Good morning and welcome to the Eastern Company's Third Quarter Fiscal Year 2024 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Marianne Barr, Treasurer of the Eastern Company. Marianne, over to you.

Good morning and thank you everyone for joining us this morning for a review of the Eastern Company's results for the third quarter of 2024. With me on the call are James Mitarotonda, Chair of Eastern's Board of Directors and the company's CFO Nicholas Vlahos. The company issued earnings press release yesterday after the market closed. If anyone has not yet seen the release, please visit the investors section of the company's website, www.easterncompany.com where you will find the release under financial news. Please note that some of the information you will hear during today's call will consist of forward-looking statements about the company's future financial performance and business prospects, including without limitation statements regarding revenue, gross margin, operating expenses, other income and expenses, taxes and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected in these forward-looking statements. We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances that occur after the call. For more information regarding these risks and uncertainties, please refer to risk factors discussed in our SEC filings including form 10-K filed with the SEC on March 12, 2024, for the fiscal year 2023 and form 10-Q filed with the SEC on November 5, 2024. In addition, during today's call, we will discuss non-GAAP financial measures that we believe are useful as supplemental measures of Eastern's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. A reconciliation of each of the non-GAAP measures discussed during today's call to the most directly comparable GAAP measure can be found in the earnings press release. With that introduction. I'll turn the call over to Jim.

Thank you, Mary Anne and good morning to those who are joining us by phone as well as those participating via the web. Operationally, the third quarter was a strong period for the Eastern Company with substantial year over year improvement in top and bottom-line results, actions were taken to improve pricing and strengthen gross margins. At the same time, Eastern's Board of directors believes that there are more actions to be taken and significant progress to be made. And we have appointed a new leader to take Eastern to the next level. Before I go into details of our new CEO appointment, I will talk about another significant step recently taken at Eastern. As discussed during our Q2 earnings call in August, we have been continuing the process of evaluating all of the company's businesses for long term performance and growth potential. During that process, we determined that the Big 3 Mold business, one of the two businesses within the big three precision products no longer fits our long-term business and financial strategy. Accordingly, we recently began taking steps to sell Big 3 Mold and reclassified it as discontinued operations. Unlike Big 3's returnable packaging business, which holds excellent potential for Eastern, Mold is a complex niche business that especially given today's market dynamics offers many fewer opportunities for synergy and require significant capital investment to remain competitive. The sale of Mold will put Eastern in a better position to play to the company's strengths. In addition, we will now be able to focus all of our resources on Eastern's best in class manufacturing and assembling capabilities in the commercial vehicle, automotive and other industrial end markets. With that introduction, I'll turn the call over to Nick for a more detailed review of our Q3 financial results.

Thank you, Jim and good morning, everyone. As Jim noted in his opening comments, we recently made the decision to sell Big 3 Mold business and determined that it met the criteria for classification for held for sale accounting and discontinued operations. The loss recognized in the write down of the Big 3 Mold business to fair value in the third quarter was $19.2 million net of tax. I'll focus my review today on Eastern's financial results from continuing operations for the third quarter. For the third quarter, net sales increased 15% to $71.3 million from $62 million in the 2023 period. Primarily due to increased demand for returnable trans-fat packaging products and truck mirror assemblies and truck accessories. Our backlog as of September 28, 2024, rose 13% to $97.2 million compared to $86.2 million as of September 30,2023. The increase was primarily driven by increased orders for various truck mirror assemblies and returnable transport packaging products. Gross margin as a percentage of sales in the third quarter was 25.5% compared to 24.9% in the 2023 period. The increase in margin primarily reflected improved price/cost alignment and other cost savings initiatives. As a percentage of net sales product development costs were 1.5% for the third quarter of 2024 compared to 2.3% for 2023 period. Selling and administrative expenses increased $1.9 million or 22% for the third quarter of 2024 compared to last year's period. The increase was primarily due to higher payroll related and legal and professional expenses. Other income and expense for the third quarter of 2024 increased $0.1 million compared to the 2023 period. The increase in other income of $0.1 million was primarily driven by lower pension expense when compared to the prior year period. Net income for the third quarter of 2024 was $4.7 million or…

Thank you, Nick. At this point, I'd like to provide further details on Eastern's newly appointed Chief Executive Officer. As we announced yesterday, we are pleased to have Ryan Schroeder join us as CEO effective today. Ryan is a seasoned executive with a strong record of leading manufacturing companies to peer beating, sustained long term growth. Ryan brings a history of growing businesses both organically and through acquisition. Most recently, he served as CEO of Plaskolite LLC, a global leader of acrylic and polycarbonate sheet with more than 120 production lines and 2000 employees worldwide. Prior to that, Ryan was President of IMI Norgen, a leader in industrial automation with some 2,200 employees across 17 facilities. And before that, Ryan spent 12 years at the engineering firm Parker Hannifin in a variety of roles including General manager of Global valves, Plant Manager and Supply Chain Manager of the company's mobile cylinders division. Ryan has extensive background in sales, lean operations, finance and supply chain management. All of which will be valuable to Easter. Ryan will share his vision for achieving long term sustained growth in our next quarterly call. So we hope you will join us for that discussion. Operator, I would now like to open the floor to questions. We will take questions from the web first but before we do that, please provide directions to those on the phone about how they can ask questions.

[Operator Instructions]

All right. So the first question we have via the web is congratulations to the new CEO, where do you want the company to be in six months?

We have pretty ambitious long-term plans and certainly we have shorter term plans quarterly, yearly. And the short-term plans, we do not comment on them specifically as far as the numbers or our ambitious long term plans but should short term plans include of course actions to achieve the long-term plans. So you can rest assured that we look at all of ways to achieve the long-term plans, which as I stated are pretty ambitious.

There are no further questions via the web. Do you have any questions on the conference call?

I'm not seeing anyone in the queue at the moment. [Operator Instructions] Not seeing anyone in the queue just yet. No, I am not seeing any questions at the moment.

Thank you, operator. Jim, there are no further questions. I will turn the call over to you for closing remarks.

Thank you all for your time today. As you have heard the third quarter was a productive period for Eastern. We have now advanced the most important elements of the company's business transformation and believe it is much better positioned to grow and prosper. We look forward to introducing you to Ryan Schroeder on our next earnings call. If there is any information you need. In the meantime, please reach out to Nick or me. Thank you.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.