UFP Technologies (UFPT) highlights customer concentration and 2026 cyber incident
Filing Impact
Filing Sentiment
Form Type
10-K
UFP Technologies, Inc. files its annual report describing a fast-growing contract development and manufacturing business focused on single-use and single-patient medical devices for leading global OEMs. Its products support minimally invasive surgery, infection prevention, wound care, orthopedics, wearables and biopharma applications.
The company operates a global footprint of ISO 13485-certified and FDA-registered plants, including major facilities in the U.S., Dominican Republic, Mexico, Puerto Rico, Ireland and Costa Rica. Two customers, Intuitive Surgical SARL and Stryker, accounted for approximately 24.3% and 21.5% of 2025 net sales, while the top ten customers represented 68.8%, underscoring significant customer concentration risk.
Market capitalization held by non‑affiliates was about
Key risks highlighted include inflationary cost pressures, supply-chain and raw material dependence, geopolitical and climate-related disruptions, cybersecurity threats, heavy reliance on a few customers, regulatory and ESG developments, and challenges integrating acquisitions. The company discloses a February 2026 cyber incident that disrupted some IT systems but reports operations and financial condition remain materially intact so far.
Positive
- None.
Negative
- None.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||||
| SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||||
| SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ____________ to ____________
Commission file number: 001-12648
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |||||||
| incorporation or organization) | Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(978 ) 352-2200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
The | ||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer o | ||||||||
Non-accelerated filer o | Smaller reporting company | |||||||
| Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No x
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $1,814,993,392 , based on the closing sales price of $244.16 per share of such stock on the NASDAQ Capital Market on June 30, 2025.
As of February 19, 2026, there were 7,713,300 shares of common stock, $0.01 par value per share, of the registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
| Document | Parts of this Form 10-K Into Which Incorporated | ||||
Portions of the registrant’s Proxy Statement for the 2026 Annual Meeting of Shareholders. | Part III | ||||
Table of Contents
PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Management and representatives of UFP Technologies, Inc. (the “Company”) also may from time to time make forward-looking statements. These statements are subject to known and unknown risks, uncertainties, and other factors, which may cause our or our industry’s actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about the Company’s prospects; the demand for its products, the well-being and availability of the Company’s employees, the continuing operation of the Company’s locations, delayed payments by the Company’s customers and the potential for reduced or canceled orders; statements about expectations regarding customer inventory levels; statements about the Company’s acquisition strategies and opportunities and the Company’s growth potential and strategies for growth; expectations regarding customer demand; expectations regarding the Company’s liquidity and capital resources, including the sufficiency of its cash reserves and the availability of borrowing capacity to fund operations and/or potential future acquisitions; anticipated revenues and the timing of such revenues; expectations about shifting the Company’s book of business to higher-margin, longer-run opportunities; anticipated trends and potential advantages in the different markets in which the Company competes, including the medical, aerospace and defense, automotive, consumer, electronics, and industrial markets, and the Company’s plans to expand in certain of its markets; statements regarding anticipated advantages the Company expects to realize from its investments and capital expenditures; statements regarding anticipated advantages to improvements and alterations at the Company’s existing plants; expectations regarding the Company’s manufacturing capacity, operating efficiencies, and new production equipment; statements about new product offerings and program launches; statements about the Company’s participation and growth in multiple markets; statements about the Company’s business opportunities; and any indication that the Company may be able to sustain or increase its net sales, earnings or earnings per share, or its sales, earnings or earnings per share growth rates.
Investors are cautioned that such forward-looking statements involve risks and uncertainties that could adversely affect the Company’s business and prospects, and otherwise cause actual results to differ materially from those anticipated by such forward-looking statements, or otherwise, including without limitation: our financial condition and results of operations, including risks relating to substantially decreased demand for the Company’s products; risks relating to the potential closure of any of the Company’s facilities or the unavailability of key personnel or other employees; risks that the Company’s inventory, cash reserves, liquidity or capital resources may be insufficient; risks relating to delayed payments by our customers and the potential for reduced or canceled orders; risks related to customer concentration; risks related to global conflict or civil unrest to the efficacy of our manufacturing process; risks associated with the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions, the integration of any such acquisition candidates, the value of those acquisitions to our customers and shareholders, and the financing of such acquisitions; risks related to our indebtedness and compliance with covenants contained in our financing arrangements, and whether any available financing may be sufficient to address our needs; risks associated with efforts to shift the Company’s book of business to higher-margin, longer-run opportunities; risks associated with the Company’s entry into and growth in certain markets; risks and uncertainties associated with seeking and implementing manufacturing efficiencies and implementing new production equipment; risks associated with governmental regulations and/or sanctions affecting the import and export of products, including global trade barriers, additional taxes, tariff increases or uncertainties, cash repatriation restrictions, retaliations and boycotts between the U.S. and other countries; risks associated with the usage of artificial intelligence technologies; risks associated with domestic, regional and global political risks and uncertainties; risks and uncertainties associated with growth of the Company’s business and increases to sales, earnings and earnings per share; risks relating to cybersecurity, including cyber-attacks on the Company’s information technology infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations, and the potential consequences of the Cyber Incident defined in Item 1A “Risk Factors” could result in data or financial loss, reputational harm, business disruption, damage to our relationships with customers, consumers, employees and third parties on which we rely, litigation, regulatory investigations, enforcement actions or other negative impacts under cybersecurity related regulations or otherwise; risks associated with our or third-party use of artificial intelligence technologies; risks associated with new product and program launches; risks relating to our performance and the performance of our counterparties under the agreements we have entered into; the risk that our two largest customers, on whom we depend for a substantial portion of our annual revenues, will not purchase the expected volume of goods under the supply agreements we have entered into with them because, among other things, they no longer require the products at all or to the degree they anticipated or because, among other things, Intuitive Surgical SARL, our largest customer, decides to manufacture the products itself or through one of its affiliates it obtains the products from other listed suppliers specified in our agreement; the risk that we will not achieve expected rebates under the applicable supply agreement; and risks relating to our ability to maintain
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increased levels of production at profitable levels, if at all; or to continue to increase production rates and risks relating to disruptions and delays in our supply chain or labor force. Accordingly, actual results may differ materially.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” and similar expressions intended to identify forward-looking statements. Our actual results could be different from the results described in or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts, and projections, and may be materially better or worse than anticipated. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions and are only as of the date of this Report. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this Report, in order to reflect changes in circumstances or expectations, or the occurrence of unanticipated events, except to the extent required by applicable securities laws. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed above and under “Risk Factors” set forth in Part I Item 1A of this Report, as well as the risks and uncertainties discussed elsewhere in this Report. We qualify all of our forward-looking statements by these cautionary statements. We caution you that these risks are not exhaustive. We operate in a continually changing business environment and new risks emerge from time to time.
Unless the context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer to UFP Technologies, Inc. and its consolidated subsidiaries.
ITEM 1. BUSINESS
The Company is a contract development and manufacturing organization that specializes in single-use and single-patient medical devices. The Company 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. Our 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.
The Company was incorporated in the State of Delaware in 1993.
The consolidated financial statements of the Company include the accounts and results of operations of UFP Technologies, Inc. and its wholly owned subsidiaries, as well as its share of minority-owned equity investments. All significant intercompany balances and transactions have been eliminated in consolidation.
Available Information
The Company’s Internet website address is http://www.ufpt.com. Through its website, the Company makes available, free of charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). These SEC reports can be accessed through the investor relations section of the Company’s website. The information found on the Company’s website is not incorporated by reference in this or any other report filed with or furnished to the SEC. The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding the Company and other issuers that file electronically with the SEC. The SEC’s Internet website address is http://www.sec.gov.
Market Overview
The applications for the Company’s products are numerous and diverse. The Company’s products are primarily sold to customers within the medical market. The global medical market is large and growing but the Company targets in specific segments where its development and manufacturing expertise and access to highly specialized materials helps customers differentiate products, improve patient outcomes, and increase their client’s speed to market. The product segments we target, and within which we operate, include minimally invasive surgery, infection control, orthopedics, interventional & surgical, surfaces & support, therapeutics, diagnostics, wound care, and biopharma.
Products
The Company’s products, which often are custom-made to its customers' specifications, are targeted at macro market trends and create specific opportunities in niche segments where the Company’s access to specialty materials, engineering
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know-how, and processing expertise can be leveraged to create value for its customers. Examples of its custom medical products include protective drapes for robotic surgery, patient handling and comfort, advanced wound care, infection prevention, disposables for surgical and endoscopic procedures, packaging for medical devices and orthopedic implants, components for cardiac implants, dispenser coils for catheters, and biopharma drug manufacturing. In general, the Company’s solutions are all aimed at improving treatment outcomes while reducing risk and cost.
Regulatory Climate and Environmental Considerations
The Company’s medical customers typically require Food and Drug Administration (“FDA”) approval for their products and therefore sometimes require their suppliers to manufacture in facilities that are FDA registered and comply with the International Organization for Standardization (“ISO”) 13485 quality standard for medical devices. The Company has nineteen manufacturing locations that are ISO 13485 certified and thirteen that are FDA registered. The Company designs products to provide optimum performance with minimum material. In addition, the Company bales and disposes certain of its urethane and cross-linked foam scrap for use in various recycled products. The Company’s Newburyport MA facility utilizes solar power to provide approximately 6% of its electricity, with plans to increase capacity in the future. The Company is aware of public support for environmentally responsible packaging and products. Future government action may impose restrictions affecting the industry in which the Company operates. There can be no assurance that any such action will not adversely impact the Company’s products and business.
Marketing and Net Sales
The Company markets to its target customers by promoting specific solutions, materials, and manufacturing capabilities and services. The Company markets through websites, trade shows and expositions, social media, online advertising, emails, and press releases. Its relationships with key material suppliers are also an important part of its marketing and sales efforts. The Company markets and sells its products principally through a direct sales force. The Company’s commercial leaders, in conjunction with Company engineers, collaborate with customers and in-house design and manufacturing experts to develop custom-engineered solutions on a cost-effective basis. For the year ended December 31, 2025, two customers’ net sales were approximately 24.3 % and 21.5 % of net sales, respectively. No other customer’s net sales exceeded 10% of net sales. For additional information, see “Risk Factors - We depend on a small number of customers for a large percentage of our net sales. The loss of any such customer, a reduction in net sales to any such customer, or the decline in the financial condition of any such customer could have a material adverse effect on our business, financial condition, and results of operations.”
Seasonality is not a major factor in the Company’s net sales. See the Company’s consolidated financial statements contained in Part IV, Item 15, of this Report for net sales by market.
Manufacturing
The Company’s manufacturing operations consist primarily of cutting, routing, compression and injection molding, vacuum-forming, micro-molding, thermoforming, laminating, radio frequency and impulse welding, and assembling. For medical custom-molded foam products and thermoplastic welded devices, the Company’s skilled engineering personnel analyze specific customer requirements to design and build prototype products to determine product functionality. Upon customer approval, prototypes are converted to final designs for commercial production runs. Molded cross-linked foam products are produced in a thermoforming process using heat, pressure, and precision metal tooling. Thin films and other materials are sealed using radio frequency and impulse welding and formed through a thermoforming process. Reticulated polyurethane foam is also used for many high-performance medical products requiring precision fluid or air management. These products are typically fabricated using high speed die-cutting or waterjet cutting. Laminated products for medical, military, and personal comfort and protection are produced through a process whereby the foam medium is heated to the melting point and then bonded to a non-foam material through the application of mechanical pressure.
The Company does not manufacture any of the raw materials used in its products. With the exception of certain grades of cross-linked foam, thermoplastic urethane (“TPU”) and technical polyurethane foams, these raw materials are available from multiple supply sources. Although the Company relies upon a limited number of suppliers for cross-linked and technical polyurethane foams, and TPU, the Company’s relationships with its suppliers are good, and the Company expects that these suppliers will be able to meet its requirements for these foams. Any delay or interruption in the supply of raw materials could have a material adverse effect on the Company’s business.
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Research and Development
The Company’s engineering personnel continuously explore new design and manufacturing techniques, as well as new and innovative materials to meet the unique demands and specifications of its customers. Research and development is an integral part of the Company’s ongoing cost structure.
Competition
The medical design and contract manufacturing industry is highly competitive as is the foam and plastics converting industry as a whole. While there are several national companies that convert foam and plastics, the Company’s primary competition is from smaller independent regional manufacturing companies. These companies generally market their products in specific geographic areas from neighboring facilities. The Company’s custom engineered products face competition primarily from smaller companies that typically concentrate on the production of products for specific industries or regions. The Company expects to compete effectively in the engineered products market due to its ability to address its customers' primary vendor selection criteria, including inclusion on their preferred supplier lists, price, product performance, product reliability, manufacturing locations, and customer service, as well as its access to a wide variety of materials, its engineering expertise, its ability to combine foams with other materials such as plastics and laminates, and its ability to manufacture products in a clean room environment.
Patents and Other Proprietary Rights
The Company relies upon trade secrets, patents, and trademarks to protect its technology and proprietary rights. The Company believes the improvement of existing products, reliance upon trade secrets and unpatented proprietary know-how, and the development of new products are generally as important as patent protection in establishing and maintaining a competitive advantage. Nevertheless, the Company has obtained patents and may continue to make efforts to obtain patents, when available, although there can be no assurance that any patent obtained will provide substantial protection or be of commercial benefit to the Company, or that its validity will be upheld if challenged. The Company has a total of 21 active patents relating to technologies primarily in the medical device, foam, and packaging fields, including lubricious extruded medical tubing, systems and methods for securing medical devices, medical device designs, radio frequency and thermal welding processes. The Company also has patent applications in process. There can be no assurance that any patent or patent application will provide significant protection for the Company’s products and technology or will not be challenged or circumvented by others. The expiration dates for the Company’s patents range from 2026 through 2044. The Company’s U.S. registered trademarks are: UFP TECHNOLOGIES®, UFP MEDTECH®, SHAPING INNOVATION®, FLEXSHIELD®, FIRMALITE®, BIOSHELL®, T‑TUBES®, T‑TUBE®, TRI‑COVERS®, DESIGN NAIL®, PRO‑STICKS®, CRYOSHELL®, CASE FIT®, ALLOSHELL®, FLASH SHINER®, MAMBO®, WINEPACKS®, UNITED FOAM®, and the Company’s STACKED U LOGO. Each trademark, trade name, or service mark of any other company appearing in this Report belongs to its respective holder.
Human Capital Management
As of January 24, 2026, the Company had a total of 4,846 full-time employees (compared to 4,146 full-time employees as of January 25, 2025) and 503 temporary workers (compared to 189 temporary workers at January 25, 2025). The Company is not a party to any collective bargaining agreements. The Company considers its employee relations to be good.
The Company strives to promote a workplace that is professional, provides opportunities for career growth and treats all workers with dignity and respect. The Company does not tolerate unlawful discrimination and harassment in the workplace; it expressly prohibits any form of unlawful discrimination or harassment based on race, color, religion, sex, sexual orientation, gender identity or expression, national origin, ethnicity, age, physical or mental disability, genetic information, military or veteran status, pregnancy, childbirth or related medical conditions, or any other legally protected status under applicable federal, state, or local law.
The Company’s employees are tasked with upholding our Code of Ethics and Business Conduct, which we view as an important component of our operating strategy. This policy covers the conduct of the Company's employees in their work-related dealings with each other, as well as interactions with our customers, vendors, and other business partners. The Company’s compliance hotline is maintained for the confidential reporting of any suspected policy violations or unethical business conduct.
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The Company’s commitment to its employees starts at the top with an executive-level officer – Senior Vice President of Human Resources (“SVP of HR”) – reporting to the CEO, attending all board meetings, and having significant involvement with the board’s compensation committee. This commitment is reflected in our efforts to attract, engage, and retain the best people possible.
Compensation and Benefits
The Company’s compensation and benefits offerings are supported by external data services. In addition to competitive compensation practices, the Company offers annual stock award bonus programs to reward and retain executives and key employees. Access to company subsidized health, life and disability insurance; a matching 401(k) plan; and paid time off for vacation, illness and personal reasons, are the highlights of the Company’s benefits available to all eligible full-time employees. For those employees struggling with life’s challenges, the Company offers employee assistance programs.
Growth and Development
The Company supports every employee’s opportunity for career growth. It offers tuition reimbursement for employees to further their industry-related formal education; access to virtual training and education platforms; reimbursement to attend work-related seminars; and on-the-job training and cross-training to improve job skills. Its talent management program provides feedback on performance, identifies employees with potential for advancement, and allows for personalized career development plans. Its summer internship program provides the opportunity for college and technical school students to demonstrate and develop the skills to become valuable members of our team.
The Company’s commitment to its employees has resulted in several national, regional, and local “Best in Class” awards.
Safety
As an essential manufacturing company, the Company takes its responsibility for our employees’ health and safety seriously. Its corporate safety officer reports directly to the Vice President, Operations, Medtech and works with dedicated safety officers at each of our plants to implement safety programs and training. Safety audits are conducted regularly to ensure compliance.
ITEM 1A. RISK FACTORS
The risks factors described below could materially impact our business, including our results of operations and financial results. These are the risks and uncertainties we believe are most important for you to consider. Additional risks and uncertainties not presently known to us, which we currently deem immaterial, or which are similar to those faced by other companies in our industry or business in general, may also impair our business operations. If any of the following risks or uncertainties occur, our business, financial condition and operating results would likely suffer.
Risks Related to our Business
Our business, operating results, and cash flows have historically been affected and may continue to be adversely affected by inflation.
Inflation rates could rise in the future. Such inflationary pressures could affect our manufacturing costs, operating expenses (including wages) and other expenses. We may not be able to pass these cost increases on to our customers in a timely manner, which could have an impact on our gross margins and profitability. In addition, inflation could result in higher interest rates and could otherwise adversely impact the macroeconomic environment, which in turn could adversely impact our customers and their ability or willingness to purchase our products. Our inability to successfully manage the effects of inflation could have a material adverse effect on our business, results of operations and cash flows.
Our operating results depend in part on our ability to contain or reduce costs. There is substantial price competition in our industry and upward pressure on material and labor costs. Our success and profitability will depend on our ability to maintain a competitive cost and price structure.
Our efforts to maintain and improve profitability depend in part on our ability to maintain or reduce the costs of materials, components, supplies and labor. While the failure of any single cost containment effort by itself would most likely not significantly impact our results, we cannot give any assurance that we will be successful in controlling material and labor
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costs to maintain a competitive cost structure. There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure. We may have to reduce prices in the future to remain competitive. Also, our future profitability will depend in part upon our ability to continue to improve our manufacturing efficiencies and maintain a cost structure that will enable us to offer competitive prices in the face of upward pressure on material and labor costs. Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition and results of operations.
The ongoing conflict between Russia and Ukraine, other similar conflicts and civil unrest in Haiti, which is in proximity to our manufacturing facilities in the Dominican Republic could have a material adverse effect on our business and results of operations.
As a result of the ongoing military conflict between Russia and Ukraine, the United States and other countries have imposed significant sanctions on Russia and could impose even wider sanctions. The military conflict and related sanctions could damage or disrupt international commerce and the global economy. We cannot predict the broader or longer-term consequences of the conflict or of the sanctions imposed to date or in the future, which could include embargoes, regional instability, geopolitical shifts, exchange rate fluctuations, financial market disruptions and economic recession. Further, the conflict could exacerbate supply chain challenges, lead to an increase in cyberattacks from Russia, affect the global price and availability of key commodities, reduce our sales and earnings or otherwise have an adverse effect on our business and results of operations.
