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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 SEPTEMBER 30, 2025
OR
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 | x | Accelerated filer | o
Non-accelerated filer | o | Smaller reporting company | o
|  |  | Emerging growth company | o

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
7,712,444 shares of registrant’s Common Stock, $0.01 par value, were outstanding as of November 5, 2025.

UFP Technologies, Inc.
Index

| Page
PART I - FINANCIAL INFORMATION | 3
Item 1. Financial Statements | 3
Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (unaudited) | 3
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (unaudited) | 4
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (unaudited) | 5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025, and September 30, 2024 (unaudited) | 6
Notes to Interim Condensed Consolidated Financial Statements | 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 29
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 35
Item 4. Controls and Procedures | 35
PART II - OTHER INFORMATION | 35
Item 1. Legal Proceedings | 35
Item 1A. Risk Factors | 35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 35
Item 3. Defaults upon Senior Securities | 36
Item 4. Mine Safety Disclosures | 36
Item 5. Other Information | 36
Item 6. Exhibits | 36
Signatures | 37

PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
UFP Technologies, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)

| September 30, 2025 |  | December 31, 2024
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 18,226 |  |  | $ | 13,450 |
Receivables, net | 85,176 |  |  | 84,677 |
Inventories | 86,149 |  |  | 87,536 |
Prepaid expenses and other current assets | 6,604 |  |  | 4,303 |
Refundable income taxes | 1,816 |  |  | 4,979 |
Total current assets | 197,971 |  |  | 194,945 |
Property, plant and equipment, net | 77,540 |  |  | 70,564 |
Goodwill | 197,302 |  |  | 189,657 |
Intangible assets, net | 143,261 |  |  | 144,252 |
Non-qualified deferred compensation plan | 7,333 |  |  | 6,174 |
Right of use assets | 18,928 |  |  | 16,148 |
Deferred income taxes | 72 |  |  | - |
Equity method investment | 6,941 |  |  | 6,808 |
Other assets | 3,473 |  |  | 447 |
Total assets | $ | 652,821 |  |  | $ | 628,995 |
Liabilities and Stockholders’ Equity |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 29,442 |  |  | $ | 24,269 |
Accrued expenses | 30,280 |  |  | 30,410 |
Deferred revenue | 4,833 |  |  | 4,667 |
Lease liabilities | 4,952 |  |  | 4,226 |
Income taxes payable | 219 |  |  | 223 |
Current portion of long-term debt | 12,500 |  |  | 12,500 |
Total current liabilities | 82,226 |  |  | 76,295 |
Long-term debt, excluding current installments | 133,620 |  |  | 176,875 |
Deferred income taxes | 7,567 |  |  | 3,296 |
Non-qualified deferred compensation plan | 6,781 |  |  | 6,193 |
Lease liabilities | 14,437 |  |  | 12,432 |
Other liabilities | 4,277 |  |  | 11,144 |
Total liabilities | 248,908 |  |  | 286,235 |
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; 7,742,003 and 7,712,444 shares issued and outstanding, respectively at September 30, 2025; 7,706,344 and 7,676,785 shares issued and outstanding, respectively, at December 31, 2024 | 77 |  |  | 77 |
Additional paid-in capital | 43,670 |  |  | 40,934 |
Retained earnings | 357,248 |  |  | 306,501 |
Accumulated other comprehensive income (loss) | 3,505 |  |  | (4,165) |
Treasury stock at cost, 29,559 shares at September 30, 2025 and 29,559 shares at December 31, 2024 | (587) |  |  | (587) |
Total stockholders’ equity | 403,913 |  |  | 342,760 |
Total liabilities and stockholders' equity | $ | 652,821 |  |  | $ | 628,995 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

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

| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net sales | $ | 154,558 |  |  | $ | 145,165 |  |  | $ | 453,882 |  |  | $ | 360,351 |
Cost of sales | 111,811 |  |  | 103,642 |  |  | 325,440 |  |  | 255,714 |
Gross profit | 42,747 |  |  | 41,523 |  |  | 128,442 |  |  | 104,637 |
Selling, general & administrative expenses | 19,069 |  |  | 15,789 |  |  | 56,474 |  |  | 43,601 |
Acquisition costs | 14 |  |  | 732 |  |  | 334 |  |  | 1,676 |
Change in fair value of contingent consideration | 263 |  |  | 238 |  |  | 789 |  |  | 714 |
Loss on disposal of property, plant & equipment | 22 |  |  | — |  |  | 11 |  |  | 7 |
Operating income | 23,379 |  |  | 24,764 |  |  | 70,834 |  |  | 58,639 |
Interest expense, net | 2,393 |  |  | 3,475 |  |  | 7,873 |  |  | 4,683 |
Other (income) expense | (78) |  |  | 70 |  |  | (10) |  |  | 30 |
Income before income tax expense | 21,064 |  |  | 21,219 |  |  | 62,971 |  |  | 53,926 |
Income tax expense | 4,681 |  |  | 4,858 |  |  | 12,224 |  |  | 11,320 |
Net income | $ | 16,383 |  |  | $ | 16,361 |  |  | $ | 50,747 |  |  | $ | 42,606 |
Net income per share: |  |  |  |  |  |  |
Basic | $ | 2.12 |  |  | $ | 2.13 |  |  | $ | 6.59 |  |  | $ | 5.56 |
Diluted | $ | 2.11 |  |  | $ | 2.11 |  |  | $ | 6.52 |  |  | $ | 5.49 |
Weighted average common shares outstanding: |  |  |  |  |  |  |
Basic | 7,712 |  |  | 7,674 |  |  | 7,703 |  |  | 7,666 |
Diluted | 7,780 |  |  | 7,772 |  |  | 7,783 |  |  | 7,763 |
Comprehensive Income |  |  |  |  |  |  |
Net Income | $ | 16,383 |  |  | $ | 16,361 |  |  | $ | 50,747 |  |  | $ | 42,606 |
Other comprehensive income: |  |  |  |  |  |  |
Foreign currency translation gain | 51 |  |  | 1,070 |  |  | 7,670 |  |  | 306 |
Other comprehensive income | 51 |  |  | 1,070 |  |  | 7,670 |  |  | 306 |
Comprehensive income | $ | 16,434 |  |  | $ | 17,431 |  |  | $ | 58,417 |  |  | $ | 42,912 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

UFP TECHNOLOGIES, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)

Three and Nine Months Ended September 30, 2025
| Common Stock |  | Additional Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Income (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 |
Share-based compensation | 1 |  |  | — |  |  | 2,285 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,285 |
Exercise of stock options net of shares presented for exercise | 3 |  |  | — |  |  | 58 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 58 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | 5,294 |  |  | — |  |  | — |  |  | 5,294 |
Net income | — |  |  | — |  |  | — |  |  | 17,180 |  |  | — |  |  | — |  |  | — |  |  | 17,180 |
Balance at June 30, 2025 | 7,711 |  |  | $ | 77 |  |  | $ | 41,682 |  |  | $ | 340,865 |  |  | $ | 3,454 |  |  | 30 |  |  | $ | (587) |  |  | $ | 385,491 |
Share-based compensation | — |  | — |  |  | 1,959 |  |  | — |  |  | — |  |  | — |  | — |  |  | 1,959 |
Exercise of stock options net of shares presented for exercise | 1 |  | — |  |  | 29 |  |  | — |  |  | — |  |  | — |  | — |  |  | 29 |
Other comprehensive income | — |  | — |  |  | — |  |  | — |  |  | 51 |  |  | — |  | — |  |  | 51 |
Net income | — |  | — |  |  | — |  |  | 16,383 |  |  | — |  |  | — |  | — |  |  | 16,383 |
Balance at September 30, 2025 | 7,712 |  | $77 |  | $43,670 |  | $357,248 |  | $3,505 |  | 30 |  | $(587) |  | $403,913

