Morning, everyone. Jeff Elliott with Three Part Advisors. Thank you all for getting up early with us for our first presentation of the day. Presenting company we have today is UFP Technologies. The ticker is UFPT. They're out of Newburyport, Massachusetts. With us today from the company is Jeff Bailly, CEO, and Ron Lataille, the CFO. With that, I'll just turn it over to Jeff. Thank you, Jeff. Good morning, everyone. Briefly call your attention to our forward-looking statement. So UFP Technologies is an innovative designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products. The company's approximately $565 million in revenue. We have over 4,000 employees across 20 factories in five countries, and we have five different design and R&D centers. So what we do is combine our design engineering capabilities with our materials expertise and precision manufacturing to help our customers either develop, improve, manufacture, or protect their products. The materials piece is very important to our value proposition. Our engineers sort of travel the world looking for the latest and greatest, most innovative materials, and then we partner with those vendors at a very high level. For our top three vendors, we have multi-year partnerships, which give us early access to their new materials, and more importantly, exclusive or semi-exclusive access to many of their materials. So one example would be Zotefoams, who is widely agreed to be the best manufacturer of cross-linked foams in the world, has given us exclusive access to all of their medical grades. Similar, FXI, the premier, particularly urethane manufacturer, dozens of their grades, and with our TPU supplier, same thing. This is very important to keeping our applications safe and protecting our innovations. So this is a snapshot of our process. Our process begins with a customer intake meeting. We have over 2,000 customers, including 25 of the top 30 med device companies in the world. They typically come to us with either a concept or a product idea. They'll meet with our engineers, we'll show them different materials, we'll iterate different designs. We have in-house rapid prototyping capabilities in multiple facilities, and we'll conceive a design with them. The next step would be tooling. We have in-house tooling. This helps us keep super close tolerances, which is critical to us. It also makes the process faster. If we do need super low-cost tooling or tons of it, we have the ability to sub out components to overseas partners. The next step would be custom equipment. Very often, the designs are made on custom equipment made by UFP. This helps make our application stickier because you can't just buy another piece of equipment and steal it from them, but also makes them very precise. Next step would be quality systems. Many of the products that we make absolutely cannot fail. They would dramatically affect a patient outcome, so many are 100% tested. So often, we'll design the system, sometimes even build the equipment together with our customers. Next step is validation and pilot manufacturing, and then finally on to production in one of our factories. This front-end business for us, this product development business, is super important to us. Number one, because it's high margin. If you dialed back the clock a bunch of years, we used to give this away in hopes of getting the manufacturing. Now, it's our ability to vet opportunities. Like, if a customer doesn't have the ability to fund their own project, they don't have faith in their own project, chances are we won't either. And sometimes even having the money isn't enough for us. If we don't have belief that it's gonna be a big program, we may not do it. The next one is adding expertise. This is big for us. So we're, we believe we're in this virtuous cycle where every time we do a development, we're learning more, which makes us more qualified to do the next one. And then relationships. So because we're co-developing with our customers' engineers, there's a lot of high-five moments, and these guys really bond as they co-invent. Sometimes they co-patent things together. But the key is these engineers and our engineers are becoming very tight, again, leading to the next one. Then ultimately, the goal of the whole process is long-term manufacturing. This is a snapshot of our business today, primarily medtech, primarily single-use, single-patient applications. This is a snapshot of our medical business. You can see robotic surgery is our largest market right now, at 30% of revenue. This is really good news for us because it's also our fastest-growing, and I think it's probably our very best fit. So virtually every major robotic program we are working on the development of, and clearly the leader in the space, Intuitive Surgical, is a key partner of ours who's now signed a multi-year agreement with us. So we're partnered up with all the players. We believe it's because we add the most value. We've been in this space for decades. Intuitive Surgical came to us very early on, asking us to develop a part for them, and we've been in this space ever since. Interventional surgical, another big one, basically our medical devices. Patient services and support, this got bigger with the recent acquisition, which I'll talk about in a little while, and you can see the rest of them around the wheel. I think the easiest way to explain our business is to show some examples. So robotic drapes is really our biggest application. So I mentioned a couple of decades ago, Intuitive Surgical came to us. They asked us to mold a part, a very critical part, that was gonna separate the robot from the instrument. So it had to almost feel like skin, and it had to be super tough and dexterous. So we've been making that part for a number of years, and then in two thousand and eighteen, we decided to forward integrate and buy one of the two companies capable of doing the next step, and they were integrators. They took the various injection molded parts, our