UFP Technologies Announces Strong Q3 2008 Results

"I am very pleased with our third quarter results, including the progress we made integrating our Stephenson & Lawyer acquisition and consolidating our two Michigan operations," said R. Jeffrey Bailly, Chairman, CEO and President. "We achieved our 41% increase in net income after absorbing approximately $400,000 in consolidation-related expenses during the quarter, a testament to the success of our continuous improvement and cost reduction efforts."

"UFP's diversity of products and markets is a wonderful asset in this time of economic uncertainty," continued Bailly. "Strength in our medical, military, and electronics markets has more than offset a depressed automotive segment, and enabled us to continue growing our business. Plus, our healthy cash reserves and bank line of credit position us well to pursue strategic acquisitions."

UFP Technologies is a leading designer and manufacturer of interior protective packaging solutions using molded fiber, vacuum-formed plastics, and molded and fabricated foam plastics. The Company also designs and manufactures engineered component solutions using laminating, molding, and fabricating technologies. The Company primarily serves the automotive, computers and electronics, medical, aerospace and defense, consumer, and industrial markets.

This news release contains forward-looking information that involves risks and uncertainties, including statements about the Company's prospects, anticipated advantages the Company expects to realize from its acquisition and integration of Stephenson & Lawyer and the Company's Michigan plant consolidation, the Company's growth potential and the Company's strategies for, and ability to finance, growth. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation risks associated with achieving anticipated cost savings and other benefits associated with the plant consolidation in the anticipated time frame, the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions and integration of any such acquisition candidates, including Stephenson & Lawyer, as well as other risks and uncertainties that are detailed in the documents filed by the Company with the SEC. Accordingly, actual results may differ materially. Readers are referred to the documents filed by the Company with the SEC, specifically the last reports on Forms 10-K and 10-Q. The forward-looking statements contained herein speak only of the Company's expectations as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.

Consolidated Condensed Statements of Income ($ in thousands, except Per Share Data) Unaudited Three Months Ended Nine Months Ended 30-Sep-08 30-Sep-07 30-Sep-08 30-Sep-07 Net sales $ 27,501 $ 22,937 $ 83,966 $ 68,130 Cost of sales 20,091 17,635 62,040 52,443 Gross profit 7,410 5,302 21,926 15,687 SG&A 4,935 3,752 14,841 11,424 Restructuring charge 406 - 406 - Operating income 2,069 1,550 6,679 4,263 Interest expense, other income & expenses 58 125 276 422 Income before income taxes 2,011 1,425 6,403 3,841 Income taxes 764 542 2,433 1,459 Net income $ 1,247 $ 883 $ 3,970 $ 2,382 Weighted average shares outstanding 5,593 5,358 5,519 5,285 Weighted average diluted shares outstanding 6,315 5,909 6,283 5,823 Per Share Data Net income per share outstanding $ 0.22 $ 0.16 $ 0.72 $ 0.45 Net income per diluted share outstanding $ 0.20 $ 0.15 $ 0.63 $ 0.41

Consolidated Condensed Balance Sheets ($ in thousands) 30-Sep-08 31-Dec-07 Assets: (unaudited) Current assets $ 30,965 $ 28,575 Net property, plant, and equipment 11,534 9,492 Other assets 7,883 7,486 Total assets $ 50,382 $ 45,553 Liabilities and stockholders' equity: Current liabilities $ 13,903 $ 13,623 Long-term debt 5,198 6,271 Other liabilities 1,434 1,416 Total liabilities $ 20,535 $ 21,310 Total stockholders' equity 29,847 24,243 Total liabilities and stockholders' equity $ 50,382 $ 45,553

SOURCE: UFP Technologies, Inc.

Ron Lataille, 978-352-2200 www.ufpt.com