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UFP TECHNOLOGIES INC

UFP TECHNOLOGIES INCUFPT決算レポート

Nasdaq · ヘルスケア · 外科用及び医療用器具

UFP Technologies, Inc. is an American multinational developer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products.

What changed in UFP TECHNOLOGIES INC's 10-K — 2024 vs 2025

Top changes in UFP TECHNOLOGIES INC's 2025 10-K

205 paragraphs added · 155 removed · 116 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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There can be no assurance that any such action will not adversely impact the Company’s products and business. 5 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.
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.
Any delay or interruption in the supply of raw materials could have a material adverse effect on the Company’s business. 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.
Any delay or interruption in the supply of raw materials could have a material adverse effect on the Company’s business. 4 Table of Contents 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.
The Company strives to promote a workplace that is professional, provides opportunity for career growth and treats all workers with dignity and respect.
The Company strives to promote a workplace that is professional, provides opportunities for career growth and treats all workers with dignity and respect.
Its corporate safety officer reports directly to the Vice President, Chief Operating Officer, 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.
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.
The Company’s U.S. registered trademarks are: UFP Technologies®, Shaping Innovation®, FlexShield®, FirmaLite®, BioShell®, T-Tubes®, T-Tube®, Tri-Covers®, Design Nail®, Pro-Sticks®, Cryoshell® Case Fit®, Alloshell®, Flash Shiner®, Mambo®, EZ-Card®, ControlClean®, United Foam®, and the Company’s U logo. Each trademark, trade name, or service mark of any other company appearing in this Report belongs to its respective holder.
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.
The Company’s single-use and single-patient devices and components are used in a wide range of medical devices and packaging for minimally invasive surgery, infection prevention, robotic surgery, patient handling, orthopedic implants, wound care, wearables, and orthopedic soft goods. The Company was incorporated in the State of Delaware in 1993.
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.
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 2025 through 2041.
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.
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 know-how, and processing expertise can be leveraged to create value for its customers.
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 3 Table of Contents know-how, and processing expertise can be leveraged to create value for its customers.
Examples of its custom products targeted to specific markets include: ● MedTech – 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.
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.
The consolidated financial statements of the Company include the accounts and results of operations of UFP Technologies, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Available Information The Company’s Internet website address is http://www.ufpt.com.
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.
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 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 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. 6 Patents and Other Proprietary Rights The Company relies upon trade secrets, patents, and trademarks to protect its technology and proprietary rights.
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.
Human Capital Management As of January 25, 2025, the Company had a total of 4,146 full-time employees (compared to 3,093 full-time employees as of January 27, 2024) and 189 temporary workers (compared to 200 temporary workers at January 27, 2024). The Company is not a party to any collective bargaining agreements. The Company considers its employee relations to be good.
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 sells its products into distinct markets with its primary focus on the MedTech market: ● MedTech – 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 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.
For those employees struggling with life’s challenges, the Company offers employee assistance programs. 7 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.
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.
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.
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.
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.
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.
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.
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.
For the year ended December 31, 2024, two customers’ net sales were approximately 28.8% and 15.4% 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.
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 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. 4 ● Automotive – Automotive companies are challenged with creating quieter, safer and more efficient vehicles.
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.
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 also engineers components for automotive use as interior trim and structural applications.
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.
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.
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.
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.
The Company’s compliance hotline is maintained for the confidential reporting of any suspected policy violations or unethical business conduct. 5 Table of Contents 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.
In general, the Company’s solutions are all aimed at improving treatment outcomes while reducing risk and cost. ● Automotive – Molded components designed to make cars lighter (therefore more fuel efficient), quieter, and safer.
In general, the Company’s solutions are all aimed at improving treatment outcomes while reducing risk and cost.
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 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 has a total of 23 active patents relating to technologies including foam, packaging, tool control technologies, radio frequency welding, automotive superforming processes and certain nail file technologies. The Company also has patent applications in process.