parts, and a TPU drape and integrated it all into a finished product. And so there was two of them. We bought one of the two. The other one has since almost exited the race because we had a better mousetrap. We were forward integrated, so that was a very good acquisition for us, so that's why we dominate this space. This next one on the right, this revascularization device, I show this as an example of how complex some of the stuff we do is. So this device is used for stroke patients. It's deployed by a catheter all the way into the brain. So if you have a blood clot or a thrombus, it goes past it, deploys, and basically draws out the blood clot and saves your life instantly. It's a wildly cool product. It was developed by Cerenovus, later bought by J&J. I was on a recent trip to our Iowa factory, and we had a customer come who wanted to, first of all, shake the hand of everybody who worked on their product 'cause it saved his life, and then take a group picture. It is a life-saving device. It does work, and it just shows how intricate the products that we can do are. The next one, IV port. This is an example. This is an older product, but this is probably the most developed product we have right now, is infection prevention. It's moved to a different space, but this is an example of somebody came to us with just a concept. "We want a product that's kinda like a coffee creamer, where you can open it. Inside, we'll have special foam fingers and alcohol. You can plunge in the IV port connector," and so just with their concept, we helped them develop a product. All these years later, we're doing it. When their product really took off, they said, "Hey, we need redundant capability in a separate factory." They want it to be El Paso. Fortunately for us, we're a larger company in our space, even though we're a relatively small company, so we actually had, clean room space in El Paso, both Class 7 and Class 8, so we do that program primarily there now. Med-surg beds, again, a great fit for us. So we have a lot of expertise around combining materials using either impulse or RF welding, and so basically, it eliminates threads. So if you can imagine a patient surface without thread, if you get blood on the patient surface, it can cause infections, et cetera. So our technology and this space are a very good fit. So examples would be innovation, where they would have a bladder on one side of the bed that would inflate and would be able to turn the patient. So it's there’s a lot of innovation that can go marrying our technology with this space. Negative pressure wound therapy, not a big market for us. Actually, you know what? I misspoke on the robotic drape. That was, I think, a 2022 acquisition. The negative pressure wound one was in 2018. So in 2018, this was a pivotal acquisition for us. We bought Dielectrics. And the reason I show this is, in the old days, UFP would just do that foam piece. When we bought Dielectrics, we could use the rest of the device. So Dielectrics was the one who was the best in class at impulse and RF welding. And so when we bought Dielectrics, we went from kind of the JV to the varsity overnight, and enabled us to dominate these other spaces, including robotic surgery. And then last, Tactile Medical compression devices. It's just an example. The reason I show this one is, this was, again, one of our factories. It really took off. They said: "We want to be redundant capability in a second factory." UFP has that ability. Our competitor in the space does not. And when we relay it out, it's better than the first time. You know, the guys start with a clean sheet of paper. They use the other factory and do the perfect layout. Advanced components. So advanced components is important to us because it basically uses the same exact materials, the same exact equipment, but instead of solving a med tech problem, it might be aerospace and defense or automotive. And it's also important to our vendors because, you know, our vendors want scale, so if we can use their materials to solve problems in other spaces. So you can be assured we wouldn't do it if it wasn't really good business for us. So we're. This is kind of the easy stuff for us to do. We're not throwing a lot of resources at growing it, but we're very happy to have it. Some applications. I show on the far left just 'cause this one's really exploding right now. Drones. So case inserts, inserts for military drones is, like, exploding. Military gear, like the MOLLE system backpack, every soldier gets one of these. We've been doing it for decades. Law enforcement, helmets, et cetera. So I wanna spend some time on our growth strategy. So we have a two-pronged growth strategy. We've essentially been executing this strategy for a couple of decades, basically. So our internal growth strategy, we summarize as marketing to our sweet spot. We look for those markets where our skills and the market needs are the best fit, where we add the most value, and therefore, can combine, command the highest margins. So this strategy was kind of born out of scar tissue. Our company has a super long history of really innovative things that have, in many cases, sort of changed the world, to be honest with you. But I'll give you one example, because it resonates with a lot of people. So when cross-linked foams were first invented, our engineers were actually traveling around Europe and found this company, which at the time was BXL. It's been bought a couple of times now. Zotefoams convinced them that we were the right partner. They only gave two people in North America access to their materials, so one on the West Coast and one on the East Coast. So we got access to this brand-new material. It was moldable, chemical resistant. It had all kinds of cool properties, so we took it to a lot of different markets. One of them was the footwear space. At the time, you know, running shoe insoles were heavy, and weight was synonymous with quality. It meant well-built. These guys wanted to revolutionize