Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'UFP TECHNOLOGIES INC | ' |
Entity Central Index Key | '0000914156 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
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 | ' | 6,999,338 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $34,620 | $37,303 |
Receivables, less allowance for doubtful accounts of $515 at March 31, 2014 and $512 at December 31, 2013 | 18,150 | 17,032 |
Inventories | 12,177 | 11,048 |
Prepaid expenses | 2,062 | 690 |
Refundable income taxes | 949 | 1,537 |
Deferred income taxes | 1,248 | 1,222 |
Total current assets | 69,206 | 68,832 |
Property, plant, and equipment | 65,951 | 64,574 |
Less accumulated depreciation and amortization | -40,079 | -39,067 |
Net property, plant, and equipment | 25,872 | 25,507 |
Goodwill | 7,322 | 7,322 |
Intangible assets, net | 1,227 | 1,346 |
Other assets | 2,064 | 2,013 |
Total assets | 105,691 | 105,020 |
Current liabilities: | ' | ' |
Accounts payable | 4,648 | 3,081 |
Accrued expenses | 5,717 | 8,265 |
Current installments of long-term debt | 980 | 976 |
Total current liabilities | 11,345 | 12,322 |
Long-term debt, excluding current installments | 2,620 | 2,867 |
Deferred income taxes | 2,341 | 2,436 |
Retirement and other liabilities | 1,525 | 1,805 |
Total liabilities | 17,831 | 19,430 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $.01 par value. Authorized 1,000,000 shares; zero shares issued or outstanding | ' | ' |
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 6,996,838 at March 31, 2014 and 6,900,683 at December 31, 2013 | 70 | 69 |
Additional paid-in capital | 20,498 | 20,291 |
Retained earnings | 67,292 | 65,230 |
Total stockholders' equity | 87,860 | 85,590 |
Total liabilities and stockholders' equity | $105,691 | $105,020 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts receivable (in dollars) | $515 | $512 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, Authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, Authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 6,996,838 | 6,900,683 |
Common stock, outstanding shares | 6,996,838 | 6,900,683 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Income | ' | ' |
Net sales | $34,609 | $33,697 |
Cost of sales | 25,580 | 24,795 |
Gross profit | 9,029 | 8,902 |
Selling, general & administrative expenses | 5,834 | 5,946 |
Operating income | 3,195 | 2,956 |
Interest expense, net | 22 | 40 |
Income before income tax expense | 3,173 | 2,916 |
Income tax expense | 1,111 | 886 |
Net income | $2,062 | $2,030 |
Net income per share: | ' | ' |
Basic (in dollars per share) | $0.30 | $0.30 |
Diluted (in dollars per share) | $0.29 | $0.29 |
Weighted average common shares outstanding: | ' | ' |
Basic (in shares) | 6,972 | 6,768 |
Diluted (in shares) | 7,148 | 7,088 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $2,062 | $2,030 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 1,131 | 974 |
Share-based compensation | 265 | 179 |
Excess tax benefit on share-based compensation | -563 | ' |
Deferred income taxes | -121 | -4 |
Changes in operating assets and liabilities: | ' | ' |
Receivables, net | -1,118 | -678 |
Inventories | -1,129 | -836 |
Prepaid expenses | -1,372 | -886 |
Refundable income taxes | 1,151 | 777 |
Other assets | -51 | -82 |
Accounts payable | 1,567 | 597 |
Accrued expenses | -2,548 | -2,031 |
Retirement and other liabilities | -280 | 75 |
Net cash (used in) provided by operating activities | -1,006 | 115 |
Cash flows from investing activities: | ' | ' |
Additions to property, plant, and equipment | -1,377 | -1,252 |
Holdback payment related to the acquisition of Packaging Alternatives Corporation | ' | -200 |
Net cash used in investing activities | -1,377 | -1,452 |
Cash flows from financing activities: | ' | ' |
Proceeds from the issuance of long-term debt | ' | 580 |
Principal repayments of long-term debt | -243 | -386 |
Proceeds from exercise of stock options, net of attestation | 81 | 31 |
Excess tax benefit on share-based compensation | 563 | ' |
Payment of statutory withholdings for stock options exercised and restricted stock units vested | -701 | -426 |
Net cash used in financing activities | -300 | -201 |
Net decrease in cash and cash equivalents | -2,683 | -1,538 |
Cash and cash equivalents at beginning of period | 37,303 | 33,480 |
Cash and cash equivalents at end of period | $34,620 | $31,942 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