Our manufacturing facilities and warehouses in the Dominican Republic play a crucial role in the production of certain of our medical products. Our manufacturing facilities and warehouses may be damaged or our ability to use or access them may be disrupted as a result of civil unrest or other occurrences in Haiti. Such events may interfere with our manufacturing process, information systems, telecommunication services, and product delivery for sustained periods and may also make it difficult or impossible for employees to reach our business locations. Damage or destruction that interrupts our manufacturing facilities could adversely affect our reputation, our relationships with our largest customers, our leadership team’s ability to administer and supervise our business and cause us to incur substantial additional expenditures to repair or replace damaged equipment or facilities or commence alternate production locations.
In addition, the conflict between Russia and Ukraine, civil unrest in Haiti and similar conflicts or situations such as a break in the current ceasefire in the Israel-Hamas War may have the effect of heightening other risks disclosed in this Form 10-K, any of which could materially and adversely affect our business and results of operations. Such risks include but are not limited to interruptions in the transportation channels for the manufacture and global distribution of our products, heightened inflation, depressed levels of consumer and commercial spending, adverse changes in international trade policies and relations, and the inability to implement and execute our business strategy. We are currently unable to predict the extent, nature or duration of any of these occurrences.
We depend on a small number of customers for a large percentage of our net sales. The loss of any such customer, a reduction in net sales to any such customer, or the decline in the financial condition of any such customer could have a material adverse effect on our business, financial condition, and results of operations.
A limited number of customers typically represent a significant percentage of our net sales in any given year. Our top ten customers represented approximately 68.8%, 68.1%, and 59.3% of our total net sales in 2025, 2024, and 2023, respectively. Two customers (Intuitive Surgical SARL and Stryker) comprised approximately 24.3% and 21.5%, respectively, of our net sales for the year ended December 31, 2025; two customers (Intuitive Surgical SARL and Stryker) comprised approximately 29.2% and 15.4%, respectively, of our net sales for the year ended December 31, 2024; one customer comprised approximately 28.1% of our net sales for the year ended December 31, 2023. The loss of a significant portion of our expected future net sales to any of our large customers could have a material adverse effect on our business, financial condition, and results of operations. Likewise, a material adverse change in the financial condition of any of these customers could have a material adverse effect on our ability to collect accounts receivable from any such customer. One customer represented approximately 32.1% of gross accounts receivable for the year ended December 31, 2025, and one customer represented approximately 34.0% of gross accounts receivable for the year ended December 31, 2024.
Our business could be harmed if our products contain undetected errors or defects or do not meet applicable specifications.
Based on customer specifications, we are continuously developing new products and improving existing products. Our existing and newly introduced products can contain undetected errors or defects. In addition, these products may not meet
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their performance specifications under all conditions or for all applications. If, despite internal testing and testing by customers, any of our products contain errors or defects or fail to meet applicable specifications, then we may be required to enhance or improve those products or technologies. We may not be able to do so on a timely basis, if at all, and may only be able to do so at considerable expense. If a particular error or defect is repeated throughout our production process, the cost of repairing such defect may be highly disproportionate to the original cost of the product or component. In addition, any significant errors, defects, or other performance failures could render our existing and/or future products unreliable or ineffective and could lead to decreased confidence in our products, adverse customer reaction, negative publicity, mandatory or voluntary recalls, or legal claims, the occurrence of any of which could have a material adverse effect upon our business, financial condition, and results of operations.
Further, if our products are defectively designed, manufactured, or labeled, contain defective components or are misused, we may become subject to costly litigation by our customers or be expected to fund product recalls. Product liability claims could divert management's attention from our core business, be expensive to defend and result in sizable damage awards against us.
New technologies could result in the development of new products by our competitors and a decrease in demand for our products, which could materially adversely affect our business, financial condition and results of operations.
Our failure to develop new technologies, or anticipate or react to changes in existing technologies, could result in a decrease in our net sales and a loss of market share to our competitors. Our financial performance depends on our ability to design, develop, and manufacture new products and product enhancements on a timely and cost-effective basis. We may not be able to successfully identify new product opportunities or develop and bring new products to market in a timely and cost-effective manner.
Products or technologies developed by other companies may render our products or technologies obsolete or noncompetitive. Our failure to identify or capitalize on any fundamental shifts in technologies, relative to our competitors, could have a material adverse effect on our competitive position within our industry and harm our relationships with our customers.
If we fail to comply with specific provisions of our customer contracts or Food and Drug Administration (FDA) regulations, our business could be materially adversely affected.
Our customer contracts, particularly with respect to contracts for which the US government is a direct or indirect customer, may include unique and specialized requirements. This may also include contracts with customers that manufacture goods subject to FDA regulations. Failure to comply with the specific provisions in our customer contracts, or any violation of government or FDA contracting regulations, could result in termination of the contracts, increased costs to us, suspension of payments, imposition of fines, and suspension from future government contracting. Further, any negative publicity related to our failure to comply with the provisions in our customer contracts could have a material adverse effect on our business, financial condition, or results of operations.
Increased focus and evolving views of lawmakers on climate change and other ESG issues could have a long-term impact on our business and result of operations.
Increased public awareness and concern regarding global climate change and other ESG matters may result in more international, regional, and/or federal regulatory or other stakeholder requirements or expectations that could mandate more restrictive or expansive standards, such as more prescriptive reporting of ESG metrics, practices, and targets, or require such changes on a more accelerated time frame. There continues to be a lack of consistent climate and other ESG legislation, which creates economic and regulatory uncertainty; however, there has been an increasing amount of legislative and regulatory activity, particularly in the European Union, United Kingdom, and U.S. In addition, there is also an increasing number of state-level anti-ESG initiatives in the U.S. that may conflict with other regulatory requirements, resulting in regulatory uncertainty. New or revised legal and regulatory requirements could impose significant operational restrictions and compliance requirements upon the Company or its products, and could negatively impact the Company’s business, capital expenditures, results of operations, financial condition, and competitive position.
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Global climate change and related regulations and changes in customer demand could negatively affect our operations and our business.
The effects of climate change could create financial risks to our business. For example, the effects of physical impacts of climate change could disrupt our operations by impacting the availability and cost of materials needed for manufacturing, exacerbate existing risks to our supply chain, disrupt our operations, and increase insurance and other operating costs. These factors may impact our decisions to construct new facilities or maintain existing facilities in areas more prone to physical climate risks. We could also face indirect financial risks passed through the supply chain and disruptions that could result in increased prices for our products and the resources needed to produce them.
The growing focus on addressing global climate change has resulted in more regulations designed to reduce greenhouse gas emissions and more customer demand for products and services that have a lower carbon footprint or that help businesses and consumers reduce carbon emissions throughout their value chains. We may be required to further increase research and development and other capital expenditures in order to develop offerings that meet these new regulations, standards, and customer demands. There can be no assurance that our new product development efforts will be successful, that our products will be accepted by the market, or that economic returns will reflect our investments in new product development.
We may pursue acquisitions or other strategic relationships that involve inherent risks, any of which may cause us to not realize anticipated benefits.
Our business strategy includes the acquisition of businesses and other business combinations that we expect will complement and expand our business. In addition, we may also pursue other strategic relationships or opportunities. We may not be able to successfully identify suitable acquisition or other strategic opportunities or complete any particular acquisition, combination, or other transaction on acceptable terms. Our identification of suitable acquisition candidates and strategic opportunities involves risks inherent in assessing the values, strengths, weaknesses, risks, and profitability of these opportunities including their effects on our business, diversion of our management’s attention and risks associated with unanticipated problems or unforeseen liabilities. Our failure to identify suitable acquisitions or other strategic opportunities may restrict our ability to grow. If we are successful in pursuing future acquisitions or strategic opportunities, we may be required to expend significant funds, incur additional debt, or issue additional securities, which may materially and adversely affect our results of operations and be dilutive to our stockholders. If we spend significant funds or incur additional debt, our ability to obtain financing for working capital or other purposes could decline and we may be more vulnerable to economic downturns and competitive pressures. In addition, we cannot guarantee that we will be able to finance additional acquisitions or that we will realize any anticipated benefits from acquisitions or other strategic opportunities that we complete. When and if we successfully acquire another business, the process of successfully integrating the acquired operations into our existing operations may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be available for the ongoing development or expansion of our existing business. Decreases in customer loyalty or product orders, failure to retain and develop the acquired workforce, failure to integrate financial reporting systems, failure to establish and maintain appropriate controls or unknown or contingent liabilities could adversely affect our ability to realize the anticipated benefits of an acquisition. The integration of an acquired business, whether or not successful, requires significant efforts which may result in additional expenses and divert the attention of our management and technical personnel from other projects. These transactions are inherently risky, and there can be no assurance that any past or future transaction will be successful.
Failure to retain key personnel could impair our ability to execute our business strategy.
The continuing service of our executive officers and essential sales, engineering, technical, back-office and management personnel, together with our ability to attract and retain such personnel, is a key factor in our continuing ability to execute our strategy. There is substantial competition to attract such employees, and the loss of any such key employees could have a material adverse effect on our business and operating results. The same could be true if we were to experience a high turnover rate among sales, engineering and technical personnel and we were unable to replace them.
We operate in highly competitive industries, and we may be unable to compete successfully, which could materially adversely affect our business, financial condition and results of operations.
We face intense competition in all markets and in each area of our business, in some cases from our own customers bringing programs in-house. Our current competitors may increase their participation in, or new competitors may enter into, the markets in which we compete. In addition, our suppliers may acquire or develop the capability and desire to compete with us. If our suppliers choose to expand their own operations, through acquisitions or otherwise, and begin
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manufacturing and selling products directly to our customers, it could reduce our pricing or sales volume and overall profitability. If we are unable to compete successfully with new or existing competitors, it could have a material adverse effect on our business, financial condition, and results of operations.
Further, technological innovation by any of our existing competitors, including our customers, or new competitors entering any of the markets in which we do business, could put us at a competitive disadvantage and could cause us to lose market share. Increased competition for the sales of our products could result in price reductions, reduced margins, and loss of market share, which could materially affect our prospects, business, financial condition and results of operations.
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards, and other requirements may adversely impact our business and financial results.
Laws and regulations in various countries around the world with regards to cybersecurity, privacy and data protection are rapidly expanding and creating a complex compliance environment. These laws include evolving legislation with respect to the collection, storage, handling, use, disclosure, transfer, and security of personal data and the notification requirements in the event of unauthorized access to or acquisition of certain types of personal information. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact that future laws, regulations, standards, or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. Failure to comply with these laws may affect our reputation and operating results negatively, subject us to significant liabilities, costs or expenses, and may require significant management time and attention.
In some cases, these legal requirements may be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other. In addition, some of the privacy and data protection laws and regulations in the U.S., the EU, China and other countries place restrictions on our ability to process personal data across our business or across country borders, and could impact our business and operations. Compliance with these laws, many of which entail substantial penalties for non-compliance, or future regulations could impose even greater compliance burdens and risks on us.
Furthermore, the Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive. For example, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute violations under Section 5(a) of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
The EU’s General Data Protection Regulation (the “GDPR”), the CCPA, and the data protection and security laws of other states and countries impose additional requirements with respect to disclosure and deletion of personal information of their residents, imposing penalties for violations and, in some cases, private right of action for data breaches. These laws, and similar legislation that is developing or has been recently enacted, impose transparency and other obligations with respect to personal data of their respective residents and provide residents with similar rights for certain types of data breaches. We have invested, and continue to invest, human and technology resources in our data compliance efforts that may be time-intensive and costly. Despite our efforts, there is a risk that we may be subject to fines and penalties for non-compliance and experience litigation, reputational harm and business interruption if we fail to protect the privacy of third-party data or to comply with the GDPR, CCPA, and other applicable data privacy and protection regimes.
Security breaches, including cybersecurity incidents and other disruptions could compromise our information, expose us to liability and harm our reputation and business.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, personal information, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our customers and employees in our data centers and on our networks. The secure maintenance and transmission of this information is critical to our operations and business strategy. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission, and storage of confidential information. Computer hackers may attempt to penetrate our computer systems and, if successful, misappropriate personal or confidential business information. In addition, an employee, contractor, or other third-party
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with whom we do business may attempt to circumvent our security measures in order to obtain such information and may purposefully or inadvertently cause a breach involving such information. Despite the security measures we have in place and any additional measures we may implement in the future to safeguard our systems and to mitigate potential security risks, our facilities and systems, and those of our third-party service providers, could be vulnerable to security breaches, including the Cyber Incident (as defined below) . If unauthorized parties gain access to our systems or databases, such as with the Cyber Incident, or those of third parties on which we rely, they could be able to steal, publish, delete, hold ransom or modify our private and sensitive information, including payment information, personal information, and confidential and other proprietary business information. The Company, its customers, suppliers and business partners, as well as the Company’s employees, could suffer harm if valuable business data, or employee, customer and other confidential and proprietary information were corrupted, lost, accessed or misappropriated by third parties due to a cyber-attack, a security systems failure, or due to one of our third-party service providers or our employees.
Any such compromise of our data security and access, public disclosure, or loss of personal or confidential business information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption of our operations, damage to our reputation, loss of our customers’ willingness to transact business with us, and subject us to additional costs and liabilities which could materially adversely affect our business. While we maintain insurance for cyber events, our insurance may not be sufficient to cover us against all losses that could potentially result from a breach of our systems or loss of sensitive data.
Even the most well protected IT networks, systems and facilities remain potentially vulnerable because the techniques used in attempted cybersecurity attacks are continually evolving, and may not be recognized until after the attack is launched against a target or, in some instances, are designed not to be detected and, in fact, may not be detected. Any such compromise of the Company’s or any of our partners’ IT systems could result in unauthorized access, public disclosure, or loss of personal, sensitive, or confidential business information, could result in legal claims and proceedings, liability under applicable laws and regulatory penalties, and could disrupt the Company’s operations, require significant management attention and resources to remedy any damages that result, and damage the Company’s reputation and customer willingness to transact business with it, any of which could adversely affect its business.
We experienced a material information technology (“IT”) systems incident in February 2026, which could result in a number of potentially unknown outcomes, including but not limited to, litigation, regulatory investigations or enforcement actions, or reputational harm, any of which could have a material impact on our business operations, financial condition, or results of operations.
On or about February 14, 2026, the Company detected suspicious activity involving its IT systems (the “Cyber Incident”). Upon detecting the issue, the Company began taking steps to assess, contain, and remediate the unauthorized activity, including isolating the affected systems and launching an investigation with the assistance of external cybersecurity advisors. The incident appears to have impacted many but not all of the Company’s IT systems and affected functions such as billing and label making for customer deliveries. Certain Company or Company-related data appear to have been stolen or destroyed. Although the Company has ascertained that certain files were exfiltrated, it is still investigating the extent of any sensitive information contained in the accessed systems, including whether any personal information was exfiltrated. It is evaluating what legal and regulatory notifications and filings may be required as a result of this incident and will make such filings as are required based on its findings.
As a result of the Cyber Incident, we may be subject to business disruptions or governmental investigations, private litigation or other claims, which could result in fines, other monetary relief, or injunctive relief that could materially increase our data security costs, adversely impact how we operate our systems and collect and use personal information. If, as a result of any such governmental investigation, other investigation or claim, we are found to be in violation of applicable laws and regulations including, without limitation, any applicable data privacy and information security laws or regulations, we could be subject to legal risk, including governmental enforcement action and civil litigation, which could adversely affect our business, reputation, financial condition or results of operations.
Defending any such litigation claim or enforcement action, regardless of merit, and whether successful or unsuccessful, and cooperating with regulatory investigations, could be expensive and time-consuming and adversely affect our business, reputation, results of operations or financial condition. In addition, we may be adversely impacted by reputational harm or a loss of confidence in the security and integrity of our IT systems among customers, employees and business partners. As of the date hereof, the Cyber Incident has not had a material impact on the Company’s financial systems, operations or financial condition due in part to the Company’s planned solutions for the issues posed by the incident. There is no
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assurance these planned solutions will work in the future for the Cyber Incident or any future incident. While the Company’s investigation and assessment of the Cyber Incident is ongoing, as of the date hereof, the Company does not believe the incident is reasonably likely to materially impact the Company’s financial condition or results of operations. There can be no assurance that the Cyber Incident or any future cybersecurity incidents will not have a material impact on the Company’s future operations, financial systems or financial condition.
Disruptions in the supply of components and raw materials we use in manufacturing our products could cause production delays or reductions in the number of products we manufacture, which could materially adversely affect our business, financial condition, and results of operations.
Our business is subject to the risk of periodic shortages of raw materials. We purchase raw materials pursuant to purchase orders placed from time to time in the ordinary course of business. Failure or delay by such suppliers in supplying us necessary raw materials could adversely affect our ability to manufacture and deliver products on a timely and competitive basis.
While we believe that we may, in certain circumstances, secure alternative sources of these materials, we may incur substantial delays and significant expense in doing so, the quality and reliability of alternative sources may not be the same and our operating results may be materially adversely affected. Alternative suppliers might charge significantly higher prices for materials than we currently pay. Under such circumstances, the disruption to our business could have a material adverse impact on our customer relationships, business, financial condition, and results of operations.
In addition, we are dependent on a relatively small number of suppliers for cross-linked foam, thermoformed plastic urethane and technical polyurethane foams. While we believe that we have developed strong relationships with these suppliers, any failure or delay by such suppliers in supplying us these necessary products could adversely affect our ability to manufacture and deliver products on a timely and competitive basis.
If we fail to accurately forecast component and raw material requirements for our products, we could incur additional costs and experience significant delays in shipments, which could have an adverse effect on the results of our business operations, and could damage our relationships with customers.
We use rolling forecasts based on anticipated product orders to determine our production requirements. It is important that we accurately predict both the demand for our products and the lead times required to obtain the necessary components and raw materials to manufacture our products. Lead times for our components and raw materials vary significantly and depend on multiple factors, including the specific supplier requirements, the size of the order, contract terms and current market demand. For substantial increases in our sales levels of certain products, some of our suppliers may need significant lead time. If we overestimate our component and raw material requirements, we may have excess inventory, which would increase our costs. If we underestimate our component and raw material requirements, we may encounter material shortages, which could interrupt production and delay delivery of our products to customers. Any of these occurrences could adversely affect our results of operations and damage our relationships with customers.
We may be unable to protect our proprietary technology from infringement.
We rely on a combination of patents, trademarks, and unpatented proprietary know-how and trade secrets to establish and protect our intellectual property rights. We enter into confidentiality agreements with suppliers, customers, employees, consultants, and potential acquisition candidates as necessary to protect our know-how, trade secrets and other proprietary information. However, these measures and our patents and trademarks may not afford complete protection of our intellectual property, and it is possible that third parties may copy or otherwise obtain and use our proprietary information and technology without authorization or otherwise infringe on our intellectual property rights. We cannot assure that our competitors will not independently develop equivalent or superior know-how, trade secrets or production methods. Significant impairment of our intellectual property rights could harm our business or our ability to compete. For example, if we are unable to maintain the proprietary nature of our technologies, our profit margins could be reduced as competitors could more easily imitate our products, possibly resulting in lower prices or lost sales for certain products. In such a case, our business, financial condition, and results of operations may be materially adversely affected.
