8-K
UFP TECHNOLOGIES INC (UFPT)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
_____________________
FORM 8-K
_____________________
Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): November 15, 2022
| UFP Technologies, Inc. | |||
|---|---|---|---|
| (Exact Name of Registrant as Specified in Charter) | |||
| Delaware | |||
| (State or Other Jurisdiction of Incorporation) | |||
| 001-12648 | 04-2314970 | ||
| (Commission File Number) | (I.R.S. Employer Identification Number) | ||
| 100 Hale Street, Newburyport, MA - USA | 01950-3504 | ||
| (Address of Principal Executive Offices) | (Zip Code) | ||
| 978-352-2200 | |||
| (Registrant’s telephone number, including area code) | |||
| N/A | |||
| (Former name or former address, if changed since last report) | |||
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | UFPT | The NASDAQ<br> Stock Market L.L.C. |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
UFP Technologies, Inc. (the “Company”) has attached hereto as Exhibit 99.1 a copy of updated presentation materials concerning its business that it intends to use in connection with meetings with investors and other interested parties and in connection with presentations and speeches to various audiences.
Limitation on Incorporationby Reference. The information furnished in this Item 7.01, including the presentation attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Cautionary NoteRegarding Forward-Looking Statements. Except for historical information contained in the presentation attached as an exhibit hereto, the presentation contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the presentation regarding these forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: November 15, 2022 | UFP TECHNOLOGIES, INC. | |
|---|---|---|
| By: | /s/ Ronald J. Lataille | |
| Ronald J. Lataille, Chief Financial | ||
| Officer and Senior Vice President |
Exhibit 99.1
Welcome Investors November 16, 2022
Forward Looking Statements 2 Certain statements in this presentation may be considered “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward - looking statements generally relate to future events or the Comp any’s future financial or operating performance and may be identified by words such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “antici pat e,” “believe,” “predict,” or similar words. These forward - looking statements are based upon assumptions made by the Company as of the date hereof and are sub ject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such fo rward - looking statements. These forward - looking statements include, among other things, statements regarding: the Company’s prospects, anticipated advanta ges the Company expects to realize from its acquisition strategies, the Company’s financial performance, targets, goals, and metrics, the Com pan y’s revenue, gross margin and operating margin targets, participation in multiple markets, its engineering and product development resources, the benef its of the Company’s product development business (including its margin and customer relationship), the Company’s business opportunities and compe tit ive advantages, the Company’s growth potential and strategies for growth, and statements about customer and industry demand. Investors are cautioned that such forward - looking statements are not guarantees of future performance and involve risks and unce rtainties, including without limitation risks associated with the identification of suitable acquisition candidates and the successful, efficient exe cution of acquisition transactions and integration of any such acquisition candidates, economic conditions that affect sales of the products of the Company’s cu sto mers, the ability of the Company to obtain new customers, the ability of the Company to fulfill its obligations on long - term contracts and to retain curr ent customers, the ability of the Company to maintain and grow its current margins, the ability of the Company to achieve its revenue, gross margin and ope rat ing margin targets, the Company’s ability to adapt to changing market needs and other factors as well as other risks and uncertainties that are detai led in the documents filed by the Company with the Securities and Exchange Commission (“SEC”). Accordingly, actual results may differ materially. The risks an d uncertainties included above are not exhaustive. Readers are referred to the documents filed by the Company with the SEC, specifically the last repo rts on Forms 10 - K and 10 - Q. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statem ent to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based. Use of Non - GAAP Financial Measures This presentation includes non - generally accepted accounting principles (“GAAP”) performance measures. The Company uses these no n - GAAP financial measures to facilitate management's financial and operational decision - making, including evaluation of the Company’s historical operating results. The Company’s management believes these non - GAAP measures are useful in evaluating the Company’s operating performance and are simil ar measures reported by publicly listed U.S. competitors, and regularly used by securities analysts, institutional investors, and other i nte rested parties in analyzing operating performance and prospects. These non - GAAP financial measures reflect an additional way of viewing aspects of the Compa ny's operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete u nde rstanding of factors and trends affecting the Company’s business. By providing these non - GAAP measures, the Company’s management intends to provide i nvestors with a meaningful, consistent comparison of the Company’s performance for the periods presented. These non - GAAP financial measures shou ld be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The Company's definition o f t hese non - GAAP measures may differ from similarly titled measures of performance used by other companies in other industries or within the same indus try .