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, 2013, included in the Company’s 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. | |
The condensed consolidated balance sheet as of March 31, 2014, the condensed consolidated statements of income for the three-month periods ended March 31, 2014 and 2013, and the condensed consolidated statements of cash flows for the three-month periods ended March 31, 2014 and 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, 2014, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2014. | |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Cash Flow Information | ' | |||||||
Supplemental Cash Flow Information | ' | |||||||
(2) Supplemental Cash Flow Information | ||||||||
Cash paid for interest and income taxes is as follows (in thousands): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Interest | $ | 31 | $ | 39 | ||||
Income taxes, net of refunds | $ | 80 | $ | 115 | ||||
During the three-month periods ended March 31, 2014, and 2013, the Company permitted the exercise of stock options with exercise proceeds paid with the Company’s stock (“cashless” exercises) totaling approximately $203,000 and $0, respectively. | ||||||||
Fair_Value_Accounting
Fair Value Accounting | 3 Months Ended |
Mar. 31, 2014 | |
Fair Value Accounting | ' |
Fair Value Accounting | ' |
(3) Fair Value Accounting | |
The Company has 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. | |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Share-Based Compensation | ' | |||||||||||
Share-Based Compensation | ' | |||||||||||
(4) Share-Based Compensation | ||||||||||||
Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the 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, 2013. The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands): | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Total share-based compensation expense | $ | 265 | $ | 179 | ||||||||
Share-based compensation for the three-month periods ended March 31, 2014, includes approximately $5,000 representing the fair value of the Company’s common stock granted during the quarter to a member of the Board of Directors. | ||||||||||||
The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $70,000 and $55,000 for the three-month periods ended March 31, 2014 and 2013, respectively. | ||||||||||||
The following is a summary of stock option activity under all plans for the three-month period ended March 31, 2014: | ||||||||||||
Shares Under | Weighted | Weighted | Aggregate | |||||||||
Options | Average | Average | Intrinsic | |||||||||
Exercise Price | Remaining | Value | ||||||||||
(per share) | Contractual | (in thousands) | ||||||||||
Life | ||||||||||||
(in years) | ||||||||||||
Outstanding at December 31, 2013 | 467,500 | $ | 9 | |||||||||
Granted | 577 | 25.48 | ||||||||||
Exercised | (100,678 | ) | 2.82 | |||||||||
Cancelled or expired | — | — | ||||||||||
Outstanding at March 31, 2014 | 367,399 | $ | 10.72 | 3.84 | $ | 5,013 | ||||||
Exercisable at March 31, 2014 | 286,150 | $ | 8.53 | 3.87 | $ | 4,532 | ||||||
Vested and expected to vest at March 31, 2014 | 367,399 | $ | 10.72 | 3.84 | $ | 5,013 | ||||||
On March 12, 2014, the Company granted one of its directors, options to purchase 577 shares of its common stock at that day’s closing price of $25.48. The compensation expense related to this grant was determined as the fair value of the options using the Black Scholes option pricing model based on the following assumptions: | ||||||||||||
Expected volatility | 38.00% | |||||||||||
Expected dividends | none | |||||||||||
Risk free interest rate | 0.70% | |||||||||||
Expected term | 5.0 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, 2014 was $8.67. | ||||||||||||
During the three-month periods ended March 31, 2014 and 2013, 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 approximately $2.3 million and $100,000, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $284,000 and $31,000, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the three-months ended March 31, 2014, 25,094 shares (7,861 for options and 17,233 for taxes) were surrendered at an average market price of $25.84. | ||||||||||||
During the three-month periods ended March 31, 2014, and 2013, the Company recognized compensation expenses related to stock options granted to directors and employees of approximately $94,000 and $25,000, respectively. | ||||||||||||