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Our products could infringe the intellectual property rights of others, which may lead to litigation that could itself be costly, result in the payment of substantial damages or royalties, and prevent us from using technology that is essential to our products.
We cannot guarantee that our products, manufacturing processes or other methods do not infringe the patents or other intellectual property rights of third parties. Infringement and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and divert our management and key personnel from other tasks important to the success of our business. In addition, intellectual property litigation or claims could force us to do one or more of the following:
•Cease selling or using any of our products that incorporate the asserted intellectual property, which would adversely affect our net sales;
•Pay substantial damages for past use of the asserted intellectual property;
•Obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all; and/or
•Redesign or rename, in the case of trademark claims, our products to avoid infringing the intellectual property rights of third parties, which may be costly and time-consuming, even if possible.
In the event of an adverse determination in an intellectual property suit or proceeding, or our failure to license essential technology, our sales could be harmed, and our costs could increase, which could materially adversely affect our business, financial condition, and results of operations.
Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs.
We primarily use electricity and natural gas at our manufacturing facilities to operate our equipment. Over the past several years, prices for electricity and natural gas have fluctuated significantly. An outbreak or escalation of hostilities between the United States and any foreign power, or between foreign powers, or a natural disaster, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of electricity or energy generally as well as an increase in the cost of our raw materials, of which many are petroleum-based. In addition, increased energy costs negatively impact our freight costs due to higher fuel prices. Future limitations on the availability or consumption of petroleum products and/or an increase in energy costs, particularly electricity for plant operations, could have a material adverse effect upon our business, financial condition, and results of operations.
Consolidation in the healthcare industry could result in greater competition and reduce our net sales and harm our business.
Many healthcare industry companies are consolidating to create new companies with greater market power. As the healthcare industry consolidates, competition to provide products and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price reductions for our products or may undertake additional vertical integration or supplier diversification initiatives. If we are forced to reduce our prices, our net sales would decrease and our operating results would suffer.
Our business is indirectly subject to healthcare industry cost containment and healthcare reform measures that could result in reduced sales of our products.
Several of our customers rely on third party payors, such as government programs and private health insurance plans, to reimburse some or all of the cost of the procedures in which our products are used. The continuing efforts of governments, insurance companies and other payors of healthcare costs to contain or reduce those costs could lead to patients being unable to obtain approval for payment from these third-party payors for procedures in which our products are used. If that occurs, sales of medical devices may decline significantly and our customers may reduce or eliminate purchases of our products, or demand further price reductions. The cost containment measures that healthcare payors are instituting both in the U.S. and internationally could reduce our revenues and harm our operating results.
In addition, in the U.S. and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to reform healthcare systems. Various elements of healthcare
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reforms, such as comparative effectiveness research, an independent payment advisory board, payment system reforms, including shared savings pilots, and other provisions, could meaningfully change the way healthcare is developed and delivered and may have material adverse impact on numerous aspects of our business, results of operations and financial condition.
Expansion of our operations into markets outside of the U.S. subjects us to political, economic, legal, operational, and other risks that could have a material adverse effect on our business, results of operations, financial condition, cash flows and reputation.
We have recently added and expanded manufacturing facilities in Puerto Rico, the Dominican Republic, Ireland, Costa Rica, and Mexico. We may continue to expand our operations by offering our services and entering new lines of business in other markets outside of the U.S. This expansion increases our exposure to the inherent risks of doing business in international markets. Depending on the market, these risks include those relating to:
•Changes in the local economic environment including, among other things, labor cost increases and other general inflationary pressures;
•Political instability, armed conflicts, or terrorism;
•Public health crises, such as pandemics or epidemics;
•Social changes;
•Intellectual property legal protections and remedies;
•Trade regulations;
•Procedures and actions affecting approval, production, pricing, reimbursement and marketing of products and services;
•Foreign currency;
•Additional U.S. and foreign taxes;
•Export controls;
•Antitrust and competition laws and regulations;
•Lack of reliable legal systems which may affect our ability to enforce contractual rights;
•Changes in local laws or regulations, or interpretation or enforcement thereof;
•Potentially longer ramp-up times for starting up new operations, and for payment and collection cycles;
•Financial, operational and information technology systems integration;
•Failure to comply with U.S. laws, such as the foreign corrupt practices act, or local laws that prohibit us, our partners, or our partners’ or our agents or intermediaries from making improper payments to foreign officials or any third party for the purpose of obtaining or retaining business; and
•Data and privacy restrictions.
•Foreign currency fluctuations
Issues relating to the failure to comply with applicable non-U.S. laws, requirements or restrictions may also impact our domestic business and increase scrutiny of our domestic practices.
Additionally, some factors that will be critical to the success of our international business and operations will be different than those affecting our domestic business and operations. For example, conducting international operations requires us to devote significant management resources to implement our controls and systems in new markets, to comply with local laws and regulations, including fulfilling financial reporting and records retention requirements, and overcoming the numerous new challenges inherent in managing international operations, such as challenges based on differing languages and cultures, as well as differing regulatory and compliance environments, and challenges related to the timely hiring, integration and retention of a sufficient number of skilled personnel to carry out operations in an environment with which we are not familiar.
Any additional expansion of our international operations through acquisitions or through organic growth could increase these risks. Additionally, while we may invest material amounts of capital and incur significant costs in connection with the growth and development of our international operations, including the costs of starting up or acquiring new operations, we may not be able to operate them profitably on the anticipated timeline, or at all.
These risks could have a material adverse effect on our business, results of operations, financial condition, and cash flows, and could materially harm our reputation.
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If significant tariffs or other restrictions are placed on imports or any related counter-measures are taken by foreign countries, our revenue and results of operations may be materially harmed. Potential changes in international trade relations between the United States and other countries could have a material adverse effect on our business.
There is currently significant uncertainty about the future relationship between the United States and various other countries, with respect to trade policies, treaties, government regulations and tariffs. The U.S. government has adopted a new approach to trade policy including in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. The U.S. government has also imposed tariffs on certain foreign goods. These measures may materially increase costs for goods imported into the United States. This in turn could require us to materially increase prices to our customers which may reduce demand, or, if we are unable to increase prices to adequately address any tariffs, quotas or duties result in lowering our margin on products sold. Changes in U.S. trade policy have resulted in, and could result in more, U.S. trading partners adopting responsive trade policies, including imposition of increased tariffs, quotas or duties, making it more difficult or costly for us to export our products to those countries. The implementation of a border tax, tariff or higher customs duties on our products manufactured abroad or components that we import into the U.S., or any potential corresponding actions by other countries in which we do business, could negatively impact our financial performance.
We have incorporated and may further incorporate artificial intelligence (AI) into our internal operations to enhance employee productivity and improve cybersecurity. Implementation of artificial intelligence technologies may result in legal and regulatory risks, reputational harm, or other adverse consequences to our business.
We have a policy placing controls around the use of AI in the enterprise. Further, certain of our third-party vendors utilize AI and machine learning technologies in furnishing services to us. As with many technological innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. By policy, we do not allow the upload of any personal or company confidential information to any AI tools except those from which we have obtained commercially reasonable assurances that such information will not be used other than to provide the services to the company (e.g., no training of models), nor will it be shared with any third party.
Though we have taken steps to be thoughtful in the allowed use of AI, it could pose certain risks to our customers, and it is not guaranteed that regulators will agree with our approach to limiting these risks or to our compliance more generally. Risks can include, but are not limited to, the potential for errors or inaccuracies in the algorithms or models used by AI, the potential for bias or inaccuracies in the data used to train the AI, the potential for improper processing of personal information, and the potential for cybersecurity breaches that could compromise internal operations. Such risks could negatively affect the performance of our business, as well as our reputation and the reputations of our customers, and we could incur liability through the violation of laws or contracts to which we are a party or civil claims.
Changes in foreign currency rates could have a material adverse effect on our financial position, results of operations, and cash flows.
A portion of our revenue is derived from our European operations and includes transactions in Euros, while our products are mainly manufactured in the U.S. and the Dominican Republic. In the event of a decline in the value of the Euro, we typically experience a decline in our revenues and profit margins. If we increase the selling prices on our products sold in Europe in order to maintain profit margins and recover costs, we may lose customer sales to lower cost competitors. Consequently, a strong U.S. dollar may adversely affect reported revenues and our profitability.
Additionally, balances maintained in foreign currencies create additional financial exposure to changing foreign currency rates. If foreign currency rates were to change significantly, we could incur material losses. While we use foreign currency contracts and other risk management techniques to hedge our foreign currency exposures, we cannot be certain that our efforts will be adequate to protect us against significant foreign currency rate fluctuations or that such efforts will not expose us to additional exchange rate risks.
Risks Related to our Share Ownership and our Capital Structure
Restrictions in our credit facilities may limit our business and financial activities, including our ability to obtain additional capital in the future.
In June 2024, we entered into a secured $275 million Third Amended and Restated Credit Agreement with Bank of America, N.A., which provided for a $150 million revolving credit facility and a $125 million term loan facility. This
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Credit Agreement contains covenants imposing various restrictions on our business and financial activities. These restrictions may affect our ability to operate our business and undertake certain financial activities and may limit our ability to take advantage of potential business or financial opportunities as they arise. The restrictions these covenants place on us include limitations on our ability to incur liens, incur indebtedness, make investments, dissolve or merge or consolidate with or into another entity, dispose of certain property, and make restricted payments. The Credit Agreement also requires us to meet certain financial ratios, including a minimum fixed-charge coverage ratio and a maximum total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio. The breach of any of these covenants or restrictions could result in a default under the Credit Agreement, which could have a material adverse impact to our business, financial condition, and results of operation.
We are also exposed to the risk of increasing interest rates as our revolving credit and term loan facilities are both at a variable interest rate. Any material changes in interest rates could result in higher interest expense and related payments for us.
Provisions of our corporate charter documents and Delaware law, may dissuade potential acquirers, prevent the replacement or removal of our current management, and may thereby affect the price of our common stock.
The board of directors has the authority to issue up to 1,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights of those shares without any further vote or action by the stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing flexibility in connection with possible financings, acquisitions, and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. We currently have no plans to issue shares of preferred stock.
Further, certain provisions of our certificate of incorporation, bylaws, and Delaware law could delay or make a merger, tender offer or proxy contest involving us or, for a third party to acquire a majority of our outstanding voting common stock more difficult. These include provisions that limit the ability of stockholders to take action by written consent, call special meetings, remove a director for cause, amend the bylaws, or approve a merger with another company. In addition, our bylaws set forth advance notice procedures for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
We are subject to the provisions of Section 203 of the Delaware General Corporation Law which prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stock‐holder, unless the business combination is approved in a prescribed manner. For purposes of Section 203, a “business combination” includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder, and an “interested stockholder” is a person who, either alone or together with affiliates and associates, owns (or within the past three years did own) 15% or more of the corporation’s voting stock.
Financial Risks
Our operating results may fluctuate, which may make it difficult to forecast our future performance and may result in volatility in our stock price.
Our operating results could fluctuate from quarter to quarter, making forecasting future performance difficult and resulting in volatility in our stock price. These fluctuations are due to a variety of factors, including the following:
•timing of orders placed by our customers;
•our customers’ approach to inventory management;
•changes in the mix of our revenue represented by our various products and customers could result in reductions in our profits if the mix of our revenue represented by lower margin products increases;
•a portion of our costs are fixed in nature, which results in our operations being particularly sensitive to fluctuations in production volumes;
•increased costs and decreased availability of raw materials or supplies; and
•our ability to effectively execute on operational initiatives to drive manufacturing efficiencies.
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Our international sales and operations are subject to a variety of market and financial risks and costs that could affect our profitability and operating results.
Our net sales to customers outside the U.S., which accounted for approximately 16.0%, of net sales for 2025, and our operations in Ireland, Mexico, Central America and the Caribbean are and could be subject to a number of risks and potential costs, including:
•changes in foreign economic conditions or regulatory requirements;
•changes in foreign currency exchange rates;
•local product preferences and product requirements;
•difficulties in enforcing agreements through foreign legal systems;
•less protection of intellectual property in some countries outside of the U.S.;
•trade protection measures and import and export licensing requirements;
•work force instability;
•political and economic instability;
•transportation delays or interruptions; and
•complex tax and cash management issues.
These risks are also present in connection with our entry into new geographic markets.
Also, due to our international operations, we are subject to exposure from currency exchange rate fluctuations. Historically, foreign currency exchange rate fluctuations have not had a material effect on our net financial results. However, fluctuations in foreign currency exchange rates could have a significant impact on our financial results in the future.
We have a complex tax profile due to the global nature of our operations and may experience increases and variability in our quarterly and annual effective tax rate due to several factors, including changes in the mix of pre-tax income and the jurisdictions to which it relates, business acquisitions, settlements with taxing authorities, and changes in tax rates.
Our global operations encompass multiple taxing jurisdictions. Variability in the mix and profitability of domestic and international activities, identification and resolution of various tax uncertainties, changes in tax laws and rates, and the extent to which we are able to realize deferred tax assets and avoid potential adverse outcomes included in deferred tax liabilities, among other matters, may significantly affect our effective income tax rate in the future.
Our effective income tax rate is the result of the income tax rates in the various countries in which we do business. Our mix of income and losses in these jurisdictions affects our effective tax rate. For example, relatively more income in higher tax rate jurisdictions would increase our effective tax rate and thus lower our net income. Similarly, if we generate losses in tax jurisdictions for which no benefits are available, our effective income tax rate will increase. Our effective income tax rate may also be impacted by the recognition of discrete income tax items, such as required adjustments to our liabilities for uncertain tax positions or our deferred tax asset valuation allowance.
We have recorded deferred tax assets based on our assessment that we will be able to realize their benefits. Realization of deferred tax assets involve significant judgments and estimates which are subject to change and ultimately depends on generating sufficient taxable income of the appropriate character during the appropriate periods. Changes in circumstances may affect the likelihood of such realization, which in turn may trigger a write-down of our deferred tax assets, the amount of which would depend on a number of factors. A write-down would reduce our reported net income, which may adversely impact our financial condition or results of operations or cash flows. In addition, we are potentially subject to ongoing and periodic tax examinations and audits in various jurisdictions. An adjustment from a taxing authority, could result in higher tax costs, penalties and interest, thereby adversely impacting our financial condition, results of operations or cash flows.
We may never realize the full value of our intangible assets, which represent a significant portion of our total assets.
At December 31, 2025, we had $338.3 million of goodwill and other intangible assets, representing approximately 51.6% of our total assets. These intangible assets consist primarily of goodwill, trade names, intellectual property, customer lists and non-compete agreements arising from our acquisitions. Goodwill and other intangible assets with indefinite lives are not amortized but are tested annually or upon the occurrence of certain events that indicate that the assets may be impaired. Definite lived intangible assets are amortized over their estimated useful lives and are tested for impairment upon the occurrence of certain events that indicate that the assets may not be recoverable. We may not receive the recorded value for our intangible assets if we sell or liquidate our business or assets. In addition, our significant amount of intangible assets
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increases the risk of a large charge to earnings in the event that the recoverability of these intangible assets is impaired. In the event of a significant charge to earnings, the market price of our common stock could be adversely affected. In addition, intangible assets with definite lives, which represent $140.8 million of our net intangible assets at December 31, 2025, will continue to be amortized. These expenses will continue to reduce our future earnings or increase our future losses. The accounting for intangible assets requires reliance on forward-looking estimates of sales and/or earnings. Estimating the future performance of our business is extremely challenging and the range of deviation from internal estimates could be more significant in this environment.
We have significant indebtedness that could adversely affect our operations, financial condition, and cash flows if we fail to meet certain financial covenants required by our debt agreements or if our access to capital markets is interrupted.
At December 31, 2025, the Company had approximately $135.5 million in outstanding borrowings under the Third Amended and Restated Credit Agreement and also had approximately $0.7 million in standby letters of credit outstanding, drawable as a financial guarantee on worker’s compensation insurance policies. The outstanding indebtedness and the terms and covenants of the agreements under which this debt was incurred, could, among other things:
•require us to dedicate a large portion of our cash flow from operations to the servicing and repayment of our outstanding indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate requirements;
•limit our ability to obtain additional financing to fund future working capital, capital expenditures, and other general corporate requirements in the future;
•delay or prevent an otherwise beneficial takeover or takeover attempt of us;
•limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•restrict our ability to make strategic acquisitions or dispositions or to exploit business opportunities;
•place us at a competitive disadvantage compared to our competitors that have less outstanding indebtedness; and
•adversely affect the market price of our common stock.
General Risks
We are subject to a variety of federal, state and local laws and regulations, including health and safety laws and regulations, and the cost of complying, or our failure to comply, with such requirements could materially adversely affect our business, financial condition and results of operations.
We are subject to a variety of federal, state and local laws and regulations, including health and safety laws and regulations. The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of our business. Despite our intention to comply with these laws and regulations, we cannot guarantee that we will at all times comply with all such requirements. Compliance with health and safety legislation and other regulatory requirements may prove to be more limiting and costly than we anticipate and may also increase substantially in future years. If we violate, or fail to comply with these requirements, we could be fined or otherwise sanctioned by regulators. In addition, these requirements are complex, change frequently and may become more stringent over time, which could materially adversely affect our business, financial condition and results of operations.
Our operations could be disrupted by natural or human causes beyond our control.
Our operations are subject to the risk of disruption by hurricanes, severe storms, floods and other forms of severe weather, earthquakes and other natural disasters, accidents, fire, power shortages, geopolitical unrest, war and other military action, terrorist attacks and other hostile acts, public health issues, epidemics or pandemics, and other events, such as raw material or supply scarcity, that are beyond our control and the control of the third parties on which we depend. Any of these catastrophic events, whether in the United States or abroad, may have a strong negative impact on the global economy, our employees, facilities, suppliers, or customers, and could decrease demand for our products or our customers’ products, create delays and inefficiencies in our supply chain and make it difficult or impossible for us to deliver products to our customers in a timely manner. If there is a natural disaster or other serious disruption at any of our facilities, we may experience plant shutdowns or periods of reduced production as a result of equipment failures, loss of power, delays in delivery of raw materials or supplies, personnel absences, or extensive damage to any of our facilities, any of which could materially adversely affect our business, financial condition, or results of operations. In addition, our insurance coverage may not adequately compensate us for losses incurred as a direct or indirect result of natural or other disasters.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk management and strategy
The Company employs a multi-faceted approach to assess, identify, and manage material risks from cybersecurity threats. Components of our approach include the following:
•The Company aligns its cybersecurity program with the Center for Internet Security (“CIS”) framework of Critical Security Controls
•System penetration testing is performed by rotating third-party service providers at least every 18 months.
•System vulnerability testing performed by our cybersecurity partner who is System of Organization Controls (“SOC”) 2 certified and also assists with mitigation.
•Network assessments are performed regularly by both an internal continuous process and by qualified 3rd party cybersecurity service providers at least bi-annually.
•Facilitated incident response tabletop exercises conducted at least bi-annually by qualified cybersecurity service providers.
•Monitoring of Federal government alerts (CISA, FBI) and industry threat information is performed to stay current on the newest cybersecurity threats bad actor tactics.
