NASDAQ:UFPT UFP Technologies Q1 2025 Earnings Report $221.97 -8.58 (-3.72%) Closing price 05/11/2026 04:00 PM EasternExtended Trading$221.08 -0.90 (-0.40%) As of 07:45 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Massive. Learn more. ProfileEarnings HistoryForecast UFP Technologies EPS ResultsActual EPS$2.47Consensus EPS $2.05Beat/MissBeat by +$0.42One Year Ago EPSN/AUFP Technologies Revenue ResultsActual Revenue$148.15 millionExpected Revenue$139.93 millionBeat/MissBeat by +$8.21 millionYoY Revenue GrowthN/AUFP Technologies Announcement DetailsQuarterQ1 2025Date5/6/2025TimeBefore Market OpensConference Call DateTuesday, May 6, 2025Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by UFP Technologies Q1 2025 Earnings Call TranscriptProvided by QuartrMay 6, 2025 ShareLink copied to clipboard.Key Takeaways Revenue grew 41% year-on-year to $148.1 million, operating income rose 45%, and EPS increased 35% to $2.21 in Q1. The Medical segment expanded 50% on strong safe patient handling demand, becoming UFP’s second largest business unit behind robotic surgery. Robotic Surgery sales declined 6% in Q1 with only low single-digit growth expected for 2025, although new programs later this year support long-term upside. UFP signed an exclusive manufacturing agreement for safe patient handling through mid-2030 and is doubling its Dominican Republic facility to capture cost savings and volume. About $8 million of sales are subject to proposed 10% tariffs; management expects to pass costs to customers but notes demand impacts are uncertain. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallUFP Technologies Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good day, and welcome to the UFP Technologies' first quarter of 2025 earnings call. All participants will be in a listen-only mode. Should you need any assistance on today's call, please notify the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw a question, please press star, then two. Also, please be aware that today's call is being recorded. I would now like to turn the call over to the Chief Financial Officer, Ron Lataille. Please go ahead, sir. Ron LatailleCFO at UFP Technologies00:00:35Thank you, Operator. Good morning, and thank you for joining us on our first quarter 2025 earnings conference call. With me on today's call is our CEO and Chairman, Jeff Bailly. Today, we will be making some forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast, and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the cautionary statement regarding forward-looking information and the risk factors in our most recent 10-K, including disclosure of the factors that could cause results to differ materially from those expressed or implied. Ron LatailleCFO at UFP Technologies00:01:42During this call, we will discuss non-GAAP financial measures, which include organic sales growth, adjusted operating income, SG&A and EPS, and EBITDA and adjusted EBITDA. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the investor relations section of our website. I'll now turn the call over to Jeff. Jeff BaillyCEO and Chairman at UFP Technologies00:02:13Thank you, Ron, and thank you to everyone joining the call. UFP had a strong first quarter. Revenue grew 41%, operating income increased 45%, and EPS grew 35% to $2.21. Our medical business grew 50%, driven by strong demand in the safe patient handling space, which has grown significantly since UFP acquired AJR. This growth was the result of winning new market share combined with higher overall market demand. This is now our second largest segment behind robotic surgery. We also saw impressive growth in our interventional and surgical, infection prevention, orthopedics, and advanced wound care segments, which all grew by more than 25%. The scale and rapid growth of our safe patient handling business are strategically important as it adds a new high-growth market segment to our medical portfolio and further diversifies our company. Our recent acquisitions have performed very well. Jeff BaillyCEO and Chairman at UFP Technologies00:03:26Our integrations are on track, and they have been solid contributors to our growth. Our organic growth was 2.3%. 5.4% growth in med tech was offset by a 16.3% decline in advanced components as we continue to focus our resources on our fastest-growing med tech opportunities. This was in line with our expectations for the quarter. Robotic surgery, after multiple years of 20% plus growth, declined 6% in Q1. It is anticipated to have only modest growth in 2025 following the completion of an inventory build by our largest customer in 2024. Our robotic surgery business remains an exciting long-term growth opportunity. We have two major new programs launching later this year, and we are in ongoing discussions with our largest robotic surgery partner on ways to support more of their needs than are covered in our current agreement. Jeff BaillyCEO and Chairman at UFP Technologies00:04:26During the quarter, we continue to make progress on our key strategic initiatives. Highlights include signing a key customer agreement in the safe patient handling space, which provides exclusive manufacturing rights through mid-2030. UFP and our customer will both invest during the contract period and share the savings that are anticipated upon transfer of the programs to our lower-cost Dominican Republic location. This agreement supports a large portion of the revenue acquired with the AJR business, which also has a projected above-average market growth rate. During the quarter, we also made progress on our Dominican Republic expansion plans. We took occupancy of a new leased facility in Santiago, roughly doubling the size of our operation, and have equipment on order to accommodate the growing book of safe patient handling business covered in our new exclusive agreement. Jeff BaillyCEO and Chairman at UFP Technologies00:05:24We also completed the installation and qualification of new equipment for our two new robotic surgery programs scheduled to launch later this year. In addition, we have a few other approved robotic surgery programs beginning to scale. Finally, building preparations are underway for the fifth facility in our La Romana Robotic Surgery Campus. The new building includes an expanded R&D lab, engineering offices, and warehouse space. We expect to take occupancy in the coming months. Our expanding Dominican Republic manufacturing and design capabilities are a key competitive differentiator and important component of our growth strategy. Looking ahead, we continue to be bullish about our future. We do not anticipate a material impact from the tariffs. Ron will expand on this in his comments. Jeff BaillyCEO and Chairman at UFP Technologies00:06:16We continue to execute our two-pronged growth strategy, focused on expanding our business in the best-fit growth markets and searching for strategic acquisitions that increase our value to customers. We are in active discussions with multiple acquisition opportunities as we speak and have recently completed a small fold-in acquisition in St. Charles, Illinois, that provides additional manufacturing space, capacity, and direct labor talent to help meet the growing needs of our safe patient handling business. In addition, we will continue to expand our product development capabilities, maintaining the innovative culture that has driven our success to date. Finally, we are focused on continuously improving all aspects of our business, increasing our efficiency, and reducing our costs. We're pleased with our progress and excited about our future. I'll now hand it back over to Ron to give a bit more color on our results. Ron LatailleCFO at UFP Technologies00:07:11Thank