On February 18, 2014, 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, 2014. The Company recorded compensation expense associated with the award of $100,000 during the three-month period ended March 31, 2014. In the three-month period ended March 31, 2013, the Company recorded $100,000 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, 2014: | ||||||||||||
Restricted | Weighted Average | |||||||||||
Stock Units | Award Date | |||||||||||
Fair Value | ||||||||||||
Unvested at December 31, 2013 | 50,900 | $ | 11.94 | |||||||||
Awarded | 21,660 | 25.97 | ||||||||||
Shares vested | (30,253 | ) | 10.11 | |||||||||
Forfeited / cancelled | — | — | ||||||||||
Unvested at March 31, 2014 | 42,307 | $ | 12.04 | |||||||||
During the three-month periods ended March 31, 2014, and 2013, the Company recorded compensation expense related to RSUs of approximately $66,000 and $54,000, respectively. | ||||||||||||
At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the three-months ended March 31, 2014; 9,878 shares were redeemed for this purpose at an average market price of $25.88. During the three-months ended March 31, 2013, 22,089 shares were redeemed for this purpose at an average market price of $19.29. | ||||||||||||
At March 31, 2014, the Company had approximately $911,000 of unrecognized compensation expense which is expected to be recognized over a period of 4.0 years. | ||||||||||||
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
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 (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 7,635 | $ | 6,627 | ||||
Work in process | 1,334 | 1,056 | ||||||
Finished goods | 3,208 | 3,365 | ||||||
Total inventory | $ | 12,177 | $ | 11,048 | ||||
Preferred_Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2014 | |
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. | |
Income_Per_Share
Income Per Share | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
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 number of common shares outstanding 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 (in thousands): | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Weighted average common shares outstanding, basic | 6,972 | 6,768 | ||||
Weighted average common equivalent shares due to stock options and RSUs | 176 | 320 | ||||
Weighted average common shares outstanding, diluted | 7,148 | 7,088 | ||||
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, 2014, and 2013, the number of stock awards excluded from the computation of diluted earnings per share for this reason was 577 and 64,337, respectively. | ||||||
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Segment Reporting | ' | |||||||||||||
(8) Segment Reporting | ||||||||||||||
The Company is organized based on the nature of the products and services that it offers. Under this structure, the Company produces products within two distinct segments: Component Products and Packaging. Within the Component Products segment, the Company primarily uses cross-linked polyethylene foam to provide customers in the medical, aerospace and defense, automotive, and packaging markets with engineered products for numerous purposes. Within the Packaging segment, the Company primarily uses polyethylene and polyurethane foams, sheet plastics, and pulp fiber to provide customers with cushion packaging for their products. | ||||||||||||||
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, 2013, 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 10% of the Company’s consolidated revenues for the three-month period ended March 31, 2014. All of the Company’s assets are located in the United States. Unallocated assets consist of the Company’s cash balance. Financial statement information by reportable segment is as follows (in thousands): | ||||||||||||||
Three Months Ended March 31, 2014 | Three Months Ended March 31, 2013 | |||||||||||||
Component | Packaging | Total | Component | Packaging | Total | |||||||||
Products | $ | UFPT | Products | $ | UFPT | |||||||||
$ | $ | $ | $ | |||||||||||
Net sales | 23,611 | 10,998 | 34,609 | 23,417 | 10,280 | 33,697 | ||||||||
Operating income | 2,443 | 752 | 3,195 | 2,815 | 141 | 2,956 | ||||||||
Depreciation / amortization | 498 | 633 | 1,131 | 445 | 529 | 974 | ||||||||
Capital expenditures | 372 | 1,005 | 1,377 | 756 | 496 | 1,252 | ||||||||