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.
ITEM 1. BUSINESS The Company is a designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products. The Company believes it is an important link in the medical device supply chain and a valued outsource partner to many of the top medical device manufacturers in the world.
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.
Removed
The Company partners with OEMs, Tier 1 suppliers, and its own material manufacturers to develop customized solutions designed to solve automakers’ challenges. ● Aerospace & Defense – With regard to the aerospace market, the Company primarily targets commercial aircraft manufacturers to address the need for improved safety, better fuel economy, lower emissions, and overall passenger comfort.
Removed
With regard to the defense market, as a long-time supplier to military defense contractors and law enforcement, the Company provides highly innovative solutions intended to enhance soldier and officer safety, improve comfort, and protect mission critical equipment. ● Industrial/Other – The applications for the Company's industrial and other products are highly diverse.
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Examples include air and liquid filters, thermal and acoustic insulation, seals and gaskets, and protective gear for sports equipment.
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Applications include acoustic insulation, interior trim, load floors, sunshades, SUV cargo cover handles, driveshaft damping, engine & manifold covers, quarter panels and wheel liners. ● Aerospace & Defense – With regard to the aerospace market, molded composites for commercial aviation make planes lighter and safer.
Removed
With regard to the defense market, molded composites for military gear improve the safety and comfort of soldiers. Applications include backpack components, knee and elbow pads, eyewear, and helmets. In addition, the Company supplies custom protective case systems to quickly and safely transport, store, and deploy mission-critical equipment.
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Applications include military ballistics panels, virtual training systems, drones, communications equipment, and rugged portable computers.
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The Company has seventeen manufacturing locations that are ISO 13485 certified and eight that are FDA registered. The Company’s automotive customers sometimes require their suppliers to certify their manufacturing locations to the International Automotive Task Force (“IATF”) 16949 automotive quality standard. The Company’s Grand Rapids, MI facility meets this requirement.
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These components are produced using a compression molding process to create highly functional composites consisting of various materials such as polypropylene/fiberglass panels, nonwovens, and fabrics. Highly specialized polypropylene based nonwoven material is used for automotive interior noise reduction and is fabricated using a die cut process.
Removed
Foam for filtration, acoustical, and thermal insulation products that do not utilize cross-linked foam are fabricated by cutting shapes from blocks of foam, using specialized cutting tools, routers, water jets, and hot wire equipment, and assembling these shapes into the final product using a variety of foam welding or gluing techniques.
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Products can be used on a stand-alone basis or bonded to another foam product or other material such as a corrugated medium. The Company does not manufacture any of the raw materials used in its products.
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The Company’s compliance hotline is maintained for the confidential reporting of any suspected policy violations or unethical business conduct.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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; 13 ● 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.
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.
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. 10 We may pursue acquisitions or other strategic relationships that involve inherent risks, any of which may cause us to not realize anticipated benefits.
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 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 acquisition or other strategic opportunities may restrict our ability to grow.
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.
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 the Dominican Republic, Ireland, Costa Rica, and Mexico.
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.
In such a case, our business, financial condition, and results of operations may be materially adversely affected. 12 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.
In such a case, our business, financial condition, and results of operations may be materially adversely affected. 12 Table of Contents 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.
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 occurs, our business, financial condition and operating results would likely suffer.
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.
Our net sales to customers outside the U.S., which accounted for approximately 16.7% of net sales for 2024, 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.
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.
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 damages equipment or facilities or commence alternate production 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.
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. 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.
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. 14 Table of Contents 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.
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. Global climate change and related regulations and changes in customer demand could negatively affect our operations and our business.
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. 8 Table of Contents Global climate change and related regulations and changes in customer demand could negatively affect our operations and our business.
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 Credit Agreement contains covenants imposing various restrictions on our business and financial activities.
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 15 Table of Contents Credit Agreement contains covenants imposing various restrictions on our business and financial activities.
