-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qi79fAiplQmdeWzA/oUk8/I5Pz41CEsjlkvG3ePsE0wx0nfoVJfubiDya5+H/FZH ZeHvuAGe1LdmgA5HDEqUVQ== 0000950146-96-002024.txt : 19961115 0000950146-96-002024.hdr.sgml : 19961115 ACCESSION NUMBER: 0000950146-96-002024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UFP TECHNOLOGIES INC CENTRAL INDEX KEY: 0000914156 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 042314970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12648 FILM NUMBER: 96661845 BUSINESS ADDRESS: STREET 1: 172 EAST MAIN ST CITY: GEORGETOWN STATE: MA ZIP: 01833 BUSINESS PHONE: 5083522200 MAIL ADDRESS: STREET 1: 172 EAST MAIN ST CITY: GEORGETOWN STATE: MA ZIP: 02135 10-Q 1 QUARTERLY REPORT FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR ------------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 1-12648 ------- UFP Technologies, Inc. --------------------- (Exact name of registrant as specified in its charter) Delaware 04-2314970 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 172 East Main Street, Georgetown, Massachusetts 01833 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (508) 352-2200 -------------- (Registrant's telephone number, including area code) ----------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings requirements for the past 90 days. Yes _X_ No ___ As of November 10, 1996, 4,636,854 shares of registrant's Common Stock, $.01 par value, were outstanding. UFP TECHNOLOGIES, INC. AND SUBSIDIARY INDEX Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance sheets September 30, 1996 and December 31, 1995 1 Consolidated Statements of Operations Three months ended and Nine months ended September 30, 1996 and 1995 2 Consolidated Statements of Cash Flows Nine months September 30, 1996 and 1995 3 Notes to Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - OTHER INFORMATION 7 SIGNATURES 8 PART I: FINANCIAL INFORMATION Item 1. Financial Statements UFP Technologies, Inc. and Subsidiary Consolidated Balance Sheets
September 30, December 31, 1996 1995 (Unaudited) (Audited) Assets: Current Assets Cash $ 603,899 524,490 Receivables, net 5,768,460 4,944,541 Inventories 2,511,005 2,432,686 Prepaid expenses 154,268 322,627 Deferred income tax 228,900 228,900 --------- --------- Total current assets 9,266,532 8,453,244 Property, plant and equipment 15,760,161 13,825,563 less accumulated depreciation and amortization (7,139,631) (6,203,543) ---------- ---------- Net property, plant and equipment 8,620,530 7,622,020 Cash surrender value of officers life insurance, net 343,990 343,990 Investments in and advances to affiliated partnership 213,950 227,950 Deferred income taxes 113,110 113,110 Goodwill, net 3,584,441 3,740,321 Other assets 312,685 293,888 ---------- ---------- Total assets $22,455,238 20,794,523 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 2,200,000 2,775,000 Current installments of long term debt 187,713 183,919 Current capital lease obligations 580,151 297,536 Accounts payable 2,187,300 1,814,807 Accrued expenses and payroll withholdings 1,909,598 1,430,396 ---------- ---------- Total current liabilities 7,064,762 6,501,658 Long term debt, excluding current installments 1,020,095 1,161,369 Capital lease obligations, excluding current installments 1,744,885 1,253,340 Retirement liability 484,896 439,896 ---------- ---------- Total liabilities 10,314,638 9,356,263 Stockholders' Equity Preferred stock, $.01 par value. Authorized 1,000,000 shares; no shares issued 0 0 Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 4,636,854 shares at September 30, 1996 and 4,626,854 shares at December 31, 1995 46,369 46,269 Additional paid-in capital 9,404,902 9,376,227 Retained earnings 2,689,329 2,015,764 ---------- ---------- Total stockholders' equity 12,140,600 11,438,260 ---------- ---------- Total liabilities and stockholders' equity $22,455,238 20,794,523 =========== ==========
The accompanying notes are an integral part of these consolidated financial statements 1 UFP Technologies, Inc. and Subsidiary Consolidated Statements of Operations (Unaudited)
