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Recently, shares of Metabolix (NASDAQ:MBLX) moved up sharply on word of a biodegradable plastics deal with Archer Daniels Midland Company (NYSE:ADM). Such plastics will be used for packaging products. Now take a look at UFP Technologies (NASDAQ:UFPT), with a market cap of $27 million and annual revenues of $94million.

UFP Technologies is a converter and fabricator of foams, plastics and natural fiber materials. The company serves the medical, consumer, automotive, industrial, electronics and military markets from its 10 North American manufacturing facilities. UFP specializes in custom solutions using foam fabrication, foam molding, laminating, plastic thermoforming and molded fiber/pulp.

UFP Technologies is providing Pangea Organics Ecocentric Bodycare, a leading organic personal care product manufacturer, with a biodegradable and recyclable clamshell for its line of bar soaps. Molded Fiber, a division of UFP Technologies, manufactures the customized shells, which are made from 100% recycled paper fibers and offer a cost-effective, environmentally-friendly alternative to petroleum-based packaging materials.

Pangea Organics recently redesigned packaging for its entire product line, and UFP Technologies provided recycled molded fiber for a visually appealing packaging solution. Molded fiber's inherent resilience and blocking and bracing capabilities enable it to outperform most vacuum-formed plastic, expanded polystyrene and corrugated designs. In addition, UFP's molded fiber has an inherent moisture content that does not fluctuate significantly, even in especially humid temperatures

For the three-month period ended Dec. 31, the company posted net income of $845,000, or 15 cents per share, compared with $408,000, or 8 cents per share, in the prior-year period.

The company reported revenue of $23.3 million, up nearly 1 percent from about $23.2 million, a year earlier. Meanwhile, its cost of sales declined 5 percent to $18.4 million from $19.4 million.

The company said revenue growth and manufacturing efficiency drove profit. It also said it reduced its debt by about $8.7 million.

For 2006, the company reported net income of $2.5 million, or 45 cents per share, compared with $659,000, or 13 cents per share, in 2005.

Annual revenue totaled $93.7 million, up from $84 million from the prior year.

The company said military sales will remain high while it expects lower sales from the automotive market in 2007.

Average daily share volume is just 27,000 for the past three months. However UFPT traded over 450,000 shares on Friday April 27.

UFPT 1-yr chart

UFPT

Disclosure: none

Source: Eye on UFP Technologies: Consider Biodegradable Packaging