In addition, our significant amount of intangible assets 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, our significant amount of intangible assets 17 Table of Contents 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.
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 their performance specifications under all conditions or for all applications.
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 7 Table of Contents their performance specifications under all conditions or for all applications.
In addition, an employee, contractor, or other third-party 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.
In addition, an employee, contractor, or other third-party 10 Table of Contents 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.
In addition, our insurance coverage may not adequately compensate us for losses incurred as a direct or indirect result of natural or other disasters.
In addition, our insurance coverage may not adequately compensate us for losses incurred as a direct or indirect result of natural or other disasters. 18 Table of Contents
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. 16 Our effective income tax rate is the result of the income tax rates in the various countries in which we do business.
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.
If our suppliers choose to expand their own operations, through acquisitions or otherwise, and begin manufacturing and selling products directly to our customers, it could reduce our pricing or sales volume and overall profitability.
If our suppliers choose to expand their own operations, through acquisitions or otherwise, and begin 9 Table of Contents manufacturing and selling products directly to our customers, it could reduce our pricing or sales volume and overall profitability.
In addition, intangible assets with definite lives, which represent $144.3 million of our net intangible assets at December 31, 2024, 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.
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.
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.
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) .
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.
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. 16 Table of Contents 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.
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. We may be unable to protect our proprietary technology from infringement.
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.
Two customers (Intuitive Surgical SARL and Stryker) comprised approximately 28.8% 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; and one customer comprised approximately 21.5% of our net sales for the year ended December 31, 2022.
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.
Our top ten customers represented approximately 68.1%, 59.3%, and 47.2% of our total net sales in 2024, 2023, and 2022, respectively.
Our top ten customers represented approximately 68.8%, 68.1%, and 59.3% of our total net sales in 2025, 2024, and 2023, respectively.
We may never realize the full value of our intangible assets, which represent a significant portion of our total assets. At December 31, 2024, we had $334 million of goodwill and other intangible assets, representing approximately 53% of our total assets.
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.
One customer represented approximately 34.0% of gross accounts receivable for the year ended December 31, 2024, and two customers represented approximately 16.5% and 12.2%, respectively, of gross accounts receivable for the year ended December 31, 2023. Our business could be harmed if our products contain undetected errors or defects or do not meet applicable specifications.
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.
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. 17 Our operations could be disrupted by natural or human causes beyond our control .
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.
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. 8 Our manufacturing facilities and warehouses in the Dominican Republic play a crucial role in the production of certain of our medical products.
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 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.
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.
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. 15 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.
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.
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.
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.
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. 14 We have incorporated and may further incorporate artificial intelligence (AI) into our internal operations to enhance employee productivity and improve cybersecurity.
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.
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.
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.
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.
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.
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 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.
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 .
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.
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.
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.
Product liability claims could divert management's attention from our core business, be expensive to defend and result in sizable damage awards against us. 9 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.
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.
Increased competition for the sales of our products could result in price reductions, reduced margins, and loss of market share, which could materially adversely affect our prospects, business, financial condition and results of operations. 11 Security breaches, including cybersecurity incidents and other disruptions could compromise our information, expose us to liability and harm our reputation and business.
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.
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.
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.
Removed
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.
Added
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.
Removed
If we violate, or fail to comply with these requirements, we could be fined or otherwise sanctioned by regulators.
Added
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.
Added
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 6 Table of Contents costs to maintain a competitive cost structure.
Added
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.
Added
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.
Added
Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition and results of operations.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
We have invested, and continue to invest, human and technology resources in our data compliance efforts that may be time-intensive and costly.
Added
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.
Added
Security breaches, including cybersecurity incidents and other disruptions could compromise our information, expose us to liability and harm our reputation and business.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
There is no 11 Table of Contents assurance these planned solutions will work in the future for the Cyber Incident or any future incident.
Added
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.
Added
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.
