Financial Data and Key Metrics Changes - Revenue grew 37% with 5% organic growth in Q2 2025 [5] - Adjusted operating income increased 35% and adjusted EPS grew 27% [5] - Gross profit margin decreased to 28.8% but improved sequentially [15] - GAAP and adjusted diluted earnings per share increased to $2.21 and $2.50 respectively [16] Business Line Data and Key Metrics Changes - Medical business grew 46%, while robotic-assisted surgery business grew 7% [5] - Advanced components business (non-medical) declined approximately 20% [6] - Revenue from two largest customers, Intuitive Surgical and Stryker, grew significantly [6] Market Data and Key Metrics Changes - Strong growth observed in patient surfaces, interventional, surgical, and wound care markets, each growing over 48% [5] - Labor turnover at AJR facility impacted operational efficiency and revenue [8] Company Strategy and Development Direction - Focus on medtech opportunities while anticipating improvement in aerospace and defense sectors [6] - Continued efforts on strategic acquisitions and enhancing customer value [12] - Expansion plans in Dominican Republic with new facilities and product development centers [10][11] Management Comments on Operating Environment and Future Outlook - Management expects Q3 to be the low point for labor inefficiencies, with gradual improvement thereafter [8][15] - Anticipation of a rebound in gross margins in Q4 despite ongoing labor issues [34] - Positive outlook on customer relationships and diverse business across multiple sectors [57] Other Important Information - Acquisitions of Unipec and TPI expected to be accretive in the first year [17] - Tariff impact estimated at approximately $9 million annually, with costs passed to customers [13][14] Q&A Session Summary Question: Broader robotic surgery business opportunities - Management highlighted strong fit in the robotic surgery market with multiple customers in development [21][22] Question: Inorganic revenue trends and AJR performance - Underperformance attributed to AJR labor inefficiencies, but other acquisitions performing well [24][25] Question: AJR product transfer timeline - Full transition expected in Q4, with training and supply chain issues impacting Q3 [27][28] Question: Channel inventory perspective - Inventory destocking issues are believed to be resolved, with a need to restock channels [31][32] Question: Gross margin expectations for Q4 - Anticipated rebound in gross margins in Q4 despite Q3 pressures [34] Question: Drape production market share - Company maintains steady market share at about two-thirds [41] Question: M&A activity and focus areas - Active in the injection molded space with a focus on cultural and strategic fit for acquisitions [42][43] Question: Margin movement expectations - Expect lower margins in Q3 due to labor issues, with potential recovery in Q4 [46][47] Question: Customer supply chain dynamics - Strong relationship with Stryker, with alternative supply options available during current supply chain challenges [51][52]