Three and Nine Months Ended September 30, 2024
| Common Stock |  | Additional Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Treasury Stock |  | Total Stockholders' Equity
| Shares |  | Amount |  |  |  |  | Shares |  | Amount |
Balance at December 31, 2023 | 7,640 |  | $ | 76 |  |  | $ | 38,814 |  |  | $ | 247,520 |  |  | $ | 268 |  |  | 30 |  | $ | (587) |  |  | $ | 286,091 |
Share-based compensation | 48 |  | 1 |  |  | 1,512 |  |  | — |  |  | — |  |  | — |  | — |  |  | 1,513 |
Exercise of stock options net of shares presented for exercise | 4 |  | — |  |  | 54 |  |  | — |  |  | — |  |  | — |  | — |  |  | 54 |
Net share settlement of RSU's | (22) |  | — |  |  | (4,751) |  |  | — |  |  | — |  |  | — |  | — |  |  | (4,751) |
Other comprehensive loss | — |  | — |  |  | — |  |  | — |  |  | (584) |  |  | — |  | — |  |  | (584) |
Net income | — |  | — |  |  | — |  |  | 12,693 |  |  | — |  |  | — |  | — |  |  | 12,693 |
Balance at March 31, 2024 | 7,670 |  | $ | 77 |  |  | $ | 35,629 |  |  | $ | 260,213 |  |  | $ | (316) |  |  | 30 |  | $ | (587) |  |  | $ | 295,016 |
Share-based compensation | 2 |  | — |  |  | 1,736 |  |  | — |  |  | — |  |  | — |  | — |  |  | 1,736 |
Exercise of stock options | 2 |  | — |  |  | 53 |  |  | — |  |  | — |  |  | — |  | — |  |  | 53 |
Other comprehensive loss | — |  | — |  |  | — |  |  | — |  |  | (181) |  |  | — |  | — |  |  | (181) |
Net income | — |  | — |  |  | — |  |  | 13,552 |  |  | — |  |  | — |  | — |  |  | 13,552 |
Balance at June 30, 2024 | 7,674 |  | $ | 77 |  |  | $ | 37,418 |  |  | $ | 273,765 |  |  | $ | (497) |  |  | 30 |  | $ | (587) |  |  | $ | 310,176 |
Share-based compensation | — |  | — |  |  | 1,539 |  |  | — |  |  | — |  |  | — |  | — |  |  | 1,539 |
Other comprehensive loss | — |  | — |  |  | — |  |  | — |  |  | 1070 |  |  | — |  | — |  |  | 1070 |
Net income | — |  | — |  |  | — |  |  | 16,361 |  |  | — |  |  | — |  | — |  |  | 16,361 |
Balance at September 30, 2024 | 7,674 |  | $ | 77 |  |  | $ | 38,957 |  |  | $ | 290,126 |  |  | $ | 573 |  |  | 30 |  | $ | (587) |  |  | $ | 329,146 |

The accompanying notes are an integral part of these consolidated financial statements.
5

UFP Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

| Nine Months Ended
| September 30,
| 2025 |  | 2024
Cash flows from operating activities: |  |  |
Net income | $ | 50,747 |  |  | $ | 42,606 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation | 6,948 |  |  | 5,855 |
Amortization of intangible assets | 7,279 |  |  | 4,203 |
Loss on disposal of property, plant & equipment | 11 |  |  | 7 |
Share-based compensation | 6,456 |  |  | 4,787 |
Change in fair value of contingent consideration | 789 |  |  | 714 |
Equity method investment net earnings | (133) |  |  | — |
Deferred income taxes | 3,402 |  |  | 827 |
Changes in operating assets and liabilities: |  |  |
Receivables, net | 3,125 |  |  | (2,893) |
Inventories | 4,589 |  |  | (5,633) |
Prepaid expenses and other current assets | (2,129) |  |  | (940) |
Other assets | (5,942) |  |  | (490) |
Accounts payable | 4,217 |  |  | 736 |
Accrued expenses | (1,887) |  |  | (622) |
Deferred revenue | (508) |  |  | (819) |
Income taxes payable | 3,147 |  |  | (753) |
Non-qualified deferred compensation plan and other liabilities | (5,045) |  |  | (5,416) |
Net cash provided by operating activities | 75,066 |  |  | 42,169 |
Cash flows from investing activities: |  |  |
Additions to property, plant, and equipment | (9,052) |  |  | (6,649) |
Acquisitions, net of cash acquired | (14,727) |  |  | (196,432) |
Purchase of real estate | — |  |  | (3,214) |
Acquisition working capital adjustments | 5 |  |  | — |
Proceeds from sale of fixed assets | 33 |  |  | 15 |
Net cash used in investing activities | (23,741) |  |  | (206,280) |
Cash flows from financing activities: |  |  |
Proceeds from advances on revolving line of credit | — |  |  | 115,200 |
Payments on revolving line of credit | (33,880) |  |  | (28,200) |
Proceeds from borrowings of long-term debt | — |  |  | 125,000 |
Principal payments of long-term debt | (9,375) |  |  | (32,000) |
Payment of contingent consideration | (250) |  |  | (188) |
Principal payments on finance lease obligations | (47) |  |  | (58) |
Proceeds from the exercise of stock options | 194 |  |  | 107 |
Payment of statutory withholdings for restricted stock units vested | (3,914) |  |  | (4,751) |
Net cash (used in) provided by financing activities | (47,272) |  |  | 175,110 |
Effect of foreign currency exchange rates on cash and cash equivalents | 723 |  |  | 94 |
Net increase in cash and cash equivalents | 4,776 |  |  | 11,093 |
Cash and cash equivalents at beginning of period | 13,450 |  |  | 5,263 |
Cash and cash equivalents at end of period | $ | 18,226 |  |  | $ | 16,356 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

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, 2024, included in the Company's 2024 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission.
The condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 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, 2024 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 and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2025.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires additional quantitative and qualitative income tax disclosures to allow readers of the consolidated financial statements to assess how the Company’s operations, related tax risks and tax planning affect its tax rate and prospects for future cash flows. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company will adopt ASU 2023-09 retrospectively beginning with its annual reporting period ending December 31, 2025, and does not expect the adoption to have a material impact on its financial statements.
(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 $200 thousand. 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.
7

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 preliminary 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 | (2,753) |
Total assets acquired, net of liabilities assumed | 6,577 |
Less: cash acquired | (2,281) |
Purchase price, net of cash acquired | $ | 4,295 |

Acquisition costs associated with the transaction of approximately $3 thousand and $189 thousand were charged to expense in the three and nine months ended September 30, 2025, respectively. 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 $100 thousand. 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.
8

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 preliminary 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 $12 thousand and $87 thousand were charged to expense in the three and nine months ended September 30, 2025, respectively. 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.
Acquisition costs associated with the transaction were approximately $0 and $59 thousand, respectively, which were charged to expense during the three and nine months ended September 30, 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.
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.
9

Marble Medical
On June 24, 2024, the Company purchased 100% of the outstanding shares of common stock of Marble Medical, Inc., (“Marble”) pursuant to a Stock Purchase Agreement and related agreements, for an aggregate purchase price of $4.5 million in cash, plus up to an additional $0.5 million based upon the achievement of sales targets of Marble for each of the 12-month periods ended December 31, 2024, and 2025. As of the opening balance sheet the contingent consideration had a fair value of approximately $400 thousand. The purchase price was subject to an adjustment based upon Marble’s estimated working capital at closing, which resulted in an increase of approximately $100 thousand. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Stock Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1988 and headquartered in Tallahassee, FL, Marble develops and manufactures adhesive based medical components and single-use devices. The purchase price includes certain real estate, which encompasses Marble’s manufacturing, warehouse and office facilities. Marble enhances the Company’s adhesives expertise as well as precision die cutting capabilities.
The following table summarizes the allocation of the total purchase price of approximately $5.0 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 | $ | 815 |
Accounts receivable | 872 |
Inventory | 494 |
Other current assets | 24 |
Property, plant, and equipment | 1,018 |
Customer lists | 250 |
Intellectual property | 300 |
Non-compete agreement | 50 |
Goodwill | 2,559 |
Total assets acquired | 6,382 |
Accounts payable | (41) |
Accrued expenses | (519) |
Total liabilities assumed | (560) |
Total assets acquired, net of liabilities assumed | 5,822 |
Less: cash acquired | (815) |
Purchase price, net of cash acquired | $ | 5,007 |

