UFP Technologies(UFPT) - 2021 Q1 - Quarterly Report

Financial Performance - Sales for the three-month period ended March 31, 2021 increased approximately 0.7% to $48.6 million from $48.3 million in the same period last year[68]. - Gross margin decreased to 25.9% for the three-month period ended March 31, 2021, down from 26.6% in the same period last year[77]. - Operating income and net income increased by 4.4% and 7.0%, respectively, for the three-month period ended March 31, 2021[68]. - Sales to customers in the Aerospace & defense and Consumer markets increased by 68.2% and 62.1%, respectively, while sales to the Medical market decreased by 11.5%[76]. - Selling, general, and administrative expenses decreased approximately 5.7% to $7.3 million for the three-month period ended March 31, 2021[78]. Cash Flow and Investments - Net cash provided by operations for the three-month period ended March 31, 2021 was approximately $3.3 million[83]. - Net cash used in investing activities during the three-month period ended March 31, 2021 was approximately $1.4 million, primarily for manufacturing machinery and equipment[84]. - As of March 31, 2021, the Company generated approximately $3.3 million in cash from operations during the three months[92]. Liquidity and Financial Position - The Company has a strong liquidity position and solid balance sheet, enabling effective management through the COVID-19 pandemic[74]. - The Company amended its credit agreement, extending the maturity date from February 1, 2023, to December 31, 2025[87]. - The credit facilities include a $20 million unsecured term loan and a $50 million unsecured revolving credit facility[88]. - The Company has no amounts outstanding under the credit agreement as of March 31, 2021[89]. - The Company is subject to a minimum fixed-charge coverage financial covenant and a maximum total funded debt to EBITDA financial covenant[89]. Future Strategy and Plans - The Company’s current strategy includes further organic growth and growth through strategic acquisitions[67]. - The Company plans to enhance manufacturing efficiencies and may consider additional acquisitions throughout fiscal 2021[93]. - The Company anticipates future capital requirements could be substantial for expansions or acquisitions[94]. - The Company has approximately $9.4 million available for future stock repurchases under its authorized program as of March 31, 2021[95]. - The Company has not repurchased any shares under its stock repurchase program in the first three months of 2021[95]. Other Financial Information - The Company deferred social security payments of approximately $1.6 million through December 31, 2020, with 50% due by December 31, 2021[75]. - The fair value of the interest rate swap agreement was approximately $(385) thousand as of March 31, 2021[90].