All right. Good morning. My name is Adam Maeder, and I'm one of the Medtech analysts here at Piper Sandler. I'm very pleased to introduce our next presenting company, UFP Technologies. With us, we have Jeff Bailly, Chairman and CEO, Ron Lataille, SVP and CFO, and Mitch Rock, President. Gentlemen, thanks so much for joining us. The floor is yours.
Thank you, Adam.
Good morning, everyone. I'd like to briefly draw your attention to our forward-looking statement. So UFP Technologies is an innovative contract development and contract manufacturing organization that specializes in single-use and single-patient Medtech devices. The company is headquartered in Newburyport, Massachusetts. We were founded in 1963. Revenue is approximately $600 million. We have 5,000 associates in 21 factories across five different countries. We have six innovation development centers. What we do is combine our design engineering capabilities, our materials expertise, and our precision manufacturing to help our customers either develop, improve, manufacture, or protect their products. The materials piece is an important part of our value proposition, and a lot of times when our customers come to us, we have tremendous depth in this area. We partner with our vendors at a very high level.
Our engineers sort of travel the globe looking for the latest and greatest, most innovative materials. When we find them, we partner with the best-in-class suppliers. We typically end up with early access to their new materials and very often either exclusive or semi-exclusive access to the grades that are most critical to us. This is a snapshot of our process. It begins with a customer intake meeting. We have relationships with 26 of the top 30 Medtech devices. The ones we don't do business with, they're in areas that we're not in our area. It's typically engineer to engineer at one of our development centers. We have quick change and rapid prototype capabilities, as well as in-house tooling. It enables us to iterate different designs very quickly. Very often, we make custom equipment.
This makes our tolerances that much tighter, but it also makes our business that much more difficult to steal because you can't just go buy a piece of equipment. You have to build your own. The next step in our system is quality. Since many of our products are critical to patient outcomes and sometimes the patient's lives. They go right into the body. Many of them are 100% tested. So we will develop quality systems together with our customers, sometimes build the test equipment ourselves. The next stage is pilot manufacturing and validation and on to commercial production in one of our facilities. This front-end part of our business is very, very important to us. If you dial back the clock 10 or 15 years, we used to just give this away in exchange for hoping to get the manufacturing. Now it's a very profitable, rapidly growing business.
It's in this sort of virtuous cycle for us. Every time we do a program, we gain knowledge that makes us more qualified to do the next one. Every time we do that, our relationship with our customers gets stronger and stronger. It's, again, typically engineer to engineer. They're co-inventing, co-developing, a lot of high-five moments. Again, those relationships lead to the next program. And then ultimately, the goal of this whole business is to feed our factories with long-term manufacturing. I think the easiest way to understand our business is to walk through a few examples. Robotic surgery is a business we've been in for about 20 years. One of our key customers came to us early on and wanted us to develop the critical component that went between the robot and the surgical instrument. It was going to be a TPU part.
We were experts in both TPU and molding. We've had a relationship with them straight along. I'll go over some of our acquisitions later that got us further and further into this space. If you continue across the top, this is probably our most sophisticated part, a revascularization device. This was developed in our Galway facility, and it was a company at the time called Cerenovus that eventually was bought by J&J, but this is used for stroke patients. It's deployed by a catheter all the way into the brain, and if you have a blood clot or thrombus, it can literally draw it out and immediately revert blood flow, excuse me, and save people's lives. As a matter of fact, we've had patients show up at our factory wanting to shake the hand of everybody that worked on their device because it saved their life. Super critical part.
Continuing across the top, this is just an example of a customer who came up with the concept. They said, "Hey, we want to develop an infection prevention device that looks a lot like a coffee creamer. You can pull out the top. It'll have special foam fingers and alcohol. You can plunge in an IV port and clean it." And so we helped them develop the part. We selected the materials. We custom-made the equipment. When their business took off, they needed redundant equipment. They said, "Hey, we really want it in El Paso, Texas." We had a facility there with Class 7 and 8 cleanrooms. So again, redundant manufacturing separate facility. Years later, we're still sole source. Very successful program. MedSurg beds, again, right in our sweet spot, combines typically TPU with RF-welded technology. So it gets rid of thread. Thread's not good. It absorbs blood, etc.
