10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2013

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number:  001-12648

UFP Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-2314970
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

172 East Main Street, Georgetown, Massachusetts 01833, USA

(Address of principal executive offices) (Zip Code)

(978) 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 filing requirements for the past 90 days.  Yes  x; No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x; No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer £	Accelerated filer T
Non–accelerated filer £	Smaller reporting company £
[Do not check if a smaller reporting company]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o; No  x

6,796,959 shares of registrant’s Common Stock, $.01 par value, were outstanding as of May 2, 2013.

UFP Technologies, Inc.

Index

	Page
PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	3
Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2013, and March 31, 2012 (unaudited)	4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013, and March 31, 2012 (unaudited)	5
Notes to Interim Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures about Market Risk	14
Item 4. Controls and Procedures	14
PART II - OTHER INFORMATION	14
Item 1A.Risk Factors	14
Item 6.Exhibits	14
SIGNATURES / EXHIBIT INDEX	15
Exhibits	17

2

PART I:FINANCIAL INFORMATION

ITEM 1:FINANCIAL STATEMENTS

UFP Technologies, Inc.

Condensed Consolidated Balance Sheets

	31-Mar-13			31-Dec-12
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	31,941,697		$	33,479,519
Receivables, net	18,514,136			17,835,902
Inventories	10,530,625			9,695,060
Prepaid expenses	1,540,282			653,916
Refundable income taxes	936,908			1,713,687
Deferred income taxes	1,120,865			1,115,959
Total current assets	64,584,513			64,494,043
Property, plant, and equipment	60,820,860			59,569,202
Less accumulated depreciation and amortization	(37,090,839		)	(36,250,906		)
Net property, plant, and equipment	23,730,021			23,318,296
Goodwill	7,038,631			7,038,631
Intangible assets, net	1,950,288			2,083,941
Other assets	1,764,512			1,682,529
Total assets	$	99,067,965		$	98,617,440
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	4,684,644			$	4,088,003
Accrued expenses	5,362,025			7,592,842
Current installments of long-term debt	1,543,773			1,550,190
Total current liabilities	11,590,442			13,231,035
Long-term debt, excluding current installments	8,514,314			8,313,709
Deferred income taxes	1,591,004			1,589,654
Retirement and other liabilities	2,297,006			2,222,238
Total liabilities	23,992,766			25,356,636
Commitments and contingencies Stockholders’ equity:
Preferred stock, $.01 par value. Authorized 1,000,000 shares; no shares issued or outstanding	—			—
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 6,796,959 at March 31, 2013, and 6,749,913 at December 31, 2012	67,970			67,499
Additional paid-in capital	19,022,615			19,238,934
Retained earnings	55,984,614			53,954,371
Total UFP Technologies, Inc. stockholders’ equity	75,075,199			73,260,804
Total liabilities and stockholders’ equity	$	99,067,965		$	98,617,440

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

UFP Technologies, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended
	31-Mar-2013		31-Mar-2012
Net sales	$	33,697,014	$	31,952,223
Cost of sales	24,794,808		22,750,861
Gross profit	8,902,206		9,201,362
Selling, general & administrative expenses	5,945,949		5,518,525
Gain on sale of fixed assets	—		(5,463		)
Operating income	2,956,257		3,688,300
Interest expense, net	40,500		15,508
Other income (expenses)	—		2,058
Income before income tax expense	2,915,757		3,670,734
Income tax expense	885,514		1,322,000
Net income	2,030,243		2,348,734
Net income per share
Basic	$	0.30	$	0.36
Diluted	$	0.29	$	0.33
Weighted average common shares outstanding:
Basic	6,768,408		6,588,367
Diluted	7,087,637		7,030,197

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

UFP Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	31-Mar-2013			31-Mar-2012
Cash flows from operating activities:
Net income	$	2,030,243		$	2,348,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	973,586			681,449
Gain on sale of fixed assets	—			(5,463		)
Share-based compensation	179,340			186,901
Excess tax benefit on share-based compensation	—			(276,596		)
Deferred income taxes	(3,556		)	58,450
Changes in operating assets and liabilities:
Receivables, net	(678,234		)	(769,707		)
Inventories	(835,565		)	(307,718		)
Taxes receivable	776,779			676,618
Prepaid expenses	(886,366		)	(391,291		)
Accounts payable	596,641			611,358
Accrued taxes and other expenses	(2,030,816		)	(820,443		)
Retirement and other liabilities	74,768			205,323
Other assets	(81,983		)	(541,299		)
Net cash provided by operating activities	114,837			1,656,316
Cash flows from investing activities:
Additions to property, plant, and equipment	(1,251,658		)	(2,309,282		)
Holdback payment related to the acquisition of PAC Foam	(200,000		)	—
Proceeds from sale of fixed assets	—			5,463
Redemption of cash value life insurance	—			131,621
Net cash used in investing activities	(1,451,658		)	(2,172,198		)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	579,650			—
Principal repayments of long-term debt	(385,462		)	(145,165		)
Proceeds from exercise of stock options, net of attestation	30,975			34,088
Excess tax benefit on share-based compensation	—			276,596
Payment of statutory withholdings for stock options exercised and restricted stock units vested	(426,164		)	(672,284		)
Distribution to United Development Company Limited (non-controlling interests)	—			(1,209,732		)
Net cash used in financing activities	(201,001		)	(1,716,497		)
Net decrease in cash and cash equivalents	(1,537,822		)	(2,232,379		)
Cash and cash equivalents at beginning of period	33,479,519			29,848,798
Cash and cash equivalents at end of period	$	31,941,697		$	27,616,419

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

NOTES TO INTERIM

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)Basis of Presentation

The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, 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 accounting principles generally accepted in the United States of America.  These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012, included in the Company’s 2012 Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

The condensed consolidated balance sheet as of March 31, 2013, the condensed consolidated statements of income for the three-month period ended March 31, 2013, and the condensed consolidated statements of cash flows for the three-month period ended March 31, 2013, are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The results of operations for the three-month period ended March 31, 2013, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2013.

(2)Supplemental Cash Flow Information

Cash paid for interest and income taxes is as follows:

	Three Months Ended
	31-Mar-13		31-Mar-12
Interest	$	39,358	$	23,008
Income taxes, net of refunds	$	114,759	$	242,336

During the three-month periods ended March 31, 2013, and 2012, the Company permitted the exercise of stock options with exercise proceeds paid with the Company’s stock (“cashless” exercises) totaling $0 and $46,620, respectively.

(3)Fair Value Accounting

The Company has other financial instruments, such as accounts receivable, accounts payable, and accrued expenses, which are stated at carrying amounts that approximate fair value because of the short maturity of those instruments.  The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.

(4)Share-Based Compensation

Share-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

6

The Company issues share-based payments through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2012.  The compensation cost charged against income for those plans is as follows:

	Three Months Ended
	31-Mar-2013		31-Mar-2012
Cost of sales	$	—	$	—
Selling, general & administrative expense	179,340		186,901
Total share-based compensation expense	$	179,340	$	186,901

The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $55,000 for each of the three-month periods ended March 31, 2013, and 2012.

The following is a summary of stock option activity under all plans for the three-month period ended March 31, 2013:

	Shares Under Options		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2012	493,888		$	5.47
Granted	60,000		18.85
Exercised	(7,500	)	4.13
Cancelled or expired	—		—
Outstanding at March 31, 2013	546,388		6.96		$	6,225,706
Options exercisable at March 31, 2013	470,138		5.28		$	6,116,693
Vested and expected to vest at March 31, 2013	546,388		6.96		$	6,225,706

On March 31, 2013, the Company granted to certain employees options for the purchase of 60,000 shares of its common stock at that day’s closing price of $18.85.  The compensation expense was determined as the fair value of the options using the Black Scholes option pricing model based on the following assumptions:

Expected volatility	40.0%
Expected dividends	none
Risk free interest rate	0.4%
Expected term	3.8 years

The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The weighted average grant date fair value of options granted during the three-month period ended March 31, 2013, was $5.77.

During the three-month periods ended March 31, 2013, and 2012, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was $114,477 and $2,028,138, respectively, and the total amount of consideration received from the exercised options was $30,975, and $80,708, respectively.

During the three-month periods ended March 31, 2013, and 2012, the Company recognized compensation expenses related to stock options granted to directors and employees of $25,396 and $18,186, respectively.

On February 18, 2013, the Company’s Compensation Committee approved the award of $400,000 payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan.  The shares will be issued on or before December 31, 2013.  The Company recorded compensation expense associated with the award of $100,000 during the three-month period ended March 31, 2013.  In the three-month period ended March 31, 2012, the Company recorded $75,000 of compensation expense for a similar award.

7

The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the three-month period ended March 31, 2013:

	Restricted Stock Units		Weighted Average Award Date Fair Value
Unvested at December 31, 2012	108,866		$	8.77
Awarded	10,600		19.97
Shares vested	(61,635	)	6.67
Forfeited / cancelled	(5,679	)	16.17
Unvested at March 31, 2013	52,152		$	13.59

During the three-month periods ended March 31, 2013, and 2012, the Company recorded compensation expense related to RSUs of $53,944 and $93,715, respectively.

At its discretion, the Company allows option and RSU holders to surrender previously owned common stock in lieu of paying the minimum statutory withholding taxes due upon the exercise of options or the vesting of RSUs.  During the three-month periods ended March 31, 2013, and 2012, 22,089 and 39,707 shares were surrendered at an average market price of $19.29 and $16.93, respectively.

March 31, 2013, unrecognized compensation expense of $1,278,676 is expected to be recognized over a weighted average period of 1.6 years.

(5)Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market, and consist of the following at the stated dates:

	31-Mar-2013		31-Dec-2012
Raw materials	$	6,662,512	$	6,260,354
Work in process	882,020		675,228
Finished goods	2,986,093		2,759,478
Total inventory	$	10,530,625	$	9,695,060

(6)Preferred Stock

On March 18, 2009, the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, to the stockholders of record on March 20, 2009.  Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Share”) of the Company, at a price of $25 per one one-thousandth of a Preferred Share subject to adjustment and the terms of the Rights Agreement.  The Rights expire on March 19, 2019.

(7)Income Per Share

Basic income per share is based on the weighted average number of shares of common stock outstanding.  Diluted income per share is based upon the weighted average of common shares and dilutive common stock equivalent shares outstanding during each period.

8

The weighted average number of shares used to compute basic and diluted net income per share consisted of the following:

	Three Months Ended
	31-Mar-2013	31-Mar-2012
Weighted average common shares outstanding, basic	6,768,408	6,588,367
Weighted average common equivalent shares due to stock options and RSUs	319,229	441,830
Weighted average common shares outstanding, diluted	7,087,637	7,030,197

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would have been antidilutive.  For the three-month periods ended March 31, 2013, and 2012, the number of stock awards excluded from the computation was 64,337 and 10,000, respectively.

(8)Segment Reporting

The Company is organized based on the nature of the products and services it offers.  Under this structure, the Company produces products within two distinct segments: Engineered Packaging and Component Products.  Within the Engineered Packaging segment, the Company primarily uses polyethylene and polyurethane foams, sheet plastics, and pulp fiber to provide customers with cushion packaging for their products.  Within the Component Products segment, the Company primarily uses cross-linked polyethylene and technical urethane foams to provide customers in the medical, aerospace and defense, automotive, athletic, and leisure industries with custom-designed products for numerous purposes.

The accounting policies of the segments are the same as those described in Note 1 to the consolidated financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission.  The Company evaluates the performance of its operating segments based on operating income.

Inter-segment transactions are uncommon and not material.  Therefore, they have not been reflected separately in the financial table below.  Revenues from customers outside of the United States are not material.  No customer comprised more than 5% of the Company’s consolidated revenues for the three-month period ended March 31, 2013.  All of the Company’s assets are located in the United States.  Unallocated assets consists of the Company’s cash balance.

