Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 8% to $280 million, driven by a 10% growth in the BDS segment, offsetting a 2% decline in the Engineering segment [16][19] - Adjusted EBITDA rose to $65.1 million, resulting in an adjusted EBITDA margin of 23.2% for 2025, a 240 basis point improvement [18][22] - Net profit totaled $29.7 million, with diluted earnings per share of $0.11, while adjusted net profit was $31.3 million with adjusted diluted EPS also at $0.11 [18][22] Business Line Data and Key Metrics Changes - BDS segment revenue grew 10% to $243.5 million, with high value solutions accounting for 42% of total revenue, driven by strong demand for high value syringes [19][20] - Engineering segment revenue decreased by 2% to $36.5 million, with gross profit margin declining to 6.6% due to a higher mix of legacy projects [20][21] - High value solutions revenue increased by 13% to $116.8 million, primarily from high value syringes, easy fill cartridges, and easy fill vials [17][19] Market Data and Key Metrics Changes - Biologics represented 39% of BDS revenue in 2025, up from 25% in the same periods of fiscal 2024 and 2023 [13] - The company is experiencing stabilization in vial demand as destocking effects ease, with a projected mid to high single-digit growth for vials in 2025 [36][38] - The company anticipates continued strong demand due to trends such as the increase in self-administration of medicine and the rise in biologics [10][27] Company Strategy and Development Direction - The company is focused on executing its multiyear investment optimization plans, enhancing commercial strategy, and positioning itself for long-term growth opportunities [26][27] - The company is evaluating a second location in Bologna, Italy, to support its innovation hub and optimize its footprint [9][10] - The strategic focus remains on high value solutions, with expectations of continued strong demand in the biologics market [10][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing healthy market demand and operational improvements [26][27] - The company is well-positioned to benefit from onshoring initiatives announced by several pharma and biotech customers, particularly in the U.S. [100] - Management noted that the biologics market is heavily investing in new technology, indicating strong future demand [33][51] Other Important Information - The company announced a $200 million financing to support expansion in syringe production and capacity for ready-to-use cartridges [22][46] - Capital expenditures totaled $69.1 million for 2025, with a significant year-over-year improvement in free cash flow [22] - The company reiterated its fiscal 2025 guidance, expecting revenue between $1.16 billion and $1.19 billion [23] Q&A Session Summary Question: Are delays in new orders related to customer decision-making due to tariffs? - Management clarified that delays are primarily due to timing and customer CapEx decision-making, not lost negotiations [30][32] Question: Is there continued improvement in vial demand? - Management confirmed a 3% increase in vial demand compared to the same period last year, with confidence in mid to high single-digit growth for 2025 [36][38] Question: Are tariffs impacting customer behavior? - Management indicated that they have not seen significant pull-forward behavior due to tariffs and have been able to offset tariff impacts through customer conversations and leveraging their global footprint [42][45] Question: What is the expected growth trajectory for the Engineering segment? - Management expects a rebound in growth and margins in the Engineering segment as legacy projects are completed and new contracts are secured [74][76] Question: How is the company positioned to benefit from onshoring initiatives? - Management noted that they are seeing increased interest from clients in the U.S. for engineering offerings and technology sales due to onshoring strategies [100][101]