you, Jeff. Before discussing our operating results, I'd like to touch on tariffs. As Jeff mentioned, we do not expect that tariffs will have a material direct impact on our operating results. That expectation is based on what we know today. As you all know, the global trade environment is very dynamic, so this could change. Based on shipments we make from our manufacturing operations outside of the U.S. to customers within the U.S., for which we are responsible for importation, we have approximately $8 million of sales that would be subject to the 10% tariffs. Our management is confident that most of this resulting $800,000 in tariffs will be passed on. What is unknown is whether there will be an impact on demand from our customers who are subject to tariffs on our shipments. Ron LatailleCFO at UFP Technologies00:08:05In addition, we do not know if there will be any inflationary impact on our incoming raw materials. Although virtually all U.S. consumer materials are sourced from U.S. suppliers, it is unknown if any of their components are sourced globally. Now to operating results. As Jeff mentioned, sales for the first quarter increased 41.1% to $148.1 million from $105 million last year. First quarter sales to the medical market increased 50.4% to $135.4 million, while sales to all other markets decreased 15% to $12.7 million from $15 million as we continue to focus resources on our fastest-growing med tech opportunities. Gross profit as a percentage of sales, or gross margin, decreased slightly to 28.5% for the first quarter of 2025 from 28.6% in the first quarter of 2024. As anticipated, we had some inefficiency in our newly acquired AJR operations related to onboarding many new direct labor associates. Ron LatailleCFO at UFP Technologies00:09:21We were able to offset most of it by leveraging fixed overhead costs throughout the company. It is anticipated that the inefficiency at AJR will continue through the second quarter as we continue to onboard new associates. Adjusted operating income for the quarter increased 49.5% to $25.8 million. This growth rate exceeds our sales growth rate as we were able to leverage SG&A expenses. Our effective tax rate for the first quarter of 2025 was 15.3%, reflecting the positive discrete impact of vested equity and estate tax refund. For modeling purposes, I would suggest a normalized rate of 21%-23% for 2025. First quarter GAAP and adjusted diluted earnings per share increased 34.8% and 39.5% to $2.21 and $2.47, respectively. First quarter adjusted EBITDA increased 45.9% to $30.2 million. Ron LatailleCFO at UFP Technologies00:10:33During our first quarter, we generated $13.8 million in cash from operations, paid down approximately $7 million in debt, and ended the quarter with a leverage ratio below 1.5 times. Capital expenditures were $2.8 million. With that, I now turn it back to the Operator for questions. Operator00:10:57We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your headset before pressing the keys. To withdraw a question, please press star, then two. At this time, we will pause just momentarily to assemble our roster. Our first question here will come from Jaeson Schmidt with Lake Street. Please go ahead. Jaeson SchmidtSenior Research Analyst at Lake Street00:11:28Hey, guys. Thanks for taking my questions. Just looking at the robotic surgery business, just want to clarify the comments surrounding modest growth for 2025. Is that that business as a whole, or is that at your largest customer within that business? Jeff BaillyCEO and Chairman at UFP Technologies00:11:47It's actually both. We have a forecast from our largest customer that slightly exceeds last year's low single-digit growth. For the robotic surgery as a whole, because we have other platforms coming on, they will stack on to that growth. Combined, still low single digits. The decline in the first quarter of 6% is partly because Q1 of last year had some large equipment sales that we are ramping up our capacity for our biggest customer. The actual unit sales is probably closer to even or even a modest growth in Q1, but we do expect both the largest customer and the group as a whole to grow. Jaeson SchmidtSenior Research Analyst at Lake Street00:12:31Okay. That's really helpful. I know you mentioned at that largest customer, you're potentially working on additional programs. I mean, there's been a lot of speculation on your relationship and specifically kind of share shifts going on at that customer. Would just be curious if you could provide some commentary on how we should think about your share at that customer going forward. Jeff BaillyCEO and Chairman at UFP Technologies00:12:57Yeah. Currently, our understanding is we probably have about two-thirds of the share. Our largest customer does a small amount themselves, and another competitor does a small amount. We used to share about 50/50 with a competitor. Slowly over time, we gained share. Similarly, at about the same time, our largest customer brought on some of their own capacity. They had been working on this for years. It is very important for them to have a bulletproof supply chain. It was an opportunity for them to control their own destiny if need be. It is, in fact, helpful to us if they are successful in this venture because they have a two-supplier mandate. If they are successful and can be a part of the supply chain themselves, then them and us could be the two suppliers. We are rooting for them to be successful. Jeff BaillyCEO and Chairman at UFP Technologies00:13:49They are very transparent with us. They have invited us in to see their operation. When they come up with something that they think is a breakthrough, they share it with us so that we can also get our costs down. We are very partnered up with them. We have a great relationship. They have assured us that they will always have a manual drape supplier as part of their future. We feel good about it. Jaeson SchmidtSenior Research Analyst at Lake Street00:14:13Okay. I appreciate that color. Just the last one from me, and I'll jump back into Q. Just given the macro backdrop here, are you seeing any pockets of excess inventory at any of your customers? Jeff BaillyCEO and Chairman at UFP Technologies00:14:27We are not. Actually, almost like the destocking that was holding us back of some of the other markets seems to be behind us because a lot of them have come back. Those other markets we talked about, infection prevention, interventional and surgical, orthopedics, wound care, all growing nicely. They had had some destocking headwinds over the past couple of years, sort of post-COVID. It seems like a lot of those issues are behind us, and we're back to business as usual. We do not have perfect visibility when people are building inventory. Our understanding is that most of what we're building is exactly for current demand at our customers. Jaeson SchmidtSenior Research Analyst at Lake Street00:15:04Great. Thanks a lot, guys. Jeff BaillyCEO and Chairman at UFP Technologies00:15:07You're welcome. Operator00:15:11Our next question will come from Brett Fishbin with KeyBank. Please go ahead. Brett FishbinVP and Equity Research Analyst at KeyBank00:15:16Hey, good morning. Thanks for taking the questions. I'll switch gears a little bit to start. Some of the commentary around segments outside of robotics, such as interventional, surgical, infection prevention, ortho wound care, all seemed pretty positive this quarter with the 25% metric. I was wondering if you could maybe just touch on a couple of those different areas and walk through some of the acceleration in growth and then how you're thinking about the outlook for the ex-robotics medical business for the rest of 2025. Jeff