Nortech Systems Inc (NSYS) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Nortech Systems second quarter 2023 earnings conference call. With me on the line today are Jay Miller, President and Chief Executive Officer; and Alan Nordstrom, Acting Chief Financial Officer. (Operator Instructions)

女士們、先生們，下午好，歡迎參加 Nortech Systems 2023 年第二季度財報電話會議。今天和我一起通話的是總裁兼首席執行官傑伊·米勒 (Jay Miller)；和代理首席財務官艾倫·諾德斯特龍 (Alan Nordstrom)。 （操作員說明）

At this time, it is my pleasure to turn the call over to Alan Nordstrom.

此時，我很高興將電話轉給艾倫·諾德斯特龍。

Thank you, Holly. I'd like to welcome everyone to today's conference call. Jay will begin this call with a review of our review of our business, current trends, and several strategic initiatives. Then I'll review Nortech's Q2 2023 financial results before turning it back over to Jay for his closing comments. Then we'll open up the call for your questions.

謝謝你，霍莉。我歡迎大家參加今天的電話會議。傑伊將在本次電話會議開始時回顧我們對我們業務、當前趨勢和幾項戰略舉措的審查。然後我將回顧 Nortech 的 2023 年第二季度財務業績，然後將其交還給 Jay 進行總結評論。然後我們將打開電話詢問您的問題。

But before we continue, please note that statements made during this call and Q&A session may be forward-looking statements, with the meaning -- within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expected revenue, gross profit, gross margin, EBITDA, free cash flow, net income, financial performance, future plans, developing technologies, opportunities, and other company expectations.

但在我們繼續之前，請注意，本次電話會議和問答環節中所做的陳述可能是前瞻性陳述，其含義符合1995 年《私人證券訴訟改革法案》的含義。前瞻性陳述包括預期收入、毛收入利潤、毛利率、EBITDA、自由現金流、淨利潤、財務業績、未來計劃、開發技術、機會和其他公司預期。

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-K and most recent Form 10-Q filed with the SEC, may be amended or supplemented. These 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 information in today's call.

這些估計、計劃和其他前瞻性陳述涉及未知和已知的風險和不確定性，可能導致實際結果與本次電話會議中明示或暗示的結果存在重大差異。這些風險，包括我們向 SEC 提交的最新表格 10-K 和最新表格 10-Q 中詳細說明的風險，可能會進行修改或補充。本次電話會議期間發表的這些聲明基於 Nortech 截至本次電話會議日期和時間已知的信息，我們不承擔更新今天電話會議中信息的義務。

You can find Nortech's complete Safe Harbor statements in our SEC filings.

您可以在我們向 SEC 提交的文件中找到 Nortech 完整的安全港聲明。

With that, I'll turn it over to Jay for his opening comments.

接下來，我將把它交給傑伊，讓他發表開場白。

Thank you, Alan, and good afternoon, everyone. We appreciate you joining us. I know we have some employees listening in as well, and I'd like to start off my remarks by thanking all of our global Nortech team members. I'm very proud to lead such a dedicated team here in Minnesota, as well as in Mexico and China, committed to serving our customers during difficult times like the global pandemic and subsequent supply chain disruptions.

謝謝艾倫，大家下午好。我們感謝您加入我們。我知道我們也有一些員工在傾聽，我想首先感謝我們所有的全球 Nortech 團隊成員。我非常自豪能夠在明尼蘇達州以及墨西哥和中國領導這樣一支敬業的團隊，致力於在全球大流行和隨後的供應鏈中斷等困難時期為我們的客戶提供服務。

While both of these specific situations have improved significantly, we know that Nortech must always be prepared to face tomorrow's challenges. I am confident in our team members' willingness and ability to consistently deliver outstanding performance that helps differentiate Nortech from our competition.

雖然這兩種具體情況都已顯著改善，但我們知道 Nortech 必須始終做好面對明天挑戰的準備。我對我們的團隊成員持續提供卓越績效的意願和能力充滿信心，這有助於 Nortech 在競爭中脫穎而出。

Also, on behalf of the entire Nortech team, I want to express appreciation for Nortech's. many supplier partners who work closely with us as we serve our mission-critical medical, industrial, and defense customers. We truly could not do our jobs without these strong relationships with our supplier partners.

