UFP Technologies(UFPT) - 2024 Q4 - Annual Report

Financial Performance - The Company achieved a net sales increase of 26.1% to $504.4 million for the year ended December 31, 2024, compared to$400.1 million in 2023, driven by $70.3 million from acquisitions and an 8.5$81.1 million, while net income increased by 31.3% to $59.0 million for the year ended December 31, 2024 [109]. - Gross profit margin improved to 29.1$62.2 million, but as a percentage of net sales, SG&A decreased to 12.3% from 12.7% [114]. Cash Flow and Investments - Net cash provided by operations was approximately $66.6 million for the year ended December 31, 2024, primarily from net income of$59.0 million [125]. - Net cash used in investing activities was approximately $210.2 million, mainly for acquisitions and capital expenditures [127]. - The Company entered into a secured$275 million Amended and Restated Credit Agreement, with outstanding borrowings of approximately $189.4 million as of December 31, 2024 [129][132]. Future Plans and Capital Requirements - The Company plans to continue enhancing manufacturing capacity and may consider additional acquisitions to support growth [136]. - The Company anticipates future capital requirements for expansions, acquisitions, or investments, which could be substantial [137]. - The Board of Directors authorized a stock repurchase program of up to$10.0 million, with approximately $9.4 million available for future repurchases as of December 31, 2024 [138]. - There were no share repurchases during the years ended December 31, 2024, 2023, and 2022 [138]. Accounting and Valuation - The Company evaluates its accounting estimates based on historical experience and current economic conditions, which may affect reported amounts of assets and liabilities [139]. - Fair value of identifiable intangible assets is based on detailed valuations and management's estimates, with potential future contingent consideration liabilities remeasured each reporting period [141]. Market Risk - Market risk includes fluctuations in interest rates, foreign exchange rates, and equity prices, with a weighted average interest rate of approximately 5.9% as of December 31, 2024 [143]. - The Company's cash and cash equivalents primarily consist of U.S. dollar bank accounts, which are not affected by market risk [143]. - Interest on credit facilities ranges from SOFR plus a margin of 1.25% to 2.25% or the bank's prime rate plus a margin of 0.25% to 1.25% [143].