BaillyCEO and Chairman at UFP Technologies00:15:49Yeah, sure. I'll start with infection prevention. Infection prevention, as we've talked about in the past, we've been doing a lot of development, particularly around external catheters. We're enjoying growth in these new products as well as in some of our conventional products. I think that if they were impacted by the destocking, that seems to be behind us. We have a blend of our base business growing combined with new products. That one has been a nice grower for us. Same with interventional and surgical. We're seeing the destocking headwinds behind us, customers that had been quiet starting to reorder. Some of these market segments overlap with our new acquisitions. We buy companies with these markets in mind. We're enjoying growth both internally at UFP as well as through our acquisitions. Jeff BaillyCEO and Chairman at UFP Technologies00:16:42In many cases, because we're teamed up as one company, we're growing faster than they would have on their own. We've seen a bunch of examples of that, particularly with our largest acquisition. That's around the patient services. Patient services, when we bought AJR, revenue was about $75 million. They had one contract to move to transfer to the Dominican Republic. Since we've teamed up, now we have three. The majority of their business is now under an exclusive contract. Now that we are one company with more capabilities and more substance and ability to transfer, we have sort of earned more of their business and more of their support. Our acquisitions are growing faster because they're part of our business. It's true really for all of them. They've all enjoyed additional growth by being part of the UFP team. Brett FishbinVP and Equity Research Analyst at KeyBank00:17:33All right. Thank you. Maybe I'll just ask a follow-up where you left off there. The acquisition revenue definitely stood out as above expectations this quarter, really taking another sequential step up to where it had been the previous couple of quarters. I guess maybe walk through what I think you touched on it a little bit, but what was driving the extra $7 million or $8 million in revenue compared to 4Q from the acquisitions. Are you now at the point with AJR where you do have close to the vast majority of that market, or is there still some share gain that's going to take place as you build out more capacity? Jeff BaillyCEO and Chairman at UFP Technologies00:18:13I think we've won most of what we're going to win because I think we're their primary supplier at this point. Infection prevention was the biggest driver of our growth. It was kind of the biggest surge. That's the easiest one to track because it's all brand new business. I think that it was hard for us to report on it because we didn't own them a year ago. Our understanding is they've grown 40+% since this time a year ago. That shows you how explosive that growth is in that segment. It's now our second largest segment with explosive growth. It's a winning combination. We are making things as fast as we possibly can. This little small acquisition that we did was with space and talent in mind. Jeff BaillyCEO and Chairman at UFP Technologies00:18:57It was two little small sister companies of AJR that we did not originally buy. They occupied a decent portion of the building that we are in, and they had some talent, some equipment. Our goal was to get more space to fit the equipment that we are buying, to get additional people to do the direct labor work. That was just a little fold-in, but it is causing or helping us instantly get some relief. Ron LatailleCFO at UFP Technologies00:19:21Yeah. Brett, it's Ron. Good morning. If you go back to the AK that we filed with the AJR acquisition, the run rate, the trailing twelve run rate was $75 million in revenue, which would imply about $19 million per quarter. In the first quarter of 2025, we did $29.2 million at AJR. That sort of emphasizes the growth that Jeff was referring to. Brett FishbinVP and Equity Research Analyst at KeyBank00:19:47All right. Super helpful. Last question from me. Some of the new product opportunities in robotic surgery, is there anything more you can tell us about what you're working on with those initiatives? It sounds like maybe at least one of them is with your large customer in that end market. Just in terms of how you're thinking about the guidance setup, when you talk about low single-digit growth in robotics, is there a meaningful contribution from those new products specifically or more of a ramp-up period this year and benefit to 2026? Thanks very much for taking the questions. Jeff BaillyCEO and Chairman at UFP Technologies00:20:22Sure. It's hard to provide a lot of detail, but this was one of the benefits of us moving to low-cost country. I mean, we had a couple of objectives. One is because our customers asked us to be there. Number two, when we tended to lose business, it tended to be towards the end of a product life cycle when our customers had to take costs out and they moved it to low-cost country. Our primary goal was to lose less, but the secondary benefit we got was when we moved there, two of our customers said, "Now that you're there, we'd like to transfer business that we are already doing to you." Both of these are programs that are up and running. There's not going to be this long ramp that requires market adoption. Jeff BaillyCEO and Chairman at UFP Technologies00:20:59It's more like us getting up and running and doing the business. They're going to launch in the second half of the year. It's two separate customers, two separate programs, but we expect meaningful revenue starting in 2026 and modest revenue this year, actually. Brett FishbinVP and Equity Research Analyst at KeyBank00:21:18All right. Very helpful. Thanks again. Jeff BaillyCEO and Chairman at UFP Technologies00:21:21You're welcome. Thank you. Operator00:21:25Our next question will come from Justin Ages with CJS. Please go ahead. Justin AgesSenior Equity Research Analyst at CJS00:21:31Hi. Morning all. Jeff BaillyCEO and Chairman at UFP Technologies00:21:34Hello. Justin AgesSenior Equity Research Analyst at CJS00:21:36Appreciate the color on the tariffs. Was hoping you could just give us an understanding on how some of your competitors might be impacted by the tariffs that might actually benefit you, put you in a better competitive position. Jeff BaillyCEO and Chairman at UFP Technologies00:21:54Yeah. Hard to tell. Originally, it looked like when there was a big battle going on with Mexico that we would be beneficiaries because some of our competitors were in Mexico. It seems like a lot of that has gone away, and it's been exempt under a different act. There's no instant gratification versus our Mexican competitors. Those that are importing from China or competitors in China, and we have won some business back, particularly in the safe patient handling that came from China, I think that we have a leg up. Those guys, for at least the short term, have no ability to compete with us at all. I don't think there's this instant gratification from the tariffs. We do have about two-thirds of our manufacturing and two-thirds of our revenue in the U.S. Jeff BaillyCEO and Chairman at UFP Technologies00:22:38We are well-positioned to ramp up in the U.S. if one of our customers is manufacturing elsewhere and would like to be back in the U.S. I think we are better positioned than our competitors in that respect. Justin AgesSenior Equity Research Analyst at CJS00:22:50All right. That's very helpful. Then one more, just on capital allocation priorities. You guys paid down debt. Maybe you can give us an update on some larger acquisitions that you're looking