Form 8-K UFP TECHNOLOGIES INC For: Jun 10
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): June 10, 2019
UFP Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-12648 | 04-2314970 | |
(Commission File Number) | (IRS Employer Identification No.) | |
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)) |
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. [ ]
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 Stock Market L.L.C. |
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 Incorporation by 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 Note Regarding 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 Number | 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: June 10, 2019 | UFP TECHNOLOGIES, INC. | ||
By: | /s/ Ronald J. Lataille | ||
Ronald J. Lataille, Chief Financial | |||
Officer and Senior Vice President |
Exhibit 99.1
Welcome Investors June 12, 2019
Nasdaq: UFPT Safe Harbor Statement This presentation contains forward - looking information that involves risks and uncertainties, including statements about the Company’s prospects, anticipated advantages the Company expects to realize from its acquisition strategies, the Company’s financial performance, targets and goals, participation in multiple markets, its engineering and product development resource s, the Company’s business opportunities, the Company’s growth potential and strategies for growth, and statements about customer demand. Investors are cautioned that such forward - looking statements are not guarantees of future performance and involve risks and uncertainties, including without limitation risks associated with the identification of suitable acquisition candidates and t he successful, efficient execution of acquisition transactions and integration of any such acquisition candidates, economic conditions that affect sales of the products of the Company’s customers, 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 current customers, the Company’s abil ity to adapt to changing market needs and other factors as well as other risks and uncertainties that are detailed in the documen ts filed by the Company with the SEC. Accordingly, actual results may differ materially. The risks and uncertainties included above are not exhaustive. Readers are referred to the documents filed by the Company with the SEC, specifically the last reports on Forms 10 - K and 10 - Q. This presentation is provided as part of an oral presentation and is qualified by such. The forward - looking statements contained herein speak only of the Company’s expectations as of the date of this presentation. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based.
Nasdaq: UFPT Who We Are UFP Technologies is an innovative designer and customer manufacturer of components, subassemblies, products and packaging primarily for the medical market. Headquarters: Newburyport, MA Ticker: UFPT Market cap: ~$285 million Share count: 7.4 million 2018 Annual revenue: $190 million Established in 1963 Public since 1993 1,100 employees / temps 9 manufacturing facilities and 2 design centers in the U.S.
Nasdaq: UFPT What We Do We combine our: • Materials expertise • Design engineering capabilities • Precision manufacturing capabilities to help our customers develop, improve, manufacture, or safely transport their products.
Nasdaq: UFPT Development Process Customer Challenge Customer Challenge 85% of new projects generated from current customers and referrals
Nasdaq: UFPT Customer Challenge Design & Development Design & Development • 90 + members in Engineering Group • Materials expertise • Vendor partnerships Development Process
Nasdaq: UFPT Prototype Prototype Customer Challenge Design & Development • Quick turnaround • Laser sample cutting • 3D printing Development Process
Nasdaq: UFPT Tooling Prototype Customer Challenge Design & Development Tooling • In house – 4 tooling centers • Offshore, low - cost tooling option • Rapid response for design enhancements • Key to close tolerances Development Process
Nasdaq: UFPT Custom Equipment Prototype Customer Challenge Design & Development Tooling Custom Equipment • Two in - house equipment design centers • 3 rd party vendor relationships • Automation Development Process
Nasdaq: UFPT Prototype Customer Challenge Design & Development Tooling Quality Systems Custom Equipment Quality Systems • Customized quality test equipment • Extensive certifications ▪ ISO 9001 Quality Management ▪ ISO 13485 Medical Device ▪ FDA Registration ▪ ISO 14001 Environmental ▪ ISO/TS 16949 Automotive ▪ AS9100D Aerospace Development Process
Nasdaq: UFPT Prototype Customer Challenge Design & Development Tooling Quality Systems Custom Equipment Pilot Manufacturing Pilot Manufacturing • Validation • Risk management Development Process
Nasdaq: UFPT Prototype Customer Challenge Design & Development Tooling Quality Systems Custom Equipment Pilot Manufacturing Commercial Production Commercial Production • High volume • Continuous improvement • In - line inspection and test Development Process
Nasdaq: UFPT Prototype Customer Challenge Design & Development Tooling Quality Systems Custom Equipment Pilot Manufacturing Commercial Production Development Process
Nasdaq: UFPT Growth Strategy Two - pronged: 1) Internal growth: market to our sweet spot 2) Strategic acquisitions