Added
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The cybersecurity risk assessment process is part of the Company’s overall risk management process. Our cybersecurity partner helps us prioritize actions to improve compliance with CIS Critical Security Controls and assists with those actions.
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.
Management is responsible for assessing and managing material risks from cybersecurity threats. This responsibility primarily resides with the VP of Information Technology and his qualified team, including dedicated cyber security personnel. The qualifications of the Information Technology team include a combination of formal education (e.g.
Management is responsible for assessing and managing material risks from cybersecurity threats. This responsibility primarily resides with the VP of Information Technology and his qualified team, including dedicated cybersecurity personnel. The qualifications of the Information Technology team include a combination of formal education (e.g.
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 at least annually by qualified third-party service providers. ● 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.
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. • Automated phishing testing is used to assess the effectiveness of our cybersecurity awareness training.
Master’s degrees in Cybersecurity and Information Assurance); CISSP and ISSMP certifications and, over 100 years of combined Information Technology experience. Management’s process for monitoring prevention, detection, mitigation, and remediation of cybersecurity incidents is summarized above in the Risk management and strategy section . 18
Master’s degrees in Cybersecurity and Information Assurance); CISSP and ISSMP certifications and, over 100 years of combined Information Technology experience. Management’s process for monitoring prevention, detection, mitigation, and remediation of cybersecurity incidents is summarized above in the Risk management and strategy section.] 20 Table of Contents
The Company does not believe that any risks from cybersecurity threats 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. Governance General risk assessment and management oversight resides with the Company’s Board of Directors.
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
The Company’s operations have continued since the detection of the Cyber Incident in all material respects. 19 Table of Contents 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.
Added
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.
Added
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.
Added
As of the date hereof, the Cyber Incident has not had a material impact on the Company’s financial systems, operations or financial condition, and, while the Company’s investigation and assessment of this incident is ongoing, the Company does not believe the Cyber Incident is reasonably likely to materially impact the Company’s financial condition or results of operations.
Added
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 General risk assessment and management oversight resides with the Company’s Board of Directors.

Item 2. Properties

Properties — owned and leased real estate

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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 Huntsville, Alabama 9,000 6/30/2031 Engineering, design, and fabrication Grand Rapids, Michigan 255,260 Company Owned Fabrication, molding, warehousing, and engineering Rancho Dominguez, California 56,000 10/31/2027 Fabrication, molding and engineering Denver, Colorado 18,270 Company Owned Fabrication and molding Denver, Colorado 28,383 Company Owned Fabrication, molding and engineering Kissimmee, Florida 49,400 Company Owned Fabrication, molding, test lab and engineering El Paso, Texas 127,730 Company Owned Warehousing, fabrication Chicopee, Massachusetts 103,792 Company Owned Fabrication, molding, clean room, warehousing, and engineering Providence, Rhode Island 79,535 9/30/2026 Fabrication, molding, clean room, and warehousing La Romana, Dominican Republic 16,557 12/31/2024 Fabrication, molding, clean room, and warehousing La Romana, Dominican Republic 12,630 12/31/2026 Fabrication, molding, clean room, and warehousing La Romana, Dominican Republic 51,970 8/31/2025 Fabrication, molding, clean room, and warehousing Tijuana, Mexico 83,256 2/28/2032 Fabrication, molding, and warehousing Kennesaw, Georgia 11,017 12/31/2027 Warehousing Galway, Ireland 35,069 Company Owned Fabrication, molding, clean room, and warehousing Galway, Ireland 11,500 12/31/2025 Fabrication, molding, clean room, and warehousing La Aurora, Heredia, Costa Rica 13,000 4/30/2028 Fabrication, molding, clean room, and warehousing Chicopee, Massachusetts 3,500 11/30/2024 Warehousing La Romana, Dominican Republic 26,468 12/31/2025 Fabrication, molding, clean room, and warehousing La Aurora, Heredia, Costa Rica 14,200 4/30/2028 Fabrication, molding, clean room, and warehousing La Romana, Dominican Republic 40,921 12/31/2028 Fabrication, molding, clean room, and warehousing La Romana, Dominican Republic 23,728 6/30/2025 Fabrication, molding, clean room, and warehousing 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
Removed
Charles, Illinois 110,086 6/30/2029 Distribution, manufacturing, and warehousing Santiago Norte, Dominican Republic 39,414 12/1/2025 Distribution, manufacturing, and warehousing Dover, New Hampshire 5,400 1/31/2027 Distribution, manufacturing, and warehousing Navan, Ireland 40,000 10/6/2041 Distribution, manufacturing, and warehousing Santiago Norte, Dominican Republic 49,425 12/16/2029 Distribution, manufacturing, and warehousing Tallahassee, Florida 12,000 Company Owned Distribution, manufacturing, and warehousing Dover, New Hampshire 22,500 Company Owned Distribution, manufacturing, and warehousing 19
Added
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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.