at, maybe smaller than kind of those two sister companies of AJR that you mentioned. Jeff BaillyCEO and Chairman at UFP Technologies00:23:09Yeah. We have a number of companies we're talking to. We have mentioned in the past that we're focused on gaining more skills in injection molding. So we're looking at a number of different injection molders with the goal of upping our game in that space. Most of the things that we're in advanced talks with now are smaller acquisitions. None of them are enormous. We do have one large opportunity that we're looking at that would be very substantial if it were to come to fruition. I would say it's pretty far out in the future. We're in the early days of that discussion. Justin AgesSenior Equity Research Analyst at CJS00:23:38All right. Very helpful. Congrats on the quarter. Thanks for taking the question. Jeff BaillyCEO and Chairman at UFP Technologies00:23:43Thanks very much. Operator00:23:48Our next question will come from Andrew Cooper with Raymond James. Please go ahead. Andrew CooperVP of Equity Research at Raymond James00:23:54Hey, everybody. Thanks for the time. Maybe just starting with the large customer and safe patient handling, the 8K talks about some price reductions as you make these transfers. Can you give a little sense for the magnitude of those reductions in terms of what that may do to just optical revenue growth? Should we assume the operating profit dollars are maintained? Is it an improvement as those play out? Just help us think about maybe the pacing over time. Jeff BaillyCEO and Chairman at UFP Technologies00:24:25Okay. Sure. Yeah. So it varies product by product, but there is kind of a standard when stuff moves. It tends to be in the 15%-20% price savings opportunity for our customers. And so if our savings are greater than that, which they typically would be, we share in some of the savings and they share in some of the savings. In this particular case, we believe our efficiencies will allow our margins as a percent of sales to go up despite the fact that revenue over time, it'll take a couple of years for everything to transfer, will be impacted negatively by that same 20%. All this is going to be offset by the fact that this market is growing rapidly. The market growth may exceed the price decreases. Jeff BaillyCEO and Chairman at UFP Technologies00:25:08The revenue may still be greater by the time it gets there, if that makes sense. Andrew CooperVP of Equity Research at Raymond James00:25:13Okay. No, that's helpful. Maybe just jumping into the P&L a little bit, you talked about the inefficiencies at AJR that should be kind of temporary here as you staff up. Can you help us think about where those land on the P&L and then kind of the scope and the timing to normalize there? I ask just with gross margins that were a little bit shy of what we were expecting here. I think that's where that lands, but just would love a little bit more color. Ron LatailleCFO at UFP Technologies00:25:40Yeah. Good morning, Andrew. It's Ron. Yeah. So AJR, so it's a little bit complicated, but when we bought this company, all of the employees were technically employed by our sister company, and they became full-time employees of ours on January 1st. With that came new benefit programs, new compensation schemes, etc. It's not uncommon for us to have turnover in the direct labor space. As we replace the direct labor, which we are successfully doing, it tends to be inefficient. We have to hire people, onboard them, train them, etc. The productivity is not as great. That process will, we expect, last through the second quarter. That shows up in basically one of the components of cost of sales, i.e., direct labor. Andrew CooperVP of Equity Research at Raymond James00:26:33Okay. Great. Maybe just one last one, kind of bigger picture. With all that's going on in terms of the tariffs, in terms of reshoring or not, obviously the commitment to the Dominican Republic right now, has anything changed in terms of the way you think about the long-term footprint? Any thoughts on expansions, whether it's into Europe or Asia in a more meaningful way, or just as you think about optimizing this footprint as you grow and scale for the long term, what's maybe evolved over the last few months with the tariff discussions? Jeff BaillyCEO and Chairman at UFP Technologies00:27:08Yeah. Good question. We are still pushing ahead aggressively with our expansion plans in the Dominican Republic at the request of very specific customers and to support very specific programs. The Dominican Republic was protected before by an act that I think the 10% will get resolved in the Dominican Republic is my personal prediction. In any event, the savings of doing business there for our customers far exceed the 10%. We are very committed to our expansion plans there. With respect to Europe, it is very market-specific. Our recent acquisitions have been in Ireland. Now we have three different factories in Ireland, but I think that we are able to service most of the world from where we are. We have been asked by at least one customer to gear up in Asia-Pacific to support their needs in those markets. Jeff BaillyCEO and Chairman at UFP Technologies00:28:00You may see us do some expansion there, potentially even via joint venture. That is part of the one part of the world that we're not able to service our customers with the highest level of service that we'd like to. Stay tuned on that one. Over the next couple of years, you may see us increase our capacity in that market only to serve that market. Andrew CooperVP of Equity Research at Raymond James00:28:25Great. I will stop there. Appreciate the time. Jeff BaillyCEO and Chairman at UFP Technologies00:28:30You're welcome. Thank you. Operator00:28:33With that, we will conclude our question-and-answer session. I'd like to turn the conference back over to Jeff Bailly for any closing remarks. Jeff BaillyCEO and Chairman at UFP Technologies00:28:42Thank you, Alfred. Thank you, everybody, for joining the call. We did start up calls at the request of a number of investors who said that they can't be on all calls at the same time. At a minimum, they could listen in. We had gone a number of years without doing them. Hopefully, this is helpful. Feel free to give us any feedback to how we can make the call better in the future. In the meantime, we look forward to speaking to you one quarter from now. Thanks very much.Read moreParticipantsExecutivesRon LatailleCFOJeff BaillyCEO and ChairmanAnalystsJustin AgesSenior Equity Research Analyst at CJSBrett FishbinVP and Equity Research Analyst at KeyBankAndrew CooperVP of Equity Research at Raymond JamesJaeson SchmidtSenior Research Analyst at Lake StreetPowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) UFP Technologies Earnings HeadlinesUFP Technologies Signals Growth Momentum Amid Short-Term DragsMay 5, 2026 | tipranks.comShould UFPT’s MedTech-Led Q1 2026 Earnings Growth Shift How Investors View Its Core Strategy?May 5, 2026 | finance.yahoo.comBefore you buy SpaceX shares, consider this alternative approachSpaceX has confidentially filed for an IPO with the SEC, targeting a June 2026 listing at a valuation exceeding $1.75 trillion - potentially the largest IPO in history. But one expert says buying shares directly may not be the smartest move. There is a lesser-known way to tap into this windfall that most investors haven't considered.May 12 at 1:00 AM | Weiss Ratings (Ad)UFP Technologies (NASDAQ:UFPT) posts Q1 CY2026 sales in line with estimatesMay 4, 2026 | msn.comUFP Technologies (UFPT) Releases Q1 2026 Earnings: Revenue Slightly Below Estimates, EPS Marginally MissesMay 4, 2026 | quiverquant.comQUFP Technologies Announces