Acquisition costs associated with the transaction of approximately $146 thousand were charged to expense during the nine months ended September 30, 2024. 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 Marble acquisition is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of Marble and the synergies that have been and are expected to further be realized post-acquisition.
AJR Enterprises
On July 1, 2024, the Company purchased 100% of the issued and outstanding membership interests of AJR Enterprises, LLC, (“AJR”) pursuant to a Securities Purchase Agreement and related agreements, for an aggregate purchase price of $110 million in cash. The purchase price was subject to an adjustment based upon AJR’s estimated working capital at closing, a final working capital adjustment, and a reduction for certain AJR liabilities funded by
10

the sellers, which together resulted in an increase to the purchase price of approximately $700 thousand. 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 customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1997 and headquartered in St. Charles, IL, with an additional manufacturing plant in Santiago, Dominican Republic, AJR develops and manufactures single-use patient handling systems. Patient surfaces and transfer devices are a growing market due in part to government guidelines and legislation around safe patient handling. AJR’s ‘cut and sew’ manufacturing capabilities and specialty fabrics expertise supplement the Company’s thermoplastic joining expertise, allowing the Company to offer a comprehensive suite of development, commercialization, and manufacturing services for this market.
The following table summarizes the allocation of the total purchase price of approximately $110.7 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 | $ | 3,000 |
Accounts receivable | 17,138 |
Inventory | 9,229 |
Other current assets | 210 |
Property, plant, and equipment | 1,127 |
Customer lists | 46,667 |
Intellectual property | 8,245 |
Non-compete agreement | 661 |
Lease right of use assets | 2,129 |
Goodwill | 35,650 |
Total assets acquired | 124,056 |
Accounts payable | (1,103) |
Accrued expenses | (7,092) |
Lease liabilities | (2,129) |
Total liabilities assumed | (10,324) |
Total assets acquired, net of liabilities assumed | 113,732 |
Less: cash acquired | (3,000) |
Purchase price, net of cash acquired | $ | 110,732 |

Acquisition costs associated with the transaction were approximately $600 thousand, which were charged to expense during the nine months ended September 30, 2024. These costs were primarily for legal, due diligence, and valuation 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 AJR acquisition is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of AJR and the significant synergies that have been and are expected to further be realized post-acquisition.
Welch Fluorocarbon
On July 15, 2024, the Company purchased 100% of the outstanding shares of common stock of Welch Fluorocarbon, Inc., (“Welch”) pursuant to a Stock Purchase Agreement and related agreements, for an aggregate purchase price of $34.6 million in cash, plus up to an additional $6.0 million based upon the achievement of certain EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) targets of Welch for each of the 12-month periods ended December 31, 2024, 2025, and 2026. The contingent consideration had a fair value of
11

approximately $800 thousand as of the opening balance sheet. The purchase price was subject to an adjustment based upon Welch’s working capital at closing, the assumption by the sellers of certain liabilities and a final working capital adjustment which together resulted in a decrease in the purchase price of approximately $200 thousand. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Stock Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1985 and headquartered in Dover, NH, Welch develops and manufactures thermoformed, and heat sealed implantable medical device components utilizing thin, high-performance films. Welch provides thin film thermoforming capabilities and expertise in developing and manufacturing components for implantable medical devices.
Also on July 15, 2024, pursuant to separate purchase and sale agreements (with separate legal parties), the Company purchased certain real estate in Dover, NH, which encompasses a majority of Welch’s manufacturing, warehousing and office facilities for an aggregate purchase of approximately $3.2 million.
The following table summarizes the allocation of the total purchase price of approximately $35.2 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 | $ | 3,817 |
Accounts receivable | 1,506 |
Inventory | 1,969 |
Other current assets | 115 |
Property, plant, and equipment | 824 |
Customer lists | 4,209 |
Intellectual property | 9,707 |
Non-compete agreement | 186 |
Lease right of use assets | 166 |
Goodwill | 17,135 |
Total assets acquired | 39,634 |
Accounts payable | (215) |
Accrued expenses | (215) |
Lease liabilities | (166) |
Total liabilities assumed | (596) |
Total assets acquired, net of liabilities assumed | 39,038 |
Less: cash acquired | (3,817) |
Net assets acquired, net of cash acquired | $ | 35,221 |

Acquisition costs associated with the transaction were approximately $281 thousand, which were charged to expense during the nine months ended September 30, 2024. These costs were primarily for legal and valuation 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 Welch acquisition is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of Welch and the synergies that have been and are expected to further be realized post-acquisition.
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AQF
On August 23, 2024, the Company purchased 100% of the issued and outstanding membership interests of the parent holding companies of AQF Limited, operating as AQF Medical, (“AQF”) pursuant to a Share Purchase Agreement and related agreements, for an aggregate purchase price of €43 million in cash (total purchase price in U.S. Dollars amounted to approximately $48.0 million). The purchase price was subject to an adjustment based upon AQF’s working capital at closing, the assumption by the sellers of certain liabilities and a final working capital adjustment, which resulted in a net decrease of approximately $300 thousand. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Share Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 2005 and headquartered in Navan, Ireland with additional joint venture operations in Singapore, AQF develops and manufactures custom-engineered foam and thermoplastic components used in a wide range of medical devices and packaging. AQF enhances the Company’s expertise in converting specialty foams and films, and provides an expanded European manufacturing presence, and an Asian market presence in Singapore.
The following table summarizes the allocation of the total purchase price of approximately $47.7 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 | $ | 3,381 |
Accounts receivable | 2,237 |
Inventory | 1,150 |
Other current assets | 204 |
Property, plant, and equipment | 976 |
Customer lists | 14,206 |
Intellectual property | 2,760 |
Non-compete agreement | 333 |
Tradename | 690 |
Lease right of use assets | 1,723 |
Equity Method Investment | 6,969 |
Goodwill | 22,925 |
Total assets acquired | 57,554 |
Accounts payable | (1,890) |
Accrued expenses | (535) |
Deferred taxes | (2,322) |
Lease liabilities | (1,723) |
Total liabilities assumed | (6,470) |
Total assets acquired, net of liabilities assumed | 51,084 |
Less: cash acquired | (3,381) |
Purchase price, net of cash acquired | $ | 47,703 |

Acquisition costs associated with the transaction were approximately $1.5 million, which were charged to expense during the nine months ended September 30, 2024. These costs were primarily for legal, due diligence, and valuation services, which are included within “Acquisition costs” on the face of the Condensed Consolidated Statements of Comprehensive Income.
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None of the goodwill related to the AQF acquisition is expected to be deductible for tax purposes. Goodwill is attributable to the workforce of AQF and the synergies that have been and are expected to further be realized post-acquisition.
Pro-forma Statements
The following table contains an unaudited pro-forma consolidated statement of comprehensive income for the three and nine months ended September 30, 2025 and 2024 as if the collective acquisitions of TPI and UNIPEC had occurred on January 1, 2024 and as if the collective acquisitions of Marble, AJR, Welch, and AQF had occurred on January 1, 2023 (in thousands):

| Three months ended |  | Nine months ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (Unaudited) |  | (Unaudited) |  | (Unaudited) |  | (Unaudited)
Sales | $ | 157,355 |  |  | $ | 150,137 |  |  | $ | 461,621 |  |  | $ | 440,327 |
Operating Income | $ | 23,546 |  |  | $ | 25,600 |  |  | $ | 72,572 |  |  | $ | 70,225 |
Net Income | $ | 16,511 |  |  | $ | 16,891 |  |  | $ | 52,056 |  |  | $ | 47,583 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 2.14 |  |  | $ | 2.20 |  |  | $ | 6.76 |  |  | $ | 6.21 |
Diluted | $ | 2.12 |  |  | $ | 2.17 |  |  | $ | 6.69 |  |  | $ | 6.13 |

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 2024 and 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 profit 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 was approximately $7.0 million. The fair value of the equity method investment was approximately $6.8 million at December 31, 2024. The following table provides a roll-forward of the equity method investment for the nine months ended September 30, 2025:

| Nine months ended
| September 30, 2025
Equity Method Investment - December 31, 2024 | $ | 6,808 |
50% share of AQF Asia net income | 223 |
Amortization of basis differences | (90) |
Equity Method Investment - September 30, 2025 | $ | 6,941 |