So these can inflate on one side, turn patients, etc. Negative pressure wound therapy. The reason I like this one is in the early days, UFP was called on just to make the little purple component. We forward-integrated and bought the company that was doing the rest of the device. Now we can do more and more for our customers. It's a typical part of our acquisition strategy to be more valuable to our customers. And then patient safety. This is probably our newest market. It came with one of our recent acquisitions. So this is for the health of the patient and for the caregiver. It typically goes under the patient at the beginning of their day, and it can be as simple as lifting them up on both sides.
Or the more sophisticated ones are almost like an air mattress or air hockey table with little laser cut holes in the bottom that inflates and just slides the patient right across. Very sophisticated. This market's growing rapidly. And again, a great fit for our skills. This is a snapshot of our business today. Robotic surgery, about 30%. Sterile packaging, about 17%. And medical devices, 53%. This space that we're in, CDMO space, is growing about 10%. And the sub-markets that we have picked are growing typically even faster in total. Here's an example of some of our sub-markets. Robotic surgery, fortunately for us, our largest market is our fastest-growing market. This has been growing in the mid-teens, and our growth in the space has been even greater than that. Patient services and support, also double-digit growth. And you can see all the way down the line.
I want to give you a little snapshot of robotic surgery, so we obviously placed a big bet in robotic surgery, and we think our skills and the market needs are an excellent fit, so we started with the part that I talked about. Later, we decided that we wanted to up our game in RF welding. We bought a company called Dielectrics. They were literally the best in the world at it. They used to make the equipment. The customers eventually came to them to do the very most difficult products, and so when we got that capability, we were more valuable, and so the next step, we bought DAS in 2021, so DAS was one of two companies qualified to do the drapes, so we were shipping our critical component all the way to the DR. It took eight days for it to get there.
So when we forward-integrated and bought DAS, we were more valuable to our customer. Now we could do the entire drape. And so that's a big part of our business now. So to become even more valuable to them, we started buying injection molding companies. There's a lot of injection molded components that go into a drape. So we bought Advent and TPI recently. There's also a lot of sticky labels. I can see the little green tape and little things that direct the caregiver and how to install it. Again, so buying more companies that make us more valuable to our customers. I want to review our strategy briefly. We've been executing the same strategy for more than a dozen years. It's a simple two-prong growth strategy. The first prong, internal growth, we summarize as marketing to our sweet spot.
It's this iterative process where we basically profile our business on a bell curve, and we find the most profitable end of the bell curve, and that sort of becomes our sales strategy. We want to do more of the very best stuff. The other end of the bell curve is where our manufacturing engineers spend their time. So we try to take something that's not as profitable and make it a better design, better materials, whatever. And if we can't, we raise the price. And if it goes away, that's okay. So our book of business is constantly improving. It's constantly migrating towards our sweet spot. And so it's this iterative process that's worked very well for us. The other piece of it relates to acquisitions. Here, our goal, very simply, is to become more valuable to our customers.
So very quickly on the organic growth side, the key here is customer-funded development. So the customers come to us, and now they pay us. This helps us screen whether they're serious, whether they have enough money to proceed, and also funds our whole process. So we have 100+ engineers, and this is critical to us. Single use, single patient is most of what we do. Goal, become more valuable complementary products and services. On the acquisition side, we have a technology roadmap that we develop together with our customers. So we basically ask them, "What can we do to become more valuable to you?" It might be a new geography. It might be a new material. We heard geography a lot in the past. We went to Ireland because we were very specifically mandated. We need you in Ireland. We were shipping $10+ million to Ireland.
They said, "Hey, if you don't get there, it's hard for you to be our long-term global partner." We heard low-cost country for a long time. We were very much an innovative company, but when it got to scale, we didn't always keep it. We were losing it. It almost always went to the Dominican Republic. They said, "Hey, we really need you to get to low-cost country." We've checked that box three different ways. We're in Mexico, Dominican Republic in two different locations, and Costa Rica. So those would be examples. But beyond that, injection molding, we talked about. These are things that our customers direct us. If you could do this, you're more valuable to us. This graph shows some of our recent acquisitions and our migration towards more and more Medtech. You can see in 2021, we were sort of $132 million of $200 million.
Now we're $550 Medtech of $600, and what's exciting on this graph is you can see in 2021, we're about $200 million, so we've 3x'd our revenue over that sort of four-year period. Snapshot of our factories, five different countries. Very nice dispersion across the U.S. in critical areas. So the why invest? I'll just spend a minute on this. I'm sure this is the reason a lot of you are here to try to see if we're a good fit for you. We think we have significant growth opportunities. Very important to us also is once we win something, we have an excellent chance of keeping it. Our strategy was sort of born out of scar tissue. We were always a super innovative company, but we weren't always able to keep it. So now we work hard to bulletproof our applications. Strong customer relationships.