Three months ended Nine months ended ------------------ ----------------- Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1996 1995 1996 1995 ----------- ---------- ---------- ---------- Net sales $10,095,026 8,431,395 28,872,206 25,282,151 Cost of sales 7,458,925 6,372,646 21,712,658 19,437,660 ----------- ---------- ---------- ---------- Gross profit 2,636,101 2,058,749 7,159,548 5,844,491 Selling, general and administrative expenses 1,997,396 1,712,983 5,701,464 5,184,789 ----------- ---------- ---------- ---------- Operating income 638,705 345,766 1,458,084 659,702 Other deductions: Interest expense 135,984 110,768 356,519 322,785 ----------- ---------- ---------- ---------- Income before income taxes 502,721 234,998 1,101,565 336,917 Incomes taxes 201,000 0 428,000 20,000 ----------- ---------- ---------- ---------- Net income $ 301,721 234,998 673,565 316,917 =========== ========== ========== ========== Weighted average shares outstanding 4,961,728 4,722,591 4,958,043 4,729,506 Per share: Net income $ 0.06 0.05 0.14 0.07
The accompanying notes are an integral part of these consolidated financial statements 2 UFP Technologies, Inc. and Subsidiary Consolidated Statements of Cash Flows (Unaudited)
Nine months ended ----------------- Sept. 30, Sept. 30, 1996 1995 ------------ ---------- Cash flows from operating activities: Net income $ 673,565 316,917 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,091,968 984,073 Net loss in affiliated partnership 14,000 15,750 Stock issued in lieu of compensation 16,875 16,250 Changes in operating assets and liabilities: Receivables, net (823,919) (563,583) Inventories (78,319) (292,976) Prepaid expenses 168,359 108,825 Accounts payable 372,493 (305,342) Accrued expenses and payroll withholdings 479,202 67,602 Retirement liability 45,000 45,000 ----------- --------- Net cash provided by operating activities 1,959,224 392,516 Cash flows from investing activities: Additions to property, plant and equipment (1,934,598) (1,288,427) Decrease in cash surrender value of officers life insurance - 234,914 Increase other assets (18,797) (51,815) ----------- --------- Net cash used in investing activities (1,953,395) (1,105,328) Cash flows from financing activities: Net borrowings (repayment) under notes payable (575,000) 540,600 Principal repayments of long-term debt (137,480) (74,398) Principal repayments of capital leases (266,840) (135,780) Proceeds from long term debt borrowings 0 400,000 Proceeds from capital lease obligation 1,041,000 0 Proceeds from sale of common stock 11,900 0 ----------- --------- Net cash provided by financing activities 73,580 730,422 ----------- --------- Net change in cash 79,409 17,610 Cash, at beginning of period 524,490 406,225 ----------- --------- Cash, at end of period $ 603,899 423,835 =========== =========
The accompanying notes are an integral part of these consolidated financial statements 3 UFP TECHNOLOGIES, INC. AND SUBSIDIARY NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The interim consolidated financial statements of UFP Technologies, Inc. (the Company) presented herein, without audit, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1995, included in the Company's 1995 Annual Report to Stockholders as provided to the Securities and Exchange Commission on May 2, 1996. The consolidated balance sheet as of September 30, 1996, the consolidated statements of operations for the three months ended and nine months ended September 30, 1996 and 1995 and the consolidated statements of cash flows for the nine months ended September 30, 1996 and 1995, are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for fair presentation of results for these interim periods. The results of operations for the three months ended and nine months ended September 30, 1996, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 1996. (2) Inventory Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: Sept. 30, December 31, 1996 1995 (unaudited) (audited) ----------- ------------ Raw materials $1,919,797 1,724,537 Work-in-process 287,249 193,185 Finished goods 303,959 383,449 Contract-in-process - 131,515 ---------- --------- Total Inventory $2,511,005 2,432,686 ========== ========= Work-in-process and finished goods inventories consists of materials, labor and manufacturing overhead. (3) Common Stock At December 31, 1995, options to purchase 668,500 shares of common stock were outstanding under the Company's 1993 Stock Option Plan ("1993 Plan"). The purpose of these options are to provide long-term rewards