UFP Technologies, Inc.

Good day and welcome to the UFP Technologies third quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing 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 a touch-tone phone. To withdraw a question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ronald J. Lathai, Senior Vice President, Treasurer, and Chief Financial Officer. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us on our third quarter 2025 earnings conference call. With me on today's call is our CEO and Chairman, Jeff Bailey. Today we will make 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 and subsequent 10-Qs, including disclosure of the factors that could cause results to differ materially from those expressed or implied. During this call, we will discuss non-GAAP financial measures, which include organic sales growth, adjusted gross margin, adjusted operating income, adjusted SG&A, adjusted 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.

Thank you, Ron, and thank you to everyone joining the call. U of P delivered solid Q3 results despite absorbing abnormally high costs related to the labor inefficiency challenge at our AJR Illinois facility. Overall sales grew 6.5% to $154.6 million. Our MedTech business grew 7.3% with impressive growth in interventional and surgical, orthopedics, and wound care, each of which grew greater than 30%, offset by a 23% decline in patient services and support, which is our AJR striker business. Advanced components or non-medical business declined 2.7%, as we continue to focus the majority of our resources on our med tech business. AJR, One of six acquisitions we completed over the last 15 months faced an issue when we went through the process of verifying the team's eligibility to legally work in the US. The E-Verify process led to the turnover of greater than 50% of the direct labor workforce. Retraining a large percentage of our workforce reduced our output, resulting in a significant reduction in revenue. In the third quarter, $3 million reduction in gross profit and operating income. and a 28 cent reduction in diluted EPS. We expect much of the revenue from delayed orders will be recaptured in the coming months when our capacity ramps back up to required levels and we can work down the backlog of open orders. We've made significant progress in hiring and training new associates. July was the low point of our inefficiency when we suffered a significant loss in Illinois and have made steady progress since, with a smaller loss in August and a return to solid profitability in September. Although we expect the inefficiency to impact a couple more quarters, the greatest impact is now behind us. AGR's results in the Dominican Republic should also continue to improve as qualifications are completed and production of transfer programs ramps up. Our first program is in commercial production, the second is in the qualification process, and we anticipate a third program transferring in 2026, all of which was contemplated in our five-year exclusive supply agreement with Stryker. On the robotic surgery front, revenue is up 5.1% in Q3. We are completing the launch of two significant new programs. The combined revenue of those two programs should be greater than $10 million in 2026, and they continue to grow rapidly from there. We are also in discussions to increase and extend our $500 million contract with our largest customer. They've asked us to plan for significantly increasing volumes. Both companies plan to make multi-million dollar investments towards increasing capacity and efficiency at our La Romana facilities. We are simultaneously working on extending our exclusive supply agreement for critical raw material and robotic drapes. As a result, we remain very bullish about our long-term future in robotic surgery. Our two recently completed acquisitions, Unipec and TPI, are both performing well ahead of expectations and have been immediately accretive to our earnings. Organic growth for UFP was essentially flat in Q3 due to the reduction in AGR sales quarter over quarter. Setting aside acquisitions completed in the prior 15 months, U of P's base business grew approximately 5%. In conclusion, we have a lot of positive momentum and good news to look forward to. AGR's return to profitability and improving operating efficiency as new team members complete their training. The positive impact of the transfer business to the Dominican Republic, launching and then reaching commercial production. two new robotic surgery programs launching and beginning commercial production, an extension process for our long-term contract with our largest customer with significantly increased volumes contemplated, and planned multimillion-dollar capital investment by our customer, and the positive impact of our recent acquisitions combined with our efforts to find strategic acquisitions that increase our value to customers. I will now hand it over to Ron to provide additional details on our financial results.