Company: UFPT
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050425
Chunk: 81

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 81
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 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