Good morning, ladies and gentlemen, and welcome to the Nortech Systems Incorporated Third Quarter 2024 Earnings Conference Call. With me on the line today are Jay Miller, President and Chief Executive Officer; and Andrew LaFrence, Chief Financial Officer and Senior Vice President of Finance. [Operator Instructions] At this time, it is my pleasure to turn the call over to Andy LaFrence.

Thank you, Jenny. I would like to welcome everyone to today's conference call. Jay will begin the call with a review of our operations, recent developments and business outlook. Then I will review Nortech's third quarter 2024 fiscal results before turning it back over to Jay for his closing comments. Then we will open up the call for your questions. Before we continue, please note that statements made during this call may be forward-looking regarding expected net sales, 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 SEC filings, may be amended or supplemented. The statements made during this conference call are based on 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 now turn the call over to Jay for his opening comments. Jay?

Thank you, Andy, and good morning, everyone. We're glad you could join us today. In our last earnings call, we noted customer order headwinds, which we expected to impact our near-term orders and revenue. Our third quarter net sales were impacted by a continuing pattern of customers delaying product purchases, customers' desire to reduce their own on-hand inventories and to shorten order to fulfillment timelines. These impacts have been a theme at many contract manufacturers over the past couple of quarters. Industry headwinds and our investments in future operating leverage have negatively affected our near-term earnings and EBITDA generation. The backdrop of the quarter has provided us with incremental opportunities to work closely with customers to provide solutions for the new norm of supply chain nearshoring. These discussions revolve around shorter lead time and on-time delivery strategies, along with deeper customer partnerships, which are fundamental to our long-term growth strategy. As noted last quarter, we have chosen to address these clear market dynamics by making a number of short-term sacrifices in exchange for improved long-term growth and profitability. This includes facility consolidations and investment in business development. We recognize that it was a difficult and disappointing quarter. We're very pleased with the progress in the third quarter to consolidate our 2024 -- to consolidate our North American footprint as well as moving customer programs to other manufacturing locations to better fit customers' needs. We're on track to complete the closure of our Blue Earth, Minnesota facility in December and move its production to our Bemidji, Minnesota facility. Regarding our cost structure, we continue to be very diligent managing operating costs with an eye for long-term optimization of our facilities. In addition to the Blue Earth closure, we are rapidly progressing with a 30% reduction in our Maple Grove lease space.…

Thank you, Jay. In the next few minutes, I'll provide certain details of our financial performance in the third quarter of 2024. I would encourage you to review our Form 8-K containing our press release and non-GAAP measures as well as our quarterly report on 10-Q, both of which were filed earlier this morning with the U.S. Securities and Exchange Commission. As a continued theme, we have historically noted that our individual quarterly performance can be affected by outside factors. These might include timing fluctuations, including seasonal fluctuations, customer shipments and supply chain issues. Any of these could materially impact a particular quarter either positively or negatively. Consequently, we believe it is more appropriate to review our business on a 12-month basis rather than focus on quarterly performance. This approach will help normalize these potential anomalies and offer a better gauge of our strategy's long-term success. So today, while I'll focus most of my comments on the third quarter and year-to-date 2024 results, I will provide some comparisons for the 12-month period ended September 30, 2024, compared with the same period ended September 30, 2023. Net sales for the third quarter of 2024 totaled $31.4 million. This represents a 5.9% decrease in net sales of $33.4 million in the third quarter of 2023. For the nine months ended September 30, 2024, net sales were $99.5 million as compared with $103.3 million in the same prior year period, a decrease of 3.6%. During 2024, we realized headwinds with our industrial customers as a result of softness in this market, which is similar to results published by other contract manufacturers, as well as delayed product launches. In 2024, we've also experienced revenue headwinds from our medical customers as they are aggressively reducing their inventory investments. We have also noted several medical product…

Thank you, Andy. Before we open the call to your questions, I want to touch on three related areas that together serve our customers and help advance Nortech's corporate stewardship, our engineering expertise, product innovation and sustainability plans. For engineering expertise, we have a dedicated engineering services team that is focused on enhancing manufacturability and serviceability, supply chain risk mitigation and cost efficiency for our customers. Our 3-tier cost structure across the U.S., Mexico and China allows us to quickly adopt our global engineering resources to fit our customers' changing needs. A core goal of our long-term strategic plan focuses on unique innovation. This is somewhat unusual for most contract manufacturers. Nortech's engineering capabilities and innovation skills further our research and development activities with advancements like the Expanded Beam Xtreme fiber optic technology, or EBX, that was announced in January. EBX is designed for digital data transmission and offers improved speed, reliability and security when compared to traditional copper. We're also excited about our Active Optical Xtreme technology that works in sophisticated magnetic environments, a testament to our team's dedication to innovation, hard work and excellence in the field of digital connectivity solutions. AOX represents a significant advancement in our product offerings and underscores our commitment to provide state-of-the-art solutions that meet the evolving needs of our clients to deliver products that offer lighter weight, lower cost and ruggedized solutions sustainably. At the simplest level, the vast majority of Nortech's products provide digital connectivity solutions that transmit data and power in various applications. As you may know, the Internet of Things or IoT, integrates a variety of electric components such as microcontrollers, sensors, actuators and connectivity modules. These components in turn, enable IoT connected devices to collect, parse, transmit and receive data. More and more today, that data is being…

Very good. Thank you, Jenny, and thanks to everyone for joining us today. We look forward to talking with you in March when we report our fourth quarter 2024 results. Again, thank you very much, and goodbye.

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