Strong Q1 ResultsMay 4, 2026 | businesswire.comSee More UFP Technologies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like UFP Technologies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on UFP Technologies and other key companies, straight to your email. Email Address About UFP TechnologiesUFP Technologies (NASDAQ:UFPT) (NASDAQ: UFPT) is a global designer and manufacturer of custom-engineered products using plastics, foams and adhesives. The company partners with customers to develop application-specific solutions through a range of in-house processes, including foam fabrication, die cutting, sheet processing, lamination, machining and assembly services. Its components find use in industries requiring precise material properties, such as medical devices, aerospace, defense, electronics and transportation. Building on its origins as a specialty foam converter, UFP Technologies has expanded its capabilities to include advanced material technologies, such as thermal management and electromagnetic interference (EMI) shielding solutions. The company provides end-to-end support from concept and prototyping through high-volume production, leveraging vertical integration across its manufacturing footprint to manage quality, lead times and total cost of ownership for customers. Headquartered in Freeport, Maine, UFP Technologies operates multiple facilities across North America and Europe, serving a diverse base of domestic and international customers. Its management team combines deep industry expertise in engineered materials and contract manufacturing with a focus on operational excellence, research and development, and supply-chain optimization.View UFP Technologies ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Latest Articles MercadoLibre Boldly Invests in Growth: Discount DeepensManic Monday.com: The Rally Is Just the Beginning for this SaaS LeaderMeta Platforms’ Wild Post-Earnings Swings: Where Analyst Price Targets Stand NowTapestry Stock Drops After Strong Quarter and Raised OutlookMarketBeat Week in Review – 05/04 - 05/08Quantum Earnings Season Is Ramping Up—What to Watch From 2 Major PlayersRocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance Upcoming Earnings Cisco Systems (5/13/2026)Alibaba Group (5/13/2026)Manulife Financial (5/13/2026)Sumitomo Mitsui Financial Group (5/13/2026)Takeda Pharmaceutical (5/13/2026)Applied Materials (5/14/2026)Brookfield (5/14/2026)National Grid Transco (5/14/2026)NU (5/14/2026)Mizuho Financial Group (5/15/2026) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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PresentationSkip to Participants Operator00:00:00Good day, and welcome to the UFP Technologies' first quarter of 2025 earnings call. All participants will be in a listen-only mode. Should you need any assistance on today's call, please notify the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw a question, please press star, then two. Also, please be aware that today's call is being recorded. I would now like to turn the call over to the Chief Financial Officer, Ron Lataille. Please go ahead, sir. Ron LatailleCFO at UFP Technologies00:00:35Thank you, Operator. Good morning, and thank you for joining us on our first quarter 2025 earnings conference call. With me on today's call is our CEO and Chairman, Jeff Bailly. Today, we will be making some forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast, and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the cautionary statement regarding forward-looking information and the risk factors in our most recent 10-K, including disclosure of the factors that could cause results to differ materially from those expressed or implied. Ron LatailleCFO at UFP Technologies00:01:42During this call, we will discuss non-GAAP financial measures, which include organic sales growth, adjusted operating income, SG&A and EPS, and EBITDA and adjusted EBITDA. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the investor relations section of our website. I'll now turn the call over to Jeff. Jeff BaillyCEO and Chairman at UFP Technologies00:02:13Thank you, Ron, and thank you to everyone joining the call. UFP had a strong first quarter. Revenue grew 41%, operating income increased 45%, and EPS grew 35% to $2.21. Our medical business grew 50%, driven by strong demand in the safe patient handling space, which has grown significantly since UFP acquired AJR. This growth was the result of winning new market share combined with higher overall market demand. This is now our second largest segment behind robotic surgery. We also saw impressive growth in our interventional and surgical, infection prevention, orthopedics, and advanced wound care segments, which all grew by more than 25%. The scale and rapid growth of our safe patient handling business are strategically important as it adds a new high-growth market segment to our medical portfolio and further diversifies our company. Our recent acquisitions have performed very well. Jeff BaillyCEO and Chairman at UFP Technologies00:03:26Our integrations are on track, and they have been solid contributors to our growth. Our organic growth was 2.3%. 5.4% growth in med tech was offset by a 16.3% decline in advanced components as we continue to focus our resources on our fastest-growing med tech opportunities. This was in line with our expectations for the quarter. Robotic surgery, after multiple years of 20% plus growth, declined 6% in Q1. It is anticipated to have only modest growth in 2025 following the completion of an inventory build by our largest customer in 2024. Our robotic surgery business remains an exciting long-term growth opportunity. We have two major new programs launching later this year, and we are in ongoing discussions with our largest robotic surgery partner on ways to support more of their needs than are covered in our current agreement. Jeff BaillyCEO and Chairman at UFP Technologies00:04:26During the quarter, we continue to make progress on our key strategic initiatives. Highlights include signing a key customer agreement in the safe patient handling space, which provides exclusive manufacturing rights through mid-2030. UFP and our customer will both invest during the contract period and share the savings that are anticipated upon transfer of the programs to our lower-cost Dominican Republic location. This agreement supports a large portion of the revenue acquired with the AJR business, which also has a projected above-average market growth rate. During the quarter, we also made progress on our Dominican Republic expansion plans. We took occupancy of a new leased facility in Santiago, roughly doubling the size of our operation, and have equipment on order to accommodate the growing book of safe patient handling business covered in our new exclusive agreement. Jeff BaillyCEO and Chairman at UFP Technologies00:05:24We also completed the installation and qualification of new equipment for our two new robotic surgery programs scheduled to launch later this year. In addition, we have a few other approved robotic surgery programs beginning to scale. Finally, building preparations are underway for the fifth facility in our La Romana Robotic Surgery Campus. The new building includes an expanded R&D lab, engineering offices, and warehouse space. We expect to take occupancy in the coming months. Our expanding Dominican Republic manufacturing and design capabilities are a key competitive differentiator and important component of our growth strategy. Looking ahead, we continue to be bullish about our future. We do not anticipate a material impact from the tariffs. Ron will expand on this in his comments. Jeff BaillyCEO and Chairman at UFP Technologies00:06:16We