June 2, 2005
via U.S. mail and facsimile to (978) 352-5616
Mr. Ronald J. Lataille
Chief Financial Officer
UFP Technologies, Inc.
172 East Main Street
Georgetown, MA 01833
RE: Form 10-K for the year ended December 31, 2004
Form 10-Q for the quarterly period ended March 31, 2005
File No. 001-12648
Dear Mr. Lataille:
We have reviewed the financial statements and
Management`s
Discussion and Analysis in your filings and have the following
comments. If you disagree with a comment, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the year ended December 31, 2004
Research and Development, page 7
1. We have noted your disclosure that "research and development is
an
integral part of the Company`s ongoing cost structure." In future
filings, consider disclosing the total costs charged to research
and
development in each period an income statement is presented.
Refer
to SFAS No. 2, paragraph 13.
Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations
Investment In and Advances to Affiliated Partnership, page 14
2. In a supplemental letter, please explain to us how your
consolidation of United Development Company Limited complies with
FIN
46. In your response to us, please address that on page 14 of
your
Form 10-K, you state that it is because of related party common
ownership; whereas, in Note 10 on page 12 of your Form 10-Q for
the
quarter ended March 31, 2005, you state the reason as you absorb
the
majority of the expected losses and residual returns.
Contractual Obligations, page 19
3. In future filings, include your interest commitments under your
interest-bearing debt in this table, or provide textual discussion
of
this obligation below the table. If you provide a textual
discussion, the discussion should quantify the interest payments
using the same time frames stipulated in the table. Refer to
footnote 46 to Release 33-8350 "Interpretation: Commission
Guidance
Regarding Management`s Discussion and Analysis of Financial
Condition
and Results of Operations."
Critical Accounting Policies - Revenue Recognition, page 20
4. Within your revenue recognition policy, we have noted your
disclosure that "If a loss is anticipated on any contract, a
provision for the entire loss is made immediately." In a
supplemental letter, please explain to us the nature of these
contracts and the dollar amount booked as a loss in each period
presented in your filing. In addition, please tell us the
accounting
literature that you cited for this policy.
Form 10-Q for the quarterly period ended March 31, 2005
Consolidated Statements of Cash Flows, page 5
5. Please amend your Form 10-Q for the quarterly period ended
March
31, 2005 to reclass your distribution to United Development
Company
partners to an operating activity rather than as a financing
activity. Dividends to minority owners are the payout of amounts
previously deducted from consolidated net income and carried as a
credit on the consolidated balance sheet. Therefore, similar to
interest paid on other sources of financing, dividends paid to
minority owners should be classified as operating cash flows.
Refer
to SFAS No. 95.
* * * *
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a supplemental response letter that keys your responses to
our comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. Please file your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
If you have any questions regarding these comments, please
direct them to Ryan Rohn, Staff Accountant, at (202) 551-3739 or,
in
his absence, to Al Pavot, Staff Accountant at (202) 551-3738, or
to
the undersigned at (202) 551-3255.
Sincerely,
Nili Shah
Accounting Branch Chief
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Mr. Ronald J. Lataille
UFP Technologies, Inc.
June 2, 2005
Page 3 of 3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE