UFP Technologies Announces Q2 Results
August 04 2020 - 8:42AM
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 $2.3 million or $0.31 per diluted common share
outstanding for its second quarter ended June 30, 2020,
compared to net income of $4.6 million or $0.62 per diluted
common share outstanding for the same period in 2019. Sales
for the second quarter were $42.6 million compared to second
quarter sales of $51.4 million in 2019. Net income for the
six-month period ended June 30, 2020 was $6.2 million or $0.82 per
diluted common share outstanding compared to $8.3 million or $1.11
per diluted common share outstanding for the same period in
2019. Sales for the six-month period ended June 30, 2020
were $90.9 million compared to sales of $98.7 million for the same
period in 2019.
"I am pleased with our Q2 results given the
challenging market conditions caused by COVID-19," said
R. Jeffrey Bailly, Chairman and CEO. "All of our
factories are up and running, and safety protocols are working
well. Our product development business, which is a key driver
of future manufacturing revenue, is up 35% year to date."
"Revenue for the quarter was down $8.8 million or
17% versus the prior year, while net income declined $2.3 million
or 50%," Bailly said. "Each of our markets has been adversely
impacted by the pandemic. Automotive, down 70%, was the hardest
hit, while Medical had the smallest decline at 4.2%. Demand
remains strong for personal protective equipment such as face
shields, and for infection prevention products and patient
surfaces. However, orders related to elective procedures have
declined. Although it is difficult to predict the impact of
COVID-19 on our future revenue, we anticipate continued near-term
softness in elective procedures offsetting the modest gains
forecasted in non-medical markets. We have responded with
cost-cutting measures, including strategic reductions of our
indirect and direct labor staffing.”
"I remain very optimistic about the future of UFP
Technologies," Bailly said. "The strong increase in our development
business bodes well for revenue growth in 2021 and beyond.
And Q2, despite the reduced operating results, still generated
approximately $5 million in cash, bringing our cash balance to over
$12 million. This, combined with our substantial borrowing
capacity, enables us to continue to invest in both internal and
external growth opportunities as well as efficiency improvements to
enhance our competitive position."
Financial Highlights for Q2 and YTD 2020:
- Sales for the second quarter declined 17.0% to $42.6 million,
from $51.4 million in the same period of 2019. Year-to-date
sales through June declined 7.9% to $90.9 million, from $98.7
million in the same period of 2019.
- Second quarter sales to the medical market declined 4.2%.
Sales to the aerospace & defense and automotive markets
declined 26.3% and 70.7%, respectively. All other sales (consumer,
electronics, and industrial) declined 30.0%.
- Year-to-date sales to the medical market grew 5.4%. Sales
to the aerospace & defense and automotive markets declined
24.9% and 43.4%, respectively. All other sales (consumer,
electronics, and industrial) declined 25.1%.
- Gross profit as a percentage of sales (“gross margin”) declined
to 23.3% for the second quarter, from 28.0% in the same quarter of
2019. Gross margin for the six-month period ended June 30,
2020 declined to 25.0% from 27.2% in the same period of 2019.
- Selling, general and administrative expenses (“SG&A”) for
the second quarter declined 14.5% to $6.7 million in 2020 compared
to $7.8 million in the same quarter of 2019. For the
six-month period ended June 30, 2020, SG&A declined 4.2% to
$14.4 million from $15.0 million in the same period of 2019.
- For the second quarter, operating income declined to $3.0
million, from $6.6 million in the same quarter of 2019. For
the six-month period ended June 30, 2020, operating income declined
to $8.1 million, from $11.8 million in the same period of
2019.
- Net income declined to $2.3 million in the second quarter of
2020, from $4.6 million in the same period of 2019. For
the six-month period ended June 30, 2020 net income declined to
$6.2 million, from $8.3 million in the same period of
2019.
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.
