UFP Technologies(UFPT) - 2021 Q2 - Quarterly Report

Sales Performance - Sales for the three-month period ended June 30, 2021 increased approximately 18.8% to $50.7 million from $42.6 million for the same period in 2020[79] - Sales for the six-month period ended June 30, 2021 increased approximately 9.2% to $99.3 million from $90.9 million for the same period in 2020[80] Gross Margin - Gross margin for the three-month period ended June 30, 2021 increased to 26.5% from 23.3% for the same period in 2020[81] - Gross margin for the six-month period ended June 30, 2021 increased to 26.2% from 25.0% for the same period in 2020[82] Expenses - Selling, general, and administrative expenses (SG&A) increased approximately 8.4% to $7.2 million for the three-month period ended June 30, 2021[83] - SG&A as a percentage of sales decreased to 14.3% for the three-month period ended June 30, 2021, from 15.6% for the same period in 2020[83] Interest and Tax - Net interest income was approximately $21 thousand for the three-month period ended June 30, 2021, compared to net interest expense of approximately $33 thousand for the same period in 2020[85] - The Company recorded tax expense of approximately 24.2% for the three-month period ended June 30, 2021, compared to 20.8% for the same period in 2020[88] - The effective tax rate for the six-month period ended June 30, 2021, was approximately 22.9%, an increase from 18.9% in the same period of 2020[89] Cash Flow - Net cash provided by operations for the six-month period ended June 30, 2021, was approximately $9.9 million, primarily driven by net income of approximately $8.9 million[91] - Net cash used in investing activities during the same period was approximately $3.3 million, mainly for additions of manufacturing machinery and equipment[92] - Net cash used in financing activities was approximately $0.6 million, primarily due to payments for stock options exercised and restricted stock units vested[94] - The Company generated cash of approximately $9.9 million in operations during the six months ended June 30, 2021, but future cash generation cannot be guaranteed[102] Credit and Financing - The Company has an unsecured $70 million Amended and Restated Credit Agreement, with a maturity date extended to December 31, 2025[97] - As of June 30, 2021, the Company had no amounts outstanding under the Restated Credit Agreement, with an applicable interest rate of approximately 1.09%[99] Future Plans and Challenges - The Company plans to continue its strategy of organic growth and growth through strategic acquisitions[71] - The Company expects to face ongoing challenges due to the COVID-19 pandemic, impacting its business and financial results[72] - The Company plans to continue adding capacity to enhance operating efficiencies and may consider additional acquisitions[103] - Approximately $9.4 million remains available for future stock repurchases under the authorized program[105] Market Risks - There have been no material changes in market risks as previously disclosed in the Annual Report for the year ended December 31, 2020[108]