
December 31
2023
2022
2023
2022
Net sales
$
101,498
$
91,237
$
400,072
$
353,792
Cost of sales
75,369
67,957
287,847
263,532
Gross profit
26,129
23,280
112,225
90,260
Selling, general and administrative expenses
13,118
11,888
50,889
45,796
Acquisition Costs
–
–
–
1,027
Change in fair value of contingent consideration
238
489
3,527
9,837
Gain on sale of Molded Fiber
–
(29
)
–
(15,651
)
Loss (gain) on disposal of fixed assets
37
56
145
(6,149
)
Operating income
12,736
10,876
57,664
55,400
Interest expense, net
(755
)
(872
)
(3,645
)
(2,763
)
Other (expense) income
(89
)
(233
)
(117
)
81
Income before income tax expense
11,892
9,771
53,902
52,718
Income tax expense
285
1,309
8,978
10,929
Net income
$
11,607
$
8,462
$
44,924
$
41,789
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