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(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 all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance. 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. The Company recognizes revenue from bill-and-hold transactions at the time the specified goods are complete and available to the customer.
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 significantly after performance, resulting in a significant financing component. We do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. In the ordinary course of business, the Company accepts sales returns from customers for defective goods, such amounts being immaterial. 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 |  | Nine Months Ended
| September 30, |  | September 30,
Net sales of: | 2025 |  | 2024 |  | 2025 |  | 2024
Products | $ | 151,833 |  |  | $ | 142,877 |  |  | $ | 446,265 |  |  | $ | 351,395 |
Tooling and Machinery | 712 |  |  | 1,420 |  |  | 2,512 |  |  | 5,977 |
Engineering services | 2,013 |  |  | 868 |  |  | 5,105 |  |  | 2,979 |
Total net sales | $ | 154,558 |  |  | $ | 145,165 |  |  | $ | 453,882 |  |  | $ | 360,351 |

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 sheet.
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The following table presents opening and closing balances of contract liabilities for the nine months ended September 30, 2025 and 2024 (in thousands):

| Contract Liabilities
| Nine Months Ended September 30,
| 2025 |  | 2024
Deferred revenue - beginning of period | $ | 4,667 |  |  | $ | 6,616 |
Increases due to customers invoiced before revenue recognized | 4,232 |  |  | 3,302 |
Revenue recognized | (4,727) |  |  | (4,128) |
Deferred revenue acquired in TPI acquisition | 661 |  |  | — |
Deferred revenue acquired in Welch acquisition | — |  |  | 8 |
Deferred revenue - end of period | 4,833 |  |  | 5,798 |

Revenue recognized during the nine months ended September 30, 2025 and 2024 from amounts included in deferred revenue at the beginning of the period were approximately $2.2 million and $3.4 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 nine months ended September 30, 2025 and 2024 (in thousands):

| Contract Assets
| Nine Months Ended September 30,
| 2025 |  | 2024
Unbilled Receivables - beginning of period | $ | 192 |  |  | $ | 114 |
Increases due to revenue recognized, not invoiced to customers | 2,937 |  |  | 1,620 |
Decreases due to customer invoicing | (2,771) |  |  | (1,532) |
Unbilled Receivables - end of period | $ | 358 |  |  | $ | 202 |

(5) Supplemental Cash Flow Information
Supplemental cash flow information consists of the following (in thousands):

| Nine Months Ended
| September 30,
| 2025 |  | 2024
Cash paid for: |  |  |
Interest | $ | 7,924 |  |  | $ | 4,427 |
Income taxes, net of refunds | 1,567 |  |  | 9,505 |
Non-cash investing and financing activities: |  |  |
Capital additions accrued but not yet paid | $ | 101 |  |  | $ | 158 |

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(6) Receivables and Allowance for Credit Losses
Receivables consist of the following (in thousands):

| September 30, 2025 |  | December 31, 2024 |  | December 31, 2023
Accounts receivable–trade | $ | 85,989 |  |  | $ | 85,562 |  |  | $ | 65,176 |
Less allowance for credit losses | (813) |  |  | (885) |  |  | (727) |
Receivables, net | $ | 85,176 |  |  | $ | 84,677 |  |  | $ | 64,449 |

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 nine months ended September 30, 2025 and 2024 (in thousands):

| Allowance for Credit Losses
| Nine Months Ended September 30,
| 2025 |  | 2024
Allowance - beginning of period | $ | 885 |  |  | $ | 727 |
(Provision) adjustment for expected credit losses | (63) |  |  | 355 |
Amounts written off against the allowance, net of recoveries | (9) |  |  | (28) |
Allowance - end of period | $ | 813 |  |  | $ | 1,054 |

(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.
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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):

| September 30, 2025 |  | December 31, 2024
Level 3 |  |  |
Purchase price contingent consideration: |  |  |
Accrued contingent consideration (earn-out) | $ | 5,778 |  |  | $ | 10,239 |
Present value of non-competition payments | $ | 5,115 |  |  | $ | 6,871 |

In connection with the acquisitions of Welch and 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 contingent consideration payments for the Welch, Marble and DAS Medical acquisitions were $6 million, $500 thousand and $20 million, respectively. 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 $800 thousand, $400 thousand and $5.2 million for the Welch, Marble and 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 approximately $5.3 million during the nine months ended September 30, 2025, related to contingent consideration. The fair value of the liability for the contingent consideration payments recognized at September 30, 2025, totaled approximately $5.8 million out of the remaining potential payments of $9.3 million. The 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 €375 thousand in payments to the previous owner of Advant Medical over a three-year period. The Company paid approximately $1.8 million during the nine months ended September 30, 2025, related to non-competition agreements. The present value of the Non-Competition Agreements at September 30, 2025, totaled approximately $5.1 million. This liability is considered to be a Level 3 financial liability that is 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).
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The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2024. The compensation cost charged against income from those plans is included in selling, general & administrative expenses as follows (in thousands):

|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
Share-based compensation related to: |  | 2025 |  | 2024 |  | 2025 |  | 2024
Common stock grants |  | $ | 100 |  |  | $ | 100 |  |  | $ | 300 |  |  | $ | 300 |
Stock option grants |  | — |  |  | 127 |  |  | 173 |  |  | 357 |
Restricted Stock Unit Awards ("RSUs") |  | 1,859 |  |  | 1,312 |  |  | 5,983 |  |  | 4,130 |
Total share-based compensation |  | $ | 1,959 |  |  | $ | 1,539 |  |  | $ | 6,456 |  |  | $ | 4,787 |

The total income tax benefit recognized in the condensed consolidated statements of comprehensive income for share-based compensation arrangements was approximately $0.5 million and $2.5 million for the three and nine months ended September 30, 2025, respectively, and approximately $0.4 million and $1.9 million for the three and nine months ended September 30, 2024.
Common Stock Grants
The compensation expense for common stock granted during the nine months ended September 30, 2025, 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 nine months ended September 30, 2025:

| 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, 2024 | 73,232 |  | $ | 67.15 |  |  |  |  |
Exercised | (11,263) |  | 36.02 |  |  |  |  |
Outstanding at September 30, 2025 | 61,969 |  | $ | 72.80 |  |  | 4.35 |  | $ | 8,039 |
Exercisable at September 30, 2025 | 61,969 |  | $ | 72.80 |  |  | 4.35 |  | $ | 8,039 |
Vested and expected to vest at September 30, 2025 | 61,969 |  | $ | 72.80 |  |  | 4.35 |  | $ | 8,039 |

During the nine months ended September 30, 2025 and 2024, 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 $2.4 million and $0.7 million, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $406 thousand and $212 thousand, 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 nine months ended September 30, 2025, 748 shares were surrendered at an average market price of $282.42. During the nine months ended September 30, 2024, 653 shares were surrendered at an average market price of $162.93.
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Restricted Stock Unit awards
The following table summarizes information about RSU activity during the nine months ended September 30, 2025:

| Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Outstanding at December 31, 2024 | 80,827 |  |  | $ | 98.79 |
Awarded | 53,055 |  |  | 259.69 |
Shares vested | (43,296) |  |  | 119.05 |
Shares forfeited | (1,738) |  |  | 150.39 |
Outstanding at September 30, 2025 | 88,848 |  |  | $ | 183.99 |

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 nine months ended September 30, 2025 and 2024, 18,152 and 21,914 shares were surrendered at an average market price of $215.60 and $216.80, respectively.
As of September 30, 2025, the Company had approximately $10.3 million of unrecognized compensation expense that is expected to be recognized over a period of 2.5 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):

| September 30, 2025 |  | December 31, 2024
Raw materials | $ | 64,865 |  |  | $ | 65,747 |
Work in process | 5,704 |  |  | 5,730 |
Finished goods | 15,580 |  |  | 16,059 |
Total inventory | $ | 86,149 |  |  | $ | 87,536 |

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

| September 30, 2025 |  | December 31, 2024
Land and improvements | $ | 5,896 |  |  | $ | 5,759 |
Buildings and improvements | 38,275 |  |  | 37,895 |
Leasehold improvements | 12,308 |  |  | 11,216 |
Machinery & equipment | 73,179 |  |  | 65,244 |
Furniture, fixtures, computers & software | 10,222 |  |  | 8,314 |
Construction in progress | 9,075 |  |  | 6,506 |
Property, plant and equipment | $ | 148,955 |  |  | $ | 134,934 |
Accumulated depreciation and amortization | (71,415) |  |  | (64,370) |
Net property, plant and equipment | $ | 77,540 |  |  | $ | 70,564 |