and incentives to the Company's key employees, officers, employee directors, consultants and advisors. During the first nine months of 1996, 51,500 options to purchase shares were issued, 5,000 options to purchase shares were exercise, and 16,000 options to purchase shares expired. At September 30, 1996, there were options to purchase 699,000 shares of common stock outstanding under the plan. 4 At December 31, 1995, options to purchase 22,500 shares of common stock were outstanding under the Company's Non-Employee Director Plan. During the first nine months of 1996, 15,000 options to purchase shares were issued, none were exercised and none expired under the Director Plan. At September 30, 1996, there were options to purchase 37,500 shares of common stock outstanding under this plan. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Three months ended September 30, 1996 and 1995 The Company's net sales increased 19.7% to $10,095,000 in the 1996 period from $8,431,000 in the 1995 period. The increase was primarily attributable to an increase in sales volume of the Company's molded fiber products and specialty foam plastics products. Costs of sales as a percentage of sales improved to 73.8% in the 1996 period from 75.6% in the 1995 period. The improvement in the cost of sales margin was primarily attributable to continued volume and manufacturing efficiency improvements associated with the Company's molded fiber products. Selling, general and administrative expenses increased to $1,997,000 (19.8% of net sales) in the 1996 period from $1,713,000 (20.3% of net sales) in the 1995 period. The increase was associated primarily to the Company's efforts to increase sales at all three of their divisions, while the improvement in the percentage of net sales primarily relates to the fixed cost absorption over a higher sales level. Interest expense increased during these respective periods primarily due to capital lease obligations associated with the Company's purchase of additional molded fiber equipment. Nine months ended September 30, 1996 and 1995 The Company's net sales increased 14.2% to $28,872,000 in the 1996 period from $25,282,000 in the 1995 period. The increase was primarily attributable to an increase in sales volume of the Company's molded fiber products and specialty foam plastics products. Costs of sales as a percentage of sales improved to 75.2% in the 1996 period from 76.9% in the 1995 period. The improvement in the cost of sales margin was primarily attributable to continued volume and manufacturing efficiency improvements associated with the Company's molded fiber products. Selling, general and administrative expenses increased to $5,701,000 (19.8% of net sales) in the 1996 period from $5,185,000 (20.5% of net sales) in the 1995 period. The increase was associated primarily to the Company's efforts to increase sales at all 5 three of their divisions, while the improvement in the percentage of net sales primarily relates to the fixed cost absorption over a higher sales level. Interest expense increased during these respective periods primarily due to capital lease obligations associated with the Company's purchase of additional molded fiber equipment. Liquidity and Capital Resources At September 30, 1996 the Company's working capital was approximately $2,202,000, including $604,000 of cash and cash equivalents. In addition, the Company had a $4,500,000 bank revolving loan facility, of which $2,200,000 was outstanding at September 30, 1996. During the nine months ended September 30, 1996, operating activities provided the Company with approximately $1,959,000 of cash, primarily due to net income, depreciation and amortization and an increase in accounts payables and accrued expenses, which were partially offset by an increase in accounts receivables. The increases in accounts receivables, accounts payables was primarily due to the increase in product demand and sales. Cash used in investing activities of approximately $1,953,000 was attributable to additions of property, plant and equipment. This amount was primarily attributable to the purchase of molded fiber manufacturing equipment which was installed late in the second quarter of 1996 at the Company's new Iowa facility. Net cash generated from financing activities totaled approximately $74,000, primarily due to an increase in long term capital lease obligations related to the new molded fiber manufacturing equipment which was partially offset by principal repayments of long term debt and capital lease obligations. In the first nine months of 1996, the Company borrowed $941,000 under a 48 month capital lease arrangement and entered into another $1,000,000 capital lease obligation associated with the purchase of an additional molded fiber manufacturing machine scheduled to be installed in late 1996. At September 30, 1996 $100,000 has been committed in progress payments. At September 30, 1996 the Company had approximately $963,000 outstanding under two mortgage notes and $244,000 outstanding under two equipment notes. At September 30, 1996 the current portion of these obligations, together with the Company's line of credit, totaled $2,388,000. On June 30, 1996 the Company renewed its lending arrangement with BayBank of Boston. Under the terms of the renewal the revolving loan facility limit was increased from $3,500,000 to $4,500,000. Additionally, BayBank agreed to extend the Company an additional $2,000,000 equipment line of credit. The term of the agreement expires on June 30, 1997. On July 8, 1996 the Company announced plans to increase the manufacturing capacity of its Iowa Moulded Fibre Technology plant by 50% by purchasing a second molded 6 pulp packaging machine for the facility. The Company anticipates financing this obligation with its equipment line of credit. Although at some point in the future the Company may seek additional debt or equity financing to fund its growth needs, management believes that cash generated from operations together with its existing resources, including its revolving loan facility and its new $2,000,000 equipment line, will be sufficient to fund its cash flow requirements through at least the next 12 months. Additionally on July 8, 1996 the Company announced that it had been approved for listing on the Nasdaq National Market, and its stock began trading there effective July 8th. PART II - OTHER INFORMATION Item 1 Legal Proceedings. No Material Litigation Item 2 Changes in Securities. None Item 3 Defaults Upon Senior Securities. None Item 4 Submission of Matters to a Vote of Security Holders. None Item 5 Other Information. None Item 6 Exhibits and Reports on Form 8-K. (a) Exhibits furnished: (11) Statement Re: Computation of Earnings Per Share. (27) Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed by the Company during the quarter ended September 30, 1996. 7 UFP TECHNOLOGIES, INC. AND SUBSIDIARY 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 thereunto duly authorized. UFP TECHNOLOGIES, INC. (Registrant) November 10, 1996 /s/ R. Jeffrey Bailly - ----------------- --------------------- Date R. Jeffrey Bailly President, Chief Executive Officer and Director November 10, 1996 /s/ Paul J. Greenler - ----------------- --------------------- Date Paul J. Greenler Chief Financial Officer 8 EX-11 2 COMPUTATION OF PER SHARE EARNINGS Exhibit 11.0 UFP Technologies, Inc. Statement of Computation of Per Share Earnings
Three months ended Nine months ended Sept 30, Sept 30, Sept 30, Sept 30, 1996 1995 1996 1995 Net income $ 301,721 234,998 673,565 316,917 Primary earnings per share: Weighted average common shares outstanding 4,636,854 4,626,854 4,633,169 4,625,151 Dilutive stock options and warrants 275,837 95,737 237,055 104,355 ---------- ---------- ---------- ----------- 4,912,691 4,722,591 4,870,224 4,729,506 ========== ========== ========== ========== Income per share $ 0.06 0.05 0.14 0.07 ========== ========== ========== ========== Fully diluted earnings per share: Weighted average common shares outstanding 4,636,854 4,626,854 4,633,169 4,625,151 Dilutive stock options and warrants 324,874 95,737 324,874 104,355 ========== ========== ========== ========== 4,961,728 4,722,591 4,958,043 4,729,506 ========== ========== ========== ========== Income per share $ 0.06 0.05 0.14 0.07 ========== ========== ========== ==========
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1996 SEP-30-1996 604 0 5,768 0 2,511 9,267 15,760 7,140 22,455 7,065 0 0 0 46 12,094 22,455 28,872 28,872 21,713 21,713 5,701 0 357 1,102 428 674 0 0 0 674 .14 .14
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