Company: UFPT
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001171843-25-003049
Chunk: 29

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 29
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ings for the 2024 acquisitions. Interest income was immaterial.

Other expense (income)

Other expense was approximately $36 thousand and other income was approximately $42 thousand for the three months ended March 31, 2025 and 2024, respectively. The changes in other expense/income are primarily generated by equity method investment income in 2025 and foreign currency transaction losses in 2025 and gains in 2024.

Income Taxes

The Company recorded tax expense of approximately 15.3% and 17.2% of income before income tax expense, for each of the three-month periods ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate for the current period as compared to the prior period is largely due to increased discrete tax benefits associated with vested equity and a state tax refund.

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 three-month period ended March 31, 2025 was approximately $13.8 million and was primarily a result of net income generated of approximately $17.2 million, depreciation and amortization of approximately $4.6 million, share-based compensation of approximately $2.2 million, a change in the fair value of contingent consideration of approximately $0.3 million, an increase in deferred taxes of approximately $1.4 million, an increase in income taxes payable of approximately $1.8 million due to the timing of payment of tax estimates, and an increase in accounts payable of approximately $5.3 million due to the building of inventory to expected demand and the timing of vendor payments in the ordinary course of business.

These cash inflows and adjustments to income were partially offset by an increase in accounts receivable of approximately $8.9 million resulting primarily from an increase in sales from the last 60 days of Q1 2025 as compared to Q4 2024, an increase in inventory of approximately $2.2 million due to inventory build for upcoming expected demand, an increase in prepaid expenses of approximately $0.8 million primarily due to the payment of current year insurance policies, an increase in other assets of approximately $2.3 million primarily due to the payment of an exclusivity fee on a long term contract, a decrease in accrued expenses of approximately $1.9 million due primarily to the payment of accrued compensation, and a decrease in other long