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. 21 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−2 removed2 unchanged
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 2024 or 2023.
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.
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”.
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, 2023 to December 31, 2024: Year Ended December 31, 2023 High Low First Quarter $ 131.80 $ 103.64 Second Quarter $ 197.23 $ 123.68 Third Quarter $ 205.08 $ 151.09 Fourth Quarter $ 185.40 $ 127.29 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 20 Number of Stockholders As of February 25, 2025, there were 72 holders of record of the Company’s common stock.
The following table sets forth the range of high and low quotations for the common stock as reported by NASDAQ for the quarterly periods fr om 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 , t here were 79 holders of record of the Company’s common stock.
Removed
Issuer Purchases of Equity Securities On June 16, 2015, the Company issued a press release announcing that its Board of Directors authorized the repurchase of up to $10.0 million of the Company’s outstanding common stock. There was no share repur‐chase activity for the years ended December 31, 2024, 2023, and 2022.
Removed
During the year ended December 31, 2015, the Company repurchased 29,559 shares of common stock at a cost of approximately $587 thousand. At December 31, 2024, approximately $9.4 million was available for future repurchases of the Company's common stock under this authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

36 edited+22 added−23 removed1 unchanged
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 commence on December 31, 2024.
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 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 margin that ranges from .25% to 1.25%. In both cases the applicable margin is dependent upon Company performance.
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.
Outstanding and Available 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.
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.
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.
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.
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.
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.
The Company bases its 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.
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.
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.
The effective tax rate for the year differs from the federal statutory rate o f 21% du e 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.
The Company believes that its existing resources, including its revolving credit facility, together with cash expected to be generated from operations, will be sufficient to fund its cash flow requirements, including capital asset acquisitions, through the next twelve months. The Company may also require additional capital in the future to fund capital expenditures, acquisitions, or other investments.
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. The Company anticipates that any future expansion of its business will be financed through existing resources, cash flow from operations, the Company's revolving credit facility, or other new financing. The Company cannot guarantee that it will be able to meet existing financial covenants or obtain other new financing on favorable terms, if at all.
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.
The fair value of the liability for the contingent consideration payments recognized upon the acquisition as part of the opening balance sheets totaled approximately $800 thousand, $400 thousand 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.
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.
The Company’s single-use and single-patient devices and components are used in a wide range of medical devices and packaging for minimally invasive surgery, infection prevention, surfaces and support, wound care, wearables, orthopedic soft goods, and orthopedic implants. The Company’s current strategy includes further organic growth and growth through strategic acquisitions.
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. 22 Table of Contents Our current strategy includes further organic growth and growth through strategic acquisitions.
The Company notes the potential for volatility in its effective tax rate, as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly into income tax expense.
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.
At December 31, 2024, the Company had approximately $189.4 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, 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.