Other_Intangible_Assets
Other Intangible Assets | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
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, 2014 and December 31, 2013, are as follows (in thousands): | ||||||||||||||
Patents | Non- | Customer | Total | |||||||||||
Compete | List | |||||||||||||
Estimated useful life | 14 years | 5 years | 5 years | |||||||||||
Gross amount at March 31, 2014 | $ | 429 | $ | 512 | $ | 2,046 | $ | 2,987 | ||||||
Accumulated amortization at March 31, 2014 | (429 | ) | (272 | ) | (1,059 | ) | (1,760 | ) | ||||||
Net balance at March 31, 2014 | $ | — | $ | 240 | $ | 987 | $ | 1,227 | ||||||
Gross amount at December 31, 2013 | $ | 429 | $ | 512 | $ | 2,046 | $ | 2,987 | ||||||
Accumulated amortization at December 31, 2013 | (429 | ) | (249 | ) | (963 | ) | (1,641 | ) | ||||||
Net balance at December 31, 2013 | $ | — | $ | 263 | $ | 1,083 | $ | 1,346 | ||||||
Amortization expense related to intangible assets was approximately $119,000 and $134,000 for the three-month periods ended March 31, 2014, and 2013, respectively. Future amortization as of March 31, 2014 will be approximately as follows (in thousands): | ||||||||||||||
Remainder of: | ||||||||||||||
2014 | $ | 273 | ||||||||||||
2015 | 318 | |||||||||||||
2016 | 318 | |||||||||||||
2017 | 318 | |||||||||||||
Total | $ | 1,227 | ||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
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 35.0% of income before income tax expense for the three-month period ended March 31, 2014, compared to a tax expense of approximately 30.4% for the comparable three-month period in 2013. The increase in the effective tax rate was a result of a retroactive application for a 2012 research and development credit which was recorded as a discrete event in the first quarter of 2013. Excluding this discrete event, the effective tax rate for the three months ended March 31, 2013, was also 35.0%. | |
Plant_Consolidation
Plant Consolidation | 3 Months Ended |
Mar. 31, 2014 | |
Plant Consolidation | ' |
Plant Consolidation | ' |
(11) Plant Consolidation | |
On January 7, 2014, the Company committed to move forward with a plan to cease operations at its Glendale Heights, Illinois plant and consolidate operations into its Grand Rapids, Michigan facility. The Company’s decision was in response to a pending significant increase in lease cost, declining sales at the Illinois facility, and significant anticipated savings as a result of the consolidation. | |
The Company expects to incur approximately $1,150,000 in one-time expenses in connection with the consolidation, and to invest approximately $300,000 in building improvements in Grand Rapids. Included in the $1,150,000 amount above are approximately $350,000 of expenses the Company expects to incur relating to employee severance payments, approximately $550,000 in moving expenses and expenses associated with vacating the Glendale Heights building and approximately $250,000 in expenses in moving equipment within the Grand Rapids location. Total cash charges are estimated at $1,450,000. The Company expects annual cost savings of approximately $750,000 as a result of the plant consolidation. | |
Through March 31, 2014, the Company has incurred approximately $90,000 for workforce training, severance and other infrastructure costs related to the plant consolidation. |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Cash Flow Information | ' | |||||||
Schedule of cash paid for interest and income taxes | ' | |||||||
Cash paid for interest and income taxes is as follows (in thousands): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Interest | $ | 31 | $ | 39 | ||||
Income taxes, net of refunds | $ | 80 | $ | 115 |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Share-Based Compensation | ' | |||||||||||
Schedule of the compensation cost charged against income for plans included in selling, general & administrative expenses | ' | |||||||||||
The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands): | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Total share-based compensation expense | $ | 265 | $ | 179 | ||||||||
Schedule of stock option activity under all plans | ' | |||||||||||
Shares Under | Weighted | Weighted | Aggregate | |||||||||
Options | Average | Average | Intrinsic | |||||||||
Exercise Price | Remaining | Value | ||||||||||