另外，我謹代表整個 Nortech 團隊對 Nortech 表示感謝。許多供應商合作夥伴在我們為關鍵任務的醫療、工業和國防客戶提供服務時與我們密切合作。如果沒有與供應商合作夥伴的牢固關係，我們確實無法完成我們的工作。

Right at the beginning, please note these key takeaways from this call. Our bookings remain very strong, and our backlog is continuing to climb. Revenue continues to grow, and our profitability is growing even faster. In fact, over the previous 10 quarters, last 12 months, revenue has grown by over 40%.

首先，請注意本次電話會議的這些關鍵要點。我們的預訂量仍然非常強勁，而且我們的積壓訂單還在繼續增加。收入持續增長，我們的盈利能力增長得更快。事實上，在過去 10 個季度（即過去 12 個月）中，收入增長了 40% 以上。

Meanwhile, our last 12 months gross profit, adjusted for one-time events, has nearly tripled, and our adjusted gross margin percentage has roughly doubled. Most importantly, our last 12-month adjusted EBITDA has improved by over $9 million from a negative $2.3 million to a positive $6.8 million. Humbly, we have to admit that's pretty amazing trend.

與此同時，我們過去 12 個月的毛利潤（根據一次性事件調整後）幾乎增加了兩倍，調整後的毛利率也大約增加了一倍。最重要的是，我們過去 12 個月調整後的 EBITDA 已改善超過 900 萬美元，從負 230 萬美元增至正 680 萬美元。謙虛地說，我們不得不承認這是一個非常驚人的趨勢。

Turning now more specifically to our second-quarter performance. We continue to achieve solid results in revenue, EBITDA, bookings, and backlog, even over strong prior-year comparisons. Bookings came in at the highest level in the past four quarters at $37 million. Our total backlog topped $100 million, which continues to surpass our expectations as the post pandemic and supply chain crisis market is stabilizing.

現在更具體地談談我們第二季度的業績。即使與去年相比，我們仍然在收入、EBITDA、預訂和積壓訂單方面繼續取得穩健的成果。預訂量達到過去四個季度的最高水平，達到 3700 萬美元。我們的積壓總額已超過 1 億美元，隨著疫情后和供應鏈危機市場的穩定，這一數字繼續超出我們的預期。

With strong bookings, we are resetting our expectations back to steady backlog growth sooner than we had anticipated. This, of course, is great news.

由於預訂量強勁，我們正在將預期重新調整為積壓訂單穩定增長，這比我們預期的要早。這當然是個好消息。

In recent quarters, when supply chain challenges were more acute, certain customers ordered parts ahead, which meant that we shipped more in those quarter than we would have otherwise. Now, those customers are working down their inventories, which means we shipped a little less in the second quarter generally than we would have otherwise. History indicates that these factors tend to balance out, and we are guardedly optimistic that the pendulum is starting to swing back.

最近幾個季度，當供應鏈挑戰更加嚴峻時，某些客戶提前訂購了零件，這意味著我們在該季度的發貨量比其他情況下要多。現在，這些客戶正在減少庫存，這意味著我們第二季度的發貨量總體上比其他情況要少一些。歷史表明，這些因素往往會相互抵消，我們對鍾擺開始回擺持謹慎樂觀的態度。

Looking ahead at the rest of 2023. Our positive results of the halfway mark support the upbeat outlook that our large customers in particular are communicating. They are expecting a pretty solid year with an outlook I would characterize as cautiously optimistic. One major customer recently cited increasing global demand as the key driver of their revenue increase.

展望 2023 年剩餘時間。我們一半的積極成果支持了我們特別是大客戶所傳達的樂觀前景。他們預計今年將是相當穩健的一年，我將其形容為謹慎樂觀。一位主要客戶最近將不斷增長的全球需求視為其收入增長的主要驅動力。

Beyond 2023, there is still some shared uncertainty about next year, including wondering what a possible recession might look like and how long it could last, however, recent macroeconomic news is encouraging, such as sustained labor market strength and easing inflation. This news has influenced higher GDP predictions for the remainder of 2023 by some economists, and the economy seems on track for a relatively soft landing.