running shoes, and so they did this lightweight insole. We did it. So if you take the insole out of your running shoe right now, that's our design, our materials, everything, all these years later. But what happened, this is the point of the story, was for four, or five, or six years, we made these products and shipped them all over the world. You can imagine with global pressure, they wanted to go to China. We were too small. And so our customers said, "Hey, we're sorry, you know, but we're moving this, and if you can't move with us, it's going." And so, but we're, we have very close relationships with our clients, and so we asked them, you know, "Talk to us." And they said, "Hey, you know, you have the best materials in the world, but we actually don't care. And the reason is, our customers step on it. If it wears out, they buy a new shoe. You have these close tolerances, you know, they're great, but again, we don't care. We just step on it." So we sort of had to ask ourselves: Who does care? Who does value these best-in-class materials? Who does value these super precise capabilities? Who does value our innovation? So at the time, we came up with three markets: aerospace and defense, automotive, and med tech. Over time, this iterative process of going towards the best fit led us to medical, and then within medical, led us to very specific segments where we added the most value. So we're constantly trying to improve our book of business, constantly going where we add the most value. And so if you look at our specific submarkets. You know, we have a tremendous competitive advantage. You know, how we look at it is: Is there an opportunity? Can we win it? Do we have the skills? And then number three, can we keep it? So bulletproofing our applications is part of our DNA now, again, out of scar tissue. We've done a lot of clever things that we ultimately lost. So that's our internal strategy. Our external strategy is equally collaborative, so we'll ask our customers: What do you want us to do to be more valuable? Where do you want us to be, and they basically help us create this technology roadmap and geographic roadmap about where we're gonna be, so on the internal growth side, the key of this slide is just at the end of the day, we've sort of landed on single-use, single-patient applications is really the best fit for us, with customer-funded development, and the customer-funded development is, again, about screening out opportunities and as I mentioned, that sort of virtuous cycle of being a better and better company. On the acquisition side, how do we become more valuable? Maybe it's the geography. We got a lot of direction on geography. You know, if you dial back the clock five years, we were primarily, you know, a US-based company. We've migrated into international, all at the request of our customers. They wanted us to be in Ireland. We're shipping $10+ million to Ireland. They wanted us to be in Mexico. Now, we failed to find a suitable acquisition in Mexico that met our standards, so we ended up doing a greenfield startup. We're happy we did because we got exactly what we wanted, exactly where we wanted. They also wanted us in a low-cost country. Now, the low-cost country thing is transformational for us and maybe one of the things the shareholders should be most excited about. Because in the old days, our sales growth was whatever applications we had that we'd already won that were growing, plus new innovations and new business, minus what we were losing. In some years, we'd lose, like, $8 million to low-cost country. Because what happened is, when something became very mature, these companies with, you know, low overhead in these low-cost countries could offer our customers a 25% or 30% savings. As their products matured, they wanted to take the savings. So when we got to low-cost country, we've done this, like, three different ways. We got to the Dominican Republic, we got to Costa Rica, and we got to Mexico. So we have a wide variety of options for them. So we plugged the leak in the bucket, that minus, for the most part, and they've given us new opportunities, these new transfer programs. So two of our major customers, two of our largest customers, said, "Now that you're here, please do this." Multimillion-dollar programs that are already ready to go, so it takes a year or two to transition them. This is difficult stuff, but. So new applications. So this platform has sort of set the table for growth for the next several years for us. Other things we're after is capabilities, and I'll talk about some of the acquisitions we recently did, some of the boxes we've checked. So not only do they say we want certain geographies, but they say we want certain capabilities. These are the types of things that'll make us more valuable. The reason I mention cultural fit is we've done a number of acquisitions. I don't even know how many at this time, between more than 16, and we've had great success rate, and we work hard on the cultural fit thing. If they are not a cultural fit, if they don't think of the world the same way we do, the way they treat their employees, the environment, their ethics, are they honorable people? We will not do the deal. We think that that's a big reason for our success. All right, I'm gonna walk you through some of the ones we recently did. Welch, this acquisition, number one, is 30 minutes up the street. We've learned when an acquisition is close to us, it's much easier, much lower risk integration. But they brought us a new capability. They're experts in thin film welding of devices that literally are implanted into the body, and they're experts in certain materials that have insulative properties and shielding properties, and they share the same customer base we do. So now we are more valuable to those customers because we can do this, and we have this new capability, and frankly, we'll be able to add value to their manufacturing processes with our discipline. They're sort of a one-stop