Earnings call transcript: UFP Technologies Q1 2025 revenue surges 41%

UFP Technologies Inc. reported a robust first quarter for 2025, with revenue climbing 41% to $148.1 million, surpassing the forecasted $140.1 million. The company’s adjusted earnings per share (EPS) also exceeded expectations, reaching $2.47 compared to a forecast of $2.00. The stock responded positively, rising 11.44% to $220.00 in pre-market trading. According to InvestingPro analysis, the stock appears overvalued at current levels, despite maintaining a favorable PEG ratio of 0.86, indicating efficient growth relative to its valuation.

Key Takeaways

• UFP Technologies’ revenue exceeded expectations, driven by strong medical market sales.
• Adjusted EPS saw a significant increase, indicating improved profitability.
• The company’s stock surged over 11% following the earnings announcement.
• New product developments and acquisitions are expected to fuel future growth.
• The company maintains a strong position in the medical technology market.

Company Performance

UFP Technologies demonstrated impressive growth in Q1 2025, with a 41% increase in revenue compared to the previous year. This performance was largely driven by a 50.4% rise in medical market sales, underscoring the company’s strong position in the medical technology sector. The company’s strategic acquisitions and product innovations are expected to support continued growth.

Financial Highlights

• Revenue: $148.1 million, up 41% from the previous year.
• Adjusted EPS: $2.47, up 39.5% year-over-year.
• Gross margin: 28.5%, slightly down from 28.6%.
• Adjusted operating income: $25.8 million, up 49.5%.
• Adjusted EBITDA: $30.2 million, up 45.9%.
• Cash from operations: $13.8 million.

Earnings vs. Forecast

UFP Technologies reported an adjusted EPS of $2.47, significantly surpassing the forecast of $2.00. This 23.5% earnings surprise reflects the company’s successful cost management and revenue growth strategies. The revenue of $148.1 million also exceeded the forecasted $140.1 million, marking a strong start to the fiscal year.

Market Reaction

Following the earnings announcement, UFP Technologies’ stock price rose 11.44% to $220.00 in pre-market trading. This surge reflects investor confidence in the company’s growth trajectory and its ability to outperform market expectations. The stock is now approaching its 52-week high of $366.41. Analyst targets remain bullish, ranging from $370 to $392, suggesting significant upside potential. For deeper insights into UFPT’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis and 8 additional ProTips.

Outlook & Guidance

UFP Technologies anticipates continued growth, with new robotic surgery programs and product developments in infection prevention and surgical segments. The company’s financial health score of 3.3 (GREAT) on InvestingPro underscores its strong market position and operational efficiency. The platform’s detailed Pro Research Report offers comprehensive analysis of UFPT’s growth strategy and market opportunities, available alongside 1,400+ other top stocks. The company projects EPS growth in the coming quarters, with forecasts set at $2.27 for Q2 2025 and $2.44 for Q3 2025. The revenue forecast for the full year 2025 is $591.9 million.

Executive Commentary

"We had a strong first quarter. Revenue grew 41%, operating income increased 45%, and EPS grew 35% to $2.21," stated Jeff Bailey, CEO. He emphasized the strategic importance of the SAFE patient handling business and highlighted ongoing discussions for potential acquisitions.

Risks and Challenges

• Potential tariff impacts on shipments, estimated at $800,000.
• Destocking challenges in certain markets.
• Competitive pressures in the medical technology sector.
• Macroeconomic factors that could affect manufacturing costs.
• Regulatory changes impacting product development.

Q&A

During the earnings call, analysts inquired about the growth expectations for robotic surgery and the performance of recent acquisitions, particularly AJR. The company addressed these queries, emphasizing its strategic focus on expanding manufacturing capabilities and exploring new market opportunities in the Asia Pacific region.

Full transcript - UFP Technologies Inc (UFPT) Q1 2025:

Conference Operator: Good day, and welcome to the UFP Technologies First Quarter of twenty twenty five Earnings Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Also, please be aware that today’s call is being recorded. I would now like to turn the call over to the Chief Financial Officer, Ron Lotae.

Please go ahead, sir.