(per share) | Contractual | (in thousands) | ||||||||||
Life | ||||||||||||
(in years) | ||||||||||||
Outstanding at December 31, 2013 | 467,500 | $ | 9 | |||||||||
Granted | 577 | 25.48 | ||||||||||
Exercised | (100,678 | ) | 2.82 | |||||||||
Cancelled or expired | — | — | ||||||||||
Outstanding at March 31, 2014 | 367,399 | $ | 10.72 | 3.84 | $ | 5,013 | ||||||
Exercisable at March 31, 2014 | 286,150 | $ | 8.53 | 3.87 | $ | 4,532 | ||||||
Vested and expected to vest at March 31, 2014 | 367,399 | $ | 10.72 | 3.84 | $ | 5,013 | ||||||
Schedule of assumptions used to determine the fair value of options using Black Scholes option pricing model | ' | |||||||||||
Expected volatility | 38.00% | |||||||||||
Expected dividends | none | |||||||||||
Risk free interest rate | 0.70% | |||||||||||
Expected term | 5.0 years | |||||||||||
Summary of Restricted Stock Units ( RSUs ) activity | ' | |||||||||||
Restricted | Weighted Average | |||||||||||
Stock Units | Award Date | |||||||||||
Fair Value | ||||||||||||
Unvested at December 31, 2013 | 50,900 | $ | 11.94 | |||||||||
Awarded | 21,660 | 25.97 | ||||||||||
Shares vested | (30,253 | ) | 10.11 | |||||||||
Forfeited / cancelled | — | — | ||||||||||
Unvested at March 31, 2014 | 42,307 | $ | 12.04 | |||||||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventories | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories are stated at the lower of cost (first-in, first-out) or market, and consist of the following at the stated dates (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 7,635 | $ | 6,627 | ||||
Work in process | 1,334 | 1,056 | ||||||
Finished goods | 3,208 | 3,365 | ||||||
Total inventory | $ | 12,177 | $ | 11,048 | ||||
Income_Per_Share_Tables
Income Per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Income Per Share | ' | |||||
Schedule of the weighted average number of shares used to compute basic and diluted net income per share | ' | |||||
The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands): | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Weighted average common shares outstanding, basic | 6,972 | 6,768 | ||||
Weighted average common equivalent shares due to stock options and RSUs | 176 | 320 | ||||
Weighted average common shares outstanding, diluted | 7,148 | 7,088 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Schedule of financial statement information by reportable segment | ' | |||||||||||||
Financial statement information by reportable segment is as follows (in thousands): | ||||||||||||||
Three Months Ended March 31, 2014 | Three Months Ended March 31, 2013 | |||||||||||||
Component | Packaging | Total | Component | Packaging | Total | |||||||||
Products | $ | UFPT | Products | $ | UFPT | |||||||||
$ | $ | $ | $ | |||||||||||
Net sales | 23,611 | 10,998 | 34,609 | 23,417 | 10,280 | 33,697 | ||||||||
Operating income | 2,443 | 752 | 3,195 | 2,815 | 141 | 2,956 | ||||||||
Depreciation / amortization | 498 | 633 | 1,131 | 445 | 529 | 974 | ||||||||
Capital expenditures | 372 | 1,005 | 1,377 | 756 | 496 | 1,252 |
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Other Intangible Assets | ' | |||||||||||||
Schedule of carrying values of definite-lived intangible assets | ' | |||||||||||||
The carrying values of the company’s definite lived intangible assets as of March 31, 2014 and December 31, 2013, are as follows (in thousands): | ||||||||||||||
Patents | Non- | Customer | Total | |||||||||||
Compete | List | |||||||||||||
Estimated useful life | 14 years | 5 years | 5 years | |||||||||||
Gross amount at March 31, 2014 | $ | 429 | $ | 512 | $ | 2,046 | $ | 2,987 | ||||||
Accumulated amortization at March 31, 2014 | (429 | ) | (272 | ) | (1,059 | ) | (1,760 | ) | ||||||
Net balance at March 31, 2014 | $ | — | $ | 240 | $ | 987 | $ | 1,227 | ||||||
Gross amount at December 31, 2013 | $ | 429 | $ | 512 | $ | 2,046 | $ | 2,987 | ||||||
Accumulated amortization at December 31, 2013 | (429 | ) | (249 | ) | (963 | ) | (1,641 | ) | ||||||
Net balance at December 31, 2013 | $ | — | $ | 263 | $ | 1,083 | $ | 1,346 | ||||||
Schedule of future amortization expense related to intangible assets | ' | |||||||||||||
Future amortization as of March 31, 2014 will be approximately as follows (in thousands): | ||||||||||||||
Remainder of: | ||||||||||||||
2014 | $ | 273 | ||||||||||||
2015 | 318 | |||||||||||||
2016 | 318 | |||||||||||||
2017 | 318 | |||||||||||||
Total | $ | 1,227 | ||||||||||||