•Multifactor authentication is required for all authorized users to access network resources which adds a second layer of protection from unauthorized entry to our systems.
•Associates are required to complete mandatory cybersecurity awareness training annually.
•We have Certified Information System Security Professional (“CISSP”) and Information Systems Security Management Professional (“ISSMP”) certifications among our internal security personnel.
The cybersecurity risk assessment process is part of the Company’s overall risk management process. The Company's cybersecurity partner helps us prioritize actions to improve compliance with CIS Critical Security Controls and assists with those actions. The Company also utilizes other third-party consultants and services in our process of assessing and managing cybersecurity risk for a diverse perspective of our cybersecurity practices and posture. To mitigate the risk of cybersecurity threats related to the use of third-party service providers, the Company obtains and reviews SOC reports from third parties when available, to provide assurance that the third-party has appropriate controls in place and has not identified any significant cyber issues.
As discussed in Item 1A “Risk Factors” on or about February 14, 2026, the Company detected the Cyber Incident. Upon detecting the Cyber Incident, the Company began taking steps to assess, contain, and remediate the unauthorized activity, including isolating the affected systems and launching an investigation with the assistance of external cybersecurity advisors. Through the Company’s efforts, the Company believes that the third party responsible for the Cyber Incident has been removed from the Company’s IT systems, and the Company’s ability to access information impacted by the Cyber Incident has been restored in all material respects. The incident appears to have impacted many but not all of the Company’s IT systems and affected functions such as billing and label making for customer deliveries. Certain Company or Company-related data appear to have been stolen or destroyed. As a result of the Company’s contingency plans and data backup systems, the Company had implemented planned solutions for the issues posed by the incident. The Company’s operations have continued since the detection of the Cyber Incident in all material respects.
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Although the Company has ascertained that certain files were exfiltrated, it is still investigating the extent of any sensitive information contained in the accessed systems, including whether any personal information was exfiltrated. It is evaluating what legal and regulatory notifications and filings may be required as a result of this incident and will make such filings as are required based on its findings. The Company continues to investigate the nature and scope of the unauthorized access.
The Company currently expects that a significant portion of its direct costs incurred relating to containing, investigating and remediating the cybersecurity incident will be reimbursed through insurance recoveries though there is no assurance these recoveries will be adequate.
The Company does not believe that any risks from cybersecurity threats such as the Cyber Incident have materially affected or are reasonably likely to affect our business strategy, results of operations, or financial condition. See Item 1A “Risk Factors” for a summary of certain cybersecurity risks, including the risks under the headings “Security breaches, including cybersecurity incidents and other disruptions could compromise our information, expose us to liability and harm our reputation and business” and “We experienced a material information technology (“IT”) systems incident in February 2026, which could result in a number of potentially unknown outcomes, including but not limited to, litigation, regulatory investigations or enforcement actions, or reputational harm, any of which could have a material impact on our business operations, financial condition, or results of operations.”
Governance
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ITEM 2. PROPERTIES
The following table presents certain information relating to each of the Company’s design and manufacturing properties:
| Location | Square Feet | Lease Expiration Date | Principal Use | ||||||||
| Newburyport, Massachusetts | 183,000 | Company Owned | Headquarters, fabrication, molding, tooling, test lab, clean room, warehousing, and engineering | ||||||||
| Grand Rapids, Michigan | 255,260 | Company Owned | Fabrication, molding, warehousing, and engineering | ||||||||
| St. Charles, Illinois | 177,891 | 6/30/2029 | Distribution, manufacturing, and warehousing | ||||||||
| El Paso, Texas | 127,730 | Company Owned | Warehousing, fabrication | ||||||||
| Chicopee, Massachusetts | 103,792 | Company Owned | Fabrication, molding, clean room, warehousing, and engineering | ||||||||
| Tijuana, Mexico | 83,526 | 2/28/2032 | Fabrication, molding, and warehousing | ||||||||
| Providence, Rhode Island | 79,535 | 9/30/2028 | Fabrication, molding, clean room, and warehousing | ||||||||
| La Romana, Dominican Republic | 56,265 | 12/31/2029 | Fabrication, molding, clean room, and warehousing | ||||||||
| Rancho Dominguez, California | 56,000 | 10/31/2027 | Fabrication, molding and engineering | ||||||||
| La Romana, Dominican Republic | 51,970 | 8/31/2030 | Fabrication, molding, clean room, and warehousing | ||||||||
| Santiago Norte, Dominican Republic | 49,425 | 12/16/2029 | Distribution, manufacturing, and warehousing | ||||||||
| Kissimmee, Florida | 49,400 | Company Owned | Fabrication, molding, test lab and engineering | ||||||||
| La Romana, Dominican Republic | 40,921 | 12/31/2028 | Fabrication, molding, clean room, and warehousing | ||||||||
| Navan, Ireland | 40,000 | 10/6/2041 | Distribution, manufacturing, and warehousing | ||||||||
| Santiago Norte, Dominican Republic | 39,414 | 12/1/2029 | Distribution, manufacturing, and warehousing | ||||||||
| Galway, Ireland | 35,069 | Company Owned | Fabrication, molding, clean room, and warehousing | ||||||||
| Añasco, Puerto Rico | 32,210 | 2/28/2027 | Manufacturing and clean room | ||||||||
| Denver, Colorado | 28,383 | Company Owned | Fabrication, molding and engineering | ||||||||
| La Romana, Dominican Republic | 26,468 | 12/31/2025 | Fabrication, molding, clean room, and warehousing | ||||||||
| Dover, New Hampshire | 22,500 | Company Owned | Distribution, manufacturing, and warehousing | ||||||||
| Denver, Colorado | 18,270 | Company Owned | Fabrication and molding | ||||||||
| La Romana, Dominican Republic | 16,557 | 12/31/2028 | Fabrication, molding, clean room, and warehousing | ||||||||
| La Romana, Dominican Republic | 15,266 | 12/31/2026 | Fabrication, molding, clean room, and warehousing | ||||||||
| La Aurora, Heredia, Costa Rica | 15,069 | 12/19/2027 | Fabrication, molding, clean room, and warehousing | ||||||||
| Dover, New Hampshire | 14,400 | 1/31/2027 | Distribution, manufacturing, and warehousing | ||||||||
| La Aurora, Heredia, Costa Rica | 14,200 | 8/31/2030 | Fabrication, molding, clean room, and warehousing | ||||||||
| Tallahassee, Florida | 12,000 | Company Owned | Distribution, manufacturing, and warehousing | ||||||||
| Galway, Ireland | 11,500 | 12/31/2025 | Fabrication, molding, clean room, and warehousing | ||||||||
| Kennesaw, Georgia | 11,017 | 12/31/2027 | Warehousing | ||||||||
| Rockville, Maryland | 9,291 | 7/31/2027 | Fabrication and molding | ||||||||
| Huntsville, Alabama | 9,000 | 6/30/2031 | Engineering, design, and fabrication | ||||||||
| La Romana, Dominican Republic | 4,209 | 5/31/2032 | Meeting rooms and offices | ||||||||
| La Romana, Dominican Republic | 56,265 | 12/31/2029 | Fabrication, molding, clean room, and warehousing | ||||||||
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company may be a party to various suits, claims and complaints arising in the ordinary course of business and is currently a party to a single employee claim. In the opinion of management of the Company, this active claim should not result in final judgments or settlements that, in the aggregate, would have a material adverse effect on the Company’s financial condition or results of operations.
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ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Price
The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “UFPT”. The following table sets forth the range of high and low quotations for the common stock as reported by NASDAQ for the quarterly periods from January 1, 2024 to December 31, 2025:
Year Ended December 31, 2024 | High | Low | |||||||||
| First Quarter | $ | 252.20 | $ | 155.66 | |||||||
| Second Quarter | $ | 263.87 | $ | 205.94 | |||||||
| Third Quarter | $ | 358.42 | $ | 283.66 | |||||||
| Fourth Quarter | $ | 346.29 | $ | 238.73 | |||||||
Year Ended December 31, 2025 | High | Low | |||||||||
| First Quarter | $ | 285.05 | $ | 198.85 | |||||||
| Second Quarter | $ | 253.30 | $ | 186.83 | |||||||
| Third Quarter | $ | 252.55 | $ | 190.04 | |||||||
| Fourth Quarter | $ | 245.60 | $ | 185.28 | |||||||
Number of Stockholders
As of February 19, 2026, there were 79 holders of record of the Company’s common stock.
Since many of the shares are held by brokers and other institutions on behalf of stockholders, the Company is unable to estimate the total number of beneficial stockholders represented by these holders of record.
Dividends
The Company did not pay any dividends in 2025 or 2024. The Company presently intends to retain all its earnings to provide funds for the operation of its business and strategic acquisitions, although it would consider paying cash dividends in the future. Any decision to pay dividends will be at the discretion of the Company’s board of directors and will depend upon the Company’s operating results, strategic plans, capital requirements, financial condition, provisions of the Company’s borrowing arrangements, applicable law and other factors the Company’s board of directors considers relevant.
ITEM 6. [Reserved]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
UFP Technologies, Inc. is a contract development and manufacturing organization that specializes in single-use and single-patient medical devices. We are a vital link in the medical device supply chain and a valued outsourcing partner to many of the world's top medical device manufacturers. Our 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.
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Our current strategy includes further organic growth and growth through strategic acquisitions.
Net sales for the year ended December 31, 2025 increased 19.5% to $602.8 million from $504.4 million in the same period last year. The increase was primarily attributable to 23.2% growth in sales to customers in the medical market, which was largely due to sales from the companies we acquired in 2024 and 2025 (See Note 2 for further information regarding these acquisitions). These companies collectively contributed approximately $168.3 million in sales for the year ended December 31, 2025 compared to $73.1 million in the same period last year. Organic sales growth was 1.5% for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Net sales from our largest two customers, Intuitive Surgical SARL and Stryker Corporation, were 24.3% and 21.5%, respectively, of our total net sales for the year ended December 31, 2025. Intuitive Surgical SARL and Stryker comprised approximately 29.2% and 15.4%, respectively, of our net sales for the year ended December 31, 2024.
In 2025, we executed a post-acquisition review of our AJR labor force’s United States employment eligibility through E-Verify protocols. This review has resulted in significant workforce turnover during the year (the "AJR Labor Issue"). Attention spent by experienced employees training new direct and indirect employees in our standards and policies has decreased productivity and therefore, has created inefficiencies in our AJR operations. To address the AJR Labor Issue, we recruited legally eligible replacement associates. We estimate that the AJR Labor Issue added over $6.3 million in incremental labor cost to our cost-of-sales for year ended December 31, 2025.
Impact of Tariffs
In 2025, the United States imposed increased tariffs on foreign imports into the United States, including all the countries in which we manufacture goods outside the United States and also the countries in which our customers operate. Although agreements have been made with various countries, the tariff policy environment remains dynamic, particularly in light of recent Supreme Court decisions, and we cannot predict what additional actions may ultimately be taken by the United States or other governments with respect to tariffs or trade relations, including retaliatory trade measures taken by other countries in response to existing or future United States tariffs or other measures. We estimate that tariffs not reimbursed by customers were immaterial to our 2025 results.
Cyber Incident
On or about February 14, 2026, the Company detected the Cyber Incident (as defined in Item 1C, Cybersecurity). As of the date hereof, the incident has not had a material impact on the Company’s financial systems, operations or financial condition. While the Company’s investigation and assessment of this incident is ongoing, as of the date of this filing, the Company believes its primary IT systems are operational in all material respects and the Company does not believe the incident is reasonably likely to materially impact the Company’s financial condition or results of operations. There can be no assurance that the Cyber Incident or any future cybersecurity incidents will not have a material impact on the Company’s future operations, financial systems or financial condition. See Item 1A “Risk Factors” under the headings “Security breaches, including cybersecurity incidents and other disruptions could compromise our information, expose us to liability and harm our reputation and business” and “We experienced a material information technology (“IT”) systems incident in February 2026, which could result in a number of potentially unknown outcomes, including but not limited to, litigation, regulatory investigations or enforcement actions, or reputational harm, any of which could have a material impact on our business operations, financial condition, or results of operations,” and the discussion in Item 1C, Cybersecurity.
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Results of Operations
The following table sets forth, for the years indicated, the percentage of net sales represented by the items as shown in the Company’s Consolidated Statements of Income:
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Cost of sales | 71.7 | % | 70.9 | % | 71.9 | % | |||||||||||
| Gross profit | 28.3 | % | 29.1 | % | 28.1 | % | |||||||||||
| Selling, general, and administrative expenses | 12.8 | % | 12.3 | % | 12.7 | % | |||||||||||
| Acquisition costs | 0.1 | % | 0.5 | % | 0.0 | % | |||||||||||
| Change in fair value of contingent consideration | — | % | 0.2 | % | 0.9 | % | |||||||||||
| Loss (gain) on sale of fixed assets | 0.0 | % | 0.0 | % | 0.1 | % | |||||||||||
| Operating income | 15.3 | % | 16.1 | % | 14.4 | % | |||||||||||
| Interest expense, net | 1.6 | % | 1.6 | % | 0.9 | % | |||||||||||
| Income before taxes | 13.7 | % | 14.5 | % | 13.5 | % | |||||||||||
| Income tax expense | 2.4 | % | 2.8 | % | 2.3 | % | |||||||||||
| Net income from consolidated operations | 11.3 | % | 11.7 | % | 11.2 | % | |||||||||||
2025 Compared to 2024
Net Sales
Net sales increased 19.5% to $602.8 million for the year ended December 31, 2025, from net sales of $504.4 million for the same period in 2024. The increase in net sales is primarily due to increased sales to customers in the medical market of 23.2%. This increase includes sales from the companies we acquired in 2024 and 2025, which collectively contributed approximately $168.3 million in sales during the year ended December 31, 2025 compared to $73.1 million in the same period last year.
Gross profit as a percentage of net sales (“Gross Margin”) decreased to 28.3% for the year ended December 31, 2025, from 29.1% in 2024. As a percentage of net sales, material costs decreased 3.0% while overhead and labor costs collectively increased 3.8%. Absent the impact on Gross Margins from the AJR Labor Issue, gross margins for the year ended December 31, 2025 would have been 29.3%.
Selling, General and Administrative Expenses
Selling, General, and Administrative Expenses (“SG&A”) increased approximately 24.5% to $77.4 million for the year ended December 31, 2025, from $62.2 million in 2024. The increase is primarily attributable to increased headcount and other back-office resources for the year ended December 31, 2025 as compared to the year ended December 31, 2024. SG&A from our 2024 and 2025 acquisitions collectively contributed approximately $17.8 million in SG&A during the year ended December 31, 2025, as compared to $7.1 million during the year ended December 31, 2024. As a percentage of sales, SG&A increased to 12.8% for the year ended December 31, 2025, from 12.3% for the same period last year.
Acquisition Costs
We incurred approximately $0.3 million in costs associated with acquisition related activities which were charged to expense for the year ended December 31, 2025, as compared to $2.5 million for the year ended December 31, 2024. These costs were primarily for legal, due diligence and valuation services and are reflected on the face of the consolidated statements of comprehensive income.
Change in fair value of contingent consideration
In connection with the acquisitions of Welch and Marble in 2024, and DAS Medical in 2021, we are required to make contingent payments, subject to the entities achieving certain financial performance thresholds. The total potential contingent consideration payments for the Welch, Marble and DAS Medical acquisitions were $6.0 million, $0.5 million,
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and $20.0 million, respectively, as of each acquisition date. The fair value of the liability for the contingent consideration payments recognized upon the acquisition as part of the purchase accounting opening balance sheets totaled approximately $0.8 million, $0.4 million and $5.2 million for the Welch, Marble and the DAS Medical acquisitions, respectively, and was estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the initial calculation were management’s financial forecasts, discount rate and various volatility factors. The ultimate settlement of contingent consideration could deviate from current estimates based on the actual results of these financial measures. Contingent consideration is considered to be a Level 3 financial liability that is re-measured each reporting period. We paid approximately $5.3 million during the year ended December 31, 2025, related to contingent consideration. The fair value of the liability for the contingent consideration payments recognized at December 31, 2025 totaled approximately $5.3 million out of the remaining potential payments of $7.3 million. The change in fair value of contingent consideration for the Welch, Marble, and DAS Medical acquisitions resulted in an expense of approximately $0.3 million and $1.0 million, respectively, for the years ended December 31, 2025 and 2024. The change in fair value of contingent consideration for the acquisitions is included in change in fair value of contingent consideration in the condensed consolidated statements of comprehensive income.
Interest expense, net
Net interest expense was approximately $9.8 million and $8.1 million for the years ended December 31, 2025 and 2024, respectively. The increase in net interest expense for the year ended December 31, 2025 was primarily due to higher average debt in 2025 as compared to 2024. Interest income was immaterial.
Other Expense (Income)
Other expense was less than $0.1 million for the year ended December 31, 2025. Other income was $0.2 million for the year ended December 31, 2024. The changes in other expense (income) are primarily generated by equity method investment income in 2025 and foreign currency transaction gains/losses in both 2025 and 2024.
Income Taxes
We recorded income tax expense, as a percentage of income before income tax expense, of 17.2% for the year ended December 31, 2025 compared to 19.2% for the same period in 2024. The decrease in the effective tax rate for the current period as compared to the prior period is largely due to a shift in mix or pre-tax income to jurisdictions where we are taxed at a favorable rate as well as increased discrete tax benefits associated with vested equity and a state tax refund.
The effective tax rate for the year differs from the federal statutory rate of 21% due to favorable rates in foreign countries, federal deductions available for certain exported goods and federal credits, offset by state income taxes and disallowed compensation under section 162M of the Internal Revenue Code.
We note the potential for volatility in our effective tax rate, as any windfall or shortfall tax benefits related to our share-based compensation plans will be recorded directly into income tax expense.
For more information about the Company’s results of operations of 2024 compared to 2023, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — 2024 Compared to 2023” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 3, 2025.
Liquidity and Capital Resources
We generally fund our operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.
Cash Flows
Net cash provided by operations for the year ended December 31, 2025 was approximately $91.9 million and was primarily a result of net income generated of approximately $68.3 million, depreciation and amortization of approximately $19.2 million, and share-based compensation of approximately $8.9 million for the year ended December 31, 2025.
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Net cash used in investing activities for the year ended December 31, 2025 was approximately $27.6 million and was primarily the result of additions of manufacturing machinery and equipment and various building improvements, as well as the acquisitions of AJR Specialty, AJR Custom Foam, TPI, and UNIPEC.
Net cash used in financing activities was approximately $58.2 million for the year ended December 31, 2025 and was primarily the result of payments on the revolving line of credit of approximately $110.1 million and principal payments of long-term debt of approximately $12.5 million, partially offset by proceeds from advances on revolving line of credit of $68.7 million.
Outstanding and Available Debt
On June 27, 2024, we, as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”) with certain of our subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time-to-time party thereto.
The credit facilities under the Third Amended and Restated Credit Agreement consist of a secured term loan to us of $125 million and a secured revolving credit facility, under which we may borrow up to $150 million. The Third Amended and Restated Credit Facilities mature on June 27, 2029. This maturity date is subject to acceleration and we could be subject to additional fees and expenses in certain circumstances should one or more events of default described in the Third Amended and Restated Credit Agreement occur. The secured term loan requires quarterly principal payments of $3,125,000 that commence on December 31, 2024. The proceeds of the Third Amended and Restated Credit Agreement may be used for general corporate purposes, including funding certain acquisitions (see Note 2 for more information regarding this acquisition), as well as certain other permitted acquisitions. Our obligations under the Third Amended and Restated Credit Agreement are guaranteed by Subsidiary Guarantors and secured by substantially all of our assets.
