NEWBURYPORT, Mass., Nov. 03, 2020 (GLOBE NEWSWIRE) -- UFP Technologies, Inc. (Nasdaq: UFPT), an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market, today reported net income of $3.0 million or $0.40 per diluted common share outstanding for its third quarter ended September 30, 2020, compared to net income of $5.6 million or $0.75 per diluted common share outstanding for the same period in 2019. Sales for the third quarter were $43.3 million compared to third quarter sales of $49.4 million in 2019. Net income for the nine-month period ended September 30, 2020 was $9.2 million or $1.22 per diluted common share outstanding compared to $14.0 million or $1.87 per diluted common share outstanding for the same period in 2019. Sales for the nine-month period ended September 30, 2020 were $134.2 million compared to sales of $148.1 million for the same period in 2019.

"I am pleased with our results and progress in Q3. We made some key strategic moves in response to market conditions related to Covid-19 and to position UFP for long-term profitable growth," said R. Jeffrey Bailly, Chairman & CEO. “We completed a series of cost-saving initiatives, including a difficult but necessary reduction of our workforce which alone will bring $5 million in annualized savings. Today, all of our factories are up and running safely, our safety protocols have helped reduce the number of Covid-positive cases, and attendance levels have stabilized.”

"Although quarterly revenue was down 12.3% vs. the prior year, it was up 1.5% vs. Q2 of this year," Bailly added. "July was our lowest revenue month of the year, and since then we have seen steady progress on both the top and bottom lines. Our Advanced Components group, which includes Automotive, Aerospace & Defense, Consumer, Electronics, and Industrial, rebounded strongly. It grew a combined 50% vs. Q2 of 2020. This was offset by a Covid-related decline in our Medical business and the dramatic reduction in elective surgeries. In Q2, many of our medical customers continued to order parts to create an inventory safety stock. Although elective procedures have begun to increase, those customers are still working through their excess inventory."

"I remain very optimistic about our future,” Bailly said. “We continue to make progress in identifying accretive strategic acquisition candidates that can increase our value to customers and strengthen our position in the marketplace. With our reduced cost structure and gradually improving market conditions, combined with our strong balance sheet – $20 million in cash and zero debt – we are well positioned to capitalize on both internal and external growth opportunities."

Financial Highlights for Q3 and YTD 2020:

• Sales for the third quarter this year decreased 12.3% to $43.3 million, from $49.4 million in the same period of 2019. Year-to-date sales through September decreased 9.4% to $134.2 million, from $148.1 million in the same period of 2019.
  ° Third quarter sales to the medical market decreased 16.6%. Sales to the aerospace & defense and automotive markets increased 3.4% and decreased 9.6%, respectively. All other sales (consumer, electronics, and industrial) decreased 4.5%.
  ° Year-to-date sales to the medical market decreased 2.1%. Sales to the aerospace & defense and automotive markets decreased 16.4% and 32.7%, respectively. All other sales (consumer, electronics, and industrial) decreased 18.4%.
• Gross profit as a percentage of sales (“gross margin”) decreased to 24.3% for the third quarter, from 27.0% in the same quarter of 2019. Gross margin for the nine-month period ended September 30, 2020 decreased to 24.8%, from 27.1% in the same period of 2019.
• Selling, general and administrative expenses (“SG&A”) for the third quarter decreased 5.5% to $6.8 million compared to $7.2 million in the same quarter of 2019. For the nine-month period ended September 30, 2020, SG&A decreased 4.6% to $21.2 million, from $22.2 million in the same period of 2019.
• For the third quarter, operating income decreased to $3.7 million, from $6.1 million in the same quarter of 2019. For the nine-month period ended September 30, 2020, operating income decreased to $11.8 million, from $18.0 million in the same period of 2019.
• Net income decreased to $3.0 million in the third quarter, from $5.6 million in the same period of 2019. For the nine-month period ended September 30, 2020 net income decreased to $9.2 million, from $14.0 million in the same period of 2019.

About UFP Technologies, Inc.

UFP Technologies is an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market. Utilizing highly specialized foams, films and plastics, UFP converts raw materials through laminating, molding, radio frequency welding and fabricating techniques. The Company is diversified by also providing highly engineered solutions to customers in the aerospace & defense, automotive, consumer, electronics and industrial markets.