This news release contains statements relating to
expected financial performance and/or future business prospects,
events and plans that are forward-looking statements. Such
statements include, but are not limited to, statements regarding
the anticipated effects on the Company of the COVID-19 pandemic,
including with respect to the different markets in which the
Company participates, demand for the Company’s products, the
Company’s product development efforts, the well-being and
availability of the Company’s employees, the continuing operation
of the Company’s locations, the effects of cost-cutting measures,
including direct and indirect labor costs, and the effectiveness of
the Company’s safety protocols; statements about the Company’s
acquisition strategies and opportunities; statements regarding
anticipated trends in the different markets in which the Company
competes and expectations regarding customer demand; statements
regarding the potential for our product development business (for
which we recognize revenue as engineering services in our financial
statements) to drive future manufacturing revenue; expectations
regarding the manufacturing capacity and efficiencies of the
Company; expectations regarding the Company’s liquidity, statements
about the Company’s participation and growth in multiple markets
and its business opportunities; statements about the Company’s
growth potential and strategies for growth; anticipated revenues
and the timing of such revenues, and any statements implying that
the Company may be able to sustain or increase its sales, earnings
and earnings per share or sales, earnings and earnings per share
growth rates. Investors are cautioned that such
forward-looking statements involve risks and uncertainties that
could adversely affect the Company’s business and prospects, and
otherwise cause actual results to differ materially from those
anticipated by such forward-looking statements, or otherwise,
including without limitation, the severity and duration of the
COVID-19 pandemic and its impact on the markets in which the
Company participates, including its impact on the Company’s
customers, suppliers and employees, as well as the U.S. and
worldwide economies; the timing, scope and effect of further
governmental, regulatory, fiscal, monetary and public health
responses to the COVID-19 pandemic; risks relating to decreased,
including substantially decreased, demand for our products; risks
relating to the potential closure of any of our facilities or the
unavailability of key personnel or other employees; risks relating
to the success of our safety protocols; risks relating to operating
with a decreased labor force; risks relating to the identification
of suitable acquisition candidates and the successful, efficient
execution of acquisition transactions and integration of any
acquisition candidates; risks that revenue from our product
development business may not result in future manufacturing
revenue; risks and uncertainties associated with maintaining and
increasing sales, earnings and earnings per share, as well as other
risks and uncertainties that are detailed in the documents filed by
the Company with the SEC. Accordingly, actual results may
differ materially. Readers are referred to the documents
filed by the Company with the SEC, specifically the last reports on
Forms 10-K and 10-Q. The forward-looking statements contained
herein speak only of the Company’s expectations as of the date of
this press release. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any such statement to reflect any change in the
Company’s expectations or any change in events, conditions, or
circumstances on which any such statement is based.
|
|
Consolidated Condensed Statements of Income(in
thousands, except per share data)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30 |
|
June 30 |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales |
|
$ |
42,644 |
|
$ |
51,399 |
|
$ |
90,921 |
|
$ |
98,726 |
Cost of sales |
|
|
32,695 |
|
|
37,028 |
|
|
68,148 |
|
|
71,859 |
Gross profit |
|
|
9,949 |
|
|
14,371 |
|
|
22,773 |
|
|
26,867 |
Selling, general and administrative expenses |
|
|
6,665 |
|
|
7,799 |
|
|
14,417 |
|
|
15,043 |
Loss on disposal of fixed assets |
|
|
290 |
|
|
- |
|
|
286 |
|
|
- |
Operating income |
|
|
2,994 |
|
|
6,572 |
|
|
8,070 |
|
|
11,824 |
Interest expense, net |
|
|
33 |
|
|
194 |
|
|
49 |
|
|
425 |
Other expense |
|
|
35 |
|
|
198 |
|
|
362 |
|
|
437 |
Income before income tax expense |
|
|
2,926 |
|
|
6,180 |
|
|
7,659 |
|
|
10,962 |
Income tax expense |
|
|
608 |
|
|
1,582 |
|
|
1,450 |
|
|
2,630 |
Net income |
|
$ |
2,318 |
|
$ |
4,598 |
|
$ |
6,209 |
|
$ |
8,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share outstanding |
|
$ |
0.31 |
|
$ |
0.62 |
|
$ |
0.83 |
|
$ |
1.12 |
Net income per diluted share outstanding |
|
$ |
0.31 |
|
$ |
0.62 |
|
$ |
0.82 |
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
7,487 |
|
|
7,423 |
|
|
7,472 |
|
|
7,413 |
Weighted average diluted shares outstanding |
|
|
7,532 |
|
|
7,467 |
|
|
7,545 |
|
|
7,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Condensed Balance Sheets(in
thousands)(Unaudited) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2020 |
|
2019 |
|
|
|
|
|
|
Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
12,266 |
|
$ |
3,743 |
Receivables, net |
|
27,271 |
|
|
28,648 |
Inventories |
|
20,959 |
|
|
18,276 |
Other current assets |
|
3,419 |
|
|
2,583 |
Net property, plant, and equipment |
|
55,158 |
|
|
56,739 |
Goodwill |
|
51,838 |
|
|
51,838 |
Intangible assets, net |
|
20,347 |
|
|
20,975 |
Other assets |
|
5,961 |
|
|
5,956 |
Total assets |
$ |
197,219 |
|
$ |
188,758 |
Liabilities and equity: |
|
|
|
|
|
Accounts payable |
|
5,415 |
|
|
4,577 |
Other current liabilities |
|
11,150 |
|
|
12,207 |
Other liabilities |
|
11,442 |
|
|
9,983 |
Total liabilities |
|
28,007 |
|
|
26,767 |
Total equity |
|
169,212 |
|
|
161,991 |
Total liabilities and stockholders' equity |
$ |
197,219 |
|
$ |
188,758 |
|
|
|
|
Contact: Ron Lataille978-234-0926rlataille@ufpt.com
Ufp Technologies (NASDAQ:UFPT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ufp Technologies (NASDAQ:UFPT)
Historical Stock Chart
From Apr 2023 to Apr 2024