Company: UFPT
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001171843-25-003049
Chunk: 28

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 28
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 General and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased approximately 34.6% to $18.7 million for the three-month period ended March 31, 2025, from $13.9 million for the same period in 2024, which we primarily attribute to SG&A from the Company’s 2024 acquisitions. As a percentage of sales, SG&A decreased to 12.6% for the three-month period ended March 31, 2025, from 13.2% for the same three-month period in 2024.

Change in fair value of contingent consideration

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 the 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 the DAS Medical acquisitions, respectively, and was estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the initial calculation were management’s financial forecasts, 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 $0.3 million during the three months ended March 31, 2025, related to contingent consideration. The fair value of the liability for the contingent consideration payments recognized at March 31, 2025 totaled approximately $10.3 million out of the remaining potential payments of $14.3 million. The change in fair value of contingent consideration for the acquisitions is included in change in fair value of contingent consideration in the consolidated statements of comprehensive income.

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Interest expense, net

Net interest expense was approximately $2.8 million and $0.6 million for the three-month periods ended March 31, 2025 and 2024, respectively. The increase in net interest expense for the three-month period ended March 31, 2025 was primarily due to higher debt related to borrow