Financial Data and Key Metrics Changes - Sales grew 19.5% for the full year, reaching $602.8 million, marking a significant revenue milestone and nearly tripling revenue since 2021 [4] - Operating income increased by 435% and EPS grew by 419% over the same four-year period [4] - 2025 EPS grew 15.4%, despite absorbing $6.3 million in labor inefficiencies at the Illinois AJR facility [4][5] - Gross profit margin decreased to 28.3% in 2025, primarily due to additional labor costs, but would have increased to 29.3% without these costs [10] Business Line Data and Key Metrics Changes - The AJR facility experienced a labor inefficiency impact of $1.2 million in Q4, down from $3 million in Q3, indicating progress in onboarding and training new labor [5] - Significant growth was noted in the safe patient handling, infection control, and orthopedic packaging medical submarkets [9] - New programs launched in the Dominican Republic and Ireland are expected to enhance global offerings and drive future growth [6] Market Data and Key Metrics Changes - Organic sales growth for the year was low single digits, attributed to high sales in 2024 and backlog issues in the safe patient handling business [9] - The company anticipates robust growth in the patient services market and has launched new programs in infection prevention and robotic surgery [23] Company Strategy and Development Direction - The company is focused on strategic initiatives including contract extensions, program launches, and facility expansions [4][6] - A sixth building is set to be acquired in April to expand robotic surgery capacity, supporting anticipated growth [6] - The company is actively seeking additional strategic acquisitions to enhance customer value while maintaining a disciplined approach [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust pipeline of new opportunities and significant progress on strategic initiatives [7] - The cybersecurity incident had minimal operational impact, with systems being restored and operations continuing with contingency plans [8][9] - Management expects Q1 to have some impact from labor inefficiencies, but anticipates improvement in subsequent quarters [17] Other Important Information - The company generated approximately $92 million in cash from operations, paid down $53.9 million in debt, and ended the year with a leverage ratio of approximately 1.1 times [11] - The CEO transition planning is complete, with the new CEO well-prepared to take over [7] Q&A Session Summary Question: Directional color on volumes with the largest customer for 2026 and 2027 - Management indicated that they cannot disclose specific volume increases due to customer confidentiality, but noted that the contract extension includes material increases [14][15] Question: Impact of AJR labor inefficiencies in Q1 and 2026 - Management expects Q1 to have less impact than Q4, with continued progress anticipated in subsequent quarters [16][17] Question: Growth drivers in med tech for 2026 - Management expects robust growth in patient services and has launched new programs that will positively influence future growth [23] Question: Cybersecurity incident and its impact on growth rates - Management confirmed that while there were delays in shipping due to the incident, operations were largely unaffected, and they do not expect a material impact on Q1 [25][26] Question: Details on the sixth facility and investment responsibilities - Management stated that there is co-investment with customers for major contracts, and they will take possession of the sixth building in April [30][31] Question: Backlog status and pacing of program transfers - Management indicated that backlog is higher than previously disclosed and expects to work it down gradually throughout 2026 [48]

Financial Data and Key Metrics Changes - Revenue grew 41.1% to $148.1 million from $105 million year-over-year [17] - Operating income increased 45% [6] - EPS grew 35% to $2.21 [6] - Adjusted operating income rose 49.5% to $25.8 million [18] - Adjusted EBITDA increased 45.9% to $30.2 million [20] - Gross margin slightly decreased to 28.5% from 28.6% [17] Business Line Data and Key Metrics Changes - Medical business revenue increased 50.4% to $135.4 million [17] - Interventional and Surgical, Infection Prevention, Orthopedics, and Advanced Wound Care segments all grew by more than 25% [6] - Advanced Components saw a decline of 16.3% [8] - Robotic Surgery declined 6% in Q1, with modest growth anticipated for 2025 [8] Market Data and Key Metrics Changes - Sales to the medical market increased significantly while sales to all other markets decreased by 15% [17] - Organic growth was reported at 2.3% [7] Company Strategy and Development Direction - The company is focused on expanding in high-growth markets and pursuing strategic acquisitions [12] - New programs in robotic surgery are set to launch later this year, with expectations for meaningful revenue starting in 2026 [49] - Expansion plans in the Dominican Republic are underway, including a new facility to support growth in the safe patient handling business [10][11] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about future growth despite challenges in the robotic surgery segment [11] - The company does not anticipate a material impact from tariffs, with confidence in passing on most tariff costs [14][15] - Management is actively discussing multiple acquisition opportunities to enhance capabilities [12][58] Other Important Information - The company has made significant progress in integrating recent acquisitions, which have contributed positively to growth [7] - The effective tax rate for Q1 was 15.3%, with a normalized rate suggested at 21% to 23% for 2025 [19] Q&A Session Summary Question: Clarification on robotic surgery business growth - The modest growth forecast for 2025 applies to both the business as a whole and the largest customer, with expectations for low single-digit growth [22][23] Question: Commentary on market share with the largest customer - The company currently holds about two-thirds of the market share with the largest customer, which is beneficial for maintaining a strong supply chain [24][25][27] Question: Excess inventory at customers - There are no signs of excess inventory; destocking issues appear to be resolved, and demand is returning to normal [29] Question: Growth in segments outside robotics - Positive growth in segments like infection prevention and interventional surgical is attributed to new product development and overcoming previous destocking challenges [34][35] Question: Impact of price reductions on revenue growth - Price reductions during transfers are expected to be around 15% to 20%, but market growth may offset this impact [64][66] Question: Inefficiencies at AJR and their impact on P&L - Inefficiencies are expected to continue through Q2 as new staff are onboarded, affecting direct labor costs [69] Question: Long-term footprint and expansion plans - The company remains committed to expansion in the Dominican Republic and is considering opportunities in Asia Pacific to better serve customer needs [72][74]