2023 年之後，明年仍然存在一些共同的不確定性，包括想知道可能的衰退會是什麼樣子以及會持續多久，但最近的宏觀經濟消息令人鼓舞，例如勞動力市場持續走強和通脹放緩。這一消息影響了一些經濟學家對 2023 年剩餘時間的 GDP 預測，經濟似乎有望實現相對軟著陸。

In this dynamic global economy and industry, Nortech's relatively small size compared to much larger EMS firms can be an advantage. We are more nimble and better able to adjust more quickly to changing conditions and market forces.

在這個充滿活力的全球經濟和行業中，與規模大得多的 EMS 公司相比，Nortech 的規模相對較小，這可能是一個優勢。我們更加靈活，能夠更快地適應不斷變化的條件和市場力量。

I'll conclude my opening comments with two examples of Nortech's agility and prudent approach. First, strategic innovation. To stay ahead of market trends and better serve our customers, we are carefully investing in new technologies that can differentiate Nortech and provide a competitive advantage.

我將用 Nortech 敏捷和審慎方法的兩個例子來結束我的開場白。一是戰略創新。為了保持領先市場趨勢並更好地服務客戶，我們正在謹慎投資新技術，使 Nortech 脫穎而出並提供競爭優勢。

Two examples include the Active Optical Xtreme and Flex Faraday Xtreme platforms. Health foster innovation like this, Nortech established the Science and Technology Committee of our Board several years ago. The existing -- this Board committee makes Nortech somewhat unique.

Active Optical Xtreme 和 Flex Faraday Xtreme 平台就是兩個例子。健康促進創新，Nortech 幾年前就成立了董事會科學技術委員會。現有的董事會委員會使 Nortech 顯得有些獨特。

Indeed, just 56 Fortune 500 companies have such committees according to a Wall Street Journal article in May of 2023. It was gratifying to be included in this article, with Nortech recognized for our focus on innovation and its impact on winning new business. The article noted that Nortech's stockprice had more than doubled in the past three years, far exceeding the 44% gain of the S&P 500.

事實上，根據《華爾街日報》 2023 年5 月的一篇文章，只有56 家財富500 強公司設有此類委員會。我們很高興能被納入這篇文章，Nortech 因我們對創新的關注及其對贏得新業務的影響而受到認可。文章指出，Nortech的股價在過去三年裡翻了一番多，遠超標準普爾500指數44%的漲幅。

Second, Nortech is committed to being a better steward of our planet. As I mentioned on our last call, we are proactively steering our focus on environmental, social, and governance, or ESG objectives. In our initial baselining steps, our US plants are initiating measurement of Nortech's Scope 1 and Scope 2 emissions, which encompass both direct emissions and indirect emissions from energy we purchase.

其次，Nortech 致力於成為我們星球的更好管理者。正如我在上次電話會議中提到的，我們正在積極將重點轉向環境、社會和治理或 ESG 目標。在我們最初的基線步驟中，我們的美國工廠正在開始測量 Nortech 的範圍 1 和範圍 2 排放，其中包括我們購買的能源的直接排放和間接排放。

While focusing our planet's long-term future through ESG efforts and the long-term value of Nortech, we simultaneously remain committed to optimizing quarterly financial returns for our shareholders. We firmly believe that these objectives can co-exist and also mutually enhance each other. We also expect that aligning with ESG goals would become -- and increasingly -- will become increasingly crucial for business in our chosen markets.

在通過 ESG 努力和 Nortech 的長期價值關注地球的長期未來的同時，我們仍然致力於為股東優化季度財務回報。我們堅信，這些目標可以共存並且相輔相成。我們還預計，與 ESG 目標保持一致對於我們所選市場中的業務將變得越來越重要。

Before I hand the call back off to Alan for our financial review, I should mention that our search for Nortech's next Chief Financial Officer is underway. We believe we are in a good position right now with our financial reporting structure and procedures in place.

在我將電話轉回艾倫進行財務審查之前，我應該提到，我們正在尋找 Nortech 的下一任首席財務官。我們相信，我們的財務報告結構和程序目前處於有利位置。

Alan is filling the interim CFO role very capably, and the finance and accounting team is operating at a very high level. We are taking the necessary time to make the right hire, realizing the next CFO will play a vital role in supporting our growth plans.