For more information about the Company’s results of operations of 2023 compared to 2022, see the section titled “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — 2023 Compared to 2022 ” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.
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.
The Company plans to continue to add capacity to enhance operating efficiencies in its manufacturing plants and accommodate anticipated growth in demand. The Company may consider additional acquisitions of companies, technologies, or products that are complementary to its business.
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.
Acquisition Costs The Company incurred approximately $2.5 million in costs associated with acquisition related activities which were charged to expense for the year ended December 31, 2024.
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.
The Company’s principal sources of funds are its operations and its Second Amended and Restated Credit Agreement. The Company generated cash of approximately $66.6 million from operations during the year ended December 31, 2024. The Company cannot guarantee that its operations will generate cash in future periods.
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.
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 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.
Liquidity and Capital Resources The Company generally funds its operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.
Liquidity and Capital Resources We generally fund our operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.
Actual results may differ from these estimates under different assumptions or conditions. The Company’s significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of this Report. The Company believes the following critical accounting policy necessitated that significant judgments and estimates be used in the preparation of its consolidated financial statements.
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.
Further, the economic uncertainty resulting from events including inflation, bank failures, and other factors beyond the control of the Company could affect the Company’s long-term ability to access the public markets and obtain necessary capital in order to properly capitalize and continue operations.
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.
The change in fair value of contingent consideration for the acquisitions for the year ended December 31, 2024, resulted in an expense of approximately $1.0 million, and is included in change in fair value of contingent consideration in the consolidated statements of comprehensive income.
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.
At December 31, 2024, the weighted average interest rate was approximately 5.9% and the Company was in compliance with all covenants under the Third Amended and Restated Credit Agreement. 24 Long-term debt consists of the following (in thousands): December 31, 2024 Revolving credit facility $ 67,500 Term loan 121,875 Total long-term debt 189,375 Current portion (12,500 ) Long-term debt, excluding current portion $ 176,875 Future maturities of long-term debt at December 31, 2024 are as follows ( in thousands ): Term Loan Revolving credit facility Total 2025 12,500 - 12,500 2026 12,500 - 12,500 2027 12,500 - 12,500 2028 12,500 - 12,500 2029 71,875 67,500 139,375 $ 121,875 $ 67,500 $ 189,375 Future Liquidity The Company requires cash to pay its operating expenses, purchase capital equipment, and to service its contractual obligations.
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 26 Table of Contents 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.
These costs were primarily for legal, due diligence and valuation services and are reflected on the face of the consolidated statements of comprehensive income. 22 Change in fair value of 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.
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 fair value of the liability for the contingent consideration payments recognized at December 31, 2024 totaled approximately $10.2 million out of the remaining potential payments of $14.5 million.
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.
Medical net sales represented 89.4% and 86.6% of overall Company net sales in 2024 and 2023, respectively. Gross Profit Gross profit as a percentage of net sales (“Gross Margin”) increased to 29.1% for the year ended December 31, 2024, from 28.1% in 2023.
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%.
This increase in net sales as well as strong margins and the leverage of relatively fixed SG&A costs, allowed the Company to generate a 40.3% and 31.3% increase in operating income and net income, respectively, for the year ended December 31, 2024. 21 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: 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 70.9 % 71.9 % 74.5 % Gross profit 29.1 % 28.1 % 25.5 % Selling, general, and administrative expenses 12.3 % 12.7 % 12.9 % Acquisition costs 0.5 % 0.0 % 0.3 % Change in fair value of contingent consideration 0.2 % 0.9 % 2.8 % Gain on sale of Molded Fiber business 0.0 % 0.0 % -4.4 % Loss (gain) on sale of fixed assets 0.0 % 0.1 % -1.8 % Operating income 16.1 % 14.4 % 15.7 % Interest expense, net 1.6 % 0.9 % 0.8 % Income before taxes 14.5 % 13.5 % 14.9 % Income tax expense 2.8 % 2.3 % 3.1 % Net income from consolidated operations 11.7 % 11.2 % 11.8 % 2024 Compared to 2023 Net Sales Net sales increased 26.1% to $504.4 million for the year ended December 31, 2024, from net sales of $400.1 million for the same period in 2023.
