Company: UFPT
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001171843-25-005268
Chunk: 78

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 78
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 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 June 30, 2025 increased approximately 37.2% to $151.2 million from sales of $110.2 million for the same period in 2024. The increase in net sales is primarily due to increased sales to customers in the medical market of 46.0%, primarily due to sales from the 2024 and 2025 acquisitions, which collectively contributed approximately $35.7 million in sales during the second quarter. Organic sales growth for the second quarter was 4.9%. Organic growth in the medical market was approximately 10% and was fueled by strong sales virtually all segments including the robot assisted surgery market.

Net sales for the six months ended June 30, 2025 increased approximately 39.1% to $299.3 million from sales of $215.2 for the same period in 2024. The increase in net sales is primarily due to increased sales to customers in the medical market of 48.2%, primarily due to sales from the 2024 and 2025 acquisitions, which collectively contributed approximately $76.3 million in sales during the first half of the year. Organic sales growth for the first half of the year was 3.6%.

Gross Profit

Gross margin decreased to 28.8% for the three months ended June 30, 2025, from 30.0% for the same period in 2024. As a percentage of sales, material and labor costs collectively increased 0.4% and overhead costs increased 0.8%. As anticipated, we had significant inefficiency in our newly acquired AJR operations related to onboarding many new direct and indirect labor associates. We estimate this added $1.2 million to our cost-of-sales in the second quarter. It is anticipated that the inefficiency at AJR will continue but gradually improve for the balance of