The Third Amended and Restated Credit Facilities call for interest at Secured Overnight Financing Rate (“SOFR”) plus a margin that ranges from 1.25% to 2.25% or, at our discretion, the bank’s prime rate plus a margin that ranges from .25% to 1.25%. In both cases the applicable margin is dependent upon performance. Under the Third Amended and Restated Credit Agreement, we are subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The Third Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.
At December 31, 2025, we had approximately $135.5 million in outstanding borrowings under the Third Amended and Restated Credit Agreement, and also had approximately $0.7 million in standby letters of credit outstanding, drawable as a financial guarantee on worker’s compensation insurance policies. At December 31, 2025, the weighted average interest rate was approximately 5.1% and we were in compliance with all covenants under the Third Amended and Restated Credit Agreement.
Long-term debt consists of the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Revolving credit facility | $ | 26,080 | $ | 67,500 | |||||||
| Term loan | 109,375 | 121,875 | |||||||||
| Total long-term debt | 135,455 | 189,375 | |||||||||
| Current portion | (12,500) | (12,500) | |||||||||
| Long-term debt, excluding current portion | $ | 122,955 | $ | 176,875 | |||||||
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Future maturities of long-term debt at December 31, 2025 are as follows (in thousands):
| Term Loan | Revolving credit facility | Total | |||||||||||||||
| 2026 | $ | 12,500 | $ | — | $ | 12,500 | |||||||||||
| 2027 | 12,500 | — | 12,500 | ||||||||||||||
| 2028 | 12,500 | — | 12,500 | ||||||||||||||
| 2029 | 71,875 | 26,080 | 97,955 | ||||||||||||||
| $ | 109,375 | $ | 26,080 | $ | 135,455 | ||||||||||||
Future Liquidity
We require cash to pay for operating expenses, purchase capital equipment, and to service its contractual obligations. Our principal sources of funds are our operations and our Second Amended and Restated Credit Agreement. We generated cash of approximately $91.9 million from operations during the year ended December 31, 2025. We cannot guarantee that our operations will generate cash in future periods. Our longer-term liquidity is contingent upon future operating performance and the availability of draws on our revolving credit facility. Further, the economic uncertainty resulting from events including inflation, bank failures, and other factors beyond our control could affect our long-term ability to access the public markets and obtain necessary capital in order to properly capitalize and continue operations.
We plan to continue to add capacity to enhance operating efficiencies in our manufacturing plants and accommodate anticipated growth in demand. We may consider additional acquisitions of companies, technologies, or products that are complementary to our business. We believe that our existing resources, including our revolving credit facility, together with cash expected to be generated from operations, will be sufficient to fund our cash flow requirements, including capital asset acquisitions, through the next twelve months.
We may also require additional capital in the future to fund capital expenditures, acquisitions, or other investments. These capital requirements could be substantial. We anticipate that any future expansion of our business will be financed through existing resources, cash flow from operations, our revolving credit facility, or other new financing. We cannot guarantee that it will be able to meet existing financial covenants or obtain other new financing on favorable terms, if at all.
Enactment of the “One Big Beautiful Bill Act” (OBBBA)
On July 4, 2025, President Donald Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to GILTI and FDII rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, the effects of the new tax law have been recognized in the period of enactment. The impact of OBBBA to our income tax expense is immaterial.
Critical Accounting Estimates
The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales, and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those listed below, on an ongoing basis. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, including current and anticipated worldwide economic conditions, both in general and specifically in relation to the packaging and component product industries, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of this Report. We do not believe that any of the significant accounting policies required significant judgment and estimates in the preparation of our consolidated financial statements.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion of our market risk includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
Market risk represents the risk of changes in value of a financial instrument caused by fluctuations in interest rates, foreign exchange rates, and equity prices. At December 31, 2025, our cash and cash equivalents consisted primarily of bank accounts in U.S. dollars, and their valuation would not be affected by market risk. Interest under our credit facilities with Bank of America, N.A. call for interest at SOFR plus a margin that ranges from 1.25% to 2.25% or, at the discretion of the Company, the bank’s prime rate plus a margin that ranges from .25% to 1.25%. Therefore, future operations could be affected by interest rate changes. As of December 31, 2025, the applicable weighted average interest rate was approximately 5.1%.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary data of the company are listed under Part IV, Item 15, in this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Report (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We closed on the acquisitions of AJR Specialty and AJR Custom Foam in the second quarter of 2025 and TPI and UNIPEC in the third quarter of 2025. The 2025 acquisitions’ total assets and net sales constituted approximately 2.4% and 2.0%, respectively, of our consolidated total assets and net sales as shown on our consolidated financial statements as of and for the period ended December 31, 2025. As the acquisitions occurred in fiscal 2025, we excluded these businesses' internal control over financial reporting from the scope of the assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the general guidance issued by the Staff of the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope within the first year of acquisition if specified conditions are satisfied.
We closed the acquisitions of Marble, AJR, Welch and AQF all in fiscal 2024. As of this annual report on Form 10-K, we have now included these businesses' internal control over financial reporting into the scope of the assessment of the effectiveness of our disclosure controls and procedures.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (“GAAP”).
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance, as opposed to absolute assurance, of achieving their internal control objectives.
Management conducted an assessment of our internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Except as described above relating to the 2025 acquisitions, based on the assessment, management concluded that, as of December 31, 2025, our internal control over financial reporting is effective.
Except as described above, there was no change in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included under Part IV, Item 15, in this Report.
ITEM 9B. OTHER INFORMATION
Insider Trading Arrangements and Policies
During the fourth quarter of 2025, none of our directors or executive officers adopted Rule 10b5-1 trading plans and none of our directors or executive officers terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this Item 10 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item 13 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| (a) (1) | Financial Statements | Page | ||||||
Index to Consolidated Financial Statements and Financial Statement Schedule | F-2 | |||||||
Reports of Independent Registered Public Accounting Firm | F-3 | |||||||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-5 | |||||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024, and 2023 | F-6 | |||||||
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024, and 2023 | F-7 | |||||||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023 | F-8 | |||||||
Notes to Consolidated Financial Statements | F-9 | |||||||
| (a) (2) | Financial Statement Schedule | ||||
| Schedule II – Valuation and Qualifying Accounts | |||||
| All other schedules have been omitted because they are not required, not applicable, or the required information is otherwise included. | |||||
| (a) (3) | Exhibits | ||||
Exhibit Index
| Number | Description of Exhibit | ||||
2.01 | Securities Purchase Agreement, dated as of December 22, 2021, by and among Parallax Investments, LLC, a Georgia limited liability company and its purchase price beneficiaries, DAS Medical Holdings, LLC, a Georgia corporation and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 23, 2021 (SEC File No. 001-12648)). | ||||
2.02 | Agreement for the Purchase and Sale of Personal Goodwill, dated December 22, 2021, between and among the Company and Danny R. Lee, Daniel Lee, Houston Lee, Armond Groves, Thomas Bonner and Bruce Grady (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 23, 2021 (SEC File No. 001-12648)). | ||||
2.03 | Stock Purchase Agreement, dated as of October 21, 2021 by and among the Company, Contech Medical, Inc., Contech Medical, Inc.’s shareholders, and Christopher M. Byrnes (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2021 (SEC File No. 001-12648)). | ||||
3.01 | Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, filed with the SEC on May 14, 2004 (SEC File No. 001-12648)). | ||||
3.02 | Amended and Restated Certificate of Designation of Series A Junior Participating Preferred Stock of the Company (incorporated by reference to Exhibit 3.02 to the Company’s Current Report on Form 8-K, filed with the SEC on March 24, 2009 (SEC File No. 001-12648)). | ||||
3.03 | Certificate of Amendment to Certificate of Incorporation of UFP Technologies, Inc., dated June 10, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 15, 2020 (SEC File No. 001-12648)). | ||||
3.04 | Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 14, 2022 (SEC File No. 001-12648)). | ||||
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| Number | Description of Exhibit | ||||
3.05 | Amended and Restated Certificate of Incorporation of UFP Technologies, Inc., dated June 7, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 13, 2023 (SEC File No. 001-12648)). | ||||
3.06 | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 15, 2020 (SEC File No. 001-12648)). | ||||
3.07 | Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 24, 2023 (SEC File No. 001-12648)). | ||||
| 4.01 | Specimen Certificate for shares of the Company’s Common Stock (incorporated by reference to Exhibit 4.01 to the Company’s Registration Statement on Form S-1, filed with the SEC on December 15, 1993) (filed in paper format). | ||||
4.02 | Description of Company Securities (incorporated by reference to Exhibit 4.02 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2024, filed with the SEC on February 29, 2024 (SEC File No. 001-12648)). | ||||
| 10.01 | Form of Indemnification Agreement for directors and officers of the Company (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1, filed with the SEC on December 15, 1993) (filed in paper format). # | ||||
10.02 | Executive Non-qualified Excess Plan (incorporated by reference to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2006, filed with the SEC on November 13, 2006 (SEC File No. 001-12648)). # | ||||
10.03 | Employment Agreement with R. Jeffrey Bailly dated October 8, 2007 (incorporated by reference to Exhibit 10.28 to the Company’s Current Report on Form 8-K, filed with the SEC on October 12, 2007 (SEC File No. 001-12648)). # | ||||
10.04 | 2009 Non-Employee Director Stock Incentive Plan (incorporated by reference to Exhibit 10.66 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on May 10, 2013 (SEC File No. 001-12648)). # | ||||
10.05 | Amendment No. 1 to Employment Agreement with R. Jeffrey Bailly (incorporated by reference to Exhibit 10.56 to the Company’s Current Report on Form 8-K, filed with the SEC on March 8, 2011 (SEC File No. 001-12648)). # | ||||
10.06 | Facility Lease between the Company and Susana Property Co. (incorporated by reference to Exhibit 10.61 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2012, filed with the SEC on November 9, 2012 (SEC File No. 001-12648)). | ||||
10.07 | Amendment No. 2 to Employment Agreement with R. Jeffrey Bailly (incorporated by reference to Exhibit 10.62 to the Company’s Current Report on Form 8-K, filed with SEC on February 22, 2013 (SEC File No. 001-12648)). # | ||||
10.08 | Form of 2019 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 25, 2019 (SEC File No. 001-12648)). # | ||||
10.09 | Form of 2019 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 25, 2019 (SEC File No. 001-12648)). # | ||||
10.10 | Form of 2019 Non-Qualified Stock Option Agreement under the 2009 Non-Employee Director Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, filed with the SEC on August 9, 2019 (SEC File No. 001-12648)). # | ||||
10.11 | Form of 2019 Stock Unit Award Agreement under the 2009 Non-Employee Director Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, filed with the SEC on August 9, 2019 (SEC File No. 001-12648)). # | ||||
10.12 | Form of 2020 Non-Qualified Stock Option Agreement under the 2009 Non-Employee Director Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020, filed with the SEC on August 7, 2020 (SEC File No. 001-12648)). # | ||||
10.13 | Form of 2020 Stock Unit Award Agreement under the 2009 Non-Employee Director Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020, filed with the SEC on August 7, 2020 (SEC File No. 001-12648)). # | ||||
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| Number | Description of Exhibit | ||||
10.14 | First Amendment to Facility Lease between the Company and Susana Property Co. dated July 6, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, filed with the SEC on August 9, 2017 (SEC File No. 001-12648)). | ||||
10.15 | Stock Purchase Agreement, dated as of January 30, 2018, by and among the Company, the Sellers defined therein, Dielectrics and the Sellers’ Representative (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2017, filed with the SEC on March 16, 2018 (SEC File No. 001-12648)). | ||||
10.16 | Agreement for the Purchase and Sale of Personal Goodwill, dated as of January 30, 2018, by and among the Company and Eric C. Stahl (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2017, filed with the SEC on March 16, 2018 (SEC File No. 001-12648)). | ||||
10.17 | Lease dated as of February 1, 2018, by and between Eric C. Stahl and the Company (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2017, filed with the SEC on March 16, 2018 (SEC File No. 001-12648)). | ||||
10.18 | Amended and Restated 2003 Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2018, filed with the SEC on May 10, 2018 (SEC File No. 001-12648))# | ||||
10.19 | Form of 2020 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 28, 2020 (SEC File No. 001-12648)). # | ||||
10.20 | Form of 2020 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 28, 2020 (SEC File No. 001-12648)). # | ||||
10.21 | Form of 2021 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 26, 2021 (SEC File No. 001-12648)). # | ||||
10.22 | Form of 2021 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 26, 2021 (SEC File No. 001-12648)). # | ||||
10.23 | Lease, dated August 9, 2021, between and among Logistica Industrial De Tijuana Este, S.A. DE C.V., Co Production De Tijuana, S.A. DE C.V., and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 13, 2021 (SEC File No. 001-126458)). | ||||
10.24 | Second Amended and Restated Credit Agreement, dated December 22, 2021, between and among the Company, certain of its subsidiaries as guarantors and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on December 23, 2021 (SEC File No. 001-12648)). | ||||
10.25 | Form of 2022 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 22, 2022 (SEC File No. 001-12648)). # | ||||
10.26 | Form of 2022 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 22, 2022 (SEC File No. 001-12648)). # | ||||
10.27 | Form of 2023 CEO Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 21, 2023 (SEC File No. 001-12648)). # | ||||
10.28 | Form of 2023 CEO Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 21, 2023 (SEC File No. 001-12648)). # | ||||
10.29 | Form of 2023 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on February 21, 2023 (SEC File No. 001-12648)). # | ||||
10.30 | Form of 2023 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on February 21, 2023 (SEC File No. 001-12648)). # | ||||
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| Number | Description of Exhibit | ||||
10.31 | Form of 2023 Stock Unit Award Agreement (Ireland) (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, filed with the SEC on March 16, 2023 (SEC File No. 001-12648)). # | ||||
10.32 | Form of 2023 Stock Unit Award Agreement (Dominican Republic) (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2023, filed with the SEC on February 29, 2024 (SEC File No. 001-12648)) # | ||||
10.33 | Form of 2024 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 8, 2024 (SEC File No. 001-12648)). # | ||||
10.34 | Form of 2024 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 8, 2024 (SEC File No. 001-12648)). # | ||||
10.35 | Amended and Restated 2003 Incentive Plan (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, filed with the SEC on March 16, 2023 (SEC File No. 001-12648)). # | ||||
10.36 | Form of 2025 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 18, 2025 (SEC File No. 001-12648)). # | ||||
10.37 | Form of 2025 Stock Unit Award Agreement. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 18, 2025 (SEC File No. 001-12648)). # | ||||
10.38 | Employment Offer Letter, Mitchell C. Rock, dated February 10, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2026 (SEC File No. 001-12648)). ^ | ||||
10.39 | Form of Executive Severance Agreement, Mitchell C. Rock (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2026 (SEC File No. 001-12648)). † | ||||
10.40 | Form of 2026 CEO Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2026 (SEC File No. 001-12648)). | ||||
10.41 | Form of 2026 Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2026 (SEC File No. 001-12648)). | ||||
10.42 | Form of Performance Share Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2026 (SEC File No. 001-12648)).^ | ||||
10.43 | Manufacturing Supply Agreement between Das Medical International SRL and Intuitive Surgical SARL dated April 25, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 18, 2024 (SEC File No. 001-12648)).^ | ||||
10.44 | Amendment No. 24 to Manufacturing Supply Agreement between Das Medical International SRL and Intuitive Surgical SARL dated March 15, 2024 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on March 18, 2024 (SEC File No. 001-12648)).^ | ||||
10.45 | Amendment No 27 to the Manufacturing Supply Agreement between Das Medical International SRL and Intuitive Surgical SARL dated February 19, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 24, 2026 (SEC File No. 001-12648)).^ | ||||
10.46 | Supplier Letter Agreement between Sage Products, LLC and AJR Enterprises, LLC, dated March 31, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 4, 2025 (SEC File No. 001-12648)). ^ | ||||
10.47 | Amended and Restated Supplier Letter Agreement between Sage Products, LLC and AJR Enterprises, LLC, dated March 26, 2025 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 4, 2025 (SEC File No. 001-12648). ^ | ||||
10.48 | Amended and Restated Credit Agreement, dated June 27, 2024, between and among UFP Technologies, Inc., certain of its subsidiaries as guarantors and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2024 (SEC File No. 001-12648)).^ | ||||
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| Number | Description of Exhibit | ||||
10.49 | Securities Purchase Agreement, dated as of July 1, 2024, by and among AJR Enterprises, LLC, a limited liability company and its purchase price beneficiaries and UFP Technologies, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2024 (SEC File No. 001-12648)). | ||||
19.0 | |||||
21.01 | Subsidiaries of the Company. * | ||||
23.01 | Consent of Grant Thornton LLP. * | ||||
31.01 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * | ||||
31.02 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * | ||||
32.01 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | ||||
97.1 | Policy for the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2023, filed with the SEC on February 29, 2024 (SEC File No. 001-12648)). | ||||
| 101.INS | Inline XBRL Instance Document. * | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. * | ||||
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document. * | ||||
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document. * | ||||
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document. * | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. * | ||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)).* | ||||
*Filed herewith.
**Furnished herewith.
# Indicates management contract or compensatory plan or arrangement.
^ Pursuant to Item 601(b)(10) of Regulation S-K, certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Further, the schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.
† Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules, or any section thereof, to the SEC upon request.
ITEM 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| UFP TECHNOLOGIES, INC. | ||||||||||||||
| Date: | February 27, 2026 | By: | /s/ R. Jeffrey Bailly | |||||||||||
| R. Jeffrey Bailly, Chief Executive Officer | ||||||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
| SIGNATURE | TITLE | DATE | ||||||||||||
| /s/ R. Jeffrey Bailly | Chairman, Chief Executive Officer, | February 27, 2026 | ||||||||||||
| R. Jeffrey Bailly | and Director | |||||||||||||
| /s/ Ronald J. Lataille | Chief Financial Officer, Senior Vice President, | February 27, 2026 | ||||||||||||
| Ronald J. Lataille | Principal Financial and Accounting Officer | |||||||||||||
| /s/ Daniel C. Croteau | Director | February 27, 2026 | ||||||||||||
| Daniel C. Croteau | ||||||||||||||
| /s/ Cynthia Feldmann | Director | February 27, 2026 | ||||||||||||
| Cynthia Feldmann | ||||||||||||||
| /s/ Marc Kozin | Director | February 27, 2026 | ||||||||||||
| Marc Kozin | ||||||||||||||
| /s/ Thomas Oberdorf | Director | February 27, 2026 | ||||||||||||
| Thomas Oberdorf | ||||||||||||||
| /s/ Joseph John Hassett | Director | February 27, 2026 | ||||||||||||
| Joseph John Hassett | ||||||||||||||
| /s/ Symeria Hudson | Director | February 27, 2026 | ||||||||||||
| Symeria Hudson | ||||||||||||||
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UFP TECHNOLOGIES, INC.
Consolidated Financial Statements
and Financial Statement Schedule
As of December 31, 2025 and 2024
And for the Years Ended December 31, 2025, 2024, and 2023
With Reports of Independent Registered Public Accounting Firm
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UFP TECHNOLOGIES, INC.