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. 23 Table of Contents 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.
Interest expense, net The Company had net interest expense of approximately $8.1 million and $3.6 million for the year ended December 31, 2024 and 2023, respectively. The increase in net interest expense for the year ended December 31, 2024 was primarily due to higher debt related to 2024 acquisitions. Interest income was immaterial.
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.
Income Taxes The Company recorded income tax expense, as a percentage of income before income tax expense, of 19.2% for the year ended December 31, 2024 compared to 16.7% for the same period in 2023.
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 contingent consideration payments for the Welch, Marble and the DAS Medical acquisitions are up to $6 million, $500 thousand and $20 million, respectively.
The total potential contingent consideration payments for the Welch, Marble and DAS Medical acquisitions were $6.0 million, $0.5 million, 24 Table of Contents and $20.0 million, respectively, as of each acquisition date.
At December 31, 2024, approximately $9.4 million was available for future repurchases of the Company’s common stock under this authorization. 25 Critical Accounting Estimates The preparation of consolidated financial statements requires the Company 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.
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.
As a percentage of net sales, SG&A decreased to 12.3% for the year ended December 31, 2024, from 12.7% for the same period in 2023 reflecting the leverage of the net sales increase over relatively fixed SG&A. The Company plans on investing in back-office resources in response to the significant acquisitions completed during 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.
Net sales relating to our largest customer, Intuitive Surgical SARL, were 28.8% of our net sales for 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.
Selling, General and Administrative Expenses Selling, General, and Administrative Expenses (“SG&A”) increased approximately 22.3% to $62.2 million for the year ended December 31, 2024, from $50.9 million in 2023, largely due to SG&A from the Company’s recent acquisitions as well as increased performance-based compensation and professional fees.
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.
Net cash used in investing activities for the year ended December 31, 2024 was approximately $210.2 million and was primarily the result of the acquisition of Marble Medical, AJR Enterprises, Welch Fluorocarbon, and AQF Medical, and the additions of manufacturing machinery and equipment and various building improvements across the Company.
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. 25 Table of Contents 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.
These borrowings were partially offset by payments on the revolving line of credit of approximately $91.7 million, principal payments of long-term debt of approximately $35.1 million, and payments of statutory withholding for stock options exercised and restricted stock units vested of approximately $5.0 million.
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.
Removed
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The Company is a designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products.
Added
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.
Removed
The Company is an important link in the medical device supply chain and a valued outsource partner to many of the top medical device manufacturers in the world.
Added
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.
Removed
The Company completed four strategic acquisitions during the year ended December 31, 2024. The acquired operations primarily serve the medical market and contributed to an overall 26.1% increase in net sales for the year. Organic net sales grew 8.5%, fueled by strong sales in the robotic surgery and infection prevention markets.
Added
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).
Removed
We attribute the increase in net sales primarily to increased net sales from newly acquired companies of $70.3 million as well as 8.5% increased organic net sales fueled by increases in the robotic surgery and infection prevention markets. Overall net sales to customers in the medical market increased 30.2% while net sales to customers in other markets were flat.
Added
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.
Removed
As a percentage of net sales, material costs decreased 1.8% while overhead and labor costs collectively increased 0.8%. We attribute the increase in gross margin primarily to the accretive margins from the Company’s recent acquisitions as well as increased manufacturing efficiencies and the containment of fixed overhead costs.
Added
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").
Removed
The gross margin increases were achieved despite the absorption of approximately $1.1 million in purchase accounting expenses (step-up of inventory to fair value at acquisition date).
Added
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.