	Three Months Ended 3/31/13				Three Months Ended 3/31/12
	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $
Net sales	10,865,306	22,831,708	—	33,697,014	9,617,822	22,334,401	—	31,952,223
Operating income	193,631	2,762,626	—	2,956,257	454,656	3,233,644	—	3,688,300
Depreciation / amortization	645,748	327,838	—	973,586	328,645	352,804	—	681,449
Capital expenditures	500,014	751,644	—	1,251,658	1,835,570	473,712	—	2,309,282
Total assets	34,448,170	32,678,098	31,941,697	99,067,965	22,038,608	30,690,457	27,616,419	80,345,484

9

(9)Other Intangible Assets

The carrying values of the company’s definite lived intangible assets as of March 31, 2013, and December 31, 2012, are as follows:

	Patents		Non-compete		Customer list		Total
Estimated useful life	14 years		5 yeats		5 years
Gross amount at March 31, 2013	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at March 31, 2013	(428,806	)	(180,701	)	(687,447	)	(1,296,954	)
Net balance at March 31, 2013	—		331,299		1,618,989		1,950,288
Gross amount at December 31, 2012	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at December 31, 2012	(428,806	)	(156,500	)	(577,995	)	(1,163,301	)
Net balance at December 31, 2012	—		355,500		1,728,441		2,083,941

Amortization expense related to intangible assets was $133,653 and $39,951 for the three-month periods ended March 31, 2013, and 2012, respectively.  Future amortization will be:

Remainder of:
2013	$	395,951
2014	444,937
2015	369,800
2016	369,800
2017	369,800
Total	$	1,950,288

(10)Income Taxes

The income tax expense included in the accompanying unaudited consolidated statements of income principally relates to the Company’s proportionate share of the pre-tax income of its majority-owned subsidiaries.  The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year adjusted for the impact of any discrete items which are accounted for in the period in which they occur.

The Company recorded a tax expense of approximately 30.4% of income before income tax expense for the three month period ended March 31, 2013, compared to a tax expense of approximately 36% for the comparable three-month period in 2012.  The effective tax rate for the quarter ended March 31, 2013 includes a discrete event for a retroactive application for a 2012 research and development credit. The American Taxpayer Relief Act of 2012 was passed by Congress and signed into law on January 1, 2013. The provisions under this law are to be applied retroactively to January 1, 2012. As a result of the law being signed on January 1, 2013, the financial impact of the retroactive provision was recorded as a discrete event in the first quarter of 2013. The Company recorded a reduction to tax expense in the first quarter of 2013 by $135,000. Excluding this discrete event, the effective tax rate for the quarter ended March 31, 2013 was 35%.

(11)Acquisition

On December 31, 2012, the Company acquired substantially all of the assets of Packaging Alternatives Corporation (“PAC”), a Costa Mesa, California-based, foam fabricator for $5.7 million.  The Consolidated Statement of Income for the three-month period ended March 31, 2013, include the following results for PAC:

Sales	$	2,681,704
Operating Income	$	66,546

10

ITEM 2:MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This report contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 and releases issued by the Securities and Exchange Commission.  The words “believe,”  “expect,”  “anticipate,” “intend,” “plan,” “estimate,” and other expressions, which are predictions of or indicate future events and trends and that do not relate to historical matters, identify forward-looking statements.  Examples of forward-looking statements included in this report include, without limitation, statements regarding the anticipated financial performance and/or future business prospects of the Company, anticipated trends in the different markets in which the Company competes, including the molded fiber, medical and military markets, anticipated advantages the Company expects to realize from its investments and capital expenditures, including the development of and investments in its molded fiber product line, expectations regarding the manufacturing capacity of the Company’s new production equipment, anticipated advantages relating to the Company’s decision to cease operations at its Ventura, California plant and to consolidate manufacturing in other facilities, expected methods of growth for the Company, and the overall economy.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance, or achievements expressed or implied by such forward-looking statements.  Other examples of these risks, uncertainties, and other factors include, without limitation, the following: economic conditions that affect sales of the products of the Company’s customers, risks associated with the identification of suitable acquisition candidates and the successful, efficient execution and integration of such acquisitions, the implementation of new production equipment in a timely, cost-efficient manner, risks that any benefits from such new equipment may be delayed or not fully realized, or that the Company may be unable to fully utilize its expected production capacity, actions by the Company’s competitors, and the ability of the Company to respond to such actions, the ability of the Company to obtain new customers, the ability of the Company to offset lost revenues, evolving customer requirements, difficulties associated with the roll-out of new products, decisions by customers to cancel or defer orders for the Company’s products that previously had been accepted, risks and uncertainties associated with plant closures and expected efficiencies from consolidating manufacturing, risks associated with the internal reorganization of our sales and engineering groups, the costs of compliance with the requirements of Sarbanes-Oxley, and general economic and industry conditions and other factors.  In addition to the foregoing, the Company’s actual future results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth elsewhere in this report and changes in general economic conditions, interest rates and the assumptions used in making such forward-looking statements.  All of the forward-looking statements are qualified in their entirety by reference to the risk factors and other disclaimers described in the Company’s filings with the Securities and Exchange Commission, in particular its most recent Annual Report on Form 10-K.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Overview

Using foams, plastics, composites and natural fiber materials, UFP Technologies designs and manufactures a vast range of solutions primarily for the medical, automotive, aerospace and defense, and packaging markets.

Sales to the automotive industry started slowly in 2013 due to temporary holiday plant shutdowns at certain UFP customers.  This sales decline, coupled with anticipated soft demand in the aerospace and defense market due to cuts in government spending, offset strong sales to the medical market.  Sales for the three-month period ended March 31, 2013 increased 5.5% over the comparable period in 2012.  However, excluding the sales of the newly acquired PAC operations in Costa Mesa, California, sales decreased 2.9%.  The impact of this, coupled with approximately $150,000 in one-time costs incurred in integrating the PAC operations and absorbing the beauty business in El Paso, Texas, caused a 13.5% reduction in net income for the first quarter of 2013, compared to the first quarter of 2012.  The Company considers the acquisition of PAC and the closure of its Ventura plant and movement of its business to other UFP plants as key strategic investments that it expects to benefit future periods.

The Company’s current strategy includes organic growth and growth through strategic acquisitions.

Details regarding the Company’s segment results of operations are described in Note 8 to the consolidated financial statements included in Item 1 of this Form 10-Q.

11

Sales

Sales for the three-month period ended March 31, 2013, increased approximately 5.5% to $33.7 million from sales of $32.0 million for the same period in 2012.  Sales for the first quarter at the Company’s newly acquired operations in Costa Mesa, CA were approximately $2.7 million.  Absent these sales the Company’s sales declined 2.9% for the quarter.  The increase in sales for the three-month period ended March 31, 2013, is primarily due to increased sales to the medical industry of approximately $3.4 million (Component Products segment), mostly due to sales at PAC, largely offset by declines in sales to the automotive market (Component Products segment) and aerospace and defense (both the Component Products and Packaging segments) of approximately $1.1 million and $525,000, respectively.

Gross Profit

Gross profit as a percentage of sales (“gross margin”) decreased to 26.4% for the three-month period ended March 31, 2013, from 28.8% in the same period in 2012.  The decrease in gross margin for the three-month period ended March 31, 2013, is primarily due to higher material content on sales of product from the newly acquired PAC operations of approximately $475,000 or 1.4% of sales (Component Products segment) as well as the impact of the fixed portion of overhead on lower sales (absent PAC sales) of 1.0% of sales (both the Component Products and Packaging segments).

Selling, General and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased approximately $427,000 or 7.7% to $5.9 million for the three-month period ended March 31, 2013, from $5.5 million for the same period in 2012.  The increase in SG&A is primarily due to SG&A of the PAC operations of approximately $500,000 (Component Products segment).

As a percentage of sales, SG&A increased slightly to17.6% for the three-month period ended March 31, 2013, from 17.3% for the same three-month period in 2012.  The increase in SG&A as a percentage of sales for the three-month period ended March 31, 2013, is primarily due to the reduction in sales absent sales of PAC.

Other Expenses

The Company had net interest expense of approximately $41,000 for the three-month period ended March 31, 2013, compared to net interest expense of approximately $16,000 in the same period of 2012. The increase in interest expense for the three-month period ended March 31, 2013, is primarily due to lower interest earned on cash and incremental term loans taken by the Company in 2012 to finance Molded Fiber equipment.

Income Taxes

The Company recorded a tax expense of approximately 30.4% of income before income tax expense for the three-month period ended March 31, 2013, compared to a tax expense of approximately 36% for the comparable three-month period in 2012.  The decrease in the effective income tax rate for the three-month period ended March 31, 2013, is primarily due to an expected research and development tax credit the in the Company’s 2012 tax returns, that was not reflected in the 2012 operating results because the R&D tax credits had expired as of December 31, 2012, but were extended by legislation passed in 2013.

Liquidity and Capital Resources

The Company funds its operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.

At March 31, 2013, and December 31, 2012, the Company’s working capital was approximately $53.0 million and $51.3 million, respectively.  The increase in working capital for the three-month period ended March 31, 2013, is primarily due to an increase in inventory of approximately $835,000 primarily due to the timing of raw material purchases and an increase in receivables, net of approximately $678,000 due to strong March sales.

Net cash provided by operations for the three-month period ended March 31, 2013, was approximately $115,000, primarily due to net income of approximately $2.0 million and depreciation and amortization of approximately $974,000, offset by a reduction in accrued expenses of approximately $2.2 million due to the payment in the first quarter of year-end bonuses, an annual profit sharing contribution and certain income tax payments.

12

Cash used in investing activities during the three-month period ended March 31, 2013, was approximately $1.5 million and was primarily the result of additions of manufacturing machinery and equipment.

Cash used in financing activities was approximately $200,000 in the three-month period ended March 31, 2013, representing cash used to service term debt and to pay statutory withholding for restricted stock units vested of approximately $810,000 partially offset by proceeds from the issuance of term debt of approximately $580,000.

On January 29, 2009, the Company amended and extended its credit facility with Bank of America, NA.  The facility comprises: (i) a revolving credit facility of $17 million; (ii) a term loan of $2.1 million with a seven-year straight line amortization; (iii) a mortgage loan of $1.8 million with a 20-year straight line amortization; and (iv) a mortgage loan of $4.0 million with a 20-year straight line amortization.  Extensions of credit under the revolving credit facility are based in part upon accounts receivable and inventory levels.  Therefore, the entire $17 million may not be available to the Company.  At March 31, 2013, the Company had no borrowings outstanding and availability of approximately $16.9 million, based upon collateral levels as of that date.  The credit facility calls for interest of LIBOR plus a margin that ranges from 1.0% to 1.5% or, at the option of the Company, the bank’s prime rate less a margin that ranges from 0.25% to zero.  In both cases the applicable margin is dependent upon Company performance.  The loans are collateralized by a first priority lien on all of the Company’s assets, including its real estate located in Georgetown, Massachusetts, and in Grand Rapids, Michigan.  Under the credit facility, the Company is subject to a minimum fixed charge coverage financial covenant with which it was in compliance at March 31, 2013.  The Company’s $17 million revolving credit facility matures November 30, 2013, and the term loans are due January 29, 2016.  The Company anticipates negotiating an extension of this facility.  The Company cannot assure that such extension will be completed on favorable terms or on a timely basis, if at all.  The interest rate on these facilities was approximately 1.2% at March 31, 2013, and there were no borrowings outstanding on the line of credit.

On October 11, 2012, the Company entered a loan agreement with US Bank Equipment Finance to finance the purchase of two new molded fiber machines, both of which are operational.  The annual interest rate is fixed at 1.83%.  As of March 31, 2013, the outstanding balance is approximately $4.6 million.  The loan will be repaid over a five-year term.  The loan is secured by the related molded fiber machines.

Throughout 2013, the Company plans to continue to add capacity to enhance operating efficiencies in its manufacturing plants.  The Company may consider additional acquisitions of companies, technologies, or products that are complementary to its business.  The Company believes that its existing resources, including its revolving credit facility, together with cash generated from operations and funds expected to be available to it through any necessary equipment financing and additional bank borrowings, will be sufficient to fund its cash flow requirements, including capital asset acquisitions, through the next twelve months.