艾倫非常有能力地擔任臨時首席財務官，財務和會計團隊的運作水平非常高。我們正在花費必要的時間來招聘合適的人選，並認識到下一任首席財務官將在支持我們的增長計劃中發揮至關重要的作用。

Now, for more in-depth financial discussion, I'll turn the call back over to Alan.

現在，為了進行更深入的財務討論，我將把電話轉回給艾倫。

Thank you, Jay, and thanks, everyone, for joining us today. For the next few minutes, I'll provide certain details of our financial performance in the 2023 second quarter. But I would encourage you to review our latest Form 10-Q, which we filed earlier as it contains far more information about our business operations and financial performance than we will cover on this call.

謝謝杰伊，也謝謝大家今天加入我們。在接下來的幾分鐘內，我將提供 2023 年第二季度財務業績的某些詳細信息。但我鼓勵您查看我們之前提交的最新表格 10-Q，因為它包含的有關我們業務運營和財務業績的信息比我們在本次電話會議中介紹的信息要多得多。

Before I begin our financial review, I'd like to take a minute to again highlight the new chart we added to our press release last quarter and which we will include each quarter going forward. It provides 10 quarters of LTM, or last 12 months historical data for four key metrics, sales, gross profit dollars, gross margin percent, and EBITDA.

在開始我們的財務審查之前，我想花一點時間再次強調我們在上個季度的新聞稿中添加的新圖表，以及我們將在未來每個季度包含的新圖表。它提供 10 個季度的 LTM，或過去 12 個月的四個關鍵指標（銷售額、毛利潤、毛利率和 EBITDA）的歷史數據。

As we've pointed out in the past, we believe that our individual quarters can be affected by outside factors. This might include timing fluctuations, customer shipments, and supply chain issues. Any of these during a given reporting cycle could temporarily disrupt our momentum.

正如我們過去指出的，我們相信我們的個人季度可能會受到外部因素的影響。這可能包括時間波動、客戶發貨和供應鏈問題。在給定的報告週期內，任何這些都可能暫時擾亂我們的勢頭。

Consequently, we believe it's more appropriate to review our business on a longer-term, 12-month basis, rather than a straight calendar year. This approach will help normalize these potential anomalies and offer a better gauge of our company's long-term success.

因此，我們認為以 12 個月為基礎的長期審查我們的業務比直接歷年審查更為合適。這種方法將有助於使這些潛在的異常現象正常化，並更好地衡量我們公司的長期成功。

So switching to our second-quarter financial performance. As Jay noted, we made progress in several key performance areas with quarterly revenue up nearly 8% from the prior-year period. Again, we're particularly pleased by this revenue momentum as this quarter's year-over-year growth continues to come on a strong prior-year comparable.

因此，轉向我們第二季度的財務業績。正如 Jay 指出的那樣，我們在幾個關鍵績效領域取得了進展，季度收入比去年同期增長了近 8%。同樣，我們對這種收入勢頭感到特別高興，因為本季度的同比增長繼續強勁，與去年同期相比。

We also saw sustained year-over-year backlog levels, increases in year-over-year gross margin, and solid levels of net income and EBITDA. Over the past several quarters, we have taken necessary steps to create a firm financial platform that can be flexible and respond quickly to changing macroeconomic conditions.

我們還看到了持續的同比積壓水平、同比毛利率的增長以及淨利潤和 EBITDA 的穩定水平。在過去的幾個季度中，我們採取了必要的措施來創建一個牢固的金融平台，該平台可以靈活并快速響應不斷變化的宏觀經濟狀況。

While we are constantly vigilant to the negative impacts of inflation, we are encouraged as our customers are reporting fewer supply chain disruptions, and we are more optimistic given the continued sales momentum we saw in the second quarter. Evidence of this renewed sense of optimism can be found in our total backlog level last quarter and our newer record level of bookings.