Removed
Other (Income) Expense Other income was approximately $189 thousand and other expense was approximately $117 thousand for the years ended December 31, 2024 and 2023, respectively. The changes in other income/expense are primarily generated by equity method investment income in 2024 and foreign currency transaction gains/losses in both 2024 and 2023.
Added
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.
Removed
The increase in the effective tax rate for the current period as compared to the prior period is largely due to the difference in discrete items during the two periods as well as more United States based income in 2024 as a result of the recent acquisitions.
Added
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.
Removed
Cash Flows Net cash provided by operations for the year ended December 31, 2024 was approximately $66.6 million and was primarily a result of net income generated of approximately $59.0 million, depreciation and amortization of approximately $14.7 million, share-based compensation of approximately $6.8 million, a change in the fair value of contingent consideration of approximately $1.0 million, an increase in net deferred income tax liabilities of approximately $ 1.3 million, a decrease in accounts receivable of approximately $1.2 million due to the collection of an escrow receivable, and a decrease in other assets of approximately $0.6 million. 23 These cash inflows and adjustments to income were partially offset by an increase in inventory of approximately $4.7 million due to inventory build for upcoming demand, an increase in prepaid expenses of approximately $0.5, an increase in refundable income taxes of approximately $3.4 million due to conservative estimated tax payments in in 2024, a decrease in accounts payable of approximately $1.1 million due to the timing of vendor payments in the ordinary course of business, a decrease in deferred revenue of approximately $1.9 million due to the recognition of development revenue and a decrease in other long-term liabilities of approximately $6.5 million due primarily to non-compete payments and payments of contingent consideration.
Added
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.
Removed
Net cash provided by financing activities was approximately $152.4 million for the year ended December 31, 2024 and was primarily the result of borrowings under the Company’s Third Amended and Restated Credit Agreement of approximately $284.2 million to recent acquisitions.
Added
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.
Removed
The Third Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement, originally dated as of December 22, 2021.
Added
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.
Removed
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.
Added
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.
Removed
The Company’s longer-term liquidity is contingent upon future operating performance and the availability of draws on its revolving credit facility.
Added
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.
Removed
Stock Repurchase Program 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. On June 16, 2015, the Company announced that its Board of Directors authorized the repurchase of up to $10.0 million of the Company’s outstanding common stock.
Added
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.
Removed
Under the program, the Company is authorized to repurchase shares through Rule 10b5-1 plans, open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934.
Added
These costs were primarily for legal, due diligence and valuation services and are reflected on the face of the consolidated statements of comprehensive income.
Removed
The stock repurchase program will end upon the earlier of the date on which the plan is terminated by the Board or when all authorized repurchases are completed. The timing and amount of stock repurchases, if any, will be determined based upon our evaluation of market conditions and other factors.
Added
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.
Removed
The stock repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the program. There were no share repurchases during the years ended December 31, 2024, 2023, and 2022.
Added
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.
Removed
The Company evaluates its estimates, including those listed below, on an ongoing basis.
Added
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.
Removed
Valuation of Intangible Assets and Contingent Consideration Liability We base the fair value of identifiable intangible assets acquired in a business combination on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use.
Added
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.
Removed
Further, for those arrangements that involve potential future contingent consideration, we record on the date of acquisition a liability equal to the fair value of the estimated additional consideration we may be obligated to pay in the future.
Added
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.
Removed
We remeasure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of comprehensive income.
Added
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.
Removed
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.
Added
We do not believe that any of the significant accounting policies required significant judgment and estimates in the preparation of our consolidated financial statements. 27 Table of Contents

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Interest under the Company’s 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.
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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discussion of the Company’s market risk includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
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, 2024, the Company’s cash and cash equivalents consisted primarily of bank accounts in U.S. dollars, and their valuation would not be affected by market risk.
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.
As of December 31, 2024, the applicable weighted average interest rate was approximately 5.9%. 26
As of December 31, 2025, the applicable weighted average interest rate was approximately 5.1%.

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