shop that could do something that nobody else could, and frankly, they don't do it that efficiently. They do it supremely well, but I think we can help them. So easy one for us, accretive immediately. AJR, now this is the big one that we did. So we were already in the patient services business, with customers like Stryker, and these guys were in the patient transfer business, again, with customers like Stryker. So Stryker was their customer, basically. So they had developed a lot of products with this company called Sage, which was a very innovative company in patient transfers, and Stryker bought them because it was really growing rapidly. And so by buying them, it fits very well with our space, but we were able to buy it very well. And so I get this question all the time: How can you buy a company like this so cheaply? So single customer concentration scares away a lot of people. Basically, everybody in the private equity world won't play. So we already know this customer. They're already a big customer of ours, and they were coming up on a risk time. So this customer is saying, "Hey, we like you, but you have to move with us." And they wanted them to move to the Dominican Republic, and they had already started this. They had already located a factory, et cetera. But we are experts in transfers. As a matter of fact, we've done transfers to foreign countries for this exact customer. So when we talk to this customer, which obviously we do before we buy somebody, they're like: "Thank God, you're coming." So because it's single customer concentration, because there's risk coming, we're able to buy these inexpensively, and those risks don't scare us. So instantly, wildly accretive, a new capability in a rapidly growing market that fits well. So we're excited about this one. Marble. So Marble's a small one, but, you know what? I've been talking about this for a while. Like, people say, "Well, what kinds of things are you looking for?" And I mention high-speed die cutting. So high-speed die cutting, we buy a lot of we buy millions of dollars worth of product from companies like this, so we want that capability to sell to ourselves. They came with a distributorship, this Solventum/3M distributorship, which we have not been able to get. They're not giving any more away. You have to buy your way in. So we got the distributorship, which gives every single one of our factories that buys this product line cheaper prices day one. And they're very good at stick-to-skin, which is a lot of these new developed products have stick-to-skin. They need this special adhesive that sticks, it's waterproof, and you can peel it off later.... And again, we had a relationship. Dielectrics, one of the companies we bought, had a 10- or 15-year relationship with these guys. These guys never went on the market. Again, if you do the due diligence on this one, I think this is the cheapest one we bought. Super inexpensive because it was a handshake deal, like, "What do you want for your business?" Gave a price to us, fair to below market, handshake deal, never goes to market. Those are the best ones if you can find them. AQF, so to be honest with you, this one closed this week. We came to this presentation with two different slide decks, one that had AQF in it, one that didn't. This closed, I think, Monday. It's, I think the money is still transferring as we speak. This one's exciting. So this is like a mini UFP over in Ireland, and so they have a lot of the capabilities that we have. We have one new business that we're moving to Ireland, and we have customers waiting for their $8-$10 million to move over there. And we have a very sophisticated factory over there, but some of the stuff is more basic than we have to do. And this was a competitor that was nipping at our heels, and so we eliminated a competitor. They're qualified with the customers that we're moving to, and they have qualified quality systems. So this gives us, like, a 3-5-year head start on the moves that we were gonna do. So we're gonna have to rent space, hire people. So this acquisition, boom, it's right there. So it's low risk. We know all their materials, all their vendors. In certain cases, they'll get better material pricing day two, because they'll get our pricing. You know, we've eliminated a competitor, which is helpful to us in the market, and we've sped up our strategic pathway. So this is good, quick and easy, and that was our most recent one. All right. This shows our map. Orange is the more recent additions. All right, why invest? I'm going to spend a couple of minutes here. So I know that's the reason most of you are here, to try to look at companies and say, are they a good fit? Maybe look at companies you already own and say, "Should I still own them?" I met a couple of people this morning who were super smart and bought our company six years ago, and they're like, I'm like, "You are the smart guys," because not everybody had the discipline to stay on the bus. And so I think it's an exciting time. We have a long history right after we do acquisitions of then enjoying the synergies, both growth synergies and cost synergies. But this platform that we have created, this international platform, I think, is the key to our next decade of growth. The fact that we've hitched our wagon to these specific segments that are a great fit for us is another reason. So growth opportunities, barriers to entry, I talked about that. Strong customer relationships. Our management team's been together a long time. Our growth strategy and metrics, I'll go through some of these quickly. On the growth markets, macro trends like aging population and micro trends like trend towards robotic surgeries, trend towards infection prevention. If you went in our labs now, half the things we're working on relate to infection prevention. It's interesting because hospital-acquired infections is a huge problem, so we're doing a lot of this. Our global footprint, huge opportunities. Barriers to entry, this is in