雖然我們始終對通脹的負面影響保持警惕，但我們的客戶報告供應鏈中斷的情況有所減少，因此我們感到鼓舞，而且考慮到第二季度持續的銷售勢頭，我們更加樂觀。從我們上季度的總積壓量和新的預訂量記錄中可以找到這種新的樂觀情緒的證據。

Total backlog continues to exceed $100 million. Coupled with the strong bookings levels and our solid foundation, we are confident that we can maintain momentum into the second half of the year.

積壓總額繼續超過 1 億美元。加上強勁的預訂水平和堅實的基礎，我們有信心能夠在下半年保持勢頭。

Increased shipments during the quarter have resulted in orders moving through the pipeline quicker and causing backlog levels to start reaching a steady state. In the near term, we expect backlog levels to remain relatively constant, with future growth coming from accelerated contributions from both new and existing customers, as well as technology innovations.

本季度出貨量的增加導致訂單更快地通過管道，並導致積壓水平開始達到穩定狀態。短期內，我們預計積壓水平將保持相對穩定，未來的增長將來自新老客戶的加速貢獻以及技術創新。

In the balance of my comments, I'll review key areas, which drove our second-quarter financial performance. They include, first, a review of certain factors impacting our income statement; second, selected items, which include new tax 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'll be happy to address them during the Q&A portion of this afternoon's call.

在我的評論中，我將回顧推動我們第二季度財務業績的關鍵領域。首先，它們包括對影響我們損益表的某些因素的審查；二是精選項目，其中包括新的稅收現金流量表；最後，對資產負債表進行簡要回顧。與往常一樣，如果您對這些項目或我們的任何季度財務業績有具體問題，我很樂意在今天下午電話會議的問答部分中解答這些問題。

In Q2 2023 near record revenue totaled $35 million. This represents a 7.7% increase from revenue of $32.5 million in the second quarter of 2022 and was up slightly from the prior quarter, which increases -- with increases coming from higher volume and previous pricing actions.

2023 年第二季度，總收入達到 3500 萬美元，接近創紀錄水平。這比 2022 年第二季度 3250 萬美元的收入增長了 7.7%，比上一季度略有增長，增長來自銷量增加和之前的定價行動。

Again, this performance was particularly noteworthy as it compares to a strong performance in the prior-year period. In fact, we've been able to sustain revenue growth over the trailing 12-month period despite the stronger historical comparables.

同樣，與去年同期的強勁表現相比，這一表現尤其值得注意。事實上，儘管歷史可比性更強，但我們在過去 12 個月內仍能維持收入增長。

Nortech's second quarter 2023 revenue performance was driven by growth in our medical, as well as our aerospace and defense categories. In the second quarter, the medical market was up $2.1 million, or 11.2%, as compared to 2022, with the majority of the increase coming from medical component products.

Nortech 2023 年第二季度的收入表現是由醫療、航空航天和國防類別的增長推動的。第二季度，醫療市場較 2022 年增長 210 萬美元，即 11.2%，其中大部分增長來自醫療組件產品。

In the second quarter, revenue from the aerospace and defense market was up $829,000, or 18%, from the prior year. Included in the financial performance for the current year, gross profit totaled $5.5 million, or 15.6%, compared to gross profit of $5 million, or 15.4%, in the prior-year quarter.

第二季度，航空航天和國防市場的收入比上年增長 829,000 美元，即 18%。計入本年度財務業績後，毛利潤總額為 550 萬美元，即 15.6%，而上年同期毛利潤為 500 萬美元，即 15.4%。

Second quarter 2023 operating expenses totaled $4.4 million, a 10% increase from the second quarter of 2022 operating expenses of $4 million and flat on a sequential basis. The $396,000 increase in year-over-year operating expenses is driven primarily by a $437,000 increase in second-quarter general and administrative expenses from the prior-year quarter. The majority of the increase in year-over-year G&A costs were due to higher professional fees and increased labor costs.

2023 年第二季度運營費用總計 440 萬美元，比 2022 年第二季度 400 萬美元的運營費用增長 10%，環比持平。運營費用同比增加 396,000 美元，主要是由於第二季度一般和管理費用較去年同期增加 437,000 美元。一般管理費用同比增長的主要原因是專業費用增加和勞動力成本增加。

Finally, we had a reduction of $34,000 year-over-year research and development costs. We believe that this level of investment was sufficient to support new technologies such as the AOX cable platform and the Flex Faraday Xtreme technology.