Commitments, Contractual Obligations, and Off-Balance Sheet Arrangements

The following table summarizes the Company’s commitments, contractual obligations, and off balance sheet arrangements at March 31, 2013, and the effect such obligations are expected to have on its liquidity and cash flow in future periods:

			Payment Due By Period
			Less than		1-3		3-5		More than
	Total		1 Year		Years		Years		5 Years
Term Loans	$	841,052	$	216,270	$	576,720	$	48,062	$	—
Equipment Loans	4,564,594		720,420		1,971,597		1,872,577		—
Grand Rapids Mortgage	3,183,333		150,001		400,002		400,001		2,233,329
Massachusetts Mortgage	1,469,108		69,225		184,600		184,600		1,030,683
Operating Leases	6,538,561		1,515,859		2,958,204		2,064,498		—
Debt interest	887,117		161,495		371,149		247,671		106,802
Supplemental Retirement	227,083		56,250		70,833		50,000		50,000
Total	$	17,710,848	$	2,889,520	$	6,533,105	$	4,867,409	$	3,420,814

The Company requires cash to pay its operating expenses, purchase capital equipment, and to service the obligations listed above.  The Company’s principal sources of funds are its operations and its revolving credit facility.

13

Although the Company generated cash from operations during the three-month period ended March 31, 2013, it cannot guarantee that its operations will generate cash in future periods.

The Company had no off balance sheet arrangements during the three-month period ended March 31, 2013, other than operating leases.

ITEM 3: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.  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 March 31, 2013, the Company’s cash and cash equivalents consisted of bank accounts in U.S. dollars, and their valuation would not be affected by market risk.  The Company has several debt instruments where interest is based upon either the prime rate or LIBOR and, therefore, future operations could be affected by interest rate changes.  However, the Company believes that the market risk of the debt is minimal.

ITEM 4:CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in SEC Rule 13a-15(e) or 15d-15(e)).  Based upon that evaluation, they concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There has been no change in the Company’s internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II:OTHER INFORMATION

ITEM 1A:RISK FACTORS

Information regarding risk factors appears in Part I — Item 2 of this Form 10-Q in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Forward-Looking Statements” and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, in Part I — Item 1A under “Risk Factors.”  There have been no material changes from the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

ITEM 6:EXHIBITS

The following exhibits are included herein:

Exhibit No.	Description
10.62	Amendment No. 2 to Employment Agreement with R. Jeffrey Bailly (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).
10.63	Form of 2013 CEO Stock Unit Award Agreement (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).
10.64	Form of 2013 Stock Unit Award Agreement (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).

14

Exhibit No.	Description
10.65	UFP Technologies, Inc. 2003 Incentive Plan, as amended.*
10.66	2009 Non-Employee Director Stock Incentive Plan, as amended.*
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.*
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.*
32	Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document.***
101.SCH	XBRL Taxonomy Extension Schema Document.***
101.CAL	XBRL Taxonomy Calculation Linkbase Document.***
101.LAB	XBRL Taxonomy Label Linkbase Document.***
101.PRE	XBRL Taxonomy Presentation Linkbase Document.***
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. ***

*	Filed herewith.
**	Furnished herewith.
***	Submitted electronically herewith. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934.

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.

Date:	May 10, 2013	By:	/s/ R. Jeffrey Bailly
		R. Jeffrey Bailly
		Chairman, Chief Executive Officer, President, and Director
		(Principal Executive Officer)
Date:	May 10, 2013	By:	/s/ Ronald J. Lataille
		Ronald J. Lataille
		Chief Financial Officer
		(Principal Financial Officer)

15

EXHIBIT INDEX

Exhibit No.	Description
10.62	Amendment No. 2 to Employment Agreement with R. Jeffrey Bailly (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).
10.63	Form of 2013 CEO Stock Unit Award Agreement (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).
10.64	Form of 2013 Stock Unit Award Agreement (incorporated by reference to the Company’s Report on Form 8-K dated February 22, 2013. The number set forth herein is the number of the Exhibit in said Report).
10.65	UFP Technologies, Inc. 2003 Incentive Plan, as amended.*
10.66	2009 Non-Employee Director Stock Incentive Plan, as amended.*
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.*
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.*
32	Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document.***
101.SCH	XBRL Taxonomy Extension Schema Document.***
101.CAL	XBRL Taxonomy Calculation Linkbase Document.***
101.LAB	XBRL Taxonomy Label Linkbase Document.***
101.PRE	XBRL Taxonomy Presentation Linkbase Document.***
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. ***

*	Filed herewith.
**	Furnished herewith.
***	Submitted electronically herewith. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934.

16

EX-10.65

Exhibit 10.65

UFP TECHNOLOGIES, INC.

2003 INCENTIVE PLAN

As Amended on March 7, 2013

1.Statement of Purpose. The purpose of this 2003 Incentive Plan (hereinafter referred to as the “Plan”) is to benefit UFP TECHNOLOGIES, INC. (the “Company”) through the maintenance and development of its businesses by offering equity-based and other incentives to certain present and future executives and other employees who are in a position to contribute to the long-term success and growth of the Company, thereby encouraging the continuance of their involvement with the Company and/or its subsidiaries.

2.Administration of the Plan.

(a)Board or Committee Administration.  The Plan shall be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”) or such other committee thereof consisting of such members (not less than two) of the Board as are appointed from time to time by the Board (the “Compensation Committee”), each of the members of which, at the time of any action under the Plan, shall be (i) a “non-employee director” as then defined under Rule 16b-3 under the Act (or meeting comparable requirements of any successor rule relating to exemption from Section 16(b) of the Act), (ii) an “outside director” as then defined under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) and (iii) an “independent director” as then defined under the rules of the Nasdaq Stock Market (or meeting comparable requirements of any stock exchange on which the Company’s Common Stock, $.01 par value (the “Common Stock”) may then be listed).  Hereinafter, all references in this Plan to the “Committee” shall mean the Board if no Committee has been appointed.  The Committee shall have all necessary powers to administer and interpret the Plan.  Such powers of the Compensation Committee include exclusive authority (within the limitations described and except as otherwise provided in the Plan) to select the employees or determine classes of employees to be granted Awards under the Plan, to determine the aggregate amount, type, size, and terms of the Awards to be made to eligible employees, and to determine the time when Awards will be granted. The Compensation Committee may take into consideration recommendations from the appropriate officers of the Company with respect to making the foregoing determinations as to Plan Awards, administration, and interpretation. The Committee shall have full power and authority to adopt such rules, regulations, agreements and instruments for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable.  The Committee’s interpretations of the Plan and all action taken and determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any director or employee of the Company or any Subsidiary.

(b)Committee Actions.  The Committee may select one of its members as its chairman, and shall hold meetings at such time and places as it may determine.  A majority of the Committee shall constitute a quorum and acts of a majority of the members of the Committee at

a meeting at which a quorum is present, or acts reduced to or approved in writing by all the members of the Committee (if consistent with applicable state law), shall be the valid acts of the Committee.  From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.

(c)Performance-based Compensation.  In the case of any Award intended to be eligible for the performance-based compensation exception under Section 162(m), the Committee shall exercise its discretion consistent with qualifying the Award for such exception.

(d)Section 409A.  The Committee shall take into account compliance with Section 409A of the Internal Revenue Code in connection with any grant of an Award under the Plan, to the extent applicable.

3.Eligibility. Participation in the Plan shall be limited to executives or other employees (including officers and directors who are also employees) of the Company and its Subsidiaries selected on the basis of such criteria as the Committee may determine.  Employees who participate in other incentive or benefit plans of the Company or any Subsidiary may also participate in this Plan. As used herein, the term “employee” shall mean any person employed full time or part time by the Company or a Subsidiary on a salaried basis, and the term “employment” shall mean full-time or part-time salaried employment by the Company or a Subsidiary.

4.Rules Applicable to Awards.

(a)All Awards.

(i)Awards. Awards may be granted in the form of any or a combination of the following: Stock Options; SARs; Restricted Stock; Unrestricted Stock; Stock Unit Awards, other Stock Based Awards; Cash Performance Awards; other Performance Awards; or grants of cash, or loans, made in connection with other Awards in order to help defray in whole or in part the economic cost (including tax cost) of the Award to the Participant.

(ii)Terms of Awards.  The Committee shall determine the terms of all Awards subject to the limitations provided herein.

(iii)Performance Criteria. Where rights under an Award depend in whole or in part on satisfaction of Performance Criteria, actions by the Company that have an effect, however material, on such Performance Criteria or on the likelihood that they will be satisfied will not be deemed an amendment or alteration of the Award.

(iv)Vesting, Etc.  Without limiting the generality of Section 4(a)(ii), the Committee may determine the time or times at which an Award will vest (i.e., become free of forfeiture restrictions) or become exercisable and the terms on which an Award requiring exercise will remain exercisable.

2

(v)Section 162(m). The Committee in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended so to qualify. In the case of an Award intended to be eligible for the performance-based compensation exception under Section 162(m), the Plan and such Award shall be construed to the maximum extent permitted by law in a manner consistent with qualifying the Award for such exception. In the case of a Performance Award intended to qualify as performance-based for the purposes of Section 162(m), the Committee shall pre-establish in writing one or more specific Performance Criteria no later than 90 days after the commencement of the period of service to which the performance relates (or at such earlier time as is required to qualify the Award as performance-based under Section 162(m)).  Prior to payment of any Performance Award intended to qualify as performance-based under Section 162(m), the Committee shall certify whether the Performance Criteria have been attained, and such determination shall be final and conclusive. In the case of a Performance Award intended to qualify as performance-based for the purposes of Section 162(m), the provisions of this Section 4(a)(v) shall be construed in a manner that is consistent with the regulations under Section 162(m).

(b)Awards Requiring Exercise.

(i)  Time and Manner of Exercise.  Unless the Committee expressly provides otherwise, (A) an Award requiring exercise by the holder will not be deemed to have been exercised until the Committee receives a written notice of exercise (in form acceptable to the Committee) signed by the appropriate person and accompanied by any payment required under the Award; and (B) if the Award is exercised by any person other than the Participant, the Committee may require satisfactory evidence that the person exercising the Award has the right to do so.

(ii)  Exercise Price.  The Committee shall determine the exercise price of each Stock Option or SAR; provided, however, that each Stock Option or SAR must have an exercise price that is not less than the fair market value of the Stock subject to the Stock Option, determined as of the date of grant.  Except as provided in Section 6, in no event may any Stock Option or SAR previously granted under the Plan (i) be amended to decrease the exercise price or strike price thereof, as the case may be, (ii) be cancelled in conjunction with the grant of any new Stock Option or SAR with a lower exercise price or strike price, as the case may be, (iii) be amended to provide for a cash buyout of the Stock Option or SAR if such Stock Option or SAR is not “in the money,” (iv) be subject to a voluntary surrender and subsequent grant of “in the money” Stock Option or SAR (v) otherwise be subject to any action that would be treated under the NASDAQ rules as a “repricing” of such Stock Option or SAR unless such amendment, cancellation or action is approved by the Company’s shareholders.

(iii)  Payment of Exercise Price, If Any. Where the exercise of an Award is to be accompanied by payment, the Committee may determine the required or permitted forms of payment.

3

(c)Awards Not Requiring Exercise.

(i).Restricted Stock.  Restricted Stock awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion, which shall set forth the number of shares of Common Stock awarded, the restrictions imposed thereon  (which may include, without limitation, restrictions on the right of the grantee to sell, assign, transfer or encumber  shares while such shares are subject to other restrictions imposed under this Section 4), the duration of such restrictions; the events (which may, in the discretion of the Committee, include performance-based events or objectives) the occurrence of which would cause a forfeiture of the Restricted Stock in whole or in part; and such other terms and conditions as the Committee in its discretion deems appropriate.  If so determined by the Committee at the time of an award of Restricted Stock, the lapse of restrictions on Restricted Stock may be based on the extent of achievement over a specified performance period of one or more performance targets based on performance criteria established by the Committee.  Restricted Stock awards shall be effective upon execution of the applicable Restricted Stock agreement by the Company and the Participant.  Following a Restricted Stock award and prior to the lapse or termination of the applicable restrictions, the share certificates for such Restricted Stock shall be held in escrow by the Company.  Upon the lapse or termination of the applicable restrictions (and not before such time), the certificates for the Restricted Stock shall be issued or delivered to the Participant.  From the date a Restricted Stock award is effective, the Participant shall be a shareholder with respect to all the shares represented by such certificates and shall have all the rights of a shareholder with respect to all such shares, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares, subject only to the restrictions imposed by the Committee.