our DNA. I talk about materials exclusivity, but there's a lot of ways. We literally have a strategy to bulletproof everything we do. Again, out of scar tissue. IP is not such a big emphasis. We have lots of patents, to be honest with you, sometimes it's just a high five for engineers. It tends to upset our customers, to be honest with you, when they, when they feel like there's no way, they don't have a choice. They, they don't often even know about the materials exclusivity. That doesn't seem to offend them. A lot of barriers to entry. The management team, the top three guys, including Ron, been together 25-plus years. All the way on the right, Mitch Rock, recently been promoted to President. The guys on the bottom, more recent hires, meaning the last 4-8 years, they're making us a better company. They're upping our game. And by the way, we're gonna fill out that row even more. We're doing more international hiring now to, to make us a better company. So these guys bring systems, bring discipline, bring knowledge to take us to the next level. The growth strategy, I talked about this at length. The strategy is not changing. We're executing the same strategy with success year after year after year. So we don't have to reinvent ourselves. All we have to do is reinvent where we aim our guns, and it's subtle shifts. Financial targets. Revenue growth, 12%-18%. This is, in theory, half organic, half acquisition. Obviously, in a year like this, we will blow that away, you know, but that is our... You know, we're probably conservative by nature. Gross margin, 28%-31%, we're already well in that target. Operating margin, same thing, well in the target. So we have conservative targets. This is a little graph of our recent revenue. Gross margin trend, you can see we're well into target, and operating margin trend. The reason I like this one is you can see the operating margin trend is a steeper graph. So as we continue to improve our book of business, the bottom line grows even faster because our fixed costs, as you can imagine, are growing as fast as our business is growing. Last slide, we show our twenty-year history. You know, I believe it's because we're executing the same strategy, it gives people courage, you know, when to get off the bus. I can tell you a story about our largest shareholder at the time, who sold his stock at one sixty or seventy after owning it. You know, he got a five X on his money. He's not sad, but you know, the guy still calls both Ron and I, tries to put Ron on boards that need financial help, whatever. You know, his last text to me is like, "I hate myself." You know, so... And we've had other people come in and say, you know, literally the perfect shareholder, that gazillions of dollars they managed before, when you probably figure out who some of these people are, and they're like: You're the perfect fit for us. We just have to find the right entry point. I'm like, "Oh, man, this is not gonna go well." I've heard that story so many times. And so then they don't want to be wrong, so if they were gonna buy it at $300, and it went to $330, "Now I'm going to wait again." So anyway, so I have faith in our company. I think it's a great story. I think this is a great time if you have a long-term view, because I think the recent moves we have done bode well for our future. So I will pause right there. Happy to take any questions you have. ... Are you going to say a bit about your, acquisition multiple? Sure. Recently, we've started burying that information in 8-K. So they're all going to be published. Some of them are voluntary. So some of them have been really low, like Marble was really low, probably five. I think the highest we've ever paid of late is around 14, for something like AQF, I think, was in that range. So two of them that were marketed publicly, and we had to fight our way. And by the way, in both those cases, we did not. We were not the high bidder. We won on cultural fit, and we kind of won the team over, like. And so again, cultural guys aren't looking for the last dollar, they're looking for how their employees are treated. So I would say we probably paid as low as five-ish, as high as fourteen-ish, and they probably blended in the eights for that, that group of four. So pretty well. Yes. So, in most cases, my understanding of many of the products you are sole source. You also know about the company's future plans as you go down the pipeline. Yep. The recurring revenue is quite high. Right. True? Yeah, I mean, we're not always sole source, and some customers have a mandate to have a second source, and like, Intuitive Surgical is one of those, and they took five years to find somebody to do this pouch. Now, we still do the vast majority of them, we're still their preferred partner. And Becton Dickinson, same thing. They have a mandate. I think we're 90% to 10%. And I think that when we're 90, we're probably the lower cost supplier as well. We probably get preferential treatment on materials, to be honest with you. So not always exclusive, but very often exclusive. You've got a rash in position. Yep. Is the pipeline still full? I would say in general, we're at a digest time in our life, where we've just spent some money digesting. We do have one or two that we're talking to. We can't stop talking to people because when the stars line up, we have to be ready. Like AQF, I could tell you, if I went back in my... I've been talking to them for fifteen years. So when the stars line up, you have to kinda, like, we'd rather spread them out. We'd rather do one a year or maybe two a years. We don't want to do four in four months, but we have to be opportunistic. So yes, we are in conversations with people as we speak, but in general, our, our strategy is to try to digest what we just bought. All right, thank you. I appreciate you guys being here so early. I'll be around for a little bit longer if you have questions, or some of you I may see you later in the day, so thank you. Appreciate your support.