(

)

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

-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, 2019,

included in the Company's

2019

Annual Report on Form

-K, as filed with the Securities and Exchange Commission.

The condensed consolidated balance sheets as of

March 31, 2020

and

December 31, 2019,

the condensed consolidated statements of income for the

three

-month periods ended

March 31, 2020

and

2019,

the condensed consolidated statements of stockholders’ equity for the

three

-month periods ended

March 31, 2020

and

2019,

and the condensed consolidated statements of cash flows for the

three

-month periods ended

March

31,

2020

and

2019

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, 2019

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 audited 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

-month period ended

March 31, 2020

are

not

necessarily indicative of the results to be expected for the entire fiscal year ending

December 31, 2020.

Recent Accounting Pronouncements

June 2016,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

2016

13,

Financial Instruments – Credit Losses (Accounting Standards Codification (ASC)

326

)

. The Company adopted ASC

326

January 1, 2020.

See Note

for further details

January 2017,

the FASB issued ASU

2017

04,

Intangibles—Goodwill and Other (ASC

350

), Simplifying the Test for Goodwill Impairment

. The guidance removes Step

of the goodwill impairment test and eliminates the need to determine the fair value of individual assets and liabilities to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value,

not

to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance will be applied prospectively and is effective for annual and interim goodwill impairment tests in fiscal years beginning after

December

15,

2019.

The Company adopted ASC

350

January 1, 2020

and it did

not

have a material impact on its financial condition or results of operations.

Revisions

Certain revisions have been made to the

December 31, 2019

Condensed Consolidated Balance Sheet to conform to the current year presentation relating to a reclassification of long-term operating lease liabilities to current operating lease liabilities. The reclassification resulted in an increase of current operating lease liabilities of

$476

thousand and a decrease of long-term operating lease liabilities of

$476

thousand. These revisions had

impact on previously reported earnings, net income or cash flows and are deemed immaterial to the previously issued financial statements.