Nasdaq: UFPT Internal Growth Strategy 60% 11% 12% 5% 5% 7% Six Target Markets 2018 Proforma Revenue Mix* • Infection prevention • Orthopedic implant packaging • Orthopedic soft braces • Advanced wound care • Sterile packaging • Surgical instrument protection • Biopharma Medical 60%* Automotive 11% • Interior trim & structural • Acoustic/thermal insulation • Weight reduction • Foam and fiber packaging • Personal comfort & protection Consumer 12%* Electronics 5%* • Packaging • Protection Industrial 5%* • Filtration • Acoustic insulation Aerospace & Defense 7%* • Uniform and tactical gear • Tools & equipment protection • Thermal insulation * Proforma revenue includes 2018 UFP revenue and revenue from Dielectrics as if we owned them on January 1, 2018
Nasdaq: UFPT Medical $371 billion Global Medical Device Market with a 5.2% CAGR 1 » UFP expertise in component solutions for orthopedics, infection prevention, wound care, and minimally invasive surgery » Customers include 24 of the top 28 largest medical device manufacturers in the world 2 UFP Differentiation • Exclusive or semi - exclusive access to medical grade materials • Medical device engineering team • Clean room manufacturing • Medical platform • Customer relationships • FDA - approved plants • Multiple locations • Advanced quality systems • Design and manufacture of custom equipment 1. 2017 Medical Device Industry Revenue. “Global Medical Device Market Outlook, 2018” – Frost & Sullivan 2. Medical Product Outsourcing Magazine - 2018
Nasdaq: UFPT Medical Product Examples Medical
Nasdaq: UFPT Automotive 17 Million Light Vehicles Manufactured in the US 1 » UFP Innovation in safety, comfort, noise control, and weight reduction lead to solutions that are lighter, stronger, and better able to manage heat, moisture, and sound. » Our components are present on many of the world’s leading automotive brands including GM, Ford, FCA, Mercedes Benz, BMW, Nissan, and Subaru. UFP Differentiation • Design engineering expertise • Precision compression molding • Material expertise • Large format die cutting • Product & material diversity 1. 2017, IHS Market
Nasdaq: UFPT Automotive Product Examples Automotive
Nasdaq: UFPT Aerospace & Defense Aircraft Volumes Expected to Double by 2037 1 While Defense Opportunities Lie in Long - term R&D » UFP expertise in comfort & safety components, acoustic insulation, thermal insulation, engine components, uniforms & tactical gear, cases and inserts UFP Differentiation • Materials and design expertise • Strategic manufacturing locations • Dedicated engineering • Difficult - to - laminate composites • AS9100 / Boeing qualified supplier 1. Boeing Commercial Market Outlook 2018 - 2037
Nasdaq: UFPT Aerospace & Defense Product Examples Aerospace & Defense
Nasdaq: UFPT Acquisitive Growth Strategy 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 outside of foam fabricators Goal is for acquisitions to be accretive within the first year.
Nasdaq: UFPT Dielectrics Acquisition » Revenue $43 million » 100% medical » Single location in Chicopee, Massachusetts » Great cultural and strategic fit » Instantly accretive to earnings » Makes UFP more valuable to medical customers
Nasdaq: UFPT Why Invest? • Significant market growth opportunities • Barriers to entry • Strong customer relationships • Experienced management team • Proven growth strategy • Attractive financial metrics
Nasdaq: UFPT Why is UFP an exciting investment? Significant market growth opportunities » Addressable market is growing • Medical – aging population • Aerospace – safer, lighter aircraft » Universe of specialty materials growing
Nasdaq: UFPT Barriers to Entry Engineering Resources • Veteran engineering team for product design and development; more than 90 members of the engineering group Greater Access to Materials • Offers broad array of materials to meet customer needs • 50 + years in business and strong supplier relationships • Exclusive access to several specialty medical grade materials Scale • National footprint – competition is generally smaller companies that have limited resources and access to materials Systems • Advanced systems (extensive quality certifications) • In addition to existing equipment, engineers will design product specific innovations in order to meet customer needs Intellectual Property • 20 patents relating to foam, packaging, tool control, radio frequency welding, automotive super - forming processes, and other products Custom Equipment • In - house custom equipment manufacturing capabilities
Nasdaq: UFPT National Footprint Gain Efficiencies Asset utilization Sharing best practices Sharing resources 9 Manufacturing Facilities Over 1 million square feet of space
Nasdaq: UFPT Management Team R. Jeffrey Bailly – Chairman, CEO & President 31 - year history at the company, beginning as an operations manager in 1988; MBA, CPA. Ronald Lataille – CFO, Sr. VP & Treasurer 21 - year history at the company; CPA. Mitchell Rock – SVP, Sales & Marketing 21 - year history at the company. Chris Litterio – SVP, Human Resources & General Counsel Former Managing Partner and head of employment law at a major Boston law firm. David Smith – SVP, Operations Joined the company in August 2013 after spending 25 years in various capacities at Rogers Corp., including as VP and General Manager of their $180 million high - performance foam division. Daniel Shaw – VP, R&D 30 - year history at the company.