Who We Are UFP Technologies, Inc. is an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market. 3 Ticker: UFPT Headquarters: Newburyport, MA Annual Revenue: ~$325 million 2,778 Employees/ Temps Established: 1963 14 Manufacturing Facilities Key Stats: 5 Design R&D Centers Market Cap: ~$855 million 1 Share Count: ~7.6 million 1 1. As of 11/7/2022
We help our customers develop, improve, manufacture, or safely transport their products through: 4 Design & engineering capabilities Materials expertise Strategic locations Precision manufacturing Shaping Innovation
Our Process Innovative process from design and engineering to manufacturing and delivery
Product Development Business 6 We bring deep experience in all aspects of flexible material - based device manufacturing, from components and packaging, to final device assembly High Margin Added Expertise Stronger Customer Relationships Long Term Manufacturing 1 2 3 4 BENEFITS
Primary Focus Areas 7 MedTech » Infection Prevention » Minimally Invasive Surgery » Fluid & Air Management » Specialty Packaging » Patient Comfort » Wound Care » Wearables 85% 5% 4% 6% Automotive » Interior Trim & Structural » Acoustic/Thermal Insulation Industrial / Other » Filtration » Acoustic Insulation » Protective Packaging Aerospace & Defense » Uniforms and Tactical Gear » Equipment Protection
MedTech 8 UFP expertise in component solutions for surgical robotics, orthopedics, infection prevention, wound care, and minimally invasive surgery Customers include 25 of the top 30 largest medical device manufacturers in the world 2 1. Fortune Business Insights 2. Medical Design & Outsourcing $489 billion Global Medical Device Market with a 5.5% CAGR 1 UFP Differentiation Exclusive or semi - exclusive access to medical grade materials Dedicated medical device engineering team Clean room manufacturing FDA - registered plants Design and manufacture custom equipment Advanced quality systems Multiple locations 1 2 3 4 5 6 7
MedTech Portfolio 9 Robotic Drapes Revascularization Device Needleless Injection Port Cleaner MedSurg Bed Negative Pressure Wound Therapy Compression Device
Advanced Components 10 INDUSTRIAL AUTOMOTIVE AEROSPACE & DEFENSE Highly engineered components and packaging used in targeted large and growing niches Our products are present on many of the world’s leading brands including GM, Ford, Mercedes, Tesla, Boeing and Lockheed Martin UFP Differentiation Precision molding Innovative design engineering Material expertise Complex laminated composites Dedicated in house tooling & equipment manufacturing AS9100 certified Strategic manufacturing locations 1 2 3 4 5 6 7
Advanced Components Product Portfolio 11 Military Gear Protective Helmets Law Enforcement Protective Cases Automotive Interior Trim
Growth Strategy Internal Growth: Market To Our Sweet Spot Strategic Acquisitions 12 TWO - PRONGED
13 Organic Growth Opportunity Focus on high growth niche segments (MedTech – approximately 85% of revenue and growing) » Single - use, single - patient » Customer funded development Market to our sweet spot and differentiated capabilities » Leverage technology differentiation » Engineering resources » Exclusive access to specialty materials » Scale (footprint, clean room manufacturing) Expand business with existing customers » Offer complementary products and services » Additional value - add services
14 Acquisition Growth Opportunity Continue to Focus on Higher - Growth, Higher - Margin Medical Opportunities that Create Value » Become more valuable to our customers » Strategic focus – new capability, geography, market penetration, materials, products » Add scale / market share » Look for synergistic opportunities » Cultural fit Goal is for acquisitions to be accretive within the first year. Experienced and disciplined management team with 14 acquisitions completed
International Expansion 15
Strategic Investments 16
Tijuana, MX – New Facility PARQUE SUR INDUSTRIAL PARK FAST FACTS » 36 min from US border » 83,546 ft 2 » Production: Q2 2022 » Corredor Tijuana - Rosarito 2000, » El Realito, 22250 Tijuana, B.C., México 17 Single - Use Medical Device Production » FDA Registration - Q4 2022 » ISO 13485 - Q4 2022 » 5,000 SF Cleanroom Space – Q1 2023 » Technologies » RF Welding » Thermoforming » Coils and Dispensers
18 Surgical Robots MIS Instruments Microscopes Fluid Warming www.das - medical.com Founded: 2010 | 1369 Employees HQ: Cartersville, GA | Manufacturing: Dom Rep DAS Medical Acquisition Contract manufacturer specializing in the design, development and manufacturing of single use surgical equipment covers, robotic draping systems and fluid control
19 Dispenser Coils Kitting Clips Assembly www.contechmedical.com Founded: 1987 | 117 Employees Locations: Providence, RI | Costa Rica Contech Medical Acquisition Global partner for medical contract manufacturing and medical packaging solutions
20 Dispenser Coils Catheter Protection Molded Components Device Assembly www.advantmedical.com Founded: 1993 | 244 Employees Locations: Galway, Ireland | Costa Rica Advant Medical Acquisition Developer and manufacturer of Class I, II, and III medical devices and packaging.
