DeAR FeLLOW sHAReHOLDeR, For UFp technologies, 2014 was a year of solid accomplishment. We made great  progress on a number of strategic initiatives designed to strengthen our operating  platform, accelerate sales growth, and position your Company for long-term success. As expected, these investments had a direct impact on our year-end results.  After eight straight years of record earnings, our net income in 2014 was $7.6  million, compared to $11.3 million in 2013. However, going forward we believe these  investments will improve UFp’s ability to compete in many important ways.  A stronger fActory footprint  several years ago, we made a strategic  decision to create a more focused and efficient factory footprint. Rather than  maintain multiple small plants in any one region, we resolved to create a tighter  network of larger, strategically located, very well-equipped facilities.  In each one, we wanted to assemble a critical mass of technical expertise, including  engineering, quality, and manufacturing resources. By concentrating these problem- solving resources under one roof, we knew they could collaborate more easily, feed  off each other’s ideas, and provide even better service to our customers. to execute  this strategy, we began a series of factory moves in 2014. plAnt consolidAtions in MichigAn And cAliforniA  First, we  consolidated our Illinois operation into our 250,000-square-foot Grand Rapids,  Michigan facility. We then completed a similar project in California, bringing our Costa  Mesa operation into our nearby Rancho Dominguez facility. In each case, we took  advantage of an expiring lease to lower operating costs and improve manufacturing  efficiency. Both consolidations were completed on time and on budget. Both will  bring significant cost savings for many years to come. And both will help us deliver  more value to customers in those regions. A new fAcility in texAs—And Another coMing soon in  MAssAchusetts  We also invested $3 million to purchase a 128,000-square-foot  facility in el paso, texas. In this new plant, we improved the efficiency of our foam  fabricating operation and added new state-of-the-art molded fiber production lines  to meet the growing demand in the southwest for our environmentally-friendly  packaging. previously, we had to ship products to local customers from our Iowa plant  more than 1,000 miles away. this new facility expands our capacity and allows us to  respond more efficiently to customer requests. 2 COMPARISON OF 5-YEAR  CUMULATIVE TOTAL RETURN ASSUMES INITIAL INVESTMENT OF $100 DECEMBER 2014 “ We believe these  investments will  improve UFP’s ability  to compete in many  important ways. ” 2010 2009 50 100 150 200 250 300 350 400 450 2011 2012 2013 2014 UFP Technologies, Inc. GICS 15103020 Paper Packaging SIC Codes 3080-3089 Miscellaneous Plastic Products NASDAQ Stock Market  (US Companies)