Proven Growth Strategy Creating Shareholder Value
Nasdaq: UFPT Organic Growth Opportunity Organic Growth (Target of 5% - 7%) • Focus on higher growth markets (Medical – approximately 60% of revenue and growing) • Expand business with existing customers o Offer complementary products and services o Additional value - add services • Gain market share with competitive advantage o Engineering resources o Access to materials o Scale (footprint, clean room manufacturing) o Systems o Intellectual property
Nasdaq: UFPT Acquisition Growth Opportunity Acquisition Growth (Target of 5% - 7%) Very fragmented market • No single company controls a large percentage of the market (UFP is one of the largest players) • 500 + companies (potential targets) • Many owner / operators at or near retirement age • Reputation for seamless integration Experienced and disciplined management team 11 acquisitions completed
FINANCIAL REVIEW Revenue Growth, Margin Expansion & Strong Financial Profile
Nasdaq: UFPT Financial Targets 10% - 14% Revenue Growth 11% - 13% Operating Margin 27% - 28% Gross Margin 3 to 5 Year Financial Targets
Nasdaq: UFPT Revenue 10% to 14% Targeted Revenue Growth Internal Growth + Acquisitions 0 20 40 60 80 100 120 140 160 180 200 2014 2015 2016 2017 2018 1Q18 TTM 1Q19 TTM $ Millions
Nasdaq: UFPT Revenue Mix Shift Revenue Mix Shift 2014 to 2018 Medical mix increased from 36% to 58% 0 20,000 40,000 60,000 80,000 100,000 120,000 Medical Consumer Automotive Aerospace & Defense Electronics Industrial 2014 2015 2016 2017 2018
Nasdaq: UFPT Adjusted* Operating Margin Target: 11 - 13% Operating leverage from mix shift + acquisition synergies + efficiencies 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2014 2015 2016 2017 2018 1Q18 TTM 1Q19 TTM * Adjusted Operating Income is a non - GAAP term. A reconciliation to GAAP is provided in the Appendix
Nasdaq: UFPT Growing Book Value Book Value EPS $1.05 $1.05 $1.10 $1.26 $1.93 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 2014 2015 2016 2017 2018 BV/ Share EPS
Thank you.
Nasdaq: UFPT Appendix Reconciliation of Non - GAAP Results (in Millions) 2014 2015 2016 2017 2018 1Q18 TTM 1Q19 TTM Revenue, As Reported $ 139.3 $ 138.9 $ 146.1 $ 147.8 $ 190.5 $ 153.7 $ 194.9 Operating Income, as reported 11.6 11.7 12.2 11.7 19.6 11.1 22.3 Add: Acquisition/ Restructuring related Costs 1.6 1.8 0.4 0.1 1.1 1.1 0.0 Less: Material overcharge Settlement - - (2.1) (0.1) (0.1) (0.1) (0.1) Less: Gain on Sale of fixed assets (0.1) (0.0) 0.0 0.0 (0.0) (0.0) (0.0) Adjusted Operating Income $ 13.1 $ 13.5 $ 10.5 $ 11.7 $ 20.6 $ 12.1 $ 22.2 Adjusted Operating Margin 9.4% 9.7% 7.2% 7.9% 10.8% 7.8% 11.4%
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