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(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 sheet.
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):

| September 30, 2025 |  | December 31, 2024
Operating lease ROU assets | $ | 18,881 |  |  | $ | 16,056 |
Finance lease ROU assets | 47 |  |  | 92 |
Total ROU assets | $ | 18,928 |  |  | $ | 16,148 |
Operating lease liabilities - current | $ | 4,909 |  |  | $ | 4,165 |
Finance lease liabilities - current | 43 |  |  | 61 |
Total lease liabilities - current | $ | 4,952 |  |  | $ | 4,226 |
Operating lease liabilities - long-term | $ | 14,431 |  |  | $ | 12,398 |
Finance lease liabilities - long-term | 6 |  |  | 34 |
Total lease liabilities - long-term | $ | 14,437 |  |  | $ | 12,432 |

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The components of lease costs for the nine months ended September 30, 2025 and 2024 consist of the following (in thousands):

| Nine Months Ended September 30,
| 2025 |  | 2024
Lease Cost: |  |  |
Finance lease cost: |  |  |
Amortization of right of use assets | $ | 45 |  |  | $ | 71 |
Interest on lease liabilities | 1 |  |  | 5 |
Operating lease cost | 3,691 |  |  | 2,776 |
Variable lease cost | 531 |  |  | 241 |
Short-term lease cost | 151 |  |  | 136 |
Total lease cost | $ | 4,419 |  |  | $ | 3,229 |
Weighted-average remaining lease term (years): |  |  |
Finance | 1.13 |  | 1.40
Operating | 6.02 |  | 4.21
Weighted-average discount rate: |  |  |
Finance | 2.15 | % |  | 2.11 | %
Operating | 5.45 | % |  | 4.87 | %

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

| Nine Months Ended September 30,
| 2025 |  | 2024
Cash paid for amounts included in measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 3,571 |  |  | $ | 2,723 |
Financing cash flows from finance leases | $ | 47 |  |  | $ | 58 |
Total operating cash flows | $ | 3,618 |  |  | $ | 2,781 |
Supplemental non-cash information: |  |  |
ROU assets obtained in exchange for new lease liabilities | $ | 3,784 |  |  | $ | 4,078 |

22

The aggregate future lease payments for leases as of September 30, 2025 are as follows (in thousands):

| Operating |  | Finance
Remainder of 2025 | $ | 1,310 |  |  | $ | 16 |
2026 | 5,305 |  |  | 29 |
2027 | 4,665 |  |  | 6 |
2028 | 3,632 |  |  | — |
2029 | 3,247 |  |  | — |
Thereafter | 4,153 |  |  | — |
Total lease payments | 22,312 |  |  | 51 |
Less: Interest | (2,972) |  |  | (2) |
Present value of lease liabilities | $ | 19,340 |  |  | $ | 49 |

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(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 |  | Nine Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Basic weighted average common shares outstanding | 7,712 |  |  | 7,674 |  |  | 7,703 |  |  | 7,666 |
Weighted average common equivalent shares due to dilutive restricted stock, stock options and RSUs | 68 |  |  | 98 |  |  | 80 |  |  | 97 |
Diluted weighted average common shares outstanding | 7,780 |  |  | 7,772 |  |  | 7,783 |  |  | 7,763 |

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 the three and nine months ended September 30, 2025, 2,958 shares were excluded from the computation of diluted earnings per share for this reason. For the three and nine months ended September 30, 2024, there were no stock awards 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
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significant segment expenses (SSEs) due to their relevance to the overall consolidated operating results (in thousands):

| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net sales from external customers | $ | 154,558 |  |  | $ | 145,165 |  |  | $ | 453,882 |  |  | $ | 360,351 |
Significant segment expenses: |  |  |  |  |  |  |
Materials | 62,581 |  |  | 61,503 |  |  | 186,457 |  |  | 157,946 |
Salaries and Benefits | 46,984 |  |  | 38,936 |  |  | 133,857 |  |  | 94,122 |
Depreciation and amortization | 4,874 |  |  | 4,027 |  |  | 14,227 |  |  | 10,058 |
Interest expense, net | 2,393 |  |  | 3,475 |  |  | 7,873 |  |  | 4,683 |
Other segment items (a) | 16,662 |  |  | 16,005 |  |  | 48,497 |  |  | 39,616 |
Income before income tax provision | 21,064 |  |  | 21,219 |  |  | 62,971 |  |  | 53,926 |
Income tax provision | 4,681 |  |  | 4,858 |  |  | 12,224 |  |  | 11,320 |
Segment net income | $ | 16,383 |  |  | $ | 16,361 |  |  | $ | 50,747 |  |  | $ | 42,606 |
Segment total assets (b) | $ | 652,821 |  |  |  |  |  |  |

(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 15.0% and 16.4% of the Company’s consolidated net sales for the three and nine months ended September 30, 2025, respectively. Net sales shipped to customers outside of the United States comprised approximately 14.7% and 17.1% of the Company’s consolidated net sales for the three and nine months ended September 30, 2024, respectively. Approximately 36.9% of all long-lived assets are located outside of the United States.
Information about Major Customers
Net sales to two customers comprised approximately 27.1% and 17.1% of the Company’s consolidated net sales for the three months ended September 30, 2025, respectively. Net sales to two customers comprised approximately 25.3% and 20.4% of the Company’s consolidated net sales for the nine months ended September 30, 2025, respectively. Net sales to two customers comprised approximately 26.7% and 24.0%, respectively, of the Company’s consolidated net sales for the three months ended September 30, 2024. Net sales to two customers comprised approximately 30.3% and 12.4%, respectively, of the Company’s consolidated net sales for the nine months ended September 30, 2024.
On September 30, 2025, two customers represented approximately 21.3% and 14.9% of gross accounts receivable, respectively. On December 31, 2024, one customer represented approximately 34.0% of gross accounts receivable.
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The Company’s products are primarily sold to customers within the Medical and Non-medical markets. Sales by market for the three and nine months ended September 30, 2025 and 2024 are as follows (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 (a) |  | 2025 |  | 2024 (a)
Market |  | Net Sales |  | % |  | Net Sales |  | % |  | Net Sales |  | % |  | Net Sales |  | %
Medical |  | $ | 142,358 |  |  | 92.1% |  | $ | 132,623 |  |  | 91.4% |  | $ | 417,107 |  |  | 91.9% |  | $ | 318,079 |  |  | 88.3%
Non-medical |  | 12,200 |  |  | 7.9% |  | 12,542 |  |  | 8.6% |  | 36,775 |  |  | 8.1% |  | 42,272 |  |  | 11.7%
Net Sales |  | $ | 154,558 |  |  | 100.0% |  | $ | 145,165 |  |  | 100.0% |  | $ | 453,882 |  |  | 100.0% |  | $ | 360,351 |  |  | 100.0%

(a)Note – This table has been updated to conform to the current year presentation.
(14) Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the nine months ended September 30, 2025 are as follows (in thousands):

| Goodwill
December 31, 2024 | $ | 189,657 |
Acquired in TPI business combination | 1,145 |
Acquired in UNIPEC business combination | 3,163 |
Marble working capital adjustment | (5) |
AJR valuation adjustment | 22 |
Foreign currency translation | 3,320 |
September 30, 2025 | $ | 197,302 |

The carrying values of the Company’s definite lived intangible assets as of September 30, 2025 are as follows (in thousands):

September 30, 2025 |  | Customer List |  | Intellectual Property |  | Tradename & Brand |  | Non- Compete |  | Total
Weighted-average amortization period |  | 20 years |  | 12.3 years |  | 13.3 years |  | 8.3 years |  |
Gross amount |  | $ | 134,374 |  |  | $ | 28,811 |  |  | $ | 1,094 |  |  | $ | 6,944 |  |  | $ | 171,223 |
Accumulated amortization |  | (20,700) |  |  | (4,200) |  |  | (334) |  |  | (2,728) |  |  | (27,962) |
Net balance |  | $ | 113,674 |  |  | $ | 24,611 |  |  | $ | 760 |  |  | $ | 4,216 |  |  | $ | 143,261 |