Ron Lotae, Chief Financial Officer, UFP Technologies: Thank you, operator. Good morning and thank you for joining us on our first quarter twenty twenty five earnings conference call. With me on today’s call is our CEO and Chairman, Jeff Bailey. Today, we will be making 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 ks, 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 operating income, SG and A and 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.

Jeff Bailey, CEO and Chairman, UFP Technologies: Thank you, Ron, and thank you to everyone joining the call. UFP had a strong first quarter. Revenue grew 41%, operating income increased 45% and EPS grew 35% to $2.21 Our Medical business grew 50% driven by strong demand in the safe patient handling space, which has grown significantly since UFP acquired AJR. This growth was the result of winning new market share combined with higher overall market demand. This is now our second largest segment behind robotic surgery.

We also saw impressive growth in our Interventional and Surgical, Infection Prevention, Orthopedics and Advanced Wound Care segments, which all grew by more than 25%. The scale and rapid growth of our SAFE patient handling business are strategically important as it adds a new high growth market segment to our Medicare portfolio and further diversifies our company. Our recent acquisitions have performed very well. Our integrations are on track and they have been solid contributors to our growth. Our organic growth was 2.3%.

Five point four % growth in MedTech was offset by a 16.3% decline in Advanced Components as we continue to focus our resources on our fastest growing MedTech opportunities. This was in line with our expectations for the quarter. Robotic Surgery after multiple years of 20% plus growth declined 6% in Q1. It is anticipated to have only modest growth in 2025 following the completion of an inventory build by our largest customer in 2024. Our robotic surgery business remains an exciting long term growth opportunity.

We have two major new programs launching later this year. We are in ongoing discussions with our largest robotic surgery partner on ways to support more of their needs that are covered in our current agreement. During the quarter, we continue to make progress on our key strategic initiatives. Highlights include signing a key customer agreement in a safe patient handling space, which provides exclusive manufacturing rights through mid-two thousand and thirty. UFP and our customer will both invest during the contract period and share the savings that are anticipated upon transfer of the programs to our lower cost Dominican Republic location.

This agreement supports a large portion of the revenue acquired with the AGR business, which also has a projected above average market growth rate. During the quarter, we also made progress on our Dominican Republic expansion plans. We took occupancy of a new leased facility in Santiago, roughly doubling the size of our operation and have equipment on order to accommodate the growing book of safe patient handling business covered in our new exclusive agreement. We also completed the installation and qualification of new equipment for our two new robotic surgery programs scheduled to launch later this year. Addition, we have a few other approved robotic surgery programs beginning to scale.

Finally, building preparations are underway for the fifth facility in our La Romana robotic surgery campus. The new building includes an expanded R and D lab, engineering offices and warehouse space. We expect to take occupancy in the coming months. Our expanding Dominican Republic manufacturing design capabilities differentiator and important component of our growth strategy. Looking ahead, we continue to be bullish about our future.

We do not anticipate a material impact from the tariffs. Ron will expand on this in his comments. We continue to execute our two pronged growth strategy, focused on expanding our business in the best fit growth markets and searching for strategic acquisitions that increase our value to customers. We are in active discussions with multiple acquisition opportunities as we speak and have recently completed a small fold in acquisition in St. Charles, Illinois that provides additional manufacturing space, capacity and direct labor talent to help meet the growing needs of our SAFE patient handling business.

In addition, we will continue to expand our product development capabilities, maintaining innovative culture that has driven our success to date. And finally, we are focused on continuously improving all aspects of our business, increasing our efficiency and reducing our costs. We’re pleased with our progress and excited about our future. I’ll now hand it back over to Ron to give a bit more color on our results.

Ron Lotae, Chief Financial Officer, UFP Technologies: Thank you, Jeff. Before discussing our operating results, I’d like to touch on tariffs. As Jeff mentioned, we do not expect that tariffs will have a material direct impact on our operating results. That expectation is based on what we know today. As you all know, the global trade environment is very dynamic, so this could change.

Based on shipments we make from our manufacturing operations outside of The United States to customers within The United States for which we are responsible for importation, we have approximately $8,000,000 of sales that would be subject to the 10% tariffs. Our management is confident that most of this resulting $800,000 in tariffs will be passed on. What is unknown is whether there will be an impact on demand from our customers who are subject to tariffs on our shipments. In addition, we do not know if there will be any inflationary impact on our incoming raw materials. Although virtually all U.

