"I am pleased with our third quarter results and continued progress with our strategic initiatives," said R. Jeffrey Bailly, Chairman and CEO. "Sales grew 6.5%, with a 7.3% increase in our MedTech sales offset by a 2.7% decline in our non-medical business. EPS was $2.11 per share, equal to last year. Strong operating results offset roughly $3 million in incremental labor costs at our Illinois AJR facility related to a post-acquisition review of our labor force's eligibility to work under US laws. Absent this expense, EPS would have increased 13%. We expect the impact in Q4 will be significantly less as our new E-Verified employees continue to improve their efficiency."
"We have made progress on several key initiatives, including the ramp-up and qualification of programs transferring to our new Santiago, Dominican Republic, facility," Bailly continued. "The first program is now in commercial production, and the second is in its qualification phase. This facility now has over 300 employees. In addition, our two new large robotic surgery programs are launching and on track to be in commercial production by year-end; we expect each will generate significant revenue in 2026 and beyond. We are also in discussions to extend and expand our contract with our largest customer, with volumes expected to significantly increase over the added term of the contract."
"Our two most recent acquisitions, UNIPEC in Rockland, Maryland, and TPI in Anasco, Puerto Rico, are both performing ahead of expectations, and their integrations are on track," said Bailly. "Looking ahead, we will continue to execute on our expansion plans in both Santiago and La Romana, Dominican Republic, integrate our new acquisitions, and seek additional acquisitions that increase our value to customers. With the benefit of rapidly improving results in Illinois, the expected completion of our program transfers in the DR, increased revenue from major new program launches, and significant anticipated long-term growth in our robotic surgery platform, we remain very bullish about our future."
Financial Highlights for Q3 and YTD 2025
Sales for the third quarter increased 6.5% to $154.6 million, from $145.2 million in the same period of 2024. Year-to-date sales through September increased 26.0% to $453.9 million, from $360.4 million in the same period of 2024. Organic sales were essentially flat for the three-month period ended September 30, 2025. Organic growth for the nine-month period ended September 30, 2025, was approximately 2.2%. More than $8 million in incremental orders were not fulfilled in the third quarter due to the labor issue at AJR.
Third quarter sales to the medical market increased 7.3% to $142.4 million. Non-medical sales decreased 2.7% to $12.2 million. For the nine-month period ended September 30, 2025, sales to the medical market increased 31.1% to $417.1 million. Non-medical sales decreased 13.0% to $36.8 million.
Gross profit as a percentage of sales ("gross margin") decreased to 27.7% for the third quarter of 2025, from 28.6% in the same quarter of 2024. Gross margin for the nine-month period ended September 30, 2024, decreased to 28.3% from 29.0% in the same period of 2024. Approximately $3 million in incremental labor cost was incurred at AJR during the third quarter of 2025. Third quarter gross margin, absent that expense, would have been 29.6%.
Selling, general and administrative expenses ("SG&A") for the third quarter increased 20.8% to $19.1 million in 2025 compared to $15.8 million in the same quarter of 2024. As a percentage of sales, SG&A increased to 12.3% in the third quarter of 2025, from 10.9% in the same period of 2024. As a percentage of sales, adjusted SG&A increased in the third quarter of 2025 to 10.7% from 9.5% in the same period of 2024. The SG&A increase for the three-month period ended September 30, 2025 was primarily due to investments in back-office resources to support our recent acquisitions. For the nine-month period ended September 30, 2025, SG&A increased 29.5% to $56.5 million from $43.6 million in the same period of 2024. As a percentage of sales, SG&A in the nine-month period ended September 30, 2025, increased slightly to 12.4% from 12.1% in the same period of 2024. For the nine months ended September 30, 2025, as a percentage of sales, adjusted SG&A decreased to 10.8% from 10.9% in the same period of 2024.
For the third quarter, operating income decreased 5.6% to $23.4 million, from $24.8 million in the same quarter of 2024. Adjusted operating income for the third quarter decreased 8.8% to $26.3 million from $28.8 million in the third quarter of 2024. For the nine-month period ended September 30, 2025, operating income increased 20.8% to $70.8 million from $58.6 million in the same period of 2024. Adjusted operating income for the nine-month period ended September 30, 2025, increased 19.7% to $79.4 million from $66.3 million in the same period of 2024.
Net income was $16.4 million in the third quarter of 2025, the same as in Q3 of 2024. Adjusted net income decreased 4.3% to $18.6 million in the third quarter of 2025. For the nine-month period ended September 30, 2025, net income increased to $50.7 million, from $42.6 million in the same period of 2024. Adjusted net income increased 18.2% to $57.1 million for the nine-month period ended September 30, 2025.
Adjusted EBITDA for the third quarter decreased 4.9% to $30.7 million from $32.3 million in the third quarter of 2024. Adjusted EBITDA for the nine-month period ended September 30, 2025, increased 20.6% to $92.8 million from $77.0 million in the same period of 2024.
About UFP Technologies, Inc.
UFP Technologies is a contract development and manufacturing organization that specializes in single-use and single-patient medical devices. UFP is a vital link in the medical device supply chain and a valued outsourcing partner to many of the world's top medical device manufacturers. The Company's single-use and single-patient devices and components are used in a wide range of medical devices and packaging for minimally invasive surgery, infection prevention, wound care, wearables, orthopedic soft goods, and orthopedic implants.
Consolidated Condensed Statements of Income(in thousands, except per share data)(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Net sales
$
154,558
$
145,165
$
453,882
$
360,351
Cost of sales
111,811
103,642
325,440
255,714
Gross profit
42,747
41,523
128,442
104,637
Selling, general & administrative expenses
19,069
15,789
56,474
43,601
Acquisition costs
14
732
334
1,676
Change in fair value of contingent consideration
263
238
789
714
Loss on disposal of property, plant & equipment
22
—
11
7
Operating income
23,379
24,764
70,834
58,639
Interest expense, net
2,393
3,475
7,873
4,683
Other (income) expense
(78
)
70
(10
)
30
Income before income tax expense
21,064
21,219
62,971
53,926
Income tax expense
4,681
4,858
12,224
11,320
Net income
$
16,383
$
16,361
$
50,747
$
42,606
Net income per share
$
2.12
$
2.13
$
6.59
$
5.56
Net income per diluted share
$
2.11
$
2.11
$
6.52
$
5.49
Weighted average common shares outstanding
7,712
7,674
7,703
7,666
Weighted average diluted common shares outstanding
7,780
7,772
7,783
7,763
Consolidated Condensed Balance Sheets(in thousands)(Unaudited)
September 30, 2025
December 31, 2024
Assets:
Cash and cash equivalents
$
18,226
$
13,450
Receivables, net
85,176
84,677
Inventories
86,149
87,536
Other current assets
8,420
9,282
Net property, plant, and equipment
77,540
70,564
Goodwill
197,302