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Supplemental Cash Flow Information | ' | ' |
Interest | $31,000 | $39,000 |
Income taxes, net of refunds | 80,000 | 115,000 |
Cashless exercises | $203,000 | $0 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Share-Based Compensation | ' | ' |
Total share-based compensation expense | $265,000 | $179,000 |
Total income tax benefit recognized | 70,000 | 55,000 |
Board of Directors | ' | ' |
Share-Based Compensation | ' | ' |
Fair value of stock granted to a member of the Board of Directors as a part of annual retainer | $5,000 | ' |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 12, 2014 | Feb. 18, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | |
Options | Options | RSUs | RSUs | Director options | 2003 Incentive Plan | 2003 Incentive Plan | 2003 Incentive Plan | |||
Chairman, Chief Executive Officer, and President | Chairman, Chief Executive Officer, and President | Chairman, Chief Executive Officer, and President | ||||||||
Common Stock | Common Stock | Common Stock | ||||||||
Shares Under Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | 467,500 | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | 577 | ' | ' | ' | 577 | ' | ' | ' |
Exercised (in shares) | ' | ' | -100,678 | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | 367,399 | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in shares) | ' | ' | 286,150 | ' | ' | ' | ' | ' | ' | ' |
Vested and expected to vest at the end of the period (in shares) | ' | ' | 367,399 | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | $9 | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $25.48 | ' | ' | ' | $25.48 | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | $2.82 | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | $10.72 | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | ' | $8.53 | ' | ' | ' | ' | ' | ' | ' |
Vested and expected to vest at the end of the period (in dollars per share) | ' | ' | $10.72 | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Remaining Contractual Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | '3 years 10 months 2 days | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period | ' | ' | '3 years 10 months 13 days | ' | ' | ' | ' | ' | ' | ' |
Vested and expected to vest at the end of the period | ' | ' | '3 years 10 months 2 days | ' | ' | ' | ' | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | $5,013,000 | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period | ' | ' | 4,532,000 | ' | ' | ' | ' | ' | ' | ' |
Vested and expected to vest at the end of the period | ' | ' | 5,013,000 | ' | ' | ' | ' | ' | ' | ' |
Assumptions used to determine the intrinsic fair market value of options using Black Scholes option pricing model | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | 38.00% | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | 0.70% | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value of options granted (in dollars per share) | ' | ' | $8.67 | ' | ' | ' | ' | ' | ' | ' |
The total intrinsic value of all options exercised | ' | ' | 2,300,000 | 100,000 | ' | ' | ' | ' | ' | ' |
Restricted Stock Units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested at the beginning of the period (in shares) | ' | ' | ' | ' | 50,900 | ' | ' | ' | ' | ' |
Awards | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' |
Awarded (in shares) | ' | ' | ' | ' | 21,660 | ' | ' | ' | ' | ' |
Shares vested (in shares) | ' | ' | ' | ' | -30,253 | ' | ' | ' | ' | ' |
Unvested at the end of the period (in shares) | ' | ' | ' | ' | 42,307 | ' | ' | ' | ' | ' |
Weighted Average Award Date Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested at the beginning of the period (in dollars per share) | ' | ' | ' | ' | $11.94 | ' | ' | ' | ' | ' |
Awarded (in dollars per share) | ' | ' | ' | ' | $25.97 | ' | ' | ' | ' | ' |
Shares vested (in dollars per share) | ' | ' | ' | ' | $10.11 | ' | ' | ' | ' | ' |
Unvested at the end of the period (in dollars per share) | ' | ' | ' | ' | $12.04 | ' | ' | ' | ' | ' |
Additional share-based compensation disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total amount of consideration received from the exercised options | ' | ' | 284,000 | 31,000 | ' | ' | ' | ' | ' | ' |
Compensation expense | 265,000 | 179,000 | 94,000 | 25,000 | 66,000 | 54,000 | ' | ' | 100,000 | 100,000 |