S. Consumed materials are sourced from U. S. Suppliers, it is unknown if any of their components are sourced globally. Now to operating results.

As Jeff mentioned, sales for the first quarter increased 41.1% to $148,100,000 from $105,000,000 last year. First quarter sales to the medical market increased 50.4% to $135,400,000 while sales to all other markets decreased 15% to $12,700,000 from $15,000,000 as we continue to focus resources on our fastest growing medtech opportunities. Gross profit as a percentage of sales or gross margin decreased slightly to 28.5% for the first quarter of twenty twenty five from 28.6% in the first quarter of twenty twenty four. As anticipated, we had some inefficiency in our newly acquired AJR operations related to onboarding many new direct labor associates. We were able to offset most of it by leveraging fixed overhead costs throughout the company.

It is anticipated that the inefficiency at HAR will continue through the second quarter as we continue to onboard new associates. Adjusted operating income for the quarter increased 49.5% to $25,800,000 This growth rate exceeds our sales growth rate as we were able to leverage SG and A expenses. Our effective tax rate for the first quarter of twenty twenty five was 15.3%, reflecting the positive discrete impact of vested equity and estate tax refund. For modeling purposes, I would suggest a normalized rate of 21% to 23% for 2025. First quarter GAAP and adjusted diluted earnings per share increased 34.839.5% to $2.21 and $2.47 respectively.

First quarter adjusted EBITDA increased 45.9% to $30,200,000 During our first quarter, we generated $13,800,000 in cash from operations, paid down approximately $7,000,000 in debt and ended the quarter with a leverage ratio below 1.5 times. Capital expenditures were $2,800,000 With that, I now turn it back to the operator for questions.

Conference Operator: We will now begin the question and answer session. And our first question here will come from Jaeson Schmidt with Lake Street. Please go ahead.

Jaeson Schmidt, Analyst, Lake Street: Hey, guys. Thanks for taking my questions. Just looking at the robotic surgery business, just want to clarify the comments surrounding modest growth for 2025. Is that that business as a whole or is that at your largest customer within that business?

Jeff Bailey, CEO and Chairman, UFP Technologies: It’s actually both. So we have a forecast from our largest customer that slightly exceeds last year’s low single digit growth. And then for the robotic surgery as a whole, because we have other platforms coming on, they will stack on to that growth. So combined, still low single digits. The decline in the first quarter of 6% is partly because Q1 of last year had some large equipment sales that we are ramping up our capacity for our biggest customer.

So the actual unit sales is probably closer to even or even a modest growth in Q1. But we do expect both the largest customer and the group as a whole to grow.

Jaeson Schmidt, Analyst, Lake Street: Okay. That’s really helpful. And then I know you mentioned at that largest customer, you’re potentially working on additional programs. I mean there’s been a lot of speculation on your relationship and specifically kind of share shifts going on at that customer. Would just be curious if you could, Brad, provide some commentary on how we should think about your share at that customer going forward?

Jeff Bailey, CEO and Chairman, UFP Technologies: Yes. Currently, understanding is we probably have about two thirds of the share. Our largest customer does a small amount themselves and another competitor does a small amount. We used to share about fifty-fifty with the competitor. Slowly over time, we gained share.

And similarly, at about the same time, our largest customer brought on some of their own capacity. They had been working on this for years. It’s very important for them to have a bulletproof supply chain. It was an opportunity for them to control their own destiny if need be. It’s, in fact, helpful to us if they’re successful in this venture because they have a two supplier mandate.

And so if they’re successful and can be a part of the supply chain themselves, then them and us could be the two suppliers. So we are rooting for them to be successful. And we they are very transparent with us. They’ve been with us and to see their operation when they come up with something that thinks a breakthrough, they’ve shared with us so that we can also get our costs down. We’re very partnered up with them.

We have a great relationship. And they have assured us that they will always have a manual drape supplier as part of their future. And so we feel good about it.

Jaeson Schmidt, Analyst, Lake Street: Okay, I appreciate that color. And then just the last one for me, and I’ll jump back into queue. Just given the macro backdrop here, are you seeing any pockets of excess inventory at any of your customers?

