Company: UFPT
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050425
Chunk: 94

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 94
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 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