continue to execute our two-pronged growth strategy, focused on expanding our business in the best-fit growth markets and searching for strategic acquisitions that increase our value to customers. We are in active discussions with multiple acquisition opportunities as we speak and have recently completed a small fold-in acquisition in St. Charles, Illinois, that provides additional manufacturing space, capacity, and direct labor talent to help meet the growing needs of our safe patient handling business. In addition, we will continue to expand our product development capabilities, maintaining the innovative culture that has driven our success to date. Finally, we are focused on continuously improving all aspects of our business, increasing our efficiency, and reducing our costs. We're pleased with our progress and excited about our future. I'll now hand it back over to Ron to give a bit more color on our results. Ron LatailleCFO at UFP Technologies00:07:11Thank you, Jeff. Before discussing our operating results, I'd like to touch on tariffs. As Jeff mentioned, we do not expect that tariffs will have a material direct impact on our operating results. That expectation is based on what we know today. As you all know, the global trade environment is very dynamic, so this could change. Based on shipments we make from our manufacturing operations outside of the U.S. to customers within the U.S., for which we are responsible for importation, we have approximately $8 million of sales that would be subject to the 10% tariffs. Our management is confident that most of this resulting $800,000 in tariffs will be passed on. What is unknown is whether there will be an impact on demand from our customers who are subject to tariffs on our shipments. Ron LatailleCFO at UFP Technologies00:08:05In addition, we do not know if there will be any inflationary impact on our incoming raw materials. Although virtually all U.S. consumer materials are sourced from U.S. suppliers, it is unknown if any of their components are sourced globally. Now to operating results. As Jeff mentioned, sales for the first quarter increased 41.1% to $148.1 million from $105 million last year. First quarter sales to the medical market increased 50.4% to $135.4 million, while sales to all other markets decreased 15% to $12.7 million from $15 million as we continue to focus resources on our fastest-growing med tech opportunities. Gross profit as a percentage of sales, or gross margin, decreased slightly to 28.5% for the first quarter of 2025 from 28.6% in the first quarter of 2024. As anticipated, we had some inefficiency in our newly acquired AJR operations related to onboarding many new direct labor associates. Ron LatailleCFO at UFP Technologies00:09:21We were able to offset most of it by leveraging fixed overhead costs throughout the company. It is anticipated that the inefficiency at AJR will continue through the second quarter as we continue to onboard new associates. Adjusted operating income for the quarter increased 49.5% to $25.8 million. This growth rate exceeds our sales growth rate as we were able to leverage SG&A expenses. Our effective tax rate for the first quarter of 2025 was 15.3%, reflecting the positive discrete impact of vested equity and estate tax refund. For modeling purposes, I would suggest a normalized rate of 21%-23% for 2025. First quarter GAAP and adjusted diluted earnings per share increased 34.8% and 39.5% to $2.21 and $2.47, respectively. First quarter adjusted EBITDA increased 45.9% to $30.2 million. Ron LatailleCFO at UFP Technologies00:10:33During our first quarter, we generated $13.8 million in cash from operations, paid down approximately $7 million in debt, and ended the quarter with a leverage ratio below 1.5 times. Capital expenditures were $2.8 million. With that, I now turn it back to the Operator for questions. Operator00:10:57We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your headset before pressing the keys. To withdraw a question, please press star, then two. At this time, we will pause just momentarily to assemble our roster. Our first question here will come from Jaeson Schmidt with Lake Street. Please go ahead. Jaeson SchmidtSenior Research Analyst at Lake Street00:11:28Hey, guys. Thanks for taking my questions. Just looking at the robotic surgery business, just want to clarify the comments surrounding modest growth for 2025. Is that that business as a whole, or is that at your largest customer within that business? Jeff BaillyCEO and Chairman at UFP Technologies00:11:47It's actually both. We have a forecast from our largest customer that slightly exceeds last year's low single-digit growth. For the robotic surgery as a whole, because we have other platforms coming on, they will stack on to that growth. Combined, still low single digits. The decline in the first quarter of 6% is partly because Q1 of last year had some large equipment sales that we are ramping up our capacity for our biggest customer. The actual unit sales is probably closer to even or even a modest growth in Q1, but we do expect both the largest customer and the group as a whole to grow. Jaeson SchmidtSenior Research Analyst at Lake Street00:12:31Okay. That's really helpful. I know you mentioned at that largest customer, you're potentially working on additional programs. I mean, there's been a lot of speculation on your relationship and specifically kind of share shifts going on at that customer. Would just be curious if you could provide some commentary on how we should think about your share at that customer going forward. Jeff BaillyCEO and Chairman at UFP Technologies00:12:57Yeah. Currently, our understanding is we probably have about two-thirds of the share. Our largest customer does a small amount themselves, and another competitor does a small amount. We used to share about 50/50 with a competitor. Slowly over time, we gained share. Similarly, at about the same time, our largest customer brought on some of their own capacity. They had been working on this for years. It is very important for them to have a bulletproof supply chain. It was an opportunity for them to control their own destiny if need be. It is, in fact, helpful to us if they are successful in this venture because they have a two-supplier mandate. If they are successful and can be a part of the supply chain themselves, then them and us could be the two suppliers. We are rooting for them to be successful. Jeff BaillyCEO and Chairman at UFP Technologies00:13:49They are very transparent with us. They have invited us in to see their operation. When they come up with something that they think is a breakthrough, they share it with us so that we can also get our costs down. We are very partnered up with them. We have a great relationship. They have assured us that they will always have a manual drape supplier as part of their future. We feel good about it. Jaeson SchmidtSenior Research Analyst at Lake Street00:14:13Okay. I appreciate that color. Just the last one from me, and I'll jump back into Q. Just given the macro backdrop here, are you seeing any pockets of excess inventory at any of your customers? Jeff BaillyCEO and Chairman at UFP Technologies00:14:27We are not. Actually, almost like the destocking that was holding us back of some of the other markets seems to be behind us because a lot of them have come back. Those other markets we talked about, infection prevention, interventional and surgical, orthopedics, wound care, all growing nicely. They had had some destocking headwinds over the past couple of years, sort of post-COVID. It seems like a lot of those issues are behind us, and we're back to business as usual. We do not have perfect visibility