UFP Technologies(US:UFPT)2020-11-06 13:45Financial Performance - Net sales for the three months ended September 30, 2020, were $43.299 million, a decrease of 12.5% compared to $49.394 million for the same period in 2019[11]. - Gross profit for the nine months ended September 30, 2020, was $33.301 million, down 17.2% from $40.188 million in the same period of 2019[11]. - Net income for the three months ended September 30, 2020, was $2.988 million, a decline of 47.0% compared to $5.641 million for the same period in 2019[11]. - Basic net income per share for the nine months ended September 30, 2020, was $1.23, down from $1.88 in the same period of 2019, reflecting a decrease of 34.6%[11]. - Operating income for the nine months ended September 30, 2020, was $11.795 million, down 34.3% from $17.962 million in the same period of 2019[11]. - Net income for the nine months ended September 30, 2020, was $9,197 thousand, a decrease of 34.5% compared to $13,973 thousand in 2019[18]. - Total net sales for the nine months ended September 30, 2020, were $134,220 thousand, down 9.4% from $148,120 thousand in 2019[27]. - Cash flows from operating activities for the nine months ended September 30, 2020, were $16,738 thousand, a decrease of 25.4% from $22,386 thousand in 2019[18]. Assets and Equity - Total assets increased to $200.664 million as of September 30, 2020, up from $188.758 million at December 31, 2019, representing a growth of 6.4%[9]. - Total current assets rose to $68.563 million as of September 30, 2020, compared to $53.250 million at December 31, 2019, marking an increase of 28.7%[9]. - Total stockholders' equity increased to $172.439 million as of September 30, 2020, up from $161.991 million at December 31, 2019, indicating a growth of 6.9%[9]. - Cash and cash equivalents significantly increased to $17.435 million as of September 30, 2020, compared to $3.743 million at December 31, 2019, reflecting a growth of 366.5%[9]. - Total inventory as of September 30, 2020, was $19,488 thousand, an increase from $18,276 thousand as of December 31, 2019[49]. Revenue and Sales - Medical market sales for the three months ended September 30, 2020, were $26,850 thousand, representing 62.0% of total sales, compared to $32,175 thousand in 2019[56]. - The company recognized revenue from engineering services of $3,157 thousand for the nine months ended September 30, 2020, compared to $1,814 thousand in 2019, reflecting a growth of 74.0%[27]. Expenses and Losses - The company reported a loss on disposal of fixed assets amounting to $12, compared to no loss in the same period of 2019[11]. - The allowance for credit losses at the end of the nine months ended September 30, 2020, was $649 thousand, an increase of 33.5% from $486 thousand at the beginning of the period[35]. - The company incurred cash paid for interest of $55 thousand for the nine months ended September 30, 2020, significantly down from $579 thousand in 2019[31]. - The total lease cost for the nine months ended September 30, 2020, was $1,100 thousand, slightly down from $1,105 thousand in 2019[52]. Stock and Compensation - Total share-based compensation for the three months ended September 30, 2020, was $239 thousand, a decrease from $473 thousand in 2019, while for the nine months, it increased to $1,338 thousand from $1,169 thousand[42]. - The total intrinsic value of all options exercised during the nine-month periods ended September 30, 2020, was approximately $757 thousand, down from $867 thousand in 2019[45]. - As of September 30, 2020, the Company had approximately $2.3 million of unrecognized compensation expense expected to be recognized over 3.5 years[48]. Debt and Financing - The Company has an unsecured $70 million Amended and Restated Credit Agreement, which includes a $20 million unsecured term loan and a $50 million revolving credit facility[59]. - As of September 30, 2020, the applicable interest rate under the Amended and Restated Credit Agreement was approximately 1.14%, and the Company was in compliance with all covenants[61]. - The Company entered into a $20 million, 5-year interest rate swap agreement to convert the interest on the term loan from a variable rate to a fixed rate, with a notional amount of approximately $12.1 million as of September 30, 2020[62]. - The fair value of the interest rate swap as of September 30, 2020, was approximately $(538) thousand, reflecting a change in fair value recorded as an expense[62]. - The Company is subject to a minimum fixed-charge coverage financial covenant and a maximum total funded debt to EBITDA financial covenant under the Amended and Restated Credit Agreement[61]. Tax and Amortization - The Company recorded an income tax expense of approximately 19.4% for the three-month period ended September 30, 2020, compared to 5.2% for the same period in 2019[58]. - The Company recorded amortization expense related to intangible assets of approximately $314 thousand for both the three-month periods ended September 30, 2020 and 2019[57]. - The estimated remaining amortization expense as of September 30, 2020, totals $20,032 thousand, with $314 thousand expected for the remainder of 2020[57]. Other Financial Information - Deferred revenue at the end of the nine months ended September 30, 2020, was $1,946 thousand, down 23.1% from $2,532 thousand in 2019[28]. - Unbilled receivables at the end of the nine months ended September 30, 2020, increased to $291 thousand from $13 thousand in 2019[30]. - The weighted average number of diluted common shares outstanding for the three months ended September 30, 2020, was 7,555 thousand, compared to 7,493 thousand in 2019[54]. - The weighted average discount rate for finance leases as of September 30, 2020, was 2.26%[52]. - The Financial Conduct Authority announced plans to phase out LIBOR by the end of 2021, which may require the Company to amend certain contracts[63].