UFP Technologies (UFPT) investor relations material

Executive summary

• Revenue grew 4.1% year-over-year to $154.2 million, driven by 5.9% growth in medical sales, while non-medical sales declined 15% as focus shifted to high-growth MedTech segments.

• Robotic surgery, patient services/support, and interventional/surgical segments grew 7%, 11%, and 15% respectively, partially offset by wound care declines due to customer inventory issues.

• Four major program launches are underway, with three customers requesting doubled capacity; these are expected to contribute significantly in the second half of the year.

• CEO transition planned for June, with Mitch Rock taking over and a strong management team in place; outgoing CEO will remain as Executive Chair for a year.

• Recent acquisitions are performing well, with integrations essentially complete and strengthening market position.

Financial highlights

• Adjusted operating margin was 16.7% of sales for Q1 2026.

• Adjusted earnings per diluted share were $2.48, up slightly year-over-year.

• Gross margin increased to 28.8% from 28.5% year-over-year, despite labor inefficiencies at AJR.

• SG&A expenses rose to $21 million, driven by back-office investments, equity compensation, and non-recurring legal expenses; as a percentage of sales, SG&A rose to 13.6%.

• Net income for Q1 2026 was $17.5 million, up 1.8% year-over-year.

Outlook and guidance

• New program revenue growth expected to accelerate in the second half of 2026 as ramp-up continues.

• Non-medical business, especially automotive, is expected to remain weak as the company phases out of this market.

• Wound care segment expected to normalize after a three-quarter slowdown due to customer inventory, with new programs anticipated next year.

• Expansion in the Dominican Republic is anticipated to support growth in robotic surgery and patient handling.

• Anticipated margin improvement from lower tariffs and potential vendor credits, though raw material costs remain volatile due to oil price fluctuations.