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Amortization expense related to intangible assets was approximately $2.5 million and $7.3 million for the three and nine months ended September 30, 2025, respectively, and $2.0 million and $4.2 million for the three and nine months ended September 30, 2024, respectively. The estimated remaining amortization expense as of September 30, 2025 is as follows (in thousands):

Remainder of 2025 | $ | 2,482 |
2026 | 9,923 |
2027 | 9,867 |
2028 | 9,820 |
2029 | 9,788 |
Thereafter | 101,380 |
Total | $ | 143,261 |

(15) Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):

| September 30, 2025 |  | December 31, 2024
Present value of non-competition payments | $ | 3,165 |  |  | $ | 4,989 |
Accrued contingent consideration | 791 |  |  | 4,938 |
Other | 321 |  |  | 1,217 |
| $ | 4,277 |  |  | $ | 11,144 |

(16) Income Taxes
The determination of income tax expense in the accompanying unaudited condensed consolidated statements of income is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur. The Company recorded income tax expense of approximately 22.2% and 19.4% of income before income tax expense for the three and nine months ended September 30, 2025, respectively, and 22.9% and 21.0% of income before income tax expense for the three and nine months ended September 30, 2024, respectively.
Enactment of the “One Big Beautiful Bill Act” (OBBBA)
On July 4, 2025, President Donald Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to GILTI and FDII rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, the effects of the new tax law have been recognized in the period of enactment. The impact of OBBBA to income tax expense is immaterial.
(17) Debt
On June 27, 2024, the Company, as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”) with certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time-to-time party thereto. The Third Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement, originally dated as of December 22, 2021.
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The credit facilities under the Third Amended and Restated Credit Agreement consist of a secured term loan to the Company of $125 million and a secured revolving credit facility, under which the Company may borrow up to $150 million. The Third Amended and Restated Credit Facilities mature on June 27, 2029. This maturity date is subject to acceleration and the Company could be subject to additional fees and expenses in certain circumstances should one or more events of default described in the Third Amended and Restated Credit Agreement occur. The secured term loan requires quarterly principal payments of $3,125,000 that commenced on December 31, 2024. The proceeds of the Third Amended and Restated Credit Agreement may be used for general corporate purposes, including funding certain acquisitions, as well as certain other permitted acquisitions. The Company’s obligations under the Third Amended and Restated Credit Agreement are guaranteed by Subsidiary Guarantors and secured by substantially all assets of the Company.
The Third Amended and Restated Credit Facilities call for interest at Secured Overnight Financing Rate (“SOFR”) plus a margin that ranges from 1.25% to 2.25% or, at the discretion of the Company, the bank’s prime rate plus a margin that ranges from .25% to 1.25%. In both cases the applicable margin is dependent upon Company performance. Under the Third Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The Third Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.
At September 30, 2025, the Company had approximately $146.1 million in outstanding borrowings under the Third Amended and Restated Credit Agreement and also had approximately $0.7 million in standby letters of credit outstanding, drawable as a financial guarantee on worker’s compensation insurance policies. At September 30, 2025, the weighted average interest rate was approximately 5.5% and the Company was in compliance with all covenants under the Third Amended and Restated Credit Agreement.
Long-term debt consists of the following (in thousands):

| September 30, 2025
Revolving credit facility | $ | 33,620 |
Term loan | 112,500 |
Total long-term debt | 146,120 |
Current portion | (12,500) |
Long-term debt, excluding current portion | $ | 133,620 |

Future maturities of long-term debt at September 30, 2025 are as follows (in thousands):

| Term Loan |  | Revolving credit facility |  | Total
Remainder of 2025 | $ | 3,125 |  |  | $ | - |  |  | $ | 3,125 |
2026 | 12,500 |  |  | - |  |  | 12,500 |
2027 | 12,500 |  |  | - |  |  | 12,500 |
2028 | 12,500 |  |  | - |  |  | 12,500 |
2029 | 71,875 |  |  | 33,620 |  |  | 105,495 |
| $ | 112,500 |  |  | $ | 33,620 |  |  | $ | 146,120 |