Index to Consolidated Financial Statements and Financial Statement Schedule
| Page | |||||
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number | F-3 | ||||
Consolidated Balance Sheets as of December 31, 2025, and 2024 | F-5 | ||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 | F-6 | ||||
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 | F-7 | ||||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 | F-8 | ||||
Notes to Consolidated Financial Statements | F-9 | ||||
Schedule II - Valuation and Qualifying Accounts | F-41 | ||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
UFP Technologies, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of UFP Technologies, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 27, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2005.
February 27, 2026
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
UFP Technologies, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of UFP Technologies, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 27, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of AJR Specialty Products, AJR Custom Foam, Techno Plastics Industries, Inc., and Universal Plastics & Engineering Company, Inc., wholly-owned subsidiaries, whose financial statements reflect total assets and revenues constituting 2.4 percent and 2.0 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025. As indicated in Management’s Report, these subsidiaries were acquired during 2025. Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of these subsidiaries.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Boston, Massachusetts
February 27, 2026
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UFP TECHNOLOGIES, INC.
Consolidated Balance Sheets
(In thousands, except share data)
| December 31, | |||||||||||
| Assets | 2025 | 2024 | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses | |||||||||||
| Refundable income taxes | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Non-qualified deferred compensation plan | |||||||||||
| Right of use assets | |||||||||||
| Equity method investment | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Deferred revenue | |||||||||||
| Lease liabilities | |||||||||||
| Income taxes payable | |||||||||||
| Current portion of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, less current portion | |||||||||||
| Deferred income taxes | |||||||||||
| Non-qualified deferred compensation plan | |||||||||||
| Lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 17) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
Treasury stock at cost, | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
F-5
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UFP TECHNOLOGIES, INC.
Consolidated Statements of Comprehensive Income
(In thousands, except per share data)
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales | $ | $ | $ | ||||||||||||||
| Cost of sales | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Selling, general, and administrative expenses | |||||||||||||||||
| Acquisition costs | |||||||||||||||||
| Change in fair value of contingent consideration | |||||||||||||||||
| Loss on disposal of property, plant and equipment | |||||||||||||||||
| Operating income | |||||||||||||||||
| Interest expense, net | |||||||||||||||||
| Other expense (income) | ( | ||||||||||||||||
| Income before income tax provision | |||||||||||||||||
| Income tax expense | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Net income per common share outstanding: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
| Comprehensive Income | |||||||||||||||||
| Net Income | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation adjustment | ( | ||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||
| Comprehensive income | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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UFP TECHNOLOGIES, INC.
Consolidated Statements of Stockholders’ Equity
Years Ended December 31, 2025, 2024 and 2023
(In thousands)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net share settlement of RSU's | ( | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net share settlement of RSU's | ( | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net share settlement of RSU's | ( | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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UFP TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(In thousands)
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income from consolidated operations | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Loss on disposal of property, plant and equipment | |||||||||||||||||
| Share-based compensation | |||||||||||||||||
| Change in fair value of contingent consideration | |||||||||||||||||
| Equity method investment net earnings | ( | ( | |||||||||||||||
| Distributions from equity method investment | |||||||||||||||||
| Deferred income taxes | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Receivables, net | ( | ||||||||||||||||
| Inventories | ( | ( | |||||||||||||||
| Prepaid expenses | ( | ( | ( | ||||||||||||||
| Income taxes | ( | ( | ( | ||||||||||||||
| Other assets | ( | ||||||||||||||||
| Accounts payable | ( | ( | |||||||||||||||
| Accrued expenses | ( | ( | |||||||||||||||
| Deferred revenue | ( | ( | |||||||||||||||
| Non-qualified deferred compensation plan and other liabilities | ( | ( | |||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Additions to property, plant & equipment | ( | ( | ( | ||||||||||||||
| Acquisition of new businesses, net of cash acquired | ( | ( | |||||||||||||||
| Purchase of real estate | ( | ||||||||||||||||
| Distributions from equity method investment | |||||||||||||||||
| Proceeds from sale of fixed assets | |||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from advances on revolving line of credit | |||||||||||||||||
| Payments on revolving line of credit | ( | ( | ( | ||||||||||||||
| Proceeds from the issuance of long-term debt | |||||||||||||||||
| Principal payments of long-term debt | ( | ( | ( | ||||||||||||||
| Payment of contingent consideration | ( | ( | ( | ||||||||||||||
| Principal payments on finance lease obligations | ( | ( | ( | ||||||||||||||
| Proceeds from the exercise of stock options | |||||||||||||||||
| Payment of statutory withholding for restricted stock units vested | ( | ( | ( | ||||||||||||||
| Net cash (used in) provided by financing activities | ( | ( | |||||||||||||||
| Effect of foreign currency exchange rates on cash and cash equivalents | ( | ( | |||||||||||||||
| Net change in cash and cash equivalents | |||||||||||||||||
| Cash and cash equivalents at beginning of year | |||||||||||||||||
| Cash and cash equivalents at end of year | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Table of Contents
UFP TECHNOLOGIES, INC.
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
UFP Technologies, Inc. (the “Company”) is a contract development and manufacturing organization that specializes in single-use and single-patient medical devices. The Company 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. Our 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.
(a) Principles of Consolidation
The consolidated financial statements of the Company include the accounts and results of operations of UFP Technologies, Inc. and its wholly owned subsidiaries. For one joint venture where the Company is not the primary beneficiary, the joint venture is not consolidated and is accounted for under the equity method. All significant intercompany balances and transactions have been eliminated in consolidation. The Company consists of a single operating and reportable segment.
(b) Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including allowance for doubtful accounts, the net realizable value of inventory, the fair value of goodwill, the fair value of intangible assets, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates.
(c) Fair Value Measurement
The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
(d) Fair Value of Financial Instruments
Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the Company’s current incremental borrowing rate.
(e) Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2025 and 2024, the Company did not
The Company maintains its cash in bank deposit accounts that at times exceed federally insured limits. The Company periodically reviews the financial stability of institutions holding its accounts and does not believe it is exposed to any significant custodial credit risk.
At December 31, 2025 and 2024, cash held by foreign subsidiaries was approximately $9.8 million and $6.9 million, respectively.
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(f) Accounts Receivable
(g) Inventories
Inventories include material, labor, and manufacturing overhead and are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (“FIFO”) method.
The Company periodically reviews the realizability of its inventory for potential excess or obsolescence. Determining the net realizable value of inventory requires management’s judgment. Conditions impacting the realizability of the Company’s inventory could cause actual asset write-offs to be materially different than the Company’s current estimates as of December 31, 2025 and 2024.
(h) Property, Plant, and Equipment
Property, plant, and equipment are stated at cost and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets or the related lease term, if shorter.
Estimated useful lives of property, plant, and equipment are as follows:
| Leasehold improvements | Shorter of estimated useful life or remaining lease term | ||||
| Buildings and improvements (years) | |||||
| Machinery and equipment (years) | |||||
| Furniture, fixtures, computers & software (years) | |||||
Property, plant, and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. No events or changes in circumstances arose during the years ended December 31, 2025, 2024, and 2023 that required management to perform an impairment analysis.
(i) Goodwill
Goodwill is tested for impairment annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level but can be combined when reporting units within the same segment have similar economic characteristics. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The Company consists of a single reporting unit.
The Company performed a qualitative assessment (“Step 0”) as of October 1, 2025 and determined that it was more likely than not that the fair value of its reporting unit exceeded its’ carrying amount. As a result, the Company has not performed a “Step 1” impairment assessment.
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(j) Intangible Assets
Intangible assets with a definite life are amortized on a straight-line basis, with estimated useful lives ranging from 5 to 20 years. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that their carrying values may not be recoverable. No events or changes in circumstances arose during the year ended December 31, 2025, 2024, and 2023 that required management to perform an impairment analysis.
(k) Revenue Recognition
The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC 606 which include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. The Company recognizes a significant portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily when the product is effectively manufactured using tooling and machinery. If customer acceptance is stipulated within the contract, the Company recognizes revenue from the sale of tooling and machinery when the acceptance is received. The Company recognizes revenue from engineering services, which are primarily product development services, as the services are performed or as otherwise determined based on the substance of the agreement.
Standard payment terms are net 30 days unless contract terms state otherwise. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or after performance, resulting in a significant financing component. The Company does not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. The Company accepts sales returns from customers for defective goods, such amounts being immaterial. The Company warrants that goods sold to customers will conform to agreed upon specifications and that services will be performed in a reasonable and workmanlike manner. The Company does not provide a service as part this assurance warranty and its customers do not have the opportunity to purchase a warranty separately. Accordingly, any warranty activities are not considered to be a separate performance obligation. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale not as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the goods and are expensed when revenue is recognized. Variable consideration to be included in the transaction price is estimated using either the expected value method or the most likely method based on facts and circumstances. Variable consideration is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company has elected to not disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations, as the Company’s contracts have an original expected duration of one year or less, or revenue has been recognized at the amount for which the Company has the right to invoice for engineering services performed.
(l) Share-Based Compensation
When accounting for equity instruments exchanged for employee services, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). Forfeitures are adjusted as they occur.
(m) Shipping and Handling Costs
Costs incurred related to shipping and handling are included in cost of sales. Amounts charged to customers pertaining to these costs are included in net sales.
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(n) Income Taxes
The Company’s income taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry‐forwards. Deferred tax expense or benefit results from the net change during the year in deferred tax assets and liabilities. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company evaluates the need for a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. Should the Company determine that it would not likely be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense.
(o) Segments and Related Information
The Company follows the provisions of Accounting Standards Codification (ASC) 280, Segment Reporting, which establish standards for the way public business enterprises report information and operating segments in annual financial statements (see Note 20).
(p) Treasury Stock
The Company accounts for treasury stock under the cost method, using the first-in, first out cost flow assumption, and includes treasury stock as a component of stockholders’ equity. The Company did not
(q) Research and Development
On a routine basis, the Company incurs costs related to research and development activity. These costs are expensed as incurred and are largely included in cost of sales in the Consolidated Statements of Comprehensive Income. Approximately $8.6 million, $10.4 million, and $7.2 million were expensed in the years ended December 31, 2025, 2024 and 2023, respectively.
(r) Foreign Currency Translation
The Company has foreign operations in the Dominican Republic, Ireland, Costa Rica, and Mexico, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in Dominican pesos, Euros, Costa Rican colones, and Mexican pesos. The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as a component of Accumulated Other Comprehensive Income (Loss) (AOCI).
(s) Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires additional quantitative and qualitative income tax disclosures to allow readers of the consolidated financial statements to assess how the Company’s operations, related tax risks and tax planning affect its tax rate and prospects for future cash flows. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 retrospectively beginning with its annual
F-12
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reporting period ending December 31, 2025. The adoption does not have a material impact on the Company's financial statements. The required disclosures are included in Note 12, "Income Tax".
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures.
(2) Acquisitions
Techno Plastics Industries
On July 7, 2025, the Company purchased 100 % of the outstanding membership interests of Techno Plastics Industries, Inc. (“TPI”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $4.5 million in cash. The purchase price was subject to adjustment based upon TPI’s estimated working capital at closing. Subsequent purchase accounting opening balance sheet adjustments resulted in a decrease to the purchase price of approximately $0.2 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Securities Purchase Agreement contains representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of five years .
TPI, based in Anasco, Puerto Rico, is a specialty manufacturer of precision thermoplastic injection-molded components.
The following table summarizes the allocation of the total purchase price of approximately $4.3 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management's preliminary estimates of fair value (in thousands):
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| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts Receivable | |||||
| Inventories | |||||
| Prepaid expenses | |||||
| PP&E | |||||
| Goodwill | |||||
| Intangible assets | |||||
| Other assets | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Deferred revenue | ( | ||||
| Deferred income taxes | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Purchase price, net of cash acquired | $ | ||||
Acquisition costs associated with the transaction of approximately $0.2 million were charged to expense during the year ended December 31, 2025. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of TPI recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2025, was approximately $5.9 million and $0.6 million, respectively.
Universal Plastics & Engineering Company
On July 2, 2025, the Company purchased 100 % of the outstanding membership interests of Universal Plastics & Engineering Company, Inc. (“UNIPEC”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $7.5 million in cash. The purchase price was subject to adjustment based upon UNIPEC’s estimated working capital at closing. Subsequent purchase accounting opening balance sheet adjustments resulted in an increase to the purchase price of approximately $0.1 million. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses, and liabilities. The Securities Purchase Agreement contains representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of seven years .
UNIPEC, headquartered in Rockville, Maryland, develops and manufactures precision thermoformed and heat-sealed polymer components used primarily for shielding batteries in Class III implantable medical devices.
The following table summarizes the allocation of the total purchase price of approximately $7.6 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s preliminary estimates of fair value (in thousands):
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| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts Receivable | |||||
| Inventories | |||||
| PP&E | |||||
| Goodwill | |||||
| Intangible assets | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Purchase price, net of cash acquired | $ | ||||
Acquisition costs associated with the transaction of approximately $0.1 million were charged to expense during the year ended December 31, 2025. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of UNIPEC recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2025, was approximately $2.1 million and $0.8 million, respectively.
AJR Specialty Products and AJR Custom Foam Products
On April 25, 2025, the Company purchased 100 % of the outstanding membership interests of AJR Specialty Products, LLC, (“AJR Specialty”) and AJR Custom Foam Products, LLC, (“AJR Custom Foam”) pursuant to a Securities Purchase Agreement, for an aggregate purchase price of $2.8 million in cash. The purchase price was subject to adjustment based upon AJR Specialty and AJR Custom Foam's estimated working capital at closing. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses, and liabilities. The Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed not to compete with the Company for a period of seven years .
AJR Specialty and AJR Custom Foam, are both headquartered in St. Charles, IL. AJR Specialty and AJR Custom Foam provide additional capacity in the growing single-use safe patient handling space, as well as additional expertise in specialty fabrics and foam fabrication.
Acquisition costs associated with the transaction of approximately $0.1 million were charged to expense during the year ended December 31, 2025. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
As the revenues, earnings, balance sheet, and pro forma effects of the AJR Specialty and AJR Custom Foam acquisitions are not, and would not have been, material to the results of operations or financial position of the Company, the Company has elected to not disclose substantially all required disclosures of Accounting Standards Codification 805, Business Combinations, for this acquisition.
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Marble Medical
On June 24, 2024, the Company purchased 100 % of the outstanding shares of common stock of Marble Medical, Inc., (“Marble”) pursuant to a Stock Purchase Agreement and related agreements, for an aggregate purchase price of $4.5 million in cash, plus up to an additional $0.5 million based upon the achievement of sales targets of Marble for each of the 12-month periods ended December 31, 2024, and 2025. As of the opening balance sheet, the contingent consideration had a fair value of approximately $0.4 million. The purchase price was subject to an adjustment based upon Marble’s estimated working capital at closing, which resulted in an increase of approximately $0.1 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Stock Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1988 and headquartered in Tallahassee, FL, Marble develops and manufactures adhesive based medical components and single-use devices. The purchase price includes certain real estate, which encompasses Marble’s manufacturing, warehouse and office facilities. Marble enhances the Company's adhesives expertise as well as precision die cutting capabilities.
The following table summarizes the allocation of the total purchase price of approximately $5.0 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):
| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant, and equipment | |||||
| Customer lists | |||||
| Intellectual property | |||||
| Non-compete agreement | |||||
| Goodwill | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Purchase price, net of cash acquired | $ | ||||
Acquisition costs associated with the transaction of approximately $0.1 million were charged to expense during the year ended December 31, 2024. These costs were primarily for legal services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of Marble recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2024, was approximately $3.6 million and $0.6 million, respectively.
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AJR Enterprises
On July 1, 2024, the Company purchased 100 % of the issued and outstanding membership interests of AJR Enterprises, LLC, (“AJR”) pursuant to a Securities Purchase Agreement and related agreements, for an aggregate purchase price of $110 million in cash. The purchase price was subject to an adjustment based upon AJR’s estimated working capital at closing, a final working capital adjustment, and a reduction for certain AJR liabilities funded by the sellers, which together resulted in an increase to the purchase price of approximately $0.7 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Securities Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1997 and headquartered in St. Charles, IL, with an additional manufacturing plant in Santiago, Dominican Republic, AJR develops and manufactures single-use patient handling systems. Patient surfaces and transfer devices are a growing market due in part to government guidelines and legislation around safe patient handling. AJR’s ‘cut and sew’ manufacturing capabilities and specialty fabrics expertise supplement the Company’s thermoplastic joining expertise, allowing the Company to offer a comprehensive suite of development, commercialization, and manufacturing services for this market.
The following table summarizes the allocation of the total purchase price of approximately $110.7 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):
| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant, and equipment | |||||
| Customer lists | |||||
| Intellectual property | |||||
| Non-compete agreement | |||||
| Lease right of use assets | |||||
| Goodwill | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Lease liabilities | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Purchase price, net of cash acquired | $ | ||||
Acquisition costs associated with the transaction of approximately $0.6 million were charged to expense during the year ended December 31, 2024. These costs were primarily for legal, due diligence, and valuation services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of AJR recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2024, was approximately $53.8 million and $12.0 million, respectively.
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Welch Fluorocarbon
On July 15, 2024, the Company purchased 100 % of the outstanding shares of common stock of Welch Fluorocarbon, Inc., (“Welch”) pursuant to a Stock Purchase Agreement and related agreements, for an aggregate purchase price of $34.6 million in cash, plus up to an additional $6.0 million based upon the achievement of certain EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) targets of Welch for each of the 12-month periods ended 2024, 2025, and 2026. The contingent consideration had a fair value of approximately $0.8 million as of the opening balance sheet. The contingent consideration has no fair value as of December 31, 2025, as Welch did not achieve the EBITDA targets for the years ended December 31, 2024, and 2025. The Company has also determined that it is not probable that Welch will achieve the EBITDA targets for the year ended December 31, 2026. The purchase price was subject to an adjustment based upon Welch’s working capital at closing, the assumption by the sellers of certain liabilities and a final working capital adjustment which together resulted in a decrease in the purchase price of approximately $0.2 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Stock Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 1985 and headquartered in Dover, NH, Welch develops and manufactures thermoformed, and heat sealed implantable medical device components utilizing thin, high-performance films. Welch provides thin film thermoforming capabilities and expertise in developing and manufacturing components for implantable medical devices.
Also on July 15, 2024, pursuant to separate purchase and sale agreements (with separate legal parties), the Company purchased certain real estate in Dover, NH, which encompasses a majority of Welch’s manufacturing, warehousing and office facilities for an aggregate purchase of approximately $3.2 million.
The following table summarizes the allocation of the total purchase price of approximately $35.2 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):
| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant, and equipment | |||||
| Customer lists | |||||
| Intellectual property | |||||
| Non-compete agreement | |||||
| Lease right of use assets | |||||
| Goodwill | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Lease liabilities | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Net assets acquired, net of cash acquired | $ | ||||
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Acquisition costs associated with the transaction of approximately $0.3 million were charged to expense during the year ended December 31, 2024. These costs were primarily for legal and valuation services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of Welch recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2024, was approximately $6.9 million and $0.4 million, respectively.