(ii).Stock Unit Awards.  Stock Unit Awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion, which shall set forth the number of shares of Common Stock to be awarded pursuant to the Award,  the restrictions imposed thereon  (which may include, without limitation: restrictions on the right of the grantee to sell, assign, transfer or encumber the Award prior to vesting, and,  in the discretion of the Committee, certain continued service requirements and terms under which the vesting of such Awards might be accelerated) and such other terms and conditions as the Committee in its discretion deems appropriate.  If so determined by the Committee at the time of the grant of a Stock Unit Award, vesting of the Award may be contingent on achievement over a specified performance period of one or more performance targets based on performance criteria established by the Committee.  Stock Unit Awards shall be effective upon execution of the applicable Stock Unit Award Agreement by the Company and the Participant.  Upon a determination of satisfaction of the applicable performance-related conditions and satisfaction of the applicable continued service requirements, (and not before such time), shares of Stock shall be issued to the Participant pursuant to the Award.  The Participant shall not have any rights of a shareholder of the Company with respect to such shares prior to such issuance.

(iii)Unrestricted Stock and Other Stock-Based Awards.  The Committee shall have the authority in its discretion to grant to eligible Participants Unrestricted Stock and other

4

Stock-Based Awards.  The Committee shall determine the terms and conditions, if any, of any Other Stock Based Awards made under the Plan.

(iv)Non Stock — Based Awards.  The Committee shall have the authority in its discretion to grant to eligible Participants Awards not based on the Stock, including, without limitation, Cash Performance Awards, and other Performance Awards as deemed by the Committee to be consistent with the purposes of the Plan.

5.Limits on Awards under the Plan.

(a)Number of Shares.   A maximum of 2,250,000 shares of Common Stock, subject to adjustment as provided in Section 6, may be delivered in satisfaction of Stock-Based Awards under the Plan.

(b)Share Counting Rules.  The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.  To the extent that an Award expires or is canceled, forfeited, settled in cash or otherwise terminated or concluded without a delivery to the Participant of the full number of shares to which the Award related, the undelivered shares will again be available for grant.  Shares withheld in payment of the exercise price or taxes relating to an Award and shares equal to the number surrendered in payment of any exercise price or taxes relating to an Award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for Awards under the Plan; provided, however, that, where shares are withheld or surrendered more than ten years after the date of the most recent stockholder approval of the Plan or any other transaction occurs that would result in shares becoming available under this Section 5(b), such shares shall not become available if and to the extent that it would constitute a material revision of the Plan subject to stockholder approval under then applicable rules of the national securities exchange on which the Stock is listed or the Nasdaq Stock Market, as applicable.

(c)Type of Shares.  Common Stock delivered by the Company under the Plan may be authorized but unissued Common Stock or previously issued Common Stock acquired by the Company and held in treasury.  No fractional shares of Common Stock will be delivered under the Plan.

(d)Other Stock-Based Award Limits.  The maximum number of shares of Common Stock subject to Awards that may be granted to any person in any calendar year  shall be 150,000.  In addition, in no event shall the number of Awards providing for the acquisition of shares of Common Stock for a consideration less than Fair Market Value as of the date of grant or exercise of such Awards granted to all Participants in any Fiscal Year exceed 250,000.   For this purpose, Fair Market Value may be determined as of a date not more than two trading days prior to the date of grant or exercise in order to facilitate compliance with the reporting requirements under Section 16 of the Act.  Subject to these limitations, each person eligible to participate in the Plan shall be eligible in any year to receive Awards covering up to the full number of shares of Common Stock then available for Awards under the Plan.

5

(e)Other Award Limits.   No more than $1,000,000 may be paid to any individual with respect to any Cash Performance Award or other Performance Award (other than an Award expressed in terms of shares of  Common Stock or units representing Common Stock, which shall instead be subject to the limit set forth in Section 5(d) above).  In applying the dollar limitation of the preceding sentence: (A) multiple Cash or other Performance Awards to the same individual that are determined by reference to performance periods of one year or less ending with or within the same fiscal year of the Company shall be subject in the aggregate to one $1,000,000 limit, and (B) multiple Cash or other Performance Awards to the same individual that are determined by reference to one or more multi-year performance periods ending in the same fiscal year of the Company shall be subject in the aggregate to separate $1,000,000 limits.

6.Adjustments for Recapitalizations, Mergers, Etc.

(a)Dilution and Other Adjustments.  Notwithstanding any other provision of the Plan, in the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares, or other similar corporate change (including a Corporate Event, as defined below), an equitable adjustment shall be made, as determined by the Committee, so as to preserve, without increasing or decreasing, the value of Awards and authorizations, in (i) the maximum number or kind of shares issuable or Awards which may be granted under the Plan, (ii) the maximum number, kind or value of any Plan Awards which may be awarded or paid in general or to any one employee or to all employees in a Fiscal Year, (iii) the performance-based events or objectives applicable to any Plan Awards, (iv) any other aspect or aspects of the Plan or outstanding Awards made thereunder as specified by the Committee, or (v) any combination of the foregoing.  Such adjustments shall be made by the Committee and shall be conclusive and binding for all purposes of the Plan.

(b)Corporate Events.  Notwithstanding the foregoing, except as may otherwise be provided in an Award agreement or a written employment agreement between the Participant and the Company which has been approved by the Committee, upon any Corporate Event, in lieu of providing the adjustment set forth in Section 6(a) above, the Committee may, in its discretion, cancel any or all vested and/or unvested Awards as of the consummation of such Corporate Event, and provide that holders of Awards so cancelled will receive a payment in respect of cancellation of their Awards based on the amount of the per share consideration being paid for the Stock in connection with such Corporate Event, less, in the case of Options and other Awards subject to exercise, the applicable exercise price; provided, however, that holders of (i) Options shall only be entitled to consideration in respect of cancellation of such Awards if the per share consideration less the applicable exercise price is greater than zero, and (ii) Performance Awards  shall only be entitled to consideration in respect of cancellation of such Awards to the extent that applicable performance criteria are achieved prior to or as a result of such Corporate Event, and shall not otherwise be entitled to payment in consideration of cancelled unvested Awards.  Payments to holders pursuant to the preceding sentence shall be made in cash, or, in the sole discretion of the Committee, in such other consideration necessary for a holder of an Award to receive property, cash or securities as such holder would have been entitled to receive upon the

6

occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of shares of Stock covered by the Award at such time.

7.Miscellaneous Provisions.

(a)The holder of a Plan Award shall have no rights as a Company shareholder with respect thereto unless, and until the date as of which, shares of Common Stock shall have been issued in respect of such Award.

(b)Except as the Committee shall otherwise determine in connection with determining the terms of Awards to be granted or shall thereafter permit, no Plan Award or any rights or interests therein of the recipient thereof shall be assignable or transferable by such recipient except upon death to his or her Designated Beneficiary or by will or the laws of descent and distribution, and, except as aforesaid, during the lifetime of the recipient, a Plan Award shall be exercisable only by, or payable only to, as the case may be, such recipient or his or her guardian or legal representative.

(c)All Awards granted under the Plan shall be evidenced by agreements in such form and containing and/or incorporating such terms and conditions (not inconsistent with the Plan and applicable law) in addition to those provided for herein as the Committee shall approve.

(d)No shares of Common Stock shall be issued, delivered or transferred upon exercise or in payment of any Award granted hereunder unless and until all legal requirements applicable to the issuance, delivery or transfer of such shares have been complied with to the satisfaction of the Committee and the Company, including, without limitation, compliance with the provisions of the Securities Act of 1933, the Act and the applicable requirements of the exchanges on which the Company’s Common Stock may, at the time, be listed. The Committee and the Company shall have the right to condition any issuance of shares of Common Stock made to any Participant hereunder on such Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares as the Committee and/or the Company shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and certificates representing such shares may be legended to reflect any such restrictions.

(e)The Company shall have the right to make such provision for the withholding of taxes as it deems necessary. In furtherance of the foregoing, the Company shall have the right to require, as a condition of the distribution of Awards in Common Stock, that the Participant or other person receiving such Common Stock either (i) pay to the Company at the time of distribution thereof the amount of any federal, state, or local taxes  which the Company is required to withhold with respect to such Common Stock or (ii) make such other arrangements as the Company may authorize from time to time to provide for such withholding including without limitation having the number of the units of the Award cancelled or the number of the shares of Common Stock to be distributed reduced by an amount with a value equal to the value of such taxes required to be withheld.  Notwithstanding the foregoing, the Committee may, in its discretion, in connection with the grant of any Award of Common Stock, authorize the Company

7

to pay to Participant receiving the Award, a cash gross-up payment  in an amount necessary to cover such federal, state or local taxes attributable to such Award and to such cash payment.

(f)No employee or director of the Company or a Subsidiary or other person shall have any claim or right to be granted an Award under this Plan.  Neither this Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company or a Subsidiary, it being understood that all Company and Subsidiary employees who have or may receive Awards under this Plan are employed at the will of the Company or such Subsidiary and in accord with all statutory provisions.

(g)The costs and expenses of administering this Plan shall be borne by the Company and not charged to any Award or to any employee or Participant receiving an Award.

(h)In addition to the terms defined elsewhere herein, the following terms as used in this Plan shall have the following meanings:

“Act” shall mean the Securities Exchange Act of 1934 as amended from time to time.

“Award” shall mean an award described in Section 4(a)(i).

“Business Combination” shall mean (i) the consummation of a reorganization, merger or consolidation or sale or disposition of all or substantially all of the assets of the Company.

“Cash Performance Award” shall mean a Performance Award payable in cash.  The right of the Company to extinguish an Award in exchange for cash or the exercise by the Company of such right shall not make an Award otherwise not payable in cash a Cash Performance Award.

“Change in Control” shall mean  (i) a Business Combination, unless, in each case following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock of the Company immediately before the consummation of such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of the transaction owns the Company or all or substantially all of the assets of the Company either directly or indirectly through one or more subsidiaries); and (B) no person or group (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) of the Company or the corporation resulting from the Business Combination) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of the common stock of the corporation resulting from the Business Combination;  (ii) individuals who, as of the date of grant of an Award hereunder constitute the Board of Directors of the Company (the “Incumbent Board”)

8

thereafter cease for any reason to constitute at least a majority of the Board of Directors of the Company, provided, however, that any individual’s becoming a director after the date of grant of such Award whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though the individual were a member of the Incumbent Board, but excluding, for this purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) any person (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) shall become at any time or in any manner the beneficial owner of capital stock of the Company representing more than 50% of the voting power of the Company.

“Corporate Event” means (i) a merger or consolidation involving the Company in which the Company is not the surviving corporation; (ii) a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of Stock receive securities of another corporation and/or other property, including cash; or (iii) the reorganization or liquidation of the Company.

“Designated Beneficiary” shall mean the person or persons, if any, last designated as such by the Participant on a form filed by him or her with the Company in accordance with such procedures as the Committee shall approve.

“Fair Market Value” of a share of Common Stock of the Company on any date shall mean the closing price of the Common Stock on the trading day coinciding with such date, or if not trading on such date, then the closing price as of the next following trading day.  If shares of the Common Stock shall not have been traded on any national exchange or interdealer quotation system for more than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the fair market value of shares of Common Stock shall be determined by the Committee in such other manner as it may deem appropriate.

“Fiscal Year” shall mean the twelve-month period used as the annual accounting period by the Company and shall be designated according to the calendar year in which such period ends.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986 and regulations thereunder as amended from time to time.  References to particular sections of the Internal Revenue Code shall include any successor provisions.

“ISO” shall mean an incentive stock option under Section 422 of the Internal Revenue Code.

9

“Participant” shall mean, as to any Award granted under this Plan and for so long as such Award is outstanding, the employee to whom such Award has been granted.

“Performance Award” shall mean an Award subject to Performance Criteria.