Jeff Bailey, CEO and Chairman, UFP Technologies: We are not. Actually, almost like the destocking that was holding us back in some of the other markets seems to be behind us because a lot of them have come back to those other markets we talked about, infection prevention, interventional and surgical, orthopedics, wound care, all growing nicely. And they have had some destocking headwinds over the past couple of years sort of post COVID. So it seems like a lot of those issues are behind us, and we’re back to business as usual. We don’t have perfect visibility when people are building inventory.

Our understanding is that most of what we’re building is exactly for current demand than our customers.

Jaeson Schmidt, Analyst, Lake Street: Great. Thanks a lot, guys.

Jeff Bailey, CEO and Chairman, UFP Technologies: You’re welcome.

Conference Operator: And our next question will come from Brett Fishman with KeyBanc. Please go ahead.

Brett Fishman, Analyst, KeyBanc: Hey, good morning. Thanks for taking the questions. I’ll switch gears a little bit to start. Some of the commentary around segments outside of robotics, such as interventional, surgical, infection prevention, ortho, wound care, all seemed pretty positive this quarter with the 25% metric. I was wondering if you could maybe just like touch on a couple of those different areas and like walk through some of the acceleration in growth and then like how you’re thinking about the outlook for the ex robotics medical business for the rest of 2025?

Jeff Bailey, CEO and Chairman, UFP Technologies: Yes, sure. So I’ll start with infection prevention. So infection prevention, as we’ve talked about in the past, we’ve been doing a lot of development, particularly around external catheters. So we’re enjoying growth in these new products as well as in some of our conventional products. And so again, I think that if they were impacted by the destocking, that seems to be behind us.

So we have a blend of our base business growing combined with new products. And so that one has been a nice grower for us. And same with Interventional and Surgical. We’re seeing the destocking headwinds behind us, customers that had been quiet starting to reorder. Some of these market segments overlap with our new acquisitions.

So we buy companies with these markets in mind. And so we’re enjoying growth both internally at UFP as well as through our acquisitions. And in many cases, because we’re teamed up as one company, we’re growing faster than they would have on And we’ve seen a bunch of examples of that, particularly with our largest acquisition, and that’s around the patient services. So patient services, when we bought AJR, revenue was about $75,000,000 They had one contract to move to transfer to the Doctor.

And since we’ve teamed up, now we have three. And so the majority of their business is now under an exclusive contract. So now that we were one company with more capabilities and more substance and ability to transfer, we have sort of earned more of their business and more of their support. So our acquisitions are growing faster because they’re part of our business, and it’s true really for all of them. They’ve all enjoyed additional growth by being part of the UFP team.

Brett Fishman, Analyst, KeyBanc: All right. Thank you. And then maybe I’ll just ask a follow-up where you left off there. The acquisition revenue definitely stood out as above expectations this quarter, really taking another sequential step up to where it had been the previous couple of quarters. I guess maybe like walk through what I think you touched on it a little bit, but what was driving the, like extra 7,000,000 or $8,000,000 in revenue compared to 4Q from the acquisitions?

And are you now at the point with AJR where you do have close to the vast majority of that market? Or is there still some share gain that’s going to take place as you build out more capacity?

Jeff Bailey, CEO and Chairman, UFP Technologies: I think we’ve won most of what we’re going to win because I think we’re their primary supplier at this point. So infection prevention was the biggest driver of our growth. It was kind of the biggest surge. So that’s the easiest one to track. It’s all brand new business.

But I think that they it was hard for report on it because we didn’t own them a year ago. But our understanding is they’ve grown 40 plus percent since this time a year ago. So that shows you how explosive that growth is in that segment. It’s now our second largest segment explosive growth, so it’s a winning combination. And we are making things as fast as we possibly can.

And this little small acquisition that we did was with Space and Talent Mind. It was two little small sister companies of AJR that we didn’t originally buy. They occupied a decent portion of the building that we’re in, and they had some talent, some equipment. And so our goal was to get more space to fit the equipment that we’re buying to get additional people to do the direct labor work. And so that was just a little fold in, but it’s causing or helping us instantly get some relief.