AQF
On August 23, 2024, the Company purchased 100 % of the issued and outstanding membership interests of the parent holding companies of AQF Limited, operating as AQF Medical, (“AQF”) pursuant to a Share Purchase Agreement and related agreements, for an aggregate purchase price of €43 million in cash (total purchase price in U.S. Dollars amounted to approximately $48.0 million). The purchase price was subject to an adjustment based upon AQF’s working capital at closing, the assumption by the sellers of certain liabilities and a final working capital adjustment, which resulted in a net decrease of approximately $0.3 million. A portion of the purchase price is being held by the Company to indemnify the Company against certain claims, losses, and liabilities. The Share Purchase Agreement contains customary representations, warranties, and covenants customary for transactions of this type.
Founded in 2005 and headquartered in Navan, Ireland with additional joint venture operations in Singapore, AQF develops and manufactures custom-engineered foam and thermoplastic components used in a wide range of medical devices and packaging. AQF enhances the Company's expertise in converting specialty foams and films, and provides an expanded European manufacturing presence, and an Asian market presence in Singapore.
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The following table summarizes the allocation of the total purchase price of approximately $47.7 million, net of cash acquired, to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):
| Purchase Price Allocation | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant, and equipment | |||||
| Customer lists | |||||
| Intellectual property | |||||
| Non-compete agreement | |||||
| Tradename | |||||
| Lease right of use assets | |||||
| Equity Method Investment | |||||
| Goodwill | |||||
| Total assets acquired | |||||
| Accounts payable | ( | ||||
| Accrued expenses | ( | ||||
| Deferred taxes | ( | ||||
| Lease liabilities | ( | ||||
| Total liabilities assumed | ( | ||||
| Total assets acquired, net of liabilities assumed | |||||
| Less: cash acquired | ( | ||||
| Purchase price, net of cash acquired | $ | ||||
Acquisition costs associated with the transaction of approximately $1.5 million were charged to expense during the year ended December 31, 2024. These costs were primarily for legal, due diligence, and valuation services, which are included within “Acquisition costs” on the face of the Consolidated Statements of Comprehensive Income.
The amount of revenue and pre-tax income of AQF recognized since the acquisition date, which is included in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2024, was approximately $6.0 million and $1.0 million, respectively.
Pro-forma Statements
The following table contains an unaudited pro forma consolidated statement of comprehensive income for the years ended December 31, 2025, 2024, and 2023, as if the collective acquisitions of TPI and UNIPEC had occurred on
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January 1, 2024 and as if the collective acquisitions of Marble, AJR, Welch, and AQF had occurred on January 1, 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Sales | $ | $ | $ | ||||||||||||||
| Operating Income | $ | $ | $ | ||||||||||||||
| Net Income | $ | $ | $ | ||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
The above unaudited pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have occurred had all of the 2024 and 2025 acquisitions occurred as presented. In addition, future results may vary significantly from the results reflected in such pro forma information. Pro-forma adjustments include depreciation adjustments on fixed asset step up/down; inventory step-up; amortization of intangibles; and estimated interest expense.
(3) Equity Method Investment
On August 23, 2024, in conjunction with the acquisition of AQF, the Company became 50 % owners of the equity interest in AQF Asia PTE Ltd., located in Singapore (“AQF Asia”). While the Company owns 50 % of the equity interest of AQF Asia and does have significant influence over the entity, the Company has concluded that it does not have control of AQF Asia due to certain veto rights held by the other joint venture partner with regard to management decision making.
As a result, the Company accounts for its ownership interest in AQF Asia following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at fair value and then increased or decreased by recording its percentage of gain or loss in the consolidated statement of comprehensive income and a corresponding change to the carrying value of the asset. The initial fair value of this equity method investment as of August 2024 was approximately $7.0 million. The following table provides a roll-forward of the equity method investment for the years ended December 31, 2025 and 2024:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Equity Method Investment - beginning of period | $ | $ | |||||||||
| Acquired in AQF Medical acquisition | |||||||||||
| Dividend distribution | ( | ||||||||||
| Amortization of basis differences | ( | ( | |||||||||
| Equity Method Investment - end of period | $ | $ | |||||||||
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(4) Revenue Recognition
Disaggregated Revenue
The following table presents the Company’s revenue disaggregated by the major types of goods and services sold to our customers (in thousands) (See Note 20 for further information regarding net sales by market):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales of: | |||||||||||||||||
| Products | $ | $ | $ | ||||||||||||||
| Tooling and Machinery | |||||||||||||||||
| Engineering services | |||||||||||||||||
| Total net sales | $ | $ | $ | ||||||||||||||
Contract balances
The timing of revenue recognition may differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has deferred revenue (contract liabilities) included within “deferred revenue” on the consolidated balance sheet. The following table presents opening and closing balances of contract liabilities for the years ended December 31, 2025, and 2024 (in thousands):
| Contract Liabilities | |||||||||||
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred revenue - beginning of period | $ | $ | |||||||||
| Acquired in business combinations | |||||||||||
| Increases due to consideration received from customers | |||||||||||
| Revenue recognized | ( | ( | |||||||||
| Deferred revenue - end of period | $ | $ | |||||||||
Revenue recognized during the years ended December 31, 2025 and 2024 from amounts included in deferred revenue at the beginning of the period was approximately $2.7 million and $4.6 million, respectively.
When invoicing occurs after revenue recognition, the Company has unbilled receivables (contract assets) included within “receivables” on the consolidated balance sheet. The following table presents opening and closing balances of contract assets for the years ended December 31, 2025 and 2024 (in thousands):
| Contract Assets | |||||||||||
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Unbilled Receivables - beginning of period | $ | $ | |||||||||
| Increases due to revenue recognized, not invoiced to customers | |||||||||||
| Decreases due to customer invoicing | ( | ( | |||||||||
| Unbilled Receivables - end of period | $ | $ | |||||||||
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(5) Supplemental Cash Flow Information
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cash paid for: | |||||||||||||||||
| Interest | $ | $ | $ | ||||||||||||||
| Income taxes, net of refunds: | |||||||||||||||||
| Federal | $ | $ | |||||||||||||||
| State: | |||||||||||||||||
| CA | |||||||||||||||||
| IL | |||||||||||||||||
| MA | |||||||||||||||||
| MN | |||||||||||||||||
| IA | ( | ||||||||||||||||
| Other States | |||||||||||||||||
| Total income taxes, net of refunds | $ | $ | $ | ||||||||||||||
| Non-cash investing and financing activities: | |||||||||||||||||
| Capital additions accrued but not yet paid | $ | $ | $ | ||||||||||||||
| Acquisition date contingent consideration | |||||||||||||||||
(6) Receivables and Allowance for Credit Losses
Receivables consist of the following (in thousands):
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Accounts receivable–trade | $ | $ | $ | ||||||||||||||
| Less allowance for credit losses | ( | ( | ( | ||||||||||||||
| Receivables, net | $ | $ | $ | ||||||||||||||
The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected for the years ended December 31, 2025 and 2024 (in thousands):
| Allowance for Credit Losses | |||||||||||
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Allowance - beginning of period | $ | $ | |||||||||
| Provision for expected credit losses | |||||||||||
| Amounts written off against the allowance, net of recoveries | ( | ( | |||||||||
| Recoveries | |||||||||||
| Allowance - end of period | $ | $ | |||||||||
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(7) Inventories
Inventories consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Total Inventory | $ | $ | |||||||||
(8) Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 are as follows (in thousands):
| 2025 | 2024 | ||||||||||
| Opening balance | $ | $ | |||||||||
| Acquisitions | |||||||||||
| Measurement period adjustments | |||||||||||
| Foreign currency translation | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
The carrying values of the Company’s definite-lived intangible assets as of December 31, 2025 and 2024 are as follows (in thousands):
| December 31, 2025 | Customer List | Intellectual Property | Tradename & Brand | Non- Compete | Total | ||||||||||||||||||||||||
| Weighted-average amortization period (years) | |||||||||||||||||||||||||||||
| Gross amount | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Accumulated amortization | ( | ( | ( | ( | $ | ( | |||||||||||||||||||||||
| Net balance | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| December 31, 2024 | Customer List | Intellectual Property | Tradename & Brand | Non- Compete | Total | ||||||||||||||||||||||||
| Weighted-average amortization period (years) | |||||||||||||||||||||||||||||
| Gross amount | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Accumulated amortization | ( | ( | ( | ( | $ | ( | |||||||||||||||||||||||
| Net balance | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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Amortization expense related to intangible assets was approximately $9.8 million, $6.7 million, and $4.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. The estimated remaining amortization expense as of December 31, 2025 is as follows (in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
(9) Property, Plant and Equipment
Property, plant, and equipment consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Land and improvements | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Leasehold improvements | |||||||||||
| Machinery & equipment | |||||||||||
| Furniture, fixtures, computers & software | |||||||||||
| Construction in progress | |||||||||||
| Property, plant and equipment | $ | $ | |||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Net property, plant and equipment | $ | $ | |||||||||
Depreciation expense of Property, Plant and Equipment for the years ended December 31, 2025, 2024, and 2023 was approximately $9.4 million, $8.0 million, and $7.0 million, respectively.
(10) Debt
On June 27, 2024, the Company, as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”) with certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time-to-time party thereto.
The credit facilities under the Third Amended and Restated Credit Agreement consist of a secured term loan to the Company of $125 million and a secured revolving credit facility, under which the Company may borrow up to $150 million. The Third Amended and Restated Credit Facilities mature on June 27, 2029. This maturity date is subject to acceleration, and the Company could be subject to additional fees and expenses in certain circumstances should one or more events of default described in the Third Amended and Restated Credit Agreement occur. The secured term loan requires quarterly principal payments of $3,125,000 that commenced on December 31, 2024. The proceeds of the Third Amended and Restated Credit Agreement may be used for general corporate purposes, including funding certain acquisitions (see Note 2 for more information regarding this acquisition), as well as certain other permitted acquisitions. The Company’s obligations under the Third Amended and Restated Credit Agreement are guaranteed by Subsidiary Guarantors and secured by substantially all assets of the Company.
The Third Amended and Restated Credit Facilities call for interest at Secured Overnight Financing Rate (“SOFR”) plus a margin that ranges from 1.25 % to 2.25 % or, at the discretion of the Company, the bank’s prime rate plus a
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margin that ranges from .25 % to 1.25 %. In both cases the applicable margin is dependent upon Company performance. Under the Third Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The Third Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.
At December 31, 2025, the Company had approximately $135.5 million in outstanding borrowings under the Third Amended and Restated Credit Agreement and also had approximately $0.7 million in standby letters of credit outstanding, drawable as a financial guarantee on worker’s compensation insurance policies. At December 31, 2025, the weighted average interest rate was approximately 5.1 % and the Company was in compliance with all covenants under the Third Amended and Restated Credit Agreement.
Long-term debt consists of the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Revolving credit facility | $ | $ | |||||||||
| Term loan | |||||||||||
| Total long-term debt | |||||||||||
| Current portion | ( | ( | |||||||||
| Long-term debt, excluding current portion | $ | $ | |||||||||
Future maturities of long-term debt at December 31, 2025 are as follows (in thousands):
| Term Loan | Revolving credit facility | Total | |||||||||||||||
| 2026 | $ | $ | $ | ||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
(11) Accrued Expenses
Accrued expenses consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Compensation | $ | $ | |||||||||
| Current portion of contingent consideration | |||||||||||
| Current portion of present value of non-competition payments | |||||||||||
| Temporary labor accrual | |||||||||||
| Accrued rebates | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
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(12) Income Tax
The Company’s domestic and foreign net income before provision for income taxes for the years ended December 31, 2025, 2024, and 2023 consists of the following (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | $ | $ | ||||||||||||||
| Foreign | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
The Company’s income tax provision for the years ended December 31, 2025, 2024, and 2023 consists of the following (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Total Current | |||||||||||||||||
| Deferred | |||||||||||||||||
| Federal | |||||||||||||||||
| State | |||||||||||||||||
| Foreign | ( | ( | |||||||||||||||
| Total Deferred | |||||||||||||||||
| Total income tax provision | $ | $ | $ | ||||||||||||||
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The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accruals | $ | $ | |||||||||
| Tax credits | |||||||||||
| Compensation programs | |||||||||||
| Equity-based compensation | |||||||||||
| Lease liability | |||||||||||
| Intangible assets | |||||||||||
| Deferred revenue | |||||||||||
| Other | |||||||||||
| Gross deferred tax assets | |||||||||||
| Valuation allowance | |||||||||||
| Net deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
| Excess of book over tax basis of fixed assets | $ | ( | $ | ( | |||||||
| Goodwill | ( | ( | |||||||||
| Right of use asset | ( | ( | |||||||||
| Intangible assets | ( | ( | |||||||||
| Tax on unremitted foreign earnings | ( | ||||||||||
| Inventory capitalization | ( | ( | |||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Net long-term deferred tax liabilities | $ | ( | $ | ( | |||||||
The amounts recorded as deferred tax assets as of December 31, 2025 and 2024 represent the amount of tax benefits of existing deductible temporary differences that are more likely than not to be realized through the generation of sufficient future taxable income. The Company had gross deferred tax assets of approximately $10.7 million on December 31, 2025, which it believes are more likely than not to be realized. Management reviews the recoverability of deferred tax assets during each reporting period.
The actual tax provision for the years presented differs from that derived from using a U.S federal statutory rate of 21% to income before income tax expense as follows:
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| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| U.S. federal statutory rate | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Increase (decrease) in income taxes resulting from: | |||||||||||||||||||||||||||||||||||
| State and local income tax, net of federal income tax effect | |||||||||||||||||||||||||||||||||||
| Foreign Tax Effects: | |||||||||||||||||||||||||||||||||||
| Dominican Republic: | |||||||||||||||||||||||||||||||||||
| Statutory tax rate difference | |||||||||||||||||||||||||||||||||||
| Withholding taxes | |||||||||||||||||||||||||||||||||||
| Free trade zone impact | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Other items | |||||||||||||||||||||||||||||||||||
| Other foreign jurisdictions | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Effect of cross border transactions: | |||||||||||||||||||||||||||||||||||
| Global Intangible low-taxed income | |||||||||||||||||||||||||||||||||||
| Foreign-derived intangible income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Nontaxable or Nondeductible Items: | |||||||||||||||||||||||||||||||||||
| Stock Compensation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| 162m Limitations | |||||||||||||||||||||||||||||||||||
| Tax credits | |||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||
| Change in uncertain tax positions | |||||||||||||||||||||||||||||||||||
| Change in valuation allowance | |||||||||||||||||||||||||||||||||||
| Effective tax rate | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
The state and local tax jurisdictions that make up the majority of the effect of the state and local income tax line item in 2025 are Illinois and Massachusetts. The state and local tax jurisdictions that make up the majority of the effect of the state and local income tax line item in 2024 are Massachusetts, California, and Texas. The state and local tax jurisdictions that make up the majority of the effect of the state and local income tax line item in 2023 are Massachusetts, California, and Michigan.
The Company’s foreign subsidiary earnings are subject to current U.S. taxation under the Tax Cuts and Jobs Act of 2017, which also repealed U.S. taxation on the subsequent repatriation of those earnings. The Company intends to repatriate substantially all of its future foreign subsidiary earnings. The repatriation of earnings outside of the U.S. generally does not represent a material net tax impact to the Company. The withholding taxes associated with the Company’s earnings in the Dominican Republic are creditable against the Company US tax liability and therefore do not produce any material incremental tax consequences. The earnings of the Company’s other foreign subsidiaries, and therefore the withholding taxes associated with those earnings, are not material for the year ended December 31, 2025.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, as well as in Ireland, Puerto Rico, and Costa Rica. It currently does not have a local filing obligation with respect to its subsidiaries in the Dominican Republic. The Company has been audited by the following states: income tax returns
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filed in Michigan through 2004, income tax returns filed in Massachusetts through 2021, income tax returns filed in Florida through 2019, income tax returns filed in New Jersey through 2012, income tax returns in Colorado through 2017, income tax returns in Iowa through 2019, and income tax returns in Illinois through 2021. The Company has been audited by the Internal Revenue Service for income tax returns filed from 2019 through 2021. Federal and state tax returns for the years 2022 through 2024 remain open to examination by the IRS and various state jurisdictions. The Company’s non-US tax returns in Ireland, Puerto Rico, and Costa Rica remain open for the years 2021 through 2024.
The Company applies the accounting guidance in ASC 740 to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions, is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. The following is a roll forward of the Company’s unrecognized tax benefits (“UTB”) (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Gross UTB balance at beginning of fiscal year | $ | $ | |||||||||
| Gross increases - tax positions of prior years | |||||||||||
| Settlement of tax positions | ( | ||||||||||
| Gross UTB balance at end of fiscal year | $ | $ | |||||||||
As of December 31, 2025, the Company had recorded zero unrecognized tax benefits. For the year ended December 31, 2024, the Company recorded zero unrecognized tax benefits. The Company closed audits with the IRS and the state of Massachusetts during the year ended December 31, 2024 and reduced previously recorded uncertain tax benefits to zero as a result of closing those audits.
(13) Net Income Per Share
Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.
The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Basic weighted average common shares outstanding during the year | |||||||||||||||||
| Weighted average common equivalent shares due to stock options and restricted stock units | |||||||||||||||||
| Diluted weighted average common shares outstanding during the year | |||||||||||||||||
The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related stock options during the period. These outstanding stock options are not included in the computation of diluted income per share because the effect would be antidilutive.
For the years ended December 31, 2025, 2024, and 2023, the number of stock awards excluded from the computation were 2,958 , 2,958 , and 4,218 , respectively.
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(14) Share-Based Compensation
The Company issues share-based awards through several plans that are described in detail below.
Incentive Plan
In June 2003, the Company formally adopted the 2003 Incentive Plan (the “Plan”). As amended and restated to date, the Plan is intended to benefit the Company by offering equity-based and other incentives to certain of the Company’s executives and employees who are in a position to contribute to the long-term success and growth of the Company, thereby encouraging the continuance of their involvement with the Company and/or its subsidiaries.
Two types of equity awards may be granted to participants under the Plan: restricted shares and other stock awards. Restricted shares are shares of common stock awarded subject to restrictions and to possible forfeiture upon the occurrence of specified events. Other stock awards are awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of common stock. Such awards may include Restricted Stock Unit Awards (“RSUs”), incentive and non-qualified stock options, performance shares, or stock appreciation rights. The Company determines the form, terms, and conditions, if any, of any awards made under the Plan.
Through December 31, 2025, 1,408,674 shares of common stock were issued under the Plan, none of which have been restricted. These shares of common stock include the vesting of RSUs, stock options exercised, and shares of common stock granted under the Plan. For year the year ended December 31, 2025, 856 shares of common stock were granted under the Plan. For year the year ended December 31, 2025, 49,305 RSUs were granted under the Plan. At December 31, 2025, 75,851 RSUs are outstanding under the Plan. For year the year ended December 31, 2025, no stock options were granted under the Plan. At December 31, 2025, 7,935 stock options are outstanding under the Plan. At December 31, 2025, 671,821 shares, RSUs, or stock options are available for future issuance under the Plan.