最後，我們的研發成本同比減少了 34,000 美元。我們相信這一水平的投資足以支持 AOX 電纜平台和 Flex Faraday Xtreme 技術等新技術。

As a result of our performance in the second quarter of 2023, net income totaled $635,000, or $0.22 per diluted share, in line with the prior quarter and second quarter of 2022. Through the first half of 2023, net income totaled $1.3 million versus $857,000 in the prior year first half. Also, all employee retention credits, or ERC, have been received as of June 30, 2023, and our balance sheet and cash flow statements reflect that.

根據我們2023 年第二季度的業績，淨利潤總計為635,000 美元，即稀釋後每股收益0.22 美元，與上一季度和2022 年第二季度一致。截至2023 年上半年，淨利潤總計為130 萬美元，而稀釋後每股收益為857,000 美元去年上半年。此外，截至 2023 年 6 月 30 日，所有員工保留積分 (ERC) 均已收到，我們的資產負債表和現金流量表也反映了這一點。

Next, in the second quarter of 2023, net cash used by operating activities was [$4.4 million]. Receivables at June 30, 2023 were $17.4 million, up from receivables of $16.2 million in the prior quarter and $16 million at year-end. This is in line with the seasonal pattern that we have seen evolve over the past couple of years.

接下來，2023 年第二季度，經營活動使用的淨現金為[440 萬美元]。截至 2023 年 6 月 30 日的應收賬款為 1,740 萬美元，高於上季度的 1,620 萬美元和年底的 1,600 萬美元。這符合我們在過去幾年中看到的季節性變化模式。

The first half of the year has been typically marked by higher receivable levels for cash collections accelerated during the summer months and second-half receivable levels decline. During the second quarter increased shipments, as well as less pressure to respond to global supply chain shortages kept inventory levels at $21.1 million, relatively flat on a reported level, and down from $22.4 million at December 31, 2022.

今年上半年的典型特點是應收賬款水平在夏季期間加速，而下半年應收賬款水平下降。第二季度出貨量增加，以及應對全球供應鏈短缺的壓力減輕，庫存水平保持在 2110 萬美元，與報告的水平相對持平，低於 2022 年 12 月 31 日的 2240 萬美元。

We ended the second quarter of 2023 with $5.3 million of borrowing capacity and a $16 million line of credit with Bank of America. This credit agreement is important and giving Nortech the flexibility to manage through the headwinds we have experienced in the last few years and the previously mentioned seasonal fluctuations we see in our receivable balances and collections.

截至 2023 年第二季度末，我們的借款能力為 530 萬美元，美國銀行的信貸額度為 1,600 萬美元。該信貸協議非常重要，它使 Nortech 能夠靈活地應對我們在過去幾年中經歷的逆風以及前面提到的我們在應收賬款餘額和收款中看到的季節性波動。

At June 30, 2023, cash and equivalents totaled $1.9 million, down from $2.5 million at the end of the prior year. However, we believe that our existing financing arrangements, anticipated cash flows from operations, and cash on hand will be sufficient to satisfy our working capital needs in 2023, as well as any capital expenditures and debt repayment. We are confident that we have created a solid financial base to take this company into the future.

截至 2023 年 6 月 30 日，現金及等價物總額為 190 萬美元，低於上年末的 250 萬美元。然而，我們相信，我們現有的融資安排、預期運營現金流和手頭現金將足以滿足我們2023年的營運資金需求以及任何資本支出和債務償還。我們相信，我們已經為公司走向未來奠定了堅實的財務基礎。

On a final note, let me reiterate that our top financial priorities for 2023 remain unchanged. First, we are extremely focused on continuing to strengthen our balance sheet and mitigate impacts that we may see from changes in economic environment or seasonality.

最後，請允許我重申，我們 2023 年的首要財務優先事項保持不變。首先，我們非常注重繼續加強我們的資產負債表，並減輕經濟環境或季節性變化可能帶來的影響。

Next, we will take further advantage of opportunities to align our operations and infrastructure with the market demand that we are seeing in order to deliver sustainable free cash flow growth. Our confidence in results from the growth momentum we saw in 2022, that has sustained thus far in 2023. Coupled with disciplined, lean operation execution, and R&D innovation, we believe Nortech can deliver on our objectives.