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-looking Statements
Some of the statements contained in this Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Management and representatives of UFP Technologies, Inc. (the “Company”) also may from time to time make forward-looking statements. These statements are subject to known and unknown risks, uncertainties, and other factors, which may cause our or our industry’s actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about the Company’s prospects; the demand for its products, the well-being and availability of the Company’s employees, the continuing operation of the Company’s locations, delayed payments by the Company’s customers and the potential for reduced or canceled orders; statements about expectations regarding customer inventory levels; statements about the Company’s acquisition strategies and opportunities and the Company’s growth potential and strategies for growth; expectations regarding customer demand; expectations regarding the Company’s liquidity and capital resources, including the sufficiency of its cash reserves and the availability of borrowing capacity to fund operations and/or potential future acquisitions; anticipated revenues and the timing of such revenues; expectations about shifting the Company’s book of business to higher-margin, longer-run opportunities; anticipated trends and potential advantages in the different markets in which the Company competes, including the medical, aerospace and defense, automotive, consumer, electronics, and industrial markets, and the Company’s plans to expand in certain of its markets; statements regarding anticipated advantages the Company expects to realize from its investments and capital expenditures; statements regarding anticipated advantages to improvements and alterations at the Company’s existing plants; expectations regarding the Company’s manufacturing capacity, operating efficiencies, and new production equipment; statements about new product offerings and program launches; statements about the Company’s participation and growth in multiple markets; statements about the Company’s business opportunities; and any indication that the Company may be able to sustain or increase its sales, earnings or earnings per share, or its sales, earnings or earnings per share growth rates.
Investors are cautioned that such forward-looking statements involve risks and uncertainties that could adversely affect the Company’s business and prospects, and otherwise cause actual results to differ materially from those anticipated by such forward-looking statements, or otherwise, including without limitation: our financial condition and results of operations, including risks relating to substantially decreased demand for the Company’s products; risks relating to the potential closure of any of the Company’s facilities or the unavailability of key personnel or other employees; risks that the Company’s inventory, cash reserves, liquidity or capital resources may be insufficient; risks relating to delayed payments by our customers and the potential for reduced or canceled orders; risks related to customer concentration; risks related to global conflict or civil unrest to the efficacy of our manufacturing process; risks associated with the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions, the integration of any such acquisition candidates, the value of those acquisitions to our customers and shareholders, and the financing of such acquisitions; risks related to our indebtedness and compliance with covenants contained in our financing arrangements, and whether any available financing may be sufficient to address our needs; risks associated with efforts to shift the Company’s book of business to higher-margin, longer-run opportunities; risks associated with the Company’s entry into and growth in certain markets; risks and uncertainties associated with seeking and implementing manufacturing efficiencies and implementing new production equipment; risks associated with governmental regulations and/or sanctions affecting the import and export of products, including global trade barriers, additional taxes, tariff increases, cash repatriation restrictions, retaliations and boycotts between the U.S. and other countries; risks associated with domestic, regional and global political risks and uncertainties; risks and uncertainties associated with growth of the Company’s business and increases to sales, earnings and earnings per share; risks relating to cybersecurity, including cyber-attacks on the Company’s information technology infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations; risks associated with our or third-party use of artificial intelligence technologies; risks associated with new product and program launches; risks relating to our performance and the performance of our counterparties under the agreements we have entered into; the risk that our two largest customers, on whom we depend for a substantial portion of our annual revenues, will not purchase the expected volume of goods under the supply agreements we have entered into with them because, among other things, they no longer require the products at all or to the degree they anticipated or because, among other things, Intuitive Surgical SARL, our largest customer, decides to manufacture the products itself or through one of its affiliates it obtains the products from other listed suppliers specified in our agreement; the risk that we will not achieve expected rebates under the applicable supply agreement; and risks relating to our ability to maintain
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increased levels of production at profitable levels, if at all; or to continue to increase production rates and risks relating to disruptions and delays in our supply chain or labor force. Accordingly, actual results may differ materially.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” and similar expressions intended to identify forward-looking statements. Our actual results could be different from the results described in or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts, and projections, and may be materially better or worse than anticipated. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions and are only as of the date of this Report. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this Report, in order to reflect changes in circumstances or expectations, or the occurrence of unanticipated events, except to the extent required by applicable securities laws. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed above and under “Risk Factors” set forth in Part I Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as well as the risks and uncertainties discussed elsewhere in this Report. We qualify all of our forward-looking statements by these cautionary statements. We caution you that these risks are not exhaustive. We operate in a continually changing business environment and new risks emerge from time to time.
Unless the context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer to UFP Technologies, Inc. and its consolidated subsidiaries.
Overview
UFP Technologies is a contract development and manufacturing organization that specializes in single-use and single-patient medical devices. UFP is a vital link in the medical device supply chain and a valued outsourcing partner to many of the world's top medical device manufacturers. Our 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.
Our current strategy includes further organic growth and growth through strategic acquisitions.
Net sales for the nine months ended September 30, 2025 increased 26.0% to $453.9 million from $360.4 million in the same period last year. The increase was primarily attributable to 31.1% growth in sales to customers in the medical market, which was largely due to sales from the 2024 and 2025 acquisitions (See Note 2 for further information regarding these acquisitions). These companies collectively contributed approximately $114.9 million in sales through the nine months ended September 30, 2025 compared to $34.6 million in the same period last year. Organic sales growth was 2.2% for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Net sales from our largest two customers, Intuitive Surgical SARL and Stryker Corporation, were 27.1% and 17.1% of our total net sales in the three months ended September 30, 2025, respectively, and 25.3% and 20.4% of our total net sales in the nine months ended September 30, 2025, respectively.
In 2025, we executed a post-acquisition review of our AJR labor force’s United States employment eligibility through E-Verify protocols. This review has resulted in significant workforce turnover during the year (the "AJR Labor Issue"). Attention spent by experienced employees training new direct and indirect employees in our standards and polices has decreased productivity and, therefore has created inefficiencies in our AJR operations. To address the AJR Labor Issue, we recruited legally eligible replacement associates. We anticipate that the third quarter of 2025 was the low point of labor inefficiencies, with gradual improvement beginning in the fourth quarter of 2025.
Impact of Tariffs
In 2025, the United States imposed increased tariffs on foreign imports into the United States, including all the countries in which we manufacture goods outside the United States and also the countries in which our customers operate. Although agreements have been made with various countries, the tariff policy environment remains dynamic, and we cannot predict what additional actions may ultimately be taken by the United States or other governments with respect to tariffs or trade relations, including retaliatory trade measures taken by other countries in response to existing or future United States tariffs or other measures.
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To date, such tariffs have not had a material direct impact on our business, financial condition or results of operations. However, based upon tariffs being passed through by our raw material suppliers, we estimate an increase of approximately $6 million in annual price increases. It is our intention to pass these costs on to our customers. This remains a very dynamic changing environment and tariffs may cause (i) further increases in manufacturing costs, (ii) disruptions or delays to our supply chain, (iii) limitations on our ability to sell our products domestically or abroad, and (iv) reductions in sales volumes and gross margins for our products, any of which could negatively affect our business, results of operations and financial condition. We cannot anticipate, for example, whether there will be an adverse impact on demand for our products from customers who are responsible for payment of the tariffs on our shipments.
Results of Operations
Net Sales
Net sales for the three months ended September 30, 2025 increased approximately 6.5% to $154.6 million from sales of $145.2 million for the same period in 2024. Net sales increased despite more than $8 million of unfulfilled orders from the AJR Labor Issue during the third quarter of 2025. The increase is primarily due to increased sales to customers in the medical market of 7.3%. This increase includes sales from the 2024 and 2025 acquisitions, which collectively contributed approximately $38.6 million in sales during the third quarter of 2025 as compared to $34.6 million in the same period last year. Organic sales change for the third quarter of 2025 as compared to the third quarter of 2024 was essentially flat, primarily attributable to unfulfilled orders as a result of the AJR Labor Issue.
Net sales for the nine months ended September 30, 2025 increased approximately 26.0% to $453.9 million from sales of $360.4 for the same period in 2024. Net sales increased despite more than $15 million of unfulfilled orders as a result of the AJR Labor Issue during the nine months ended September 30, 2025. The increase in net sales is primarily due to increased sales to customers in the medical market of 31.1%. This increase includes sales from the 2024 and 2025 acquisitions, which collectively contributed approximately $114.9 million in sales during the nine months ended September 30, 2025 compared to $34.6 million in the same period last year. Organic sales growth, which was impacted by the AJR Labor Issue during the 2025 period, was 2.2% for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
Gross Profit
Gross margin decreased to 27.7% for the three months ended September 30, 2025, from 28.6% for the same period in 2024. As a percentage of sales, material and labor costs collectively decreased 0.7% and overhead costs increased 1.6%. We estimate that the AJR Labor Issue added approximate ly $3.0 m illion in incremental labor cost to our cost-of-sales in the third quarter. We expect the labor inefficiencies to continue but significantly improve for the balance of 2025.
Gross margin decreased to 28.3% for the nine months ended September 30, 2025, from 29.0% for the same period in 2024. As a percentage of sales, material and labor costs collectively decreased 0.1% and overhead costs increased 0.8%. We estimate that the AJR Labor Issue added over $5.0 m illion in incremental labor cost to our cost-of-sales for the nine months ended September 30, 2025.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) increased approximately 20.8% to $19.1 million for the three months ended September 30, 2025, from $15.8 million for the same period in 2024. The increase is primarily attributable to increased headcount and other back-office resources for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. As a percentage of sales, SG&A increased to 12.3% for the three months ended September 30, 2025, from 10.9% for the same three months in 2024.
SG&A increased approximately 29.5% to $56.5 for the nine months ended September 30, 2025, from $43.6 million for the same period in 2024. The increase is primarily attributable to SG&A from our 2024 and 2025 acquisitions, which collectively contributed approximately $10.1 million in SG&A during the nine months ended September 30, 2025, along with increased headcount and other back-office resources for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 As a percentage of sales, SG&A increased to 12.4% for the nine months ended September 30, 2025, from 12.1% for the same nine months in 2024.
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Change in Fair Value of Contingent Consideration
In connection with the acquisitions of Welch and Marble in 2024, and DAS Medical in 2021, we are required to make contingent payments, subject to the entities achieving certain financial performance thresholds. The contingent consideration payments for the Welch, Marble and DAS Medical acquisitions are up to $6 million, $500 thousand and $20 million, respectively. 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 $800 thousand, $400 thousand and $5.2 million for the Welch, Marble and 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. We paid approximately $5.3 million during the nine months ended September 30, 2025, related to contingent consideration. The fair value of the liability for the contingent consideration payments recognized at September 30, 2025, totaled approximately $5.8 million out of the remaining potential payments of $9.3 million. The change in fair value of contingent consideration for the Welch, Marble, and DAS Medical acquisitions for the three and nine months ended September 30, 2025, resulted in an expense of approximately $263 thousand and $789 thousand, respectively. The change in fair value of contingent consideration for the DAS Medical acquisition for the three and nine months ended September 30, 2024, resulted in an expense of approximately $238 thousand and $714 thousand, respectively. The 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.
Interest Expense, net
Net interest expense was approximately $2.4 million and $3.5 million for the three months ended September 30, 2025, and 2024, respectively. The decrease in net interest expense for the three months ended September 30, 2025, was primarily due to lower average debt in 2025 as compared to 2024. Interest income was immaterial.
Net interest expense was approximately $7.9 million and $4.7 million for the nine months ended September 30, 2025, and 2024, respectively. The increase in net interest expense for the nine months ended September 30, 2025 was primarily due to higher average debt in 2025 as compared to 2024. Interest income was immaterial.
Other (Income) Expense
Other income was approximately $78 thousand and other expense was approximately $70 thousand for the three months ended September 30, 2025 and 2024, respectively. The changes in other (income) expense are primarily generated by equity method investment income in 2025 and foreign currency transaction gains in 2025 and 2024.
Other income was approximately $10 thousand and other expense was approximately $30 thousand for the nine months ended September 30, 2025 and 2024, respectively. The changes in other (income) expense are primarily generated by equity method investment income in 2025 and foreign currency transaction gains in 2025 and 2024.
Income Taxes
We recorded tax expense of approximately 22.2% and 22.9% of income before income tax expense, for the three months ended September 30, 2025 and 2024, respectively. The change in the effective tax rate for the third quarter of 2025 is primarily related to changes in the allocation of income generated in various jurisdictions where we operate and the differing tax rates in these jurisdictions.
We recorded tax expense of approximately 19.4% and 21.0% of income before income tax expense, for each of the nine months ended September 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the current period as compared to the prior period is largely due to changes in the allocation of income generated in various jurisdictions where we operate as well as increased discrete tax benefits associated with vested equity and a state tax refund.
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Liquidity and Capital Resources
We generally fund our operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.
Cash Flows
Net cash provided by operations for the nine months ended September 30, 2025 was approximately $75.1 million and was primarily a result of net income generated of approximately $50.7 million, depreciation and amortization of approximately $14.2 million, and share-based compensation of approximately $6.5 million for the nine months ended September 30, 2025.
Net cash used in investing activities during the nine months ended September 30, 2025 was approximately $23.7 million and was primarily the result of additions of manufacturing machinery and equipment and various building improvements, as well as the acquisitions of AJR Specialty, AJR Custom Foam, TPI, and UNIPEC.
Net cash used for financing activities was approximately $47.3 million during the nine months ended September 30, 2025 and was primarily the result of payments on the revolving line of credit of approximately $33.9 million and principal payments of long-term debt of approximately $9.4 million.
Outstanding and Available Debt
On June 27, 2024, we, as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”) with certain of the our subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time-to-time party thereto. The Third Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement, originally dated as of December 22, 2021.
The credit facilities under the Third Amended and Restated Credit Agreement consist of a secured term loan to us of $125 million and a secured revolving credit facility, under which we may borrow up to $150 million. The Third Amended and Restated Credit Facilities mature on June 27, 2029. This maturity date is subject to acceleration and we could be subject to additional fees and expenses in certain circumstances should one or more events of default described in the Third Amended and Restated Credit Agreement occur. The secured term loan requires quarterly principal payments of $3,125,000 that commenced on December 31, 2024. The proceeds of the Third Amended and Restated Credit Agreement may be used for general corporate purposes, including funding certain acquisitions, as well as certain other permitted acquisitions. Our obligations under the Third Amended and Restated Credit Agreement are guaranteed by Subsidiary Guarantors and secured by substantially all of our assets.
The Third Amended and Restated Credit Facilities call for interest at the Secured Overnight Financing Rate (“SOFR”) plus a margin that ranges from 1.25% to 2.25% or, at our discretion, the bank’s prime rate plus a margin that ranges from .25% to 1.25%. In both cases the applicable margin is dependent upon Company performance. Under the Third Amended and Restated Credit Agreement, we are subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The Third Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.
At September 30, 2025, we had approximately $146.1 million in outstanding borrowings under the Third Amended and Restated Credit Agreement and also had approximately $0.7 million in standby letters of credit outstanding, drawable as a financial guarantee on worker’s compensation insurance policies. At September 30, 2025, the weighted average interest rate was approximately 5.5% and we were in compliance with all covenants under the Third Amended and Restated Credit Agreement.
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Long-term debt consists of the following (in thousands):