Ron Lotae, Chief Financial Officer, UFP Technologies: Yes. And Brett, it’s Ron. Good morning. So yes, if you go back to the eight ks that we filed with the AJR acquisition, the run rate, the trailing 12 run rate was $75,000,000 in revenues, which would imply about $19,000,000 per quarter. In the first quarter of twenty twenty five, we did 29,200,000 at AJR.

So that sort of emphasizes the growth that Jeff was referring to.

Brett Fishman, Analyst, KeyBanc: All right. Super helpful. And last question from me. Just on the new product opportunities in robotic surgery, is there anything more you can tell us about like what you’re working on with those initiatives? It sounds like maybe at least one of them is with your large customer that end market.

And just in terms of like how you’re thinking about the guidance set up, like when you talk about like low single digit growth in robotics, is there like a meaningful contribution from those new products specifically or more of like a ramp up period this year and benefit to ’26? Thanks very much for taking the questions.

Jeff Bailey, CEO and Chairman, UFP Technologies: Sure. It’s hard to provide a lot of detail, but this was one of the benefits of us moving to low cost country. I mean, we had a couple of objectives. One is because our customers asked us to be there. And number two, we tended to lose business.

It tended to be towards the end of a product life cycle when our customers had to take costs out and they moved it to low cost country. So our primary goal was to lose less. But the secondary benefit we got was when we moved there, two of our customers said, now that you’re there, we’d like to transfer business that we are already doing to you. So both of these are programs that are up and running. So it’s not going to be this long ramp that requires market adoption.

It’s more like us getting up and running and doing the business. So they’re going to launch in the second half of the year. It’s two separate customers, two separate programs. But we expect meaningful revenue starting in 2026 and modest revenue this year actually.

Brett Fishman, Analyst, KeyBanc: All right. Very helpful. Thanks again.

Jeff Bailey, CEO and Chairman, UFP Technologies: You’re welcome. Thank you.

Conference Operator: And our next question will come from Justin Aages with CJS. Please go ahead.

Justin Aages, Analyst, CJS: Hi, morning all.

Jeff Bailey, CEO and Chairman, UFP Technologies: Hello.

Justin Aages, Analyst, CJS: Appreciate the color on the tariffs. I was hoping you could just give us an understanding on how some of your competitors might be impacted by the tariffs that might actually benefit you, put you in a better competitive position?

Jeff Bailey, CEO and Chairman, UFP Technologies: Yes, hard to tell. Originally, it looked like when there was a big battle going on with Mexico that we would be beneficiaries because some of our competitors were in Mexico. It seems like a lot of that has gone away, and it’s been exempt under a different act. So there’s no like instant gratification versus our Mexican competitors. But those that are importing from China or competitors in China, and we have won some business back, particularly in the safe patient handling that came from China, I think that we have a leg up.

So those guys, for at least the short term, have no ability to compete with us at all. But I don’t think this is instant gratification from the tariffs. We do have about two thirds of our manufacturing and two thirds of our revenue in The U. S. And so we are well positioned to ramp up in The U.

S. If one of our customers manufacturing elsewhere would like to be back in The U. S. So I think we’re better positioned than our competitors in that respect.

Justin Aages, Analyst, CJS: All right. That’s very helpful. And then one more, just on capital allocation priorities. You guys paid down debt. Maybe you can give us an update on some larger acquisitions that you’re looking at maybe smaller than kind of those two sister companies of AJR that you mentioned?

Jeff Bailey, CEO and Chairman, UFP Technologies: Yes. Have a number of companies we’re talking to. We have mentioned in the past that we’re focused on gaining more skills in injection molding. So we’re looking at a number of different injection molders with the goal of upping our game in that space. Most of the things that we’re in advanced talks with now are smaller acquisitions, none of them are enormous.

But we do have one large opportunity that we’re looking at that would be very substantial if it were to come to fruition. But I would say it’s pretty far out in the future. We’re in early days of that discussion.

Justin Aages, Analyst, CJS: All right. Very helpful. Congrats on the quarter. Thanks for taking the question.

Jeff Bailey, CEO and Chairman, UFP Technologies: Thanks very much.

Conference Operator: And our next question will come from Andrew Cooper with Raymond James. Please go ahead.