when people are building inventory. Our understanding is that most of what we're building is exactly for current demand at our customers. Jaeson SchmidtSenior Research Analyst at Lake Street00:15:04Great. Thanks a lot, guys. Jeff BaillyCEO and Chairman at UFP Technologies00:15:07You're welcome. Operator00:15:11Our next question will come from Brett Fishbin with KeyBank. Please go ahead. Brett FishbinVP and Equity Research Analyst at KeyBank00:15:16Hey, good morning. Thanks for taking the questions. I'll switch gears a little bit to start. Some of the commentary around segments outside of robotics, such as interventional, surgical, infection prevention, ortho wound care, all seemed pretty positive this quarter with the 25% metric. I was wondering if you could maybe just touch on a couple of those different areas and walk through some of the acceleration in growth and then how you're thinking about the outlook for the ex-robotics medical business for the rest of 2025. Jeff BaillyCEO and Chairman at UFP Technologies00:15:49Yeah, sure. I'll start with infection prevention. Infection prevention, as we've talked about in the past, we've been doing a lot of development, particularly around external catheters. We're enjoying growth in these new products as well as in some of our conventional products. I think that if they were impacted by the destocking, that seems to be behind us. We have a blend of our base business growing combined with new products. That one has been a nice grower for us. Same with interventional and surgical. We're seeing the destocking headwinds behind us, customers that had been quiet starting to reorder. Some of these market segments overlap with our new acquisitions. We buy companies with these markets in mind. We're enjoying growth both internally at UFP as well as through our acquisitions. Jeff BaillyCEO and Chairman at UFP Technologies00:16:42In many cases, because we're teamed up as one company, we're growing faster than they would have on their own. We've seen a bunch of examples of that, particularly with our largest acquisition. That's around the patient services. Patient services, when we bought AJR, revenue was about $75 million. They had one contract to move to transfer to the Dominican Republic. Since we've teamed up, now we have three. The majority of their business is now under an exclusive contract. Now that we are one company with more capabilities and more substance and ability to transfer, we have sort of earned more of their business and more of their support. Our acquisitions are growing faster because they're part of our business. It's true really for all of them. They've all enjoyed additional growth by being part of the UFP team. Brett FishbinVP and Equity Research Analyst at KeyBank00:17:33All right. Thank you. Maybe I'll just ask a follow-up where you left off there. The acquisition revenue definitely stood out as above expectations this quarter, really taking another sequential step up to where it had been the previous couple of quarters. I guess maybe walk through what I think you touched on it a little bit, but what was driving the extra $7 million or $8 million in revenue compared to 4Q from the acquisitions. Are you now at the point with AJR where you do have close to the vast majority of that market, or is there still some share gain that's going to take place as you build out more capacity? Jeff BaillyCEO and Chairman at UFP Technologies00:18:13I think we've won most of what we're going to win because I think we're their primary supplier at this point. Infection prevention was the biggest driver of our growth. It was kind of the biggest surge. That's the easiest one to track because it's all brand new business. I think that it was hard for us to report on it because we didn't own them a year ago. Our understanding is they've grown 40+% since this time a year ago. That shows you how explosive that growth is in that segment. It's now our second largest segment with explosive growth. It's a winning combination. We are making things as fast as we possibly can. This little small acquisition that we did was with space and talent in mind. Jeff BaillyCEO and Chairman at UFP Technologies00:18:57It was two little small sister companies of AJR that we did not originally buy. They occupied a decent portion of the building that we are in, and they had some talent, some equipment. Our goal was to get more space to fit the equipment that we are buying, to get additional people to do the direct labor work. That was just a little fold-in, but it is causing or helping us instantly get some relief. Ron LatailleCFO at UFP Technologies00:19:21Yeah. Brett, it's Ron. Good morning. If you go back to the AK that we filed with the AJR acquisition, the run rate, the trailing twelve run rate was $75 million in revenue, which would imply about $19 million per quarter. In the first quarter of 2025, we did $29.2 million at AJR. That sort of emphasizes the growth that Jeff was referring to. Brett FishbinVP and Equity Research Analyst at KeyBank00:19:47All right. Super helpful. Last question from me. Some of the new product opportunities in robotic surgery, is there anything more you can tell us about what you're working on with those initiatives? It sounds like maybe at least one of them is with your large customer in that end market. Just in terms of how you're thinking about the guidance setup, when you talk about low single-digit growth in robotics, is there a meaningful contribution from those new products specifically or more of a ramp-up period this year and benefit to 2026? Thanks very much for taking the questions. Jeff BaillyCEO and Chairman at UFP Technologies00:20:22Sure. It's hard to provide a lot of detail, but this was one of the benefits of us moving to low-cost country. I mean, we had a couple of objectives. One is because our customers asked us to be there. Number two, when we tended to lose business, it tended to be towards the end of a product life cycle when our customers had to take costs out and they moved it to low-cost country. Our primary goal was to lose less, but the secondary benefit we got was when we moved there, two of our customers said, "Now that you're there, we'd like to transfer business that we are already doing to you." Both of these are programs that are up and running. There's not going to be this long ramp that requires market adoption. Jeff BaillyCEO and Chairman at UFP Technologies00:20:59It's more like us getting up and running and doing the business. They're going to launch in the second half of the year. It's two separate customers, two separate programs, but we expect meaningful revenue starting in 2026 and modest revenue this year, actually. Brett FishbinVP and Equity Research Analyst at KeyBank00:21:18All right. Very helpful. Thanks again. Jeff BaillyCEO and Chairman at UFP Technologies00:21:21You're welcome. Thank you. Operator00:21:25Our next question will come from Justin Ages with CJS. Please go ahead. Justin AgesSenior Equity Research Analyst at CJS00:21:31Hi. Morning all. Jeff BaillyCEO and Chairman at UFP Technologies00:21:34Hello. Justin AgesSenior Equity Research Analyst at CJS00:21:36Appreciate the color on the tariffs. Was hoping you could just give us an understanding on how some of your competitors might be impacted by the tariffs that might actually benefit you, put you in a better competitive position. Jeff BaillyCEO and Chairman at UFP Technologies00:21:54Yeah. Hard to tell. Originally, it looked like when there was a big battle going on with Mexico that we would be beneficiaries because some of our competitors were in Mexico. It seems like a lot of that has gone away, and it's been exempt under a different act. There's no instant