Net-share settlement (in shares) | ' | ' | 17,233 | ' | 9,878 | 22,089 | ' | ' | ' | ' |
Net-share settlement, market price per share | ' | ' | ' | ' | $25.88 | $19.29 | ' | ' | ' | ' |
Unrecognized compensation expense | $911,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period of recognition of unrecognized compensation expense | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares surrendered in lieu of payment of exercise price and withholding taxes | ' | ' | 25,094 | ' | ' | ' | ' | ' | ' | ' |
Shares surrendered in lieu of payment of exercise price of awards | ' | ' | 7,861 | ' | ' | ' | ' | ' | ' | ' |
Average market price of shares surrendered in lieu of payment of exercise price and withholding taxes (in dollars per share) | ' | ' | $25.84 | ' | ' | ' | ' | ' | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials | $7,635 | $6,627 |
Work in process | 1,334 | 1,056 |
Finished goods | 3,208 | 3,365 |
Total inventory | $12,177 | $11,048 |
Preferred_Stock_Details
Preferred Stock (Details) (USD $) | 0 Months Ended | ||
Mar. 18, 2009 | Mar. 31, 2014 | Dec. 31, 2013 | |
right | |||
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 | ' | ' |
Income_Per_Share_Details
Income Per Share (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income Per Share | ' | ' |
Weighted average common shares outstanding, basic | 6,972,000 | 6,768,000 |
Weighted average common equivalent shares due to stock options and RSUs | 176,000 | 320,000 |
Weighted average common shares outstanding, diluted | 7,148,000 | 7,088,000 |
Number of stock awards excluded from the computation of diluted income per share | 577 | 64,337 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
item | ||
Segment Reporting | ' | ' |
Number of distinct segments | 2 | ' |
Segment Reporting | ' | ' |
Net sales | $34,609 | $33,697 |
Operating income | 3,195 | 2,956 |
Depreciation / amortization | 1,131 | 974 |
Capital expenditures | 1,377 | 1,252 |
Component Products | ' | ' |
Segment Reporting | ' | ' |
Net sales | 23,611 | 23,417 |
Operating income | 2,443 | 2,815 |
Depreciation / amortization | 498 | 445 |
Capital expenditures | 372 | 756 |
Packaging | ' | ' |
Segment Reporting | ' | ' |
Net sales | 10,998 | 10,820 |
Operating income | 752 | 141 |
Depreciation / amortization | 633 | 529 |
Capital expenditures | $1,005 | $496 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Other Intangible Assets | ' | ' | ' |
Gross amount | $2,987,000 | ' | $2,987,000 |
Accumulated amortization | -1,760,000 | ' | -1,641,000 |
Net balance | 1,227,000 | ' | 1,346,000 |
Amortization expense related to intangible assets | 119,000 | 134,000 | ' |
Future amortization | ' | ' | ' |
2014 | 273,000 | ' | ' |
2015 | 318,000 | ' | ' |
2016 | 318,000 | ' | ' |
2017 | 318,000 | ' | ' |
Total | 1,227,000 | ' | ' |
Patents | ' | ' | ' |
Other Intangible Assets | ' | ' | ' |
Estimated useful life | '14 years | ' | ' |
Gross amount | 429,000 | ' | 429,000 |
Accumulated amortization | -429,000 | ' | -429,000 |
Non-compete | ' | ' | ' |
Other Intangible Assets | ' | ' | ' |
Estimated useful life | '5 years | ' | ' |
Gross amount | 512,000 | ' | 512,000 |
Accumulated amortization | -272,000 | ' | -249,000 |
Net balance | 240,000 | ' | 263,000 |
Customer list | ' | ' | ' |
Other Intangible Assets | ' | ' | ' |
Estimated useful life | '5 years | ' | ' |
Gross amount | 2,046,000 | ' | 2,046,000 |
Accumulated amortization | -1,059,000 | ' | -963,000 |
Net balance | $987,000 | ' | $1,083,000 |
Income_Taxes_Details
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income Taxes | ' | ' |
Effective tax rate (as a percent) | 35.00% | 30.40% |
Effective tax rate excluding the effect of the change in applicable tax law (as a percent) | ' | 35.00% |
Plant_Consolidation_Details
Plant Consolidation (Details) (USD $) | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | Jan. 07, 2014 | Jan. 07, 2014 | Jan. 07, 2014 | Jan. 07, 2014 | |
Expected | Expected | Expected | Expected | ||
Employee severance payments | Moving and vacating expenses | Moving equipment expenses | |||
Plant Consolidation | ' | ' | ' | ' | ' |
Restructuring charges | ' | $1,150,000 | $350,000 | $550,000 | $250,000 |
Investment in building improvements | ' | 300,000 | ' | ' | ' |
Cash charges | ' | 1,450,000 | ' | ' | ' |
Annual cost savings | ' | 750,000 | ' | ' | ' |
Workforce training, severance and other infrastructure costs | $90,000 | ' | ' | ' | ' |