| September 30, 2025
Revolving credit facility | $ | 33,620 |
Term loan | 112,500 |
Total long-term debt | 146,120 |
Current portion | (12,500) |
Long-term debt, excluding current portion | $ | 133,620 |

Future maturities of long-term debt at September 30, 2025 are as follows (in thousands):

| Term Loan |  | Revolving credit facility |  | Total
Remainder of 2025 | $ | 3,125 |  |  | $ | - |  |  | $ | 3,125 |
2026 | 12,500 |  |  | - |  |  | 12,500 |
2027 | 12,500 |  |  | - |  |  | 12,500 |
2028 | 12,500 |  |  | - |  |  | 12,500 |
2029 | 71,875 |  |  | 33,620 |  |  | 105,495 |
| $ | 112,500 |  |  | $ | 33,620 |  |  | $ | 146,120 |

Future Liquidity
We require cash to pay our operating expenses, purchase capital equipment, and to service our contractual obligations. Our principal sources of funds are our operations and our Third Amended and Restated Credit Agreement. We generated cash of approximately $75.1 million from operations during the nine months ended September 30, 2025. We cannot guarantee that its operations will generate cash in future periods. The Company’s longer-term liquidity is contingent upon future operating performance and the availability of draws on its revolving credit facility. Further, the economic uncertainty resulting from events including inflation, tariffs, bank failures, and other factors beyond our control could affect our long-term ability to access the public markets and obtain necessary capital in order to properly capitalize and continue operations.
We plan to continue to add capacity to enhance operating efficiencies in our manufacturing plants and accommodate anticipated growth in demand. We may consider additional acquisitions of companies, technologies, or products that are complementary to our business. We believe that our existing resources, including our revolving credit facility, together with cash expected to be generated from operations, will be sufficient to fund our cash flow requirements, including expected capital expenditures, through the next twelve months.
We may also require additional capital in the future to fund capital expenditures, acquisitions, or other investments. These capital requirements could be substantial. We anticipate that any future expansion of our business will be financed through existing resources, cash flow from operations, our revolving credit facility, or other new financing. We cannot guarantee that we will be able to meet existing financial covenants or obtain other new financing on favorable terms, if at all.
Enactment of the “One Big Beautiful Bill Act” (OBBBA)
On July 4, 2025, President Donald Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to GILTI and FDII rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, the effects of the new tax law have been recognized in the period of enactment. The impact of OBBBA to our income tax expense is immaterial.
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Critical Accounting Estimates
There have been no material changes to the our Critical Accounting Estimates, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Commitments and Contractual Obligations
There have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risks as previously disclosed in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 4: CONTROLS AND PROCEDURES
The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Report (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
The Company closed on the acquisitions of AJR Specialty and AJR Custom Foam in the second quarter of 2025 and TPI and UNIPEC in the third quarter of 2025. The 2025 acquisitions’ total assets and net sales constituted approximately 3.1% and 1.5%, respectively, of the Company’s consolidated total assets and net sales as shown on our condensed consolidated financial statements as of and for the nine months ended September 30, 2025. As the acquisitions occurred in the second and third quarters of fiscal 2025, the Company excluded all of the acquired businesses internal control over financial reporting from the scope of the assessment of the effectiveness of the Company’s disclosure controls and procedures. This exclusion is in accordance with the general guidance issued by the Staff of the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope within the first year of acquisition if specified conditions are satisfied.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is not a party to any material litigation or other material legal proceedings. From time to time, the Company may be a party to various suits, claims and complaints arising in the ordinary course of business. In the opinion of management of the Company, these suits, claims and complaints should not result in final judgments or settlements that, in the aggregate, would have a material adverse effect on the Company’s financial condition or results of operations.
ITEM 1A: RISK FACTORS
The Company faces a number of uncertainties and risks that are difficult to predict and many of which are outside of the Company's control. For a detailed discussion of the risks that affect our business, you should consider carefully the risks and uncertainties described in this Quarterly Report on Form 10-Q as well as our other public filings with the SEC including Part I, Item IA, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
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ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4: MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5: OTHER INFORMATION
During the third quarter of fiscal 2025, none of our directors or executive officers adopted Rule 10b5-1 trading plans and none of our directors or executive officers terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
ITEM 6: EXHIBITS

Exhibit No. | Description
3.01 | Amended and Restated Certificate of Incorporation of UFP Technologies, Inc., dated June 7, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 13, 2023 (SEC File No. 001-12648)).
3.02 | Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 24, 2023 (SEC File No. 001-12648)).
31.1 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.*
31.2 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.*
32.1 | Certifications pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS | Inline XBRL Instance Document.*
101.SCH | Inline XBRL Taxonomy Extension Schema Document.*
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document.*
101.LAB | Inline XBRL Taxonomy Label Linkbase Document.*
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document.*
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.*
104 | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

_______________
*Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UFP TECHNOLOGIES, INC.

Date: November 7, 2025 |  | By: /s/ R. Jeffrey Bailly
|  | R. Jeffrey Bailly Chairman, Chief Executive Officer, and Director (Principal Executive Officer)
Date: November 7, 2025 |  | By: /s/ Ronald J. Lataille
|  | Ronald J. Lataille Chief Financial Officer (Principal Financial Officer)

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