“Performance Criteria” shall mean specified criteria the satisfaction of which is a condition for the exercisability, vesting or full enjoyment of an Award. For purposes of Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion shall mean an objectively determinable measure of performance relating to any of the following (determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): (i) sales; revenues; assets; liabilities; costs; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization or other items, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; working capital requirements; stock price; stockholder return; sales, contribution or gross margin, of particular products or services; particular operating or financial ratios; customer acquisition, expansion and retention; or any combination  of the foregoing; or (ii) acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity) and refinancings; transactions that would constitute a change of control; or any combination of the foregoing.  A Performance Criterion measure and targets with respect thereto determined by the Committee need not be based upon an increase, a positive or improved result or avoidance of loss.

“Restricted Stock” shall mean an Award of Stock subject to forfeiture to the Company if specified conditions are not satisfied.

“SARs” shall mean rights entitling the holder upon exercise to receive cash or Stock, as the Committee determines, equal to a function (determined by the Committee using such factors as it deems appropriate) of the amount by which the Stock has appreciated in value since the date of the Award.

“Stock” shall mean Common Stock of the Company, par value $.01 per share.

“Stock-based Awards” shall mean such awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock as deemed by the Committee to be consistent with the purposes of the Plan, and shall include, without limitation, all Stock Options, SARs, Restricted Stock, Stock Unit Awards and any Performance Awards consisting of any of the foregoing.

“Stock Options” shall mean options entitling the recipient to acquire shares of Stock upon payment of the exercise price and shall consist of ISO’s and non-statutory options.

10

“Stock Unit Awards” shall mean an award payable in shares of Stock.  A Stock Unit Award may, but shall not be required to include a Performance Award.

“Subsidiary” shall mean any domestic or foreign corporation, partnership, association, joint stock company, trust or unincorporated organization “affiliated “ with the Company, that is, directly or indirectly, through one or more intermediaries, “controlling”, “controlled by” or  “under common control with”, the Company.

“Unrestricted Stock” shall mean an Award of Stock not subject to any restrictions under the Plan.

(i)This Plan shall be governed by the laws of the Commonwealth of Massachusetts and shall be construed for all purposes in accordance with the laws of said Commonwealth except as may be required by the General Corporation Law of Delaware or by applicable federal law.

8.Amendments and Termination; Requisite Shareholder Approval.   The Board may at any time terminate or from time to time amend or suspend the Plan in whole or in part in such respects as the Board may deem advisable in order that Awards granted thereunder shall conform to any change in the law, or in any other respect which the Board may deem to be in the best interests of the Company; provided, however, that no amendment of the Plan shall be made without shareholder approval if shareholder approval of the amendment is at the time required by applicable law, or by the rules of the Nasdaq Stock Market or any stock exchange on which Common Stock may be listed. The Board shall have the power to amend the Plan in any manner contemplated by Section 9 deemed necessary or advisable for Awards granted under the Plan to qualify for the exemption provided by Rule 16b-3 (or any successor rule relating to exemption from Section 16(b) of the Act), to qualify as “performance-based” compensation under Section 162(m) or to comply with applicable law, and any such amendment shall, to the extent deemed necessary or advisable by the Board, be applicable to any outstanding Awards theretofore granted under the Plan notwithstanding any contrary provisions contained in any Award agreement.  In the event of any such amendment to the Plan, the holder of any Award outstanding under the Plan shall, upon request of the Board and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Board to any Award agreement relating thereto within such reasonable time as the Board shall specify in such request.  With the consent of the Participant affected, the Board may amend outstanding agreements evidencing Plan Awards in a manner not inconsistent with the terms of the Plan.  Notwithstanding anything contained in this Section 8 or in any other provision of the Plan, unless required by law, no action contemplated or permitted by this Section 8 shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Award theretofore made under the Plan without the consent of the affected Participant.

9.Effective Date and Term of Plan. This Plan was adopted on April 8, 2003.  The Plan was amended on February 26, 2007, March 22, 2007, February 21, 2008, March 2, 2011 and March 7, 2013.   The Plan shall remain in effect, subject to the right of the Board of Directors to further amend or terminate the Plan at any time pursuant to Section 8 hereof, until

11

all shares subject to it shall have been purchased or acquired according to the Plan’s provisions, provided, however, that no ISO may be granted under the Plan after March 1, 2021.

12

EX-10.66

Exhibit 10.66

UFP TECHNOLOGIES, INC.

2009 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN

(as amended on March 7, 2013)

1.Statement of Purpose. The purpose of this 2009 Non-Employee Director Stock Incentive Plan (formerly known as the 1998 Director Stock Option Incentive Plan and hereinafter referred to as the “Plan”) is to benefit non-employee members of the Board of Directors of UFP TECHNOLOGIES, INC. (the “Company”) in consideration of their management of the Company by offering to them equity-based incentives, thereby encouraging the continuance of their involvement with the Company and/or its subsidiaries.

2.Administration of the Plan.   The Plan shall be administered by the Board of Directors of the Company or by any committee of the Board of Directors, including the Compensation Committee (any such committee or the full Board, as the case may be, hereinafter referred to as the “Committee”).  The Committee shall have full and plenary authority to interpret the terms and provisions of the Plan.  Such powers of the Committee include exclusive authority (within the limitations described and except as otherwise provided in the Plan) to  determine the aggregate amount, type, size, and terms of the Awards to be made to eligible Non-employee Directors, and to determine the time when Awards will be granted. The Committee may take into consideration recommendations from the appropriate officers of the Company with respect to making the foregoing determinations as to Plan Awards, administration, and interpretation. The Committee shall have full power and authority to adopt such rules, regulations, agreements and instruments for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable.  The Committee’s interpretations of the Plan and all action taken and determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any director of the Company.

3.Eligibility.  Non-employee Directors of the Company (individually a “Participant” and collectively the “Participants”) shall be eligible to receive grants of Awards under this Plan (individually an “Award” and collectively “Awards”) pursuant to the provisions of Section 4 hereof.

4.Rules Applicable to Awards.

(a)All Awards.

(i)Awards. Awards may be granted in the form of any or a combination of the following: Stock Options; SARs; Restricted Stock; Unrestricted Stock; Stock Unit Awards, or other Stock Based Awards.

(ii)Terms of Awards.  The Committee shall determine the terms of all Awards subject to the limitations provided herein.

(iii)Vesting, Etc.  The Committee may determine the time or times at which an Award will vest (i.e., become free of forfeiture restrictions) or become exercisable and the terms on which an Award requiring exercise will remain exercisable.

(b)Awards Requiring Exercise.

(i)Time and Manner of Exercise.  Unless the Committee expressly provides otherwise, (A) an Award requiring exercise by the holder will not be deemed to have been exercised until the Committee receives a written notice of exercise (in form acceptable to the Committee) signed by the appropriate person and accompanied by any payment required under the Award; and (B) if the Award is exercised by any person other than the Participant, the Committee may require satisfactory evidence that the person exercising the Award has the right to do so.

(ii)Exercise Price.  The Committee shall determine the exercise price of each Stock Option or SAR; provided, however, that each Stock Option or SAR must have an exercise price that is not less than the fair market value of the Stock subject to the Stock Option, determined as of the date of grant.  Except as provided in Section 6, in no event may any Stock Option or SAR previously granted under the Plan (i) be amended to decrease the exercise price or strike price thereof, as the case may be, (ii) be cancelled in conjunction with the grant of any new Stock Option or SAR with a lower exercise price or strike price, as the case may be, (iii) be amended to provide for a cash buyout of the Stock Option or SAR if such Stock Option or SAR is not “in the money,” (iv) be subject to a voluntary surrender and subsequent grant of “in the money” Stock Option or SAR (v) otherwise be subject to any action that would be treated under the NASDAQ rules as a “repricing” of such Stock Option or SAR, unless such amendment, cancellation or action is approved by the Company’s shareholders.”

(iii)Payment of Exercise Price, If Any. Where the exercise of an Award is to be accompanied by payment, the Committee may determine the required or permitted forms of payment.

(c)Awards Not Requiring Exercise.

(i)Restricted Stock.  Restricted Stock awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion, which shall set forth the number of shares of Common Stock awarded, the restrictions imposed thereon  (which may include, without limitation, restrictions on the right of the grantee to sell, assign, transfer or encumber shares while such shares are subject to other restrictions imposed under this Section 4), the duration of such restrictions; the events (which may, in the discretion of the Committee, include performance-based events or objectives) the occurrence of which would cause a forfeiture of the Restricted Stock in whole or in part; and such other terms and conditions as the Committee in its discretion deems appropriate.  Restricted Stock awards shall be effective upon execution of the applicable Restricted Stock agreement by the Company and the Participant.  Following a Restricted Stock award and prior to the lapse or termination of the applicable

2

restrictions, the share certificates for such Restricted Stock shall be held in escrow by the Company.  Upon the lapse or termination of the applicable restrictions (and not before such time), the certificates for the Restricted Stock shall be issued or delivered to the Participant.  From the date a Restricted Stock award is effective, the Participant shall be a shareholder with respect to all the shares represented by such certificates and shall have all the rights of a shareholder with respect to all such shares, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares, subject only to the restrictions imposed by the Committee.

(ii)Stock Unit Awards.  Stock Unit Awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion, which shall set forth the number of shares of Common Stock to be awarded pursuant to the Award,  the restrictions imposed thereon  (which may include, without limitation: restrictions on the right of the grantee to sell, assign, transfer or encumber the Award prior to vesting, and,  in the discretion of the Committee, certain continued service requirements and terms under which the vesting of such Awards might be accelerated) and such other terms and conditions as the Committee in its discretion deems appropriate.  Stock Unit Awards shall be effective upon execution of the applicable Stock Unit Award Agreement by the Company and the Participant.  Upon a determination of satisfaction of any applicable performance-related conditions and satisfaction of any applicable continued service requirements, (and not before such time), shares of Stock shall be issued to the Participant pursuant to the Award.  The Participant shall not have any rights of a shareholder of the Company with respect to such shares prior to such issuance.

(iii)Unrestricted Stock and Other Stock-Based Awards.  The Committee shall have the authority in its discretion to grant to eligible Participants Unrestricted Stock and other Stock-Based Awards.  The Committee shall determine the terms and conditions, if any, of any other Stock Based Awards made under the Plan.

5.Limits on Awards under the Plan.

(a)Number of Shares.   A maximum of 975,000 shares of Common Stock, subject to adjustment as provided in Section 6, may be delivered in satisfaction of Stock-Based Awards under the Plan, which amount includes all stock options previously granted under the Plan under its former name, except to the extent any such former option was canceled prior to having been exercised, as further described in subsection (b) below.

(b)Share Counting Rules.  The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.  To the extent that an Award expires or is canceled, forfeited, settled in cash or otherwise terminated or concluded without a delivery to the Participant of the full number of shares to which the Award related, including, without limitation, any option granted under the Plan under its former name and terminated without having been exercised, the undelivered shares will again be available for grant.  Shares withheld in payment of the exercise price or taxes relating to an Award and shares equal to the number surrendered in payment of any exercise price or taxes relating to an Award shall be deemed to constitute shares not delivered to the Participant and

3

shall be deemed to again be available for Awards under the Plan; provided, however, that, where shares are withheld or surrendered more than ten years after the date of the most recent stockholder approval of the Plan or any other transaction occurs that would result in shares becoming available under this Section 5(b), such shares shall not become available if and to the extent that it would constitute a material revision of the Plan subject to stockholder approval under then applicable rules of the national securities exchange on which the Stock is listed.

(c)Type of Shares.  Common Stock delivered by the Company under the Plan may be authorized but unissued Common Stock or previously issued Common Stock acquired by the Company and held in treasury.  No fractional shares of Common Stock will be delivered under the Plan.

6.Adjustments for Recapitalizations, Mergers, Etc.

(a)Dilution and Other Adjustments.  Notwithstanding any other provision of the Plan, in the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares, or other similar corporate change (including a Corporate Event, as defined below), an equitable adjustment shall be made, as determined by the Committee, so as to preserve, without increasing or decreasing, the value of Awards and authorizations, in (i) the maximum number or kind of shares issuable or Awards which may be granted under the Plan, (ii) the performance-based events or objectives applicable to any Plan Awards, (iii) any other aspect or aspects of the Plan or outstanding Awards made thereunder as specified by the Committee, or (iv) any combination of the foregoing.  Such adjustments shall be made by the Committee and shall be conclusive and binding for all purposes of the Plan.