Andrew Cooper, Analyst, Raymond James: Hey, everybody. Thanks for the time. Maybe just starting with the large customer in safe patient handling, the eight ks talks about some price reductions as you make these transfers. Can you give a little sense for the magnitude of those reductions in terms of what that may do to just optical revenue growth? And then should we assume the operating profit dollars are maintained?

Is it an improvement as those play out? And just help us think about maybe the pacing over time.

Jeff Bailey, CEO and Chairman, UFP Technologies: Okay, sure. Yes, so it varies product by product, but there is kind of a standard when stuff moves, it tends to be in the 15% to 20% price savings opportunity for our And so if our savings are greater than that, which they typically would be, we share in some of the savings and they share in some of the savings. So in this particular case, we believe our efficiencies will allow our margins as a percent of sales to go up despite the fact that revenue over time, it will take a couple of years for everything to transfer, will be impacted negatively by that same 20%. So but all this is going to be offset by the fact that this market is growing rapidly. So the market growth may exceed the price decreases.

So the revenue may still be greater by the time it gets there, if that makes sense.

Andrew Cooper, Analyst, Raymond James: Okay. No, that’s helpful. And then maybe just jumping into the P and L a little bit. You talked about the inefficiencies at AJR that should be kind of temporary here as you staff up. Can you help us think about where those land on the P and L and then kind of the scope and the timing to normalize there?

And I ask just with gross margins that were a little bit shy of what we were expecting here, I think that’s where that lands, but just would love a little bit more color.

Ron Lotae, Chief Financial Officer, UFP Technologies: Morning, Andrew. It’s Ron. Yes. So AJR, so it’s a little bit complicated. But when we bought this company, all of the employees were technically employed by our sister company, and they became full time employees of ours on January 1.

So with that came new benefit programs, new compensation schemes, etcetera. And so it’s not uncommon for us to have turnover in the direct labor space. And so as we replace the direct labor, which we are successfully doing, there it tends to be inefficient. So we have to hire people, onboard them, train them, etcetera. The productivity is not as great.

So that process will we expect to last through the second quarter, and that shows up in basically one of the components of cost of sales, I. E, direct labor.

Andrew Cooper, Analyst, Raymond James: Okay. Great. And then maybe just one last one kind of bigger picture. With all that’s going on in terms of the tariffs, in terms of reshoring or not, obviously, the commitment to the Dominican Republic right now, Has anything changed in terms of the way you think about the long term footprint? Any thoughts on expansions, whether it’s into Europe or Asia in a more meaningful way or just as you think optimizing this footprint as you grow and scale for the long term, what’s maybe evolved over the last few months with the tariff discussions?

Jeff Bailey, CEO and Chairman, UFP Technologies: Yes, good question. So we are still pushing ahead aggressively with our expansion plans in the Doctor at the request of very specific customers and to support very specific programs. The Doctor was protected before by an act that we I think the 10% will get resolved in the Doctor is my personal prediction. But in any event, the savings of doing business there for our customers far exceed the 10%. So we are very committed expansion plans there.

With respect to Europe, it’s very market specific. Our recent acquisitions have been in Ireland. Now we have three different factories in Ireland. But I think that we’re able to service most of the world from where we are. We have been asked by at least one customer to gear up in Asia Pacific to support their needs in those markets.

So you may see us do some expansion there, potentially even via joint venture. But that’s part of the one part of the world that we’re not able to service our customers with the highest level of service that we’d like to. So that stay tuned on that one. But over the next couple of years, you may see us increase our capacity in that market only to serve that market.

Andrew Cooper, Analyst, Raymond James: Great. I will stop there. Appreciate the time.

Jeff Bailey, CEO and Chairman, UFP Technologies: You are welcome. Thank you.

Conference Operator: And with that, we will conclude our question and answer session. I’d like to turn the conference back over to Jeff Bailey for any closing remarks.

Jeff Bailey, CEO and Chairman, UFP Technologies: Thanks, operator, and thank you everybody for joining the call. We did start up calls at the request of a number of investors who said that they can’t be on all calls at the same time for so at a minimum they could listen in. We had gone a number of years without doing them. So hopefully, is helpful. Feel free to give us any feedback to how we can make the call better in the future.

But in the meantime, we look forward to speaking to you one quarter from now. Thanks very much.

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