Greetings. Welcome to Nortech’s Third Quarter 2023 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Alan Nordstrom, Acting CFO at Nortech. Alan, you may begin.

Alright. Thank you, Paul. I’d like to welcome everyone to today’s conference call. Jay will begin today’s call with a review of our operations, recent developments and business outlook. We now review Nortech’s third quarter 2023 financial results before handing it back over to Jay for his closing comments. Then we’ll open up the call for your questions. Please note that we’re still working through the final steps with our independent auditors, and we will file the Form 10-Q when those steps have been completed. But before we continue, please note that statements made during this call and Q&A session may be forward-looking regarding expected revenue, earnings, future plans, opportunities and other company expectations. These estimates, plans and other forward-looking statements involve unknown and known risks and uncertainties that may cause actual results to differ materially from those expressed or implied on this call. These risks including those that are detailed in our most recent Form 10-Q may be amended or supplemented. The statements made during this conference call are based upon information known by Nortech as of the date and time of this call, and we assume no obligation to update the information in today’s call. You can find Nortech’s complete safe harbor statements in our SEC filings. And with that, I’ll turn it over to you, Jay, for your opening comments.

Thank you, Alan, and good afternoon, everyone. We’re glad you could join us today. As usual, I’d like to start by thanking our more than 750 employees worldwide for their dedicated efforts. These people are truly Nortech’s most important competitive advantage. Our team members work hard every day to deliver the mission-critical electrical components, higher level assemblies, complete finished products and engineering services our customers rely on. Today, I’d like to especially recognize team members at our two international facilities. Alan and I are speaking to you from Nortech’s facility in Monterrey, Mexico, about 1,500 miles south of our Minneapolis headquarters. This week, we held our quarterly Board of Directors meeting here, and it’s been a great opportunity for our Board to see our Monterrey team in action. Our 77,000 square foot facility here opened in 2018, newly built and outfitted to our specifications for additional engineering resources and enhanced manufacturing workflow. Nortech has operated in Mexico since 2002. Our other international team members are in Suzhou just left of Shanghai and the Eastern Coast of China, where it’s already Thursday morning. They are about 6,800 miles away from Nortech’s headquarters. This facility opened in 2016 and encompasses 60,000 square feet. By the way, Nortech first started in China in 1999 with an operating partnership. We are very proud – we were very proud to announce last month in our Suzhou facility recently received Class II Medical Device certification from China’s National Medical Products Administration for serving the Asian market. Our Suzhou team members worked very hard to achieve this prestigious certification, which ensures the highest level of safety and effectiveness. This is a shining example of how Nortech’s reputation for superior quality and customer service continues to grow around the world, thanks to our employees’ efforts. This is a…

Thank you, Jay. In the next few minutes, I’ll provide certain details of our financial performance in the 2023 third quarter, but I also encourage you to review our latest Form 10-Q when filed as it contains far more information about our business operations and financial performance than we will cover on this call. As we pointed out in the past, we believe that our individual quarters can be affected by outside factors. These not include timing fluctuations, customer shipment and supply chain issues. Any of these during a given reporting cycle could temporarily disrupt our momentum. Consequently, we believe it is more appropriate to review our business on a 12-month basis rather than a strict calendar fiscal year. This approach will help normalize these potential anomalies and offer a better gauge of our strategy’s long-term success. So switching to our third quarter financial performance. As Jay noted earlier, we have anticipated the demand levels to fluctuate as customers work through inventory. We saw this influenced third quarter revenue levels. However, we expect this issue to get resolved in the near term. Also, the year-over-year decline largely results from last year’s record high third quarter revenue levels that were boosted by significant pricing actions in the period ahead of material cost increases. Yet, we see sustained year-over-year backlog levels, sequential gross margin expansion and solid levels of net income and EBITDA. In the balance of my comments, I will review key areas, which drove our third quarter financial performance. They include first, a review of certain factors impacting our income statement; second, selected items, which includes Nortech’s cash flow statement; and lastly, a brief review of the balance sheet. As usual, if you have specific questions about these items or any of our quarterly financial results, I will be happy…

Thanks, again, Alan. Before we open the call up to your questions, there are three topics I’d like to touch on, inflation, ESG and Nortech’s peer comparisons. First, over the past couple of years, unfortunately, inflation is nothing new. We’ve been carefully managing through its impact on both wages and raw materials. For wages, our team members received across-the-board pay increases this past April. We feel strongly about taking care of the financial well-being of our team members and their families. By the way, I should add that staffing levels are good across all Nortech locations. As a company, we addressed inflation somewhat early, including the price increases we made during the third quarter of 2022. In calculating these price adjustments, we consider both inflation trends and the fact that our pricing for certain technologies and services was not in line with the market because of timing issues for price increases relative to expense recognition, quarterly margin comparisons will fluctuate. However, if you look at the trailing 12-month chart we included in our press release, it shows a tremendous expansion in gross margin levels over the past 2 years. Going forward, we expect gross margins will continue to increase through a combination of strategic pricing actions and operational improvements. Second, our ESG efforts, environmental, social and governance continue to follow a methodical measured approach. Guided by our long-term vision, we are in the early stages of activities, specifically baseline measurements for Nortech’s emissions, both direct and indirect through our supplier partners. We expect to post ESG updates to the Nortech website early 2024, being proactive with ESG positions Nortech well with our own customers, many of which are already actively engaged in ESG efforts. Early on this call, I mentioned the growing importance in the medical market for Nortech. This…

Thank you, Paul and thanks everyone for joining us today. We look forward to talking to you next March when we present our fourth quarter 2023 results. Thank you again and goodbye.

Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.