(b)Corporate Events.  Notwithstanding the foregoing, except as may otherwise be provided in an Award agreement, upon any Corporate Event, in lieu of providing the adjustment set forth in Section 6(a) above, the Committee may, in its discretion, cancel any or all vested and/or unvested Awards as of the consummation of such Corporate Event, and provide that holders of Awards so cancelled will receive a payment in respect of cancellation of their Awards based on the amount of the per share consideration being paid for the Stock in connection with such Corporate Event, less, in the case of Options and other Awards subject to exercise, the applicable exercise price; provided, however, that holders of Options shall only be entitled to consideration in respect of cancellation of such Awards if the per share consideration less the applicable exercise price is greater than zero.   Payments to holders pursuant to the preceding sentence shall be made in cash, or, in the sole discretion of the Committee, in such other consideration necessary for a holder of an Award to receive property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of shares of Stock covered by the Award at such time.

7.Miscellaneous Provisions.

(a)The holder of a Plan Award shall have no rights as a Company shareholder with respect thereto unless, and until the date as of which, shares of Common Stock shall have been

4

issued in respect of such Award.

(b)Except as the Committee shall otherwise determine in connection with determining the terms of Awards to be granted or shall thereafter permit, no Plan Award or any rights or interests therein of the recipient thereof shall be assignable or transferable by such recipient except upon death to his or her Designated Beneficiary or by will or the laws of descent and distribution, and, except as aforesaid, during the lifetime of the recipient, a Plan Award shall be exercisable only by, or payable only to, as the case may be, such recipient or his or her guardian or legal representative.

(c)All Awards granted under the Plan shall be evidenced by agreements in such form and containing and/or incorporating such terms and conditions (not inconsistent with the Plan and applicable law) in addition to those provided for herein as the Committee shall approve.

(d)No shares of Common Stock shall be issued, delivered or transferred upon exercise or in payment of any Award granted hereunder unless and until all legal requirements applicable to the issuance, delivery or transfer of such shares have been complied with to the satisfaction of the Committee and the Company, including, without limitation, compliance with the provisions of the Securities Act of 1933, the Exchange Act and the applicable requirements of the exchanges on which the Company’s Common Stock may, at the time, be listed. The Committee and the Company shall have the right to condition any issuance of shares of Common Stock made to any Participant hereunder on such Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares as the Committee and/or the Company shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and certificates representing such shares may be legended to reflect any such restrictions.

(e)The Company shall have the right to make such provision for the withholding of taxes as it deems necessary. In furtherance of the foregoing, the Company shall have the right to require, as a condition of the distribution of Awards in Common Stock, that the Participant or other person receiving such Common Stock either (i) pay to the Company at the time of distribution thereof the amount of any federal, state, or local taxes  which the Company is required to withhold with respect to such Common Stock or (ii) make such other arrangements as the Company may authorize from time to time to provide for such withholding including without limitation having the number of the units of the Award cancelled or the number of the shares of Common Stock to be distributed reduced by an amount with a value equal to the value of such taxes required to be withheld.

(f)No director of the Company or other person shall have any claim or right to be granted an Award under this Plan.  Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right to continue to serve as a member of the Board of Directors of the Company for any specific period of time.

(g)The costs and expenses of administering this Plan shall be borne by the Company and not charged to any Award or to any Participant receiving an Award.

5

(h)In addition to the terms defined elsewhere herein, the following terms as used in this Plan shall have the following meanings:

“Award” shall mean an award described in Section 4(a)(i).

“Business Combination” shall mean (i) the consummation of a reorganization, merger or consolidation or sale or disposition of all or substantially all of the assets of the Company.

“Change in Control” shall mean  (i) a Business Combination, unless, in each case following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock of the Company immediately before the consummation of such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of the transaction owns the Company or all or substantially all of the assets of the Company either directly or indirectly through one or more subsidiaries); and (B) no person or group (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) of the Company or the corporation resulting from the Business Combination) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of the common stock of the corporation resulting from the Business Combination;  (ii) individuals who, as of the date of grant of an Award hereunder constitute the Board of Directors of the Company (the “Incumbent Board”) thereafter cease for any reason to constitute at least a majority of the Board of Directors of the Company, provided, however, that any individual’s becoming a director after the date of grant of such Award whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though the individual were a member of the Incumbent Board, but excluding, for this purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) any person (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) shall become at any time or in any manner the beneficial owner of capital stock of the Company representing more than 50% of the voting power of the Company.

“Corporate Event” means (i) a merger or consolidation involving the Company in which the Company is not the surviving corporation; (ii) a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of Stock receive securities of another corporation and/or other property, including cash; or (iii) the reorganization or liquidation of the Company.

“Designated Beneficiary” shall mean the person or persons, if any, last designated

6

as such by the Participant on a form filed by him or her with the Company in accordance with such procedures as the Committee shall approve.

“Exchange Act” shall mean the Securities Exchange Act of 1934 as amended from time to time.

“Fair Market Value” of a share of Common Stock of the Company on any date shall mean the closing price of the Common Stock on the trading day coinciding with such date, or if not trading on such date, then the closing price as of the next following trading day.  If shares of the Common Stock shall not have been traded on any national exchange or interdealer quotation system for more than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the fair market value of shares of Common Stock shall be determined by the Committee in such other manner as it may deem appropriate.

“Fiscal Year” shall mean the twelve-month period used as the annual accounting period by the Company and shall be designated according to the calendar year in which such period ends.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986 and regulations thereunder as amended from time to time.  References to particular sections of the Internal Revenue Code shall include any successor provisions.

“Participant”  shall mean, as to any Award granted under this Plan and for so long as such Award is outstanding, the director to whom such Award has been granted.

“Restricted Stock” shall mean an Award of Stock subject to forfeiture to the Company if specified conditions are not satisfied.

“SARs” shall mean rights entitling the holder upon exercise to receive Stock equal to a function (determined by the Committee using such factors as it deems appropriate) of the amount by which the Stock has appreciated in value since the date of the Award.

“Stock” shall mean Common Stock of the Company, par value $.01 per share.

“Stock-based Awards” shall mean such awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock as deemed by the Committee to be consistent with the purposes of the Plan, and shall include, without limitation, all Stock Options, SARs, Restricted Stock, and Stock Unit Awards.

“Stock Options” shall mean non-qualified options entitling the recipient to acquire shares of Stock upon payment of the exercise price.

“Stock Unit Awards” shall mean an award payable in shares of Stock.

7

“Unrestricted Stock” shall mean an Award of Stock not subject to any restrictions under the Plan.

(i)This Plan shall be governed by the laws of the Commonwealth of Massachusetts and shall be construed for all purposes in accordance with the laws of said Commonwealth except as may be required by the General Corporation Law of Delaware or by applicable federal law.

8.Amendments and Termination; Requisite Shareholder Approval.   The Board may at any time terminate or from time to time amend or suspend the Plan in whole or in part in such respects as the Board may deem advisable in order that Awards granted thereunder shall conform to any change in the law, or in any other respect which the Board may deem to be in the best interests of the Company; provided, however, that no amendment of the Plan shall be made without shareholder approval if shareholder approval of the amendment is at the time required by applicable law, or by the rules of any stock exchange on which Common Stock may be listed. The Board shall have the power to amend the Plan in any manner contemplated by Section 9 deemed necessary or advisable for Awards granted under the Plan to qualify for the exemption provided by Rule 16b-3 (or any successor rule relating to exemption from Section 16(b) of the Exchange Act), or to comply with applicable law, and any such amendment shall, to the extent deemed necessary or advisable by the Board, be applicable to any outstanding Awards theretofore granted under the Plan notwithstanding any contrary provisions contained in any Award agreement.  In the event of any such amendment to the Plan, the holder of any Award outstanding under the Plan shall, upon request of the Board and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Board to any Award agreement relating thereto within such reasonable time as the Board shall specify in such request.  With the consent of the Participant affected, the Board may amend outstanding agreements evidencing Plan Awards in a manner not inconsistent with the terms of the Plan.  Notwithstanding anything contained in this Section 8 or in any other provision of the Plan, unless required by law, no action contemplated or permitted by this Section 8 shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Award theretofore made under the Plan without the consent of the affected Participant.

9.Effective Date and Term of Plan. This Plan was adopted on March 18, 2009, became effective on June 1, 2009, and was amended on March 7, 2013.  The Plan shall remain in effect, subject to the right of the Board of Directors to further amend or terminate the Plan at any time pursuant to Section 8 hereof, until all shares subject to it shall have been purchased or acquired according to the Plan’s provisions.

8

EX-31.1

EXHIBIT 31.1

EXHIBITS

Certification

I, R. Jeffrey Bailly, certify that:

1.I have reviewed this quarterly report on Form 10-Q of UFP Technologies, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2013	/s/ R. Jeffrey Bailly
		R. Jeffrey Bailly
		Chief Executive Officer

1

EX-31.2

EXHIBIT 31.2

Certification

I, Ronald J. Lataille, certify that:

1.I have reviewed this quarterly report on Form 10-Q of UFP Technologies, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2013	/s/ Ronald J. Lataille
		Ronald J. Lataille
		Chief Financial Officer

1

EX-32

EXHIBIT 32

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

I, R. Jeffrey Bailly, President and Chief Executive Officer of UFP Technologies, Inc., a Delaware corporation (the “Company”), do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that, to the best of my knowledge and belief:

(1)The Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all materials respects, the financial condition and results of operations of the Company.

Date:	May 10, 2013	/s/ R. Jeffrey Bailly
		R. Jeffrey Bailly
		Chairman, Chief Executive Officer, President, and Director
		(Principal Executive Officer)

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

I, Ronald J. Lataille, Chief Financial Officer of UFP Technologies, Inc., a Delaware corporation (the “Company”), do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that, to the best of my knowledge and belief:

(1)The Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all materials respects, the financial condition and results of operations of the Company.

Date:	May 10, 2013	/s/ Ronald J. Lataille
		Ronald J. Lataille
		Chief Financial Officer
		(Principal Financial Officer)

A signed original of these written statements required by Section 906 has been provided to UFP Technologies, Inc. and will be retained by UFP Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

1

XML

Income Taxes (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Taxes
Effective tax rate (as a percent)	30.40%	36.00%
Reduction of tax expense due to changes in applicable tax law	$ 135,000
Effective tax rate excluding the effect of the change in applicable tax law (as a percent)	35.00%

XML

Share-Based Compensation (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-Based Compensation
Total share-based compensation expense	$ 179,340	$ 186,901
Board of Directors
Share-Based Compensation
Total income tax benefit recognized	55,000	55,000
Selling, general & administrative expense
Share-Based Compensation
Total share-based compensation expense	$ 179,340	$ 186,901

XML

Share-Based Compensation

3 Months Ended

Mar. 31, 2013

Share-Based Compensation

Share-Based Compensation

(4) Share-Based Compensation

Share-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

The Company issues share-based payments through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2012.  The compensation cost charged against income for those plans is as follows:

	Three Months Ended
	31-Mar-2013		31-Mar-2012
Cost of sales	$	—	$	—
Selling, general & administrative expense	179,340		186,901
Total share-based compensation expense	$	179,340	$	186,901

The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $55,000 for each of the three-month periods ended March 31, 2013, and 2012.

The following is a summary of stock option activity under all plans for the three-month period ended March 31, 2013:

	Shares Under Options		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2012	493,888		$	5.47
Granted	60,000		18.85
Exercised	(7,500	)	4.13
Cancelled or expired	—		—
Outstanding at March 31, 2013	546,388		6.96		$	6,225,706
Options exercisable at March 31, 2013	470,138		5.28		$	6,116,693
Vested and expected to vest at March 31, 2013	546,388		6.96		$	6,225,706

On March 31, 2013, the Company granted to certain employees options for the purchase of 60,000 shares of its common stock at that day’s closing price of $18.85.  The compensation expense was determined as the fair value of the options using the Black Scholes option pricing model based on the following assumptions:

Expected volatility	40.0%
Expected dividends	none
Risk free interest rate	0.4%
Expected term	3.8 years

The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The weighted average grant date fair value of options granted during the three-month period ended March 31, 2013, was $5.77.