Why Invest? 21 Significant market growth opportunities Barriers to entry Strong customer relationships Experienced management team Proven growth strategy Attractive financial metrics
22 Significant Market Growth Opportunities » Medical device development » Medical device manufacturing » Medical components » Medical packaging Addressable market is growing Universe of specialty materials growing
Barriers To Entry 23 » Advanced systems (extensive quality certifications) » In addition to existing equipment, engineers will design product specific innovations in order to meet customer needs Systems » In - house custom equipment manufacturing capabilities Custom Equipment » 20 patents relating to foam, packaging, tool control, radio frequency welding, automotive super - forming processes, and other products Intellectual Property » Global footprint – competition is generally smaller companies that have limited resources and access to materials Scale » Veteran engineering team for product design and development; more than 90 members of the engineering group Engineering Resources » Offers broad array of materials to meet customer needs » Almost 60 years in business and strong supplier relationships » Exclusive access to several specialty medical grade materials Greater Access to Materials
Management Team 24 Chris Litterio SVP, Human Resources & General Counsel Former Managing Partner and head of employment law at a major Boston law firm; 5 - years at the company Steve Cardin VP & COO, MedTech 27 years in the medical device industry; 3 - years at the company Jason Holt VP & GM, Advanced Components Former VP & GM at ITW; 4 - years at the company R. Jeffrey Bailly Chairman, CEO & President 34 - year history at the company Ronald Lataille CFO, Sr. VP & Treasurer 25 - year history at the company Mitchell Rock President, MedTech 29 - year history at the company.
Proven Growth Strategy 25 Creating Shareholder Value
Financial Targets 26
Financial Targets 27 3 to 5 Year Financial Targets 10 - 15% Revenue Growth 27 - 30% Gross Margin 12 - 15% Operating Margin
10% to 15% Targeted Revenue Growth Internal Growth + Acquisitions $0 $50 $100 $150 $200 $250 $300 2017 2018 2019 2020 2021 2022 TTM 28 Revenue *2022 TTM (Trailing 12 Months) as of 9/30/22
Gross Margin Target – 27% to 30% Operating Leverage from Mix Shift + Acquisition synergies + Efficiencies 29 Gross Profit Margin 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 2017 2018 2019 2020 2021 2022 TTM Target: 27 - 30% *2022 TTM (Trailing 12 Months) as of 9/30/22
Operating Margin Target - 12% to 15% Operating leverage from mix shift + acquisition synergies + efficiencies 30 Adjusted* Operating Margin -1.0% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 2017 2018 2019 2020 2021 2022 TTM Target: 12 - 15% *See non - GAAP reconciliation on slide 33 *2022 TTM (Trailing 12 Months) as of 9/30/22
Growing Book Value 31 $1.10 $1.26 $1.93 $2.63 $1.77 $2.09 $4.79 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 $28.00 $30.00 2016 2017 2018 2019 2020 2021 2022 TTM * EPS Book Value / Share Book Value EPS *2022 TTM (Trailing 12 Months) as of 9/30/22
UFP Historical Stock Performance 32 *Measured as the percent increase from the beginning of November 2002 through the beginning of November 2022 8743% 382% 328% 0% 1000% 2000% 3000% 4000% 5000% 6000% 7000% 8000% 9000% Nov-02 Nov-04 Nov-06 Nov-08 Nov-10 Nov-12 Nov-14 Nov-16 Nov-18 Nov-20 Nov-22 UFP Technologies Inc (UFPT) Price % Change Russell 2000 (^RUT) Level % Change S&P 500 (^SPX) Level % Change
R. Jeffrey Bailly Chairman, CEO & President Newburyport, Massachusetts Ronald Lataille CFO, Sr. VP & Treasurer Newburyport, Massachusetts UFP Technologies 100 Hale St. Newburyport, MA 01950 978 - 352 - 2200 investorinfo@ufpt.com www.ufpt.com
Reconciliation of Non - GAAP Results Appendix 34 (in Millions) 2017 2018 2019 2020 2021 2022 TTM Revenue, As Reported $ 147.8 $ 190.5 $ 198.4 $ 179.4 $ 206.3 $ 318.9 Operating Income, as reported 11.7 19.6 24.7 16.7 21.2 49.2 Add: Acquisition/ Restructuring related Costs 0.1 1.1 - - 0.4 1.3 Add earnout fair value adjustment - - - - - 9.3 Less: Material overcharge Settlement (0.1) (0.1) - - - - Less: Gain or Add: Loss on Sale of fixed assets - - - 0.5 0 (6.2) Less: Sale of MFT (15.6) Adjusted Operating Income $ 11.7 $ 20.6 $ 24.7 $ 17.2 $ 21.6 $ 38.0 Adjusted Operating Margin 7.9% 10.8% 12.4% 9.6% 10.5% 11.9% *2022 TTM: Trailing 12 - month financials from October 2021 through September 2022