gratification versus our Mexican competitors. Those that are importing from China or competitors in China, and we have won some business back, particularly in the safe patient handling that came from China, I think that we have a leg up. Those guys, for at least the short term, have no ability to compete with us at all. I don't think there's this instant gratification from the tariffs. We do have about two-thirds of our manufacturing and two-thirds of our revenue in the U.S. Jeff BaillyCEO and Chairman at UFP Technologies00:22:38We are well-positioned to ramp up in the U.S. if one of our customers is manufacturing elsewhere and would like to be back in the U.S. I think we are better positioned than our competitors in that respect. Justin AgesSenior Equity Research Analyst at CJS00:22:50All right. That's very helpful. Then one more, just on capital allocation priorities. You guys paid down debt. Maybe you can give us an update on some larger acquisitions that you're looking at, maybe smaller than kind of those two sister companies of AJR that you mentioned. Jeff BaillyCEO and Chairman at UFP Technologies00:23:09Yeah. We have a number of companies we're talking to. We have mentioned in the past that we're focused on gaining more skills in injection molding. So we're looking at a number of different injection molders with the goal of upping our game in that space. Most of the things that we're in advanced talks with now are smaller acquisitions. None of them are enormous. We do have one large opportunity that we're looking at that would be very substantial if it were to come to fruition. I would say it's pretty far out in the future. We're in the early days of that discussion. Justin AgesSenior Equity Research Analyst at CJS00:23:38All right. Very helpful. Congrats on the quarter. Thanks for taking the question. Jeff BaillyCEO and Chairman at UFP Technologies00:23:43Thanks very much. Operator00:23:48Our next question will come from Andrew Cooper with Raymond James. Please go ahead. Andrew CooperVP of Equity Research at Raymond James00:23:54Hey, everybody. Thanks for the time. Maybe just starting with the large customer and safe patient handling, the 8K talks about some price reductions as you make these transfers. Can you give a little sense for the magnitude of those reductions in terms of what that may do to just optical revenue growth? Should we assume the operating profit dollars are maintained? Is it an improvement as those play out? Just help us think about maybe the pacing over time. Jeff BaillyCEO and Chairman at UFP Technologies00:24:25Okay. Sure. Yeah. So it varies product by product, but there is kind of a standard when stuff moves. It tends to be in the 15%-20% price savings opportunity for our customers. And so if our savings are greater than that, which they typically would be, we share in some of the savings and they share in some of the savings. In this particular case, we believe our efficiencies will allow our margins as a percent of sales to go up despite the fact that revenue over time, it'll take a couple of years for everything to transfer, will be impacted negatively by that same 20%. All this is going to be offset by the fact that this market is growing rapidly. The market growth may exceed the price decreases. Jeff BaillyCEO and Chairman at UFP Technologies00:25:08The revenue may still be greater by the time it gets there, if that makes sense. Andrew CooperVP of Equity Research at Raymond James00:25:13Okay. No, that's helpful. Maybe just jumping into the P&L a little bit, you talked about the inefficiencies at AJR that should be kind of temporary here as you staff up. Can you help us think about where those land on the P&L and then kind of the scope and the timing to normalize there? I ask just with gross margins that were a little bit shy of what we were expecting here. I think that's where that lands, but just would love a little bit more color. Ron LatailleCFO at UFP Technologies00:25:40Yeah. Good morning, Andrew. It's Ron. Yeah. So AJR, so it's a little bit complicated, but when we bought this company, all of the employees were technically employed by our sister company, and they became full-time employees of ours on January 1st. With that came new benefit programs, new compensation schemes, etc. It's not uncommon for us to have turnover in the direct labor space. As we replace the direct labor, which we are successfully doing, it tends to be inefficient. We have to hire people, onboard them, train them, etc. The productivity is not as great. That process will, we expect, last through the second quarter. That shows up in basically one of the components of cost of sales, i.e., direct labor. Andrew CooperVP of Equity Research at Raymond James00:26:33Okay. Great. Maybe just one last one, kind of bigger picture. With all that's going on in terms of the tariffs, in terms of reshoring or not, obviously the commitment to the Dominican Republic right now, has anything changed in terms of the way you think about the long-term footprint? Any thoughts on expansions, whether it's into Europe or Asia in a more meaningful way, or just as you think about optimizing this footprint as you grow and scale for the long term, what's maybe evolved over the last few months with the tariff discussions? Jeff BaillyCEO and Chairman at UFP Technologies00:27:08Yeah. Good question. We are still pushing ahead aggressively with our expansion plans in the Dominican Republic at the request of very specific customers and to support very specific programs. The Dominican Republic was protected before by an act that I think the 10% will get resolved in the Dominican Republic is my personal prediction. In any event, the savings of doing business there for our customers far exceed the 10%. We are very committed to our expansion plans there. With respect to Europe, it is very market-specific. Our recent acquisitions have been in Ireland. Now we have three different factories in Ireland, but I think that we are able to service most of the world from where we are. We have been asked by at least one customer to gear up in Asia-Pacific to support their needs in those markets. Jeff BaillyCEO and Chairman at UFP Technologies00:28:00You may see us do some expansion there, potentially even via joint venture. That is part of the one part of the world that we're not able to service our customers with the highest level of service that we'd like to. Stay tuned on that one. Over the next couple of years, you may see us increase our capacity in that market only to serve that market. Andrew CooperVP of Equity Research at Raymond James00:28:25Great. I will stop there. Appreciate the time. Jeff BaillyCEO and Chairman at UFP Technologies00:28:30You're welcome. Thank you. Operator00:28:33With that, we will conclude our question-and-answer session. I'd like to turn the conference back over to Jeff Bailly for any closing remarks. Jeff BaillyCEO and Chairman at UFP Technologies00:28:42Thank you, Alfred. Thank you, everybody, for joining the call. We did start up calls at the request of a number of investors who said that they can't be on all calls at the same time. At a minimum, they could listen in. We had gone a number of years without doing them. Hopefully, this is helpful. Feel free to give us any feedback to how we can make the call better in the future. In the meantime, we look forward to speaking to you one quarter from now. Thanks very much.Read moreParticipantsExecutivesRon LatailleCFOJeff BaillyCEO and ChairmanAnalystsJustin AgesSenior Equity Research Analyst at CJSBrett FishbinVP and Equity Research Analyst at KeyBankAndrew CooperVP of Equity Research at Raymond JamesJaeson SchmidtSenior Research Analyst at Lake StreetPowered by