During the three-month periods ended March 31, 2013, and 2012, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was $114,477 and $2,028,138, respectively, and the total amount of consideration received from the exercised options was $30,975, and $80,708, respectively.

During the three-month periods ended March 31, 2013, and 2012, the Company recognized compensation expenses related to stock options granted to directors and employees of $25,396 and $18,186, respectively.

On February 18, 2013, the Company’s Compensation Committee approved the award of $400,000 payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan.  The shares will be issued on or before December 31, 2013.  The Company recorded compensation expense associated with the award of $100,000 during the three-month period ended March 31, 2013.  In the three-month period ended March 31, 2012, the Company recorded $75,000 of compensation expense for a similar award.

The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the three-month period ended March 31, 2013:

	Restricted Stock Units		Weighted Average Award Date Fair Value
Unvested at December 31, 2012	108,866		$	8.77
Awarded	10,600		19.97
Shares vested	(61,635	)	6.67
Forfeited / cancelled	(5,679	)	16.17
Unvested at March 31, 2013	52,152		$	13.59

During the three-month periods ended March 31, 2013, and 2012, the Company recorded compensation expense related to RSUs of $53,944 and $93,715, respectively.

At its discretion, the Company allows option and RSU holders to surrender previously owned common stock in lieu of paying the minimum statutory withholding taxes due upon the exercise of options or the vesting of RSUs.  During the three-month periods ended March 31, 2013, and 2012, 22,089 and 39,707 shares were surrendered at an average market price of $19.29 and $16.93, respectively.

March 31, 2013, unrecognized compensation expense of $1,278,676 is expected to be recognized over a weighted average period of 1.6 years.

XML

Income Per Share (Details)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Per Share
Weighted average common shares outstanding, basic	6,768,408	6,588,367
Weighted average common equivalent shares due to stock options and RSUs	319,229	441,830
Weighted average common shares outstanding, diluted	7,087,637	7,030,197
Number of stock awards excluded from the computation of diluted income per share	64,337	10,000

XML

Preferred Stock (Details) (USD $)	0 Months Ended
	Mar. 18, 2009 right	Mar. 31, 2013	Dec. 31, 2012
Preferred Stock
Number of preferred share purchase rights declared as dividend for each outstanding share of common stock	1
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Number of shares of Series A Junior Participating Preferred Stock that each right entitles the registered holder to purchase	0.001
Par value of Series A Junior Participating Preferred Stock (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Purchase price of Series A Junior Participating Preferred Stock (in dollars per one one-thousandth of a share)	25

XML

Segment Reporting (Details)	3 Months Ended
	Mar. 31, 2013 item
Segment Reporting
Number of distinct segments	2
Revenues | Sales risk
Concentration of risk
Number of major customers	0

XML

Segment Reporting (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Segment Reporting
Net sales	$ 33,697,014	$ 31,952,223
Operating income	2,956,257	3,688,300
Depreciation / amortization	973,586	681,449
Capital expenditures	1,251,658	2,309,282
Total assets	99,067,965	80,345,484	98,617,440
Engineered Packaging
Segment Reporting
Net sales	10,865,306	9,617,822
Operating income	193,631	454,656
Depreciation / amortization	645,748	328,645
Capital expenditures	500,014	1,835,570
Total assets	34,448,170	22,038,608
Component Products
Segment Reporting
Net sales	22,831,708	22,334,401
Operating income	2,762,626	3,233,644
Depreciation / amortization	327,838	352,804
Capital expenditures	751,644	473,712
Total assets	32,678,098	30,690,457
Unallocated Assets
Segment Reporting
Total assets	$ 31,941,697	$ 27,616,419

XML

Fair Value Accounting

3 Months Ended

Mar. 31, 2013

Fair Value Accounting

Fair Value Accounting

(3) Fair Value Accounting

The Company has other financial instruments, such as accounts receivable, accounts payable, and accrued expenses, which are stated at carrying amounts that approximate fair value because of the short maturity of those instruments.  The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.

XML

Other Intangible Assets (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Other Intangible Assets
Gross amount	$ 3,247,242		$ 3,247,242
Accumulated amortization	(1,296,954)		(1,163,301)
Net balance	1,950,288		2,083,941
Amortization expense related to intangible assets	133,653	39,951
Future amortization
2013	395,951
2014	444,937
2015	369,800
2016	369,800
2017	369,800
Total	1,950,288
Patents
Other Intangible Assets
Estimated useful life	14 years
Gross amount	428,806		428,806
Accumulated amortization	(428,806)		(428,806)
Non-compete
Other Intangible Assets
Estimated useful life	5 years
Gross amount	512,000		512,000
Accumulated amortization	(180,701)		(156,500)
Net balance	331,299		355,500
Customer list
Other Intangible Assets
Estimated useful life	5 years
Gross amount	2,306,436		2,306,436
Accumulated amortization	(687,447)		(577,995)
Net balance	$ 1,618,989		$ 1,728,441

XML

Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 31,941,697	$ 33,479,519
Receivables, net	18,514,136	17,835,902
Inventories	10,530,625	9,695,060
Prepaid expenses	1,540,282	653,916
Refundable income taxes	936,908	1,713,687
Deferred income taxes	1,120,865	1,115,959
Total current assets	64,584,513	64,494,043
Property, plant, and equipment	60,820,860	59,569,202
Less accumulated depreciation and amortization	(37,090,839)	(36,250,906)
Net property, plant, and equipment	23,730,021	23,318,296
Goodwill	7,038,631	7,038,631
Intangible assets, net	1,950,288	2,083,941
Other assets	1,764,512	1,682,529
Total assets	99,067,965	98,617,440
Current liabilities:
Accounts payable	4,684,644	4,088,003
Accrued expenses	5,362,025	7,592,842
Current installments of long-term debt	1,543,773	1,550,190
Total current liabilities	11,590,442	13,231,035
Long-term debt, excluding current installments	8,514,314	8,313,709
Deferred income taxes	1,591,004	1,589,654
Retirement and other liabilities	2,297,006	2,222,238
Total liabilities	23,992,766	25,356,636
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 1,000,000 shares; no shares issued or outstanding
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 6,796,959 at March 31, 2013, and 6,749,913 at December 31, 2012	67,970	67,499
Additional paid-in capital	19,022,615	19,238,934
Retained earnings	55,984,614	53,954,371
Total UFP Technologies, Inc. stockholders' equity	75,075,199	73,260,804
Total liabilities and stockholders' equity	$ 99,067,965	$ 98,617,440

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2013

Basis of Presentation

Basis of Presentation

(1) Basis of Presentation

The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, 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 accounting principles generally accepted in the United States of America.  These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012, included in the Company’s 2012 Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

The condensed consolidated balance sheet as of March 31, 2013, the condensed consolidated statements of income for the three-month period ended March 31, 2013, and the condensed consolidated statements of cash flows for the three-month period ended March 31, 2013, are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The results of operations for the three-month period ended March 31, 2013, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2013.

XML

Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Other Intangible Assets

Schedule of carrying values of definite-lived intangible assets

	Patents		Non-compete		Customer list		Total
Estimated useful life	14 years		5 yeats		5 years
Gross amount at March 31, 2013	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at March 31, 2013	(428,806	)	(180,701	)	(687,447	)	(1,296,954	)
Net balance at March 31, 2013	—		331,299		1,618,989		1,950,288
Gross amount at December 31, 2012	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at December 31, 2012	(428,806	)	(156,500	)	(577,995	)	(1,163,301	)
Net balance at December 31, 2012	—		355,500		1,728,441		2,083,941

Schedule of future amortization expense related to intangible assets

Remainder of:
2013	$	395,951
2014	444,937
2015	369,800
2016	369,800
2017	369,800
Total	$	1,950,288

XML

Supplemental Cash Flow Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Supplemental Cash Flow Information
Interest	$ 39,358	$ 23,008
Income taxes, net of refunds	114,759	242,336
Cashless exercises	$ 0	$ 46,620

XML

Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2013

Supplemental Cash Flow Information

Supplemental Cash Flow Information

(2) Supplemental Cash Flow Information

Cash paid for interest and income taxes is as follows:

	Three Months Ended
	31-Mar-13		31-Mar-12
Interest	$	39,358	$	23,008
Income taxes, net of refunds	$	114,759	$	242,336

During the three-month periods ended March 31, 2013, and 2012, the Company permitted the exercise of stock options with exercise proceeds paid with the Company’s stock (“cashless” exercises) totaling $0 and $46,620, respectively.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Authorized shares (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, Authorized shares (in shares)	20,000,000	20,000,000
Common stock, issued shares (in shares)	6,796,959	6,749,913
Common stock, outstanding shares (in shares)	6,796,959	6,749,913

XML

Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2013

Supplemental Cash Flow Information

Schedule of cash paid for interest and income taxes

	Three Months Ended
	31-Mar-13		31-Mar-12
Interest	$	39,358	$	23,008
Income taxes, net of refunds	$	114,759	$	242,336

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 02, 2013
Document and Entity Information
Entity Registrant Name	UFP TECHNOLOGIES INC
Entity Central Index Key	0000914156
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		6,796,959
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

XML

Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Share-Based Compensation

Schedule of the compensation cost charged against income for plans

	Three Months Ended
	31-Mar-2013		31-Mar-2012
Cost of sales	$	—	$	—
Selling, general & administrative expense	179,340		186,901
Total share-based compensation expense	$	179,340	$	186,901

Schedule of stock option activity under all plans

	Shares Under Options		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2012	493,888		$	5.47
Granted	60,000		18.85
Exercised	(7,500	)	4.13
Cancelled or expired	—		—
Outstanding at March 31, 2013	546,388		6.96		$	6,225,706
Options exercisable at March 31, 2013	470,138		5.28		$	6,116,693
Vested and expected to vest at March 31, 2013	546,388		6.96		$	6,225,706

Schedule of assumptions used to determine the fair value of options using Black Scholes option pricing model

Expected volatility	40.0%
Expected dividends	none
Risk free interest rate	0.4%
Expected term	3.8 years

Summary of Restricted Stock Units ( RSUs ) activity

	Restricted Stock Units		Weighted Average Award Date Fair Value
Unvested at December 31, 2012	108,866		$	8.77
Awarded	10,600		19.97
Shares vested	(61,635	)	6.67
Forfeited / cancelled	(5,679	)	16.17
Unvested at March 31, 2013	52,152		$	13.59

XML

Condensed Consolidated Statements of Income (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements of Income
Net sales	$ 33,697,014	$ 31,952,223
Cost of sales	24,794,808	22,750,861
Gross profit	8,902,206	9,201,362
Selling, general & administrative expenses	5,945,949	5,518,525
Gain on sale of fixed assets		(5,463)
Operating income	2,956,257	3,688,300
Interest expense, net	40,500	15,508
Other income (expenses)		2,058
Income before income tax expense	2,915,757	3,670,734
Income tax expense	885,514	1,322,000
Net income	$ 2,030,243	$ 2,348,734
Net income per share
Basic (in dollars per share)	$ 0.30	$ 0.36
Diluted (in dollars per share)	$ 0.29	$ 0.33
Weighted average common shares outstanding:
Basic (in shares)	6,768,408	6,588,367
Diluted (in shares)	7,087,637	7,030,197

XML

Income Per Share

3 Months Ended

Mar. 31, 2013

Income Per Share

Income Per Share

(7) Income Per Share

Basic income per share is based on the weighted average number of shares of common stock outstanding.  Diluted income per share is based upon the weighted average of common shares and dilutive common stock equivalent shares outstanding during each period.

The weighted average number of shares used to compute basic and diluted net income per share consisted of the following:

	Three Months Ended
	31-Mar-2013	31-Mar-2012
Weighted average common shares outstanding, basic	6,768,408	6,588,367
Weighted average common equivalent shares due to stock options and RSUs	319,229	441,830
Weighted average common shares outstanding, diluted	7,087,637	7,030,197

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would have been antidilutive.  For the three-month periods ended March 31, 2013, and 2012, the number of stock awards excluded from the computation was 64,337 and 10,000, respectively.

