Company: UFPT
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001171843-25-005268
Chunk: 95

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 2
Chunk 95
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 tax refund.

28

Liquidity and Capital Resources

The Company generally funds its operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.

Cash Flows

Net cash provided by operations for the six months ended June 30, 2025 was approximately $39.1 million and was primarily a result of net income generated of approximately $34.4 million, depreciation and amortization of approximately $9.4 million, share-based compensation of approximately $4.5 million, a change in the fair value of contingent consideration of approximately $0.5 million, an increase in deferred taxes of approximately $1.7 million, a decrease in accounts receivable of approximately $1.3 million due to lower days sales outstanding (DSO) driven by customer sales mix, a decrease in inventory of approximately $3.9 million due to strategic reductions of raw material stock, and an increase in income taxes payable of approximately $3.2 million due to the timing of payment of tax estimates.

These cash inflows and adjustments to income were partially offset by an increase in prepaid expenses of approximately $0.3 million primarily due to the payment of current year insurance policies, an increase in other assets of approximately $3.7 million primarily due to the payment of an exclusivity fee on a long term contract, a decrease in accounts payable of approximately $2.3 million due to the timing of vendor payments in the ordinary course of business, a decrease in accrued expenses of approximately $6.1 million due primarily to the payment of accrued compensation, and a decrease in other long-term liabilities of approximately $7.1 million due primarily to earn-out, non-compete and acquisition holdback payments.

Net cash used in investing activities during the six months ended June 30, 2025 was approximately $8.5 million and was primarily the result of additions of manufacturing machinery and equipment and various building improvements across the Company, as well as the acquisitions of AJR Specialty and AJR Custom Foam.

Net cash used for financing activities was approximately $29.8 million during the six months ended June 30, 2025 and was primarily the result of payments on the revolving line of credit of approximately $36.0 million, principal payments of long-term debt of approximately $6.3 million, payments of contingent consideration of approximately $0.3 million and payments of statutory withholding for stock options exercised and restricted stock units vested of approximately $3.9 million. These payments were partially offset by borrowings under our revolving line