Our experienced management team has been together a long time. Ron's coming up on 30 years. Mitch is 25, and by the way, we announced yesterday that Mitch is going to be our CEO in June of next year when I retire, so congratulations to Mitch on that, but this team has been doing the same thing for a bunch of years very successfully. I'm going to click past this one. Quickly on the barriers to entry. The materials one is a big one. The custom equipment is a big one. For our top four suppliers, we have relationships, so cross-linked foam is in our DNA. The best cross-linked foam manufacturer in the world is a company called Zotefoams, headquartered out of England. They have given us exclusive access to 100% of their white medical grades of foam.
FXI, the best technical urethane manufacturer in the world, has given us exclusive access to dozens of grades. Same with TPU and technical fabrics. So we end up with exclusive access to these materials. They do that because it protects the value we create. So a customer comes to us along the way with a dollar problem. If we have a 50-cent solution and sell it for 90 or 95 cents, the customer's happy. We're happy. And we've created value that everybody enjoys. If they didn't protect us, it went out for a bid a year or two later. Somebody bid 55 cents. The customer was upset. The material supplier got beat on to reduce their prices. So they give us this exclusivity because it's in their best interest and typically we're their largest customer. So we place concentrated bets with fewer people. Proven growth strategy. We talked about that.
I want to touch on our growth targets. These are our published targets. Revenue growth, 12%-18%. We look about half of that to come through acquisition, half through internal growth. Gross margins, 28%-31%. Adjusted operating, 17%-20%. This shows the nice smooth plot of our revenue since 2020. Gross margins, you can see we're already in target. I want to explain this little step back in Q. Year to date, actually. One of our acquisitions, AJR, when we went through the process of E-Verifying their employees, it turns out that more than half of them were not legal to work in the U.S. So we had to replace a huge chunk of these workers. We have been publicly disclosing this with each quarterly release what the impact of that is.
But the key is we hit sort of the low point in July, and we're digging our way out. So it's still going to be with us for a couple more quarters as these people get trained up. But we've been able to stay within our target range despite this fairly painful issue we're dealing with. This graph shows the same thing with a steeper curve. So the key here is as we grow sales, our fixed costs don't grow that quickly. So we have a pretty impressive upward tick on the operating income line. Again, the target range has been impacted by that one AJR issue. Lastly, this is our 20-year stock graph. This was a request from some of our shareholders to say, "Hey, you guys don't have a one-to-five-year strategy.
You've been doing this successfully for 20+ years." And those are the key indices: S&P 500 and Russell. So I will pause there and take any questions anybody has. Yes. Oops. Sorry. Correct. Single customer concentration. Sure. So in the robotic surgery space, we have 20+ customers in one form of development with us. So we're really diverse. We are actually the world's leader in this by far. So all the major players have come to us. We have major programs with other people as well. They're just not as far ahead as our largest customer. So there has been some concern from people about whether it be disintermediated. I can tell you when we came to the DR, there were two people qualified to do this. We became the better mousetrap. We became a lower-cost solution.
We moved that critical process that we did in the United States to the DR, so we are a lower-cost solution, and so we are winning more and more of the business, so with our key customer, we are well more than half, close to two-thirds of their business already. So there's always the risk. Any one of our customers can decide they want to do this themselves instead of with us. We think this is a very difficult part to do and probably not in their best interest to do it. These customers are used to much higher gross margins, and we are happy to work with different gross margins, so always a risk with any customer. We think we have to earn their business. We protect ourselves with long-term contracts, so we're halfway through a four-year contract. We're working on extending that.
We'll sort of aspire to always have four years in front of us of contractual protection. Yes.
When you work with these companies, you have engineers on staff. You help them develop their products further along, whatever. There's IP that's created there. Is that IP shared? Is that IP theirs? How does that work?
So typically, how it works is any IP related to the product becomes our customer's property. Any IP related to the process typically becomes ours. It's not always the case. In the old days, we used to patent more things than we do. It tended to just upset our customers. Then we went to joint patenting with things, and then we just said, "All right. You can have anything product-related." And so that's basically it. So they pay us to help develop the product, and they own that IP.
The magic we have to produce it is typically ours. I'll set.