Director Plan
Effective July 15, 1998, the Company adopted the 1998 Director Plan, which was amended and renamed on June 3, 2009 as the 2009 Non-Employee Director Stock Incentive Plan (the “Director Plan”). The Director Plan was amended on March 7, 2013, to (i) prohibit the repricing of stock options or other equity awards without the consent of the Company’s shareholders, and (ii) prohibit the Company from buying out underwater stock options. The Director Plan was amended on June 8, 2022, to increase the maximum number of shares issuable under the Director Plan from 975,000 to 1,075,000 . The Director Plan, as amended, provides for the issuance of stock options, RSUs, and other equity-based securities to non-employee members of the Company’s board of directors.
For the year ended December 31, 2025, 3,750 RSUs were granted under the Director Plan. At December 31, 2025, 3,750 RSUs are outstanding under the Director Plan. For the year ended December 31, 2025, no stock options were granted under the Director Plan. At December 31, 2025, 54,034 stock options are outstanding under the Director Plan. At December 31, 2025, 115,937 shares, RSUs, or stock options are available for future issuance under the Plan.
Share-based compensation
Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). Share-based compensation is included in selling, general & administrative expenses as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| Share-based compensation related to: | 2025 | 2024 | 2023 | ||||||||||||||
| Common stock grants | $ | $ | $ | ||||||||||||||
| Stock option grants | |||||||||||||||||
| RSUs | |||||||||||||||||
| Total share-based compensation | $ | $ | $ | ||||||||||||||
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The total income tax benefit recognized in the consolidated statements of comprehensive income for share-based compensation arrangements was approximately $4.8 million, $2.4 million, and $2.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Common stock grants
The compensation expense for common stock granted during the years ended December 31, 2025, 2024, and 2023, was determined based on the market price of the shares on the date of grant.
Stock option grants
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Expected volatility | ||||||||||||||
| Expected dividends | None | None | ||||||||||||
| Risk-free interest rate | ||||||||||||||
| Exercise price | $ | $ | ||||||||||||
| Expected term (years) | ||||||||||||||
| Weighted-average grant date fair value | $ | $ | ||||||||||||
The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option. The expected term is estimated based on historical option exercise activity.
The following is a summary of stock option activity for the year ended December 31, 2025:
| Shares Under Options | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding December 31, 2024 | $ | ||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Outstanding December 31, 2025 | $ | $ | |||||||||||||||||||||
| Exercisable at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Vested and expected to vest at December 31, 2025 | $ | $ | |||||||||||||||||||||
During the years ended December 31, 2025, 2024, and 2023, the total intrinsic value of all options exercised (i.e., the difference between the market price and the price paid by the employees to exercise the options) was approximately $2.1 million, $1.5 million, and $3.0 million, respectively, and the amount of consideration received from the exercise of these options was approximately $0.2 million, $0.2 million, and $0.7 million, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the years ended December 31, 2025, 2024 and 2023, 748 shares, 653 shares and 861 shares were redeemed for this purpose at an average market price of $282.42 , $162.93 and $127.05 , respectively.
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RSUs
The Company grants RSUs to its directors, executive officers and employees. The stock unit awards are subject to various time-based vesting requirements, and certain portions of these awards are subject to performance criteria of the Company. Compensation expense on these awards is recorded based on the fair value of the award at the date of grant, which is equal to the Company’s closing stock price, and is charged, to expense ratably over the requisite service period for time-based awards, and to expense utilizing the accelerated attribution method for performance-based awards. No compensation expense is taken on awards that do not become vested, and the amount of compensation expense recorded is adjusted based on management’s determination of the probability that these awards will become vested.
The following table summarizes information about stock unit award activity during the year ended December 31, 2025:
| Restricted Stock Units | Weighted Average Award Date Fair Value | ||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||
| Awarded | |||||||||||
| Shares vested | ( | ||||||||||
| Forfeitures | ( | ||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the years ended December 31, 2025, 2024 and 2023, 18,152 shares, 21,914 shares and 20,457 shares were redeemed for this purpose at an average market price of $215.60 , $216.80 and $117.95 , respectively.
The following summarizes the future share-based compensation expense the Company will record as the equity securities granted through December 31, 2025, vest (in thousands):
| Restricted Stock Units | Total | ||||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| Total | $ | $ | |||||||||
(15) Leases
The Company has operating and finance leases for offices, manufacturing plants, vehicles and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right of use (“ROU”) assets or lease liabilities. These are expensed as incurred and recorded as variable lease expense. The Company determines if an arrangement is a lease at the inception of a contract. Operating and finance lease ROU assets and operating and finance lease liabilities are stated separately in the condensed consolidated balance sheet.
ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments pursuant to the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The lease term assumed in the determination of the ROU assets and lease liabilities includes options to extend or
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terminate the lease when it is reasonably certain that the Company will exercise that option. ROU assets are also adjusted for any deferred or accrued rent. As the Company's leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The Company leases one of its owned properties to a third party. The lease descriptions, terms, and variable lease payments are generally the same as those described above.
ROU assets and lease liabilities consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating lease ROU assets | $ | $ | |||||||||
| Finance lease ROU assets | |||||||||||
| Total ROU assets | $ | $ | |||||||||
| Operating lease liabilities - current | $ | $ | |||||||||
| Finance lease liabilities - current | |||||||||||
| Total lease liabilities - current | $ | $ | |||||||||
| Operating lease liabilities - long-term | $ | $ | |||||||||
| Finance lease liabilities - long-term | |||||||||||
| Total lease liabilities - long-term | $ | $ | |||||||||
The components of lease costs consist of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Lease Cost: | |||||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right of use assets | $ | $ | $ | ||||||||||||||
| Interest on lease liabilities | |||||||||||||||||
| Operating lease cost | |||||||||||||||||
| Variable lease cost | |||||||||||||||||
| Short-term lease cost | |||||||||||||||||
| Total lease cost | $ | $ | $ | ||||||||||||||
| Weighted-average remaining lease term (years): | |||||||||||||||||
| Finance | |||||||||||||||||
| Operating | |||||||||||||||||
| Weighted-average discount rate: | |||||||||||||||||
| Finance | % | % | % | ||||||||||||||
| Operating | % | % | % | ||||||||||||||
The components of lease income were as follows:
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| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Lease income: | |||||||||||||||||
| Operating lease income | $ | $ | $ | ||||||||||||||
| Total lease income | $ | $ | $ | ||||||||||||||
The following table provides additional details of cash flow information related to the Company's leases (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for amounts included in measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | $ | ||||||||||||||
| Financing cash flows from finance leases | |||||||||||||||||
| ROU assets obtained in exchange for lease liabilities | $ | $ | $ | ||||||||||||||
Maturities of lease liabilities and receipts as of December 31, 2025 were as follows (in thousands):
| December 31, 2025 | |||||||||||||||||
| Lease Liabilities | Lease Receipts | ||||||||||||||||
| Operating | Finance | Operating | |||||||||||||||
| 2026 | $ | $ | $ | ||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| 2030 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| Total lease payments | $ | ||||||||||||||||
| Less: Interest | ( | ||||||||||||||||
| Present value of lease liabilities | $ | $ | |||||||||||||||
Rent expense amounted to approximately $5.0 million, $3.7 million, and $2.9 million in 2025, 2024, and 2023, respectively.
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(16) Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Present value of non-competition payments | $ | $ | |||||||||
| Accrued contingent consideration (earn-out) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
(17) Commitments and Contingencies
(a)Legal – From time to time, the Company may be a party to various suits, claims and complaints arising in the ordinary course of business. In the opinion of management, these suits, claims and complaints should not result in final judgments or settlements that, in the aggregate, would have a material adverse effect on the Company’s financial condition or results of operations.
(b)Contingent Consideration – In connection with the acquisitions of Welch and Marble in 2024, and DAS Medical in 2021, the Company is required to make contingent payments, subject to the entities achieving certain financial performance thresholds. Also, in connection with the DAS Medical and Advant Medical acquisitions, the Company incurred a liability for contingent consideration related to the present value of non-competition payments. The Company re-measures contingent liabilities each reporting period and records changes in fair value through a separate line item within our Consolidated Statements of Comprehensive Income. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount rates, periods, timing and amount of projected revenue or timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, useful life, or probability of achieving clinical, regulatory, or revenue-based milestones could result in different purchase price allocations and recognized amortization expense and contingent consideration expense or benefit in current and future periods.
(18) Employee Benefit Plans
The Company maintains 401(k) and profit-sharing plans for eligible employees. Contributions to the Plans are made in the form of matching contributions to employee 401(k) deferrals. Contributions to the Plan were approximately $2.1 million, $1.6 million, and $1.3 million for the years 2025, 2024, and 2023, respectively.
The Company has a partially self-insured health insurance program that covers all eligible participating employees. The maximum liability is limited by a stop loss of $0.2 million per insured person, along with an aggregate stop loss determined by the number of participants.
The Company has an Executive, Non-qualified “Excess” Plan (“the Plan”), which is a deferred compensation plan available to certain executives. The Plan permits participants to defer receipt of part of their current compensation to a later date as part of their personal retirement or financial planning. Participants have an unsecured contractual commitment from the Company to pay amounts due under the Plan.
The compensation withheld from Plan participants, together with gains or losses determined by the participants’ deferral elections is reflected as a deferred compensation obligation to participants and is classified within the liabilities section in the accompanying balance sheets. At December 31, 2025 and 2024, the balance of the deferred compensation liability totaled approximately $6.7 million and $6.2 million, respectively. The related assets, which are held in the form of a Company-owned, variable life insurance policy that names the Company as the beneficiary, are classified within the other assets section of the accompanying balance sheets and are accounted for based on the underlying cash surrender values of the policies and totaled approximately $7.5 million and $6.2 million as of December 31, 2025 and 2024, respectively.
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(19) Fair Value of Financial Instruments
Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC 820, Fair Value Measurements and Disclosures, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:
Level 1
Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2
Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level 3
Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
The following table presents the fair value and hierarchical levels, for financial assets that are measured at fair value on a recurring basis (in thousands):
| Level 3 | December 31, 2025 | December 31, 2024 | |||||||||
| Purchase price contingent consideration (Note 2): | |||||||||||
| Accrued contingent consideration (earn-out) | $ | $ | |||||||||
| Present value of non-competition payments | |||||||||||
| Total contingent consideration | $ | $ | |||||||||
The following table presents the changes in the estimated fair values of the Company’s liabilities for contingent consideration measured using significant unobservable inputs (Level 3) (in thousands):
| December 31, 2023 | $ | ||||
| Fair value of earnouts from acquisitions | |||||
| Fair value measurement adjustments | |||||
| Payments | ( | ||||
| December 31, 2024 | $ | ||||
| Fair value measurement adjustments | |||||
| Payments | ( | ||||
| December 31, 2025 | $ | ||||
Significant unobservable inputs include revenue and EBITDA projections and risk-free discount rates.
The total potential contingent consideration payments for the Welch, Marble and DAS Medical acquisitions were $6.0 million, $0.5 million, and $20.0 million, respectively, as of each acquisition date. The fair value of the liability for the contingent consideration payments recognized upon the acquisition as part of the purchase accounting opening balance sheets totaled approximately $0.8 million, $0.4 million and $5.2 million for the Welch, Marble and the DAS Medical acquisitions, respectively, and was estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the initial calculation were management’s financial forecasts, discount rate and various volatility factors. The ultimate settlement of contingent consideration could deviate from current estimates based on the actual results of these financial measures. The contingent consideration for the Welch acquisition has no fair value as of December 31, 2025, as Welch did not achieve the
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EBITDA targets for the years ended December 31, 2024, and 2025. The Company has also determined that it is not probable that Welch will achieve the EBITDA targets for the year ended December 31, 2026. Contingent consideration is considered to be a Level 3 financial liability that is re-measured each reporting period. The Company paid approximately $5.3 million during the year ended December 31, 2025. The fair value of the liability for the contingent consideration payments recognized at December 31, 2025 totaled approximately $5.3 million out of the remaining potential payments of $7.3 million. The change in fair value of contingent consideration for the Welch, Marble, and DAS Medical acquisitions resulted in an expense of approximately $0.3 million and $1.0 million, respectively, for the years ended December 31, 2025 and 2024. The change in fair value of contingent consideration for the acquisitions is included in change in fair value of contingent consideration in the condensed consolidated statements of comprehensive income.
The Company entered into Non-Competition Agreements with certain previous owners of DAS Medical and Advant Medical which includes an aggregate of $10.0 million in payments to certain previous owners of DAS Medical over a ten-year period, and an aggregate of €0.4 million in payments to the previous owner of Advant Medical over a three-year period. The Company paid approximately $2.0 million during 2025 related to non-competition agreements. The present value of the Non-Competition Agreements at December 31, 2025 totaled approximately $5.0 million. This liability is considered to be a Level 3 financial liability that is re-measured each reporting period.
The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, which are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.
(20) Segment Data
The Company consists of a single operating and reportable segment and uses consolidated net income as its measure of segment profit and loss. The chief operating decision maker of the Company is the Chairman and Chief Executive Officer (CEO). The Chairman and CEO reviews consolidated operating results to make decisions about how to allocate resources to the segment and assess its performance as a whole. The Company has identified the following significant segment expenses (SSEs) due to their relevance to the overall consolidated operating results (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales from external customers | $ | $ | $ | ||||||||||||||
| Significant segment expenses: | |||||||||||||||||
| Materials | |||||||||||||||||
| Salaries and Benefits | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Interest expense, net | |||||||||||||||||
| Other segment items (a) | |||||||||||||||||
| Income before income tax provision | |||||||||||||||||
| Income tax provision | |||||||||||||||||
| Segment net income | $ | $ | $ | ||||||||||||||
| Segment total assets (b) | $ | $ | $ | ||||||||||||||
(a)Other segment items include (production overhead, stock compensation, professional fees, and other SG&A expenses)
(b)See Consolidated Balance Sheet for details
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Information about Geographic Areas
Net sales shipped to customers outside of the United States comprised approximately 16.0 %, 16.7 %, and 20.8 % of the Company’s consolidated net sales for the years ended December 31, 2025, 2024, and 2023, respectively. Approximately 36.7 % of all long-lived assets are located outside of the United States.
Information about Major Customers
Net sales to two customers comprised approximately 24.3 % and 21.5 %, respectively, of the Company’s consolidated net sales for the year ended December 31, 2025. Net sales to two customers comprised approximately 29.2 % and 15.4 %, respectively, of the Company’s consolidated net sales for the year ended December 31, 2024. Net sales to one customer comprised approximately 28.1 % of the Company’s consolidated net sales for the year ended December 31, 2023.
On December 31, 2025, one customer represented approximately 32.1 % of gross accounts receivable. On December 31, 2024, one customer represented approximately 34.0 % of gross accounts receivable.
The Company’s products are primarily sold to customers within the Medical and Non-medical markets. Net sales by market for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Market | Net Sales | % | Net Sales | % | Net Sales | % | ||||||||||||||||||||||||||||||||
| Medical | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
| Non-medical | % | % | % | |||||||||||||||||||||||||||||||||||
| Net Sales | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
(21) Quarterly Financial Information (unaudited)
Summarized quarterly financial data is as follows (in thousands, except per share data):
| 2025 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Basic net income per share | |||||||||||||||||||||||
| Diluted net income per share | |||||||||||||||||||||||
| 2024 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Basic net income per share | |||||||||||||||||||||||
| Diluted net income per share | |||||||||||||||||||||||
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| 2023 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Basic net income per share | |||||||||||||||||||||||
| Diluted net income per share | |||||||||||||||||||||||
(22) Subsequent Event
On or about February 14, 2026, the Company detected suspicious activity involving its information technology (“IT”) systems. Upon detecting the issue, the Company began taking steps to assess, contain, and remediate the unauthorized activity, including isolating the affected systems and launching an investigation with the assistance of external cybersecurity advisors.
Through the Company’s efforts, the Company believes that the third party responsible for this incident has been removed from the Company’s IT systems, and the Company’s ability to access information impacted by this incident has been restored in all material respects. The Company’s operations have continued throughout the period since the detection of the cybersecurity incident in all material respects. The Company continues to investigate the nature and scope of the unauthorized access. The Company currently expects that a significant portion of its direct costs incurred relating to containing, investigating and remediating the cybersecurity incident will be reimbursed through insurance recoveries.
While the Company’s investigation and assessment of this incident is ongoing, as of the date of this filing, the Company does not believe the incident is reasonably likely to materially impact the Company’s financial condition or results of operations.
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Schedule II
UFP TECHNOLOGIES, INC.
Consolidated Financial Statement Schedule
Valuation and Qualifying Accounts
Years ended December 31, 2025, 2024, and 2023
Accounts receivable, allowance for credit losses:
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | $ | $ | ||||||||||||||
| Provision for bad debt | |||||||||||||||||
| Write-offs, net of recoveries | ( | ( | ( | ||||||||||||||
| Balance at end of year | $ | $ | $ | ||||||||||||||
F-41
FAQ
What is UFP Technologies (UFPT) core business focus?
UFP Technologies focuses on contract development and manufacturing of single-use and single-patient medical devices and components. Its products support minimally invasive surgery, infection prevention, wound care, orthopedics, wearables, diagnostics, and biopharma packaging for many of the world’s top medical device manufacturers.
How concentrated are UFP Technologies (UFPT) revenues among major customers?
Customer concentration is high. In 2025, the top ten customers represented about 68.8% of net sales. Intuitive Surgical SARL and Stryker alone generated approximately 24.3% and 21.5% of net sales, respectively, making the company sensitive to volume or relationship changes with these accounts.
What cybersecurity issues did UFP Technologies (UFPT) disclose?
In February 2026, UFP Technologies detected a cyber incident affecting many IT systems, including billing and labeling. Some data appear to have been stolen or destroyed. The company reports operations and financial systems remain materially intact and expects significant direct response costs to be reimbursed by insurance.
Where does UFP Technologies (UFPT) manufacture its medical products?
UFP Technologies runs a global network of facilities, with major sites in the United States, Dominican Republic, Mexico, Puerto Rico, Ireland and Costa Rica. Many locations are ISO 13485 certified and several are FDA registered, supporting stringent medical-device quality and regulatory requirements for its customers.
How large is UFP Technologies (UFPT) in terms of market value and shares?
As of the last business day of its most recent second quarter, non‑affiliate equity was valued at about $1.81 billion, based on a $244.16 share price. As of February 19, 2026, the company had 7,713,300 shares of common stock outstanding, reflecting its current equity base.
What are key operational risks identified by UFP Technologies (UFPT)?
The company highlights risks from inflation, raw material and supplier dependence, geopolitical instability, climate and ESG regulation, data privacy and cybersecurity, heavy customer concentration, and challenges in integrating acquisitions. These factors could pressure margins, disrupt production, or reduce sales if not managed effectively.
Ufp Technologies
NASDAQ:UFPT
UFPT Rankings
UFPT Latest News
UFPT Latest SEC Filings
Feb 27, 2026
[8-K] UFP TECHNOLOGIES INC Reports Material Event
Feb 24, 2026
[8-K] UFP TECHNOLOGIES INC Reports Material Event
Feb 24, 2026
[8-K] UFP TECHNOLOGIES INC Reports Material Event
Feb 24, 2026
[8-K] UFP TECHNOLOGIES INC Reports Material Event
Feb 13, 2026
[8-K] UFP TECHNOLOGIES INC Reports Material Event
UFPT Stock Data
1.66B
7.39M
Medical Devices
Surgical & Medical Instruments & Apparatus
United States
NEWBURYPORT