XML

Preferred Stock

3 Months Ended

Mar. 31, 2013

Preferred Stock

Preferred Stock

(6) Preferred Stock

On March 18, 2009, the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, to the stockholders of record on March 20, 2009.  Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Share”) of the Company, at a price of $25 per one one-thousandth of a Preferred Share subject to adjustment and the terms of the Rights Agreement.  The Rights expire on March 19, 2019.

XML

Acquisition (Tables)

3 Months Ended

Mar. 31, 2013

Acquisition

Schedule of the results of acquiree included in the consolidated statement of income

Sales	$	2,681,704
Operating Income	$	66,546

XML

Inventories (Tables)

3 Months Ended

Mar. 31, 2013

Inventories

Schedule of inventories

	31-Mar-2013		31-Dec-2012
Raw materials	$	6,662,512	$	6,260,354
Work in process	882,020		675,228
Finished goods	2,986,093		2,759,478
Total inventory	$	10,530,625	$	9,695,060

XML

Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

Income Taxes

(10) Income Taxes

The income tax expense included in the accompanying unaudited consolidated statements of income principally relates to the Company’s proportionate share of the pre-tax income of its majority-owned subsidiaries.  The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year adjusted for the impact of any discrete items which are accounted for in the period in which they occur.

The Company recorded a tax expense of approximately 30.4% of income before income tax expense for the three month period ended March 31, 2013, compared to a tax expense of approximately 36% for the comparable three-month period in 2012.  The effective tax rate for the quarter ended March 31, 2013 includes a discrete event for a retroactive application for a 2012 research and development credit. The American Taxpayer Relief Act of 2012 was passed by Congress and signed into law on January 1, 2013. The provisions under this law are to be applied retroactively to January 1, 2012. As a result of the law being signed on January 1, 2013, the financial impact of the retroactive provision was recorded as a discrete event in the first quarter of 2013. The Company recorded a reduction to tax expense in the first quarter of 2013 by $135,000. Excluding this discrete event, the effective tax rate for the quarter ended March 31, 2013 was 35%.

XML

Segment Reporting

3 Months Ended

Mar. 31, 2013

Segment Reporting

Segment Reporting

(8) Segment Reporting

The Company is organized based on the nature of the products and services it offers.  Under this structure, the Company produces products within two distinct segments: Engineered Packaging and Component Products.  Within the Engineered Packaging segment, the Company primarily uses polyethylene and polyurethane foams, sheet plastics, and pulp fiber to provide customers with cushion packaging for their products.  Within the Component Products segment, the Company primarily uses cross-linked polyethylene and technical urethane foams to provide customers in the medical, aerospace and defense, automotive, athletic, and leisure industries with custom-designed products for numerous purposes.

The accounting policies of the segments are the same as those described in Note 1 to the consolidated financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission.  The Company evaluates the performance of its operating segments based on operating income.

Inter-segment transactions are uncommon and not material.  Therefore, they have not been reflected separately in the financial table below.  Revenues from customers outside of the United States are not material.  No customer comprised more than 5% of the Company’s consolidated revenues for the three-month period ended March 31, 2013.  All of the Company’s assets are located in the United States.  Unallocated assets consists of the Company’s cash balance.

	Three Months Ended 3/31/13				Three Months Ended 3/31/12
	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $
Net sales	10,865,306	22,831,708	—	33,697,014	9,617,822	22,334,401	—	31,952,223
Operating income	193,631	2,762,626	—	2,956,257	454,656	3,233,644	—	3,688,300
Depreciation / amortization	645,748	327,838	—	973,586	328,645	352,804	—	681,449
Capital expenditures	500,014	751,644	—	1,251,658	1,835,570	473,712	—	2,309,282
Total assets	34,448,170	32,678,098	31,941,697	99,067,965	22,038,608	30,690,457	27,616,419	80,345,484

XML

Other Intangible Assets

3 Months Ended

Mar. 31, 2013

Other Intangible Assets

Other Intangible Assets

(9) Other Intangible Assets

The carrying values of the company’s definite lived intangible assets as of March 31, 2013, and December 31, 2012, are as follows:

	Patents		Non-compete		Customer list		Total
Estimated useful life	14 years		5 yeats		5 years
Gross amount at March 31, 2013	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at March 31, 2013	(428,806	)	(180,701	)	(687,447	)	(1,296,954	)
Net balance at March 31, 2013	—		331,299		1,618,989		1,950,288
Gross amount at December 31, 2012	428,806		512,000		2,306,436		3,247,242
Accumulated amortization at December 31, 2012	(428,806	)	(156,500	)	(577,995	)	(1,163,301	)
Net balance at December 31, 2012	—		355,500		1,728,441		2,083,941

Amortization expense related to intangible assets was $133,653 and $39,951 for the three-month periods ended March 31, 2013, and 2012, respectively.  Future amortization will be:

Remainder of:
2013	$	395,951
2014	444,937
2015	369,800
2016	369,800
2017	369,800
Total	$	1,950,288

XML

Acquisition

3 Months Ended

Mar. 31, 2013

Acquisition

Acquisition

(11) Acquisition

On December 31, 2012, the Company acquired substantially all of the assets of Packaging Alternatives Corporation (“PAC”), a Costa Mesa, California-based, foam fabricator for $5.7 million.  The Consolidated Statement of Income for the three-month period ended March 31, 2013, include the following results for PAC:

Sales	$	2,681,704
Operating Income	$	66,546

XML

Acquisition (Details) (PAC, USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
PAC
Acquisition
Purchase price		$ 5,700,000
Sales	2,681,704
Operating Income	$ 66,546

XML

Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting

Schedule of segment reporting

	Three Months Ended 3/31/13				Three Months Ended 3/31/12
	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $	Engineered Packaging $	Component Products $	Unallocated Assets $	Total UFPT $
Net sales	10,865,306	22,831,708	—	33,697,014	9,617,822	22,334,401	—	31,952,223
Operating income	193,631	2,762,626	—	2,956,257	454,656	3,233,644	—	3,688,300
Depreciation / amortization	645,748	327,838	—	973,586	328,645	352,804	—	681,449
Capital expenditures	500,014	751,644	—	1,251,658	1,835,570	473,712	—	2,309,282
Total assets	34,448,170	32,678,098	31,941,697	99,067,965	22,038,608	30,690,457	27,616,419	80,345,484

XML

Share-Based Compensation (Details 2) (USD $)	0 Months Ended	3 Months Ended
	Feb. 18, 2013	Mar. 31, 2013	Mar. 31, 2012
Additional share-based compensation disclosures
Compensation expense		$ 179,340	$ 186,901
Shares surrendered in lieu of payment of withholding taxes (in shares)		22,089	39,707
Average market price of shares surrendered in lieu of payment of withholding taxes (in dollars per share)		$ 19.29	$ 16.93
Unrecognized compensation expense		1,278,676
Weighted average period of recognition of unrecognized compensation expense		1 year 7 months 6 days
Stock option
Shares Under Options
Outstanding at the beginning of the period (in shares)		493,888
Granted (in shares)		60,000
Exercised (in shares)		7,500
Outstanding at the end of the period (in shares)		546,388
Options exercisable at the end of the period (in shares)		470,138
Vested and expected to vest at the end of the period (in shares)		546,388
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)		$ 5.47
Granted (in dollars per share)		$ 18.85
Exercised (in dollars per share)		$ 4.13
Outstanding at the end of the period (in dollars per share)		$ 6.96
Options exercisable at the end of the period (in dollars per share)		$ 5.28
Vested and expected to vest at the end of the period (in dollars per share)		$ 6.96
Aggregate Intrinsic Value
Outstanding at the end of the period		6,225,706
Options exercisable at the end of the period		6,116,693
Vested and expected to vest at the end of the period		6,225,706
Assumptions used to determine the intrinsic fair market value of options using Black Scholes option pricing model
Expected volatility (as a percent)		40.00%
Expected dividends (as a percent)		0.00%
Risk free interest rate (as a percent)		0.40%
Expected term		3 years 9 months 18 days
Weighted average grant date fair value of options granted (in dollars per share)		$ 5.77
The total intrinsic value of all options exercised		114,477	2,028,138
Additional share-based compensation disclosures
Total amount of consideration received from the exercised options		30,975	80,708
RSUs
Restricted Stock Units
Unvested at the beginning of the period (in shares)		108,866
Awarded (in shares)		10,600
Shares vested (in shares)		(61,635)
Forfeited / cancelled (in shares)		(5,679)
Unvested at the end of the period (in shares)		52,152
Weighted Average Award Date Fair Value
Unvested at the beginning of the period (in dollars per share)		$ 8.77
Awarded (in dollars per share)		$ 19.97
Shares vested (in dollars per share)		$ 6.67
Forfeited / cancelled (in dollars per share)		$ 16.17
Unvested at the end of the period (in dollars per share)		$ 13.59
Additional share-based compensation disclosures
Compensation expense		53,944	93,715
Directors and employees | Stock option
Additional share-based compensation disclosures
Compensation expense		25,396	18,186
Employees | Stock option
Shares Under Options
Granted (in shares)		60,000
Weighted Average Exercise Price
Granted (in dollars per share)		$ 18.85
2003 Incentive Plan | Chairman, Chief Executive Officer, and President | Common Stock
Restricted Stock Units
Awards	400,000
Additional share-based compensation disclosures
Compensation expense		$ 100,000	$ 75,000

XML

Condensed Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 2,030,243	$ 2,348,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	973,586	681,449
Gain on sale of fixed assets		(5,463)
Share-based compensation	179,340	186,901
Excess tax benefit on share-based compensation		(276,596)
Deferred income taxes	(3,556)	58,450
Changes in operating assets and liabilities:
Receivables, net	(678,234)	(769,707)
Inventories	(835,565)	(307,718)
Taxes receivable	776,779	676,618
Prepaid expenses	(886,366)	(391,291)
Accounts payable	596,641	611,358
Accrued taxes and other expenses	(2,030,816)	(820,443)
Retirement and other liabilities	74,768	205,323
Other assets	(81,983)	(541,299)
Net cash provided by operating activities	114,837	1,656,316
Cash flows from investing activities:
Additions to property, plant, and equipment	(1,251,658)	(2,309,282)
Holdback payment related to the acquisition of PAC Foam	(200,000)
Proceeds from sale of fixed assets		5,463
Redemption of cash value life insurance		131,621
Net cash used in investing activities	(1,451,658)	(2,172,198)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	579,650
Principal repayments of long-term debt	(385,462)	(145,165)
Proceeds from exercise of stock options, net of attestation	30,975	34,088
Excess tax benefit on share-based compensation		276,596
Payment of statutory withholdings for stock options exercised and restricted stock units vested	(426,164)	(672,284)
Distribution to United Development Company Limited (non-controlling interests)		(1,209,732)
Net cash used in financing activities	(201,001)	(1,716,497)
Net decrease in cash and cash equivalents	(1,537,822)	(2,232,379)
Cash and cash equivalents at beginning of period	33,479,519	29,848,798
Cash and cash equivalents at end of period	$ 31,941,697	$ 27,616,419

XML

Inventories

3 Months Ended

Mar. 31, 2013

Inventories

Inventories

(5) Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market, and consist of the following at the stated dates:

	31-Mar-2013		31-Dec-2012
Raw materials	$	6,662,512	$	6,260,354
Work in process	882,020		675,228
Finished goods	2,986,093		2,759,478
Total inventory	$	10,530,625	$	9,695,060

XML

Inventories (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Inventories
Raw materials	$ 6,662,512	$ 6,260,354
Work in process	882,020	675,228
Finished goods	2,986,093	2,759,478
Total inventory	$ 10,530,625	$ 9,695,060

XML

Income Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Income Per Share

Schedule of the weighted average number of shares used to compute basic and diluted net income per share

	Three Months Ended
	31-Mar-2013	31-Mar-2012
Weighted average common shares outstanding, basic	6,768,408	6,588,367
Weighted average common equivalent shares due to stock options and RSUs	319,229	441,830
Weighted average common shares outstanding, diluted	7,087,637	7,030,197