接下來，我們將進一步利用機會，使我們的運營和基礎設施與我們所看到的市場需求保持一致，以實現可持續的自由現金流增長。我們對2022 年增長勢頭的信心來自於我們在2022 年看到的增長勢頭，並且這種增長勢頭一直持續到2023 年。再加上嚴格、精益的運營執行和研發創新，我們相信Nortech 能夠實現我們的目標。

With that, I turn it back over to Jay for his closing comments.

說完，我把它轉回給傑伊，讓他發表結束語。

Thanks, Alan. Early in this call, I mentioned our efforts around two key initiatives, innovation and ESG. I conclude my remarks by citing these other initiatives, the internet of things, or IoT; and artificial intelligence, or AI.

謝謝，艾倫。在本次電話會議的早期，我提到了我們圍繞創新和 ESG 兩項關鍵舉措所做的努力。我通過引用這些其他舉措來結束我的發言：物聯網或物聯網；和人工智能（AI）。

We know there are opportunities for Nortech to leverage IoT and AI applications to enhance our services' efficiency and financial scalability. While ChatGPT is getting most of the media headlines, AI and machine learning and IoT have actually been around for a number of years. But the opportunities and awareness of IoT and AI is potentially -- are certainly ramping up.

我們知道 Nortech 有機會利用物聯網和人工智能應用來提高我們的服務效率和財務可擴展性。雖然 ChatGPT 佔據了大部分媒體頭條，但人工智能、機器學習和物聯網實際上已經存在很多年了。但物聯網和人工智能的機會和意識有可能——肯定會增加。

As with our ESG approach, we intend to lead and not just follow with IoT and AI. With good IoT and AI implementation look like in Nortech Systems, we're in the early stages, but here are some applications our team will be analyzing.

與我們的 ESG 方法一樣，我們打算在物聯網和人工智能領域發揮引領作用，而不僅僅是跟隨。 Nortech Systems 擁有良好的物聯網和人工智能實施，我們正處於早期階段，但以下是我們團隊將分析的一些應用程序。

For improved quality control, AI and IoT can be leveraged proactively in the detection of manufacturing issues to ensure better product performance and customer satisfaction. For enhanced engineering support, IoT and AI can streamline and design assistance we offer customers for their PCBAs and higher-level assemblies, followed by accelerating our production set up. And when future component charges happen, IoT and AI can help us more quickly identify and source substitute parts.

為了改進質量控制，可以主動利用人工智能和物聯網來檢測製造問題，以確保更好的產品性能和客戶滿意度。為了增強工程支持，物聯網和人工智能可以簡化我們為客戶提供的 PCBA 和更高級別組件的設計幫助，然後加快我們的生產設置。當未來發生組件收費時，物聯網和人工智能可以幫助我們更快地識別和採購替代零件。

By harnessing the potential of IoT and AI, Nortech can not only accelerate manufacturing processes and improve product quality, but also expand our services and reinforce Nortech's competitive advantages.

通過利用物聯網和人工智能的潛力，Nortech 不僅可以加快製造流程並提高產品質量，還可以擴展我們的服務並增強 Nortech 的競爭優勢。

Finally, before our Q&A session, the key takeaways I noted earlier bear repeating. Our bookings remain very strong, and our backlog is continuing to climb. Revenue continues to grow, and our profitability has grown even faster.

最後，在問答環節之前，我需要重複一下我之前提到的關鍵要點。我們的預訂量仍然非常強勁，而且我們的積壓訂單還在繼續增加。收入持續增長，我們的盈利能力增長得更快。

Over the previous 12 -- 10 quarters, trailing 12-month revenue has grown by over 40%. Meanwhile, our last 12-month gross profit, adjusted for one-time events, has nearly tripled, and our adjusted gross margin percentage has roughly doubled.

在過去 12 到 10 個季度中，過去 12 個月的收入增長了 40% 以上。與此同時，根據一次性事件調整後，我們過去 12 個月的毛利潤幾乎增加了兩倍，調整後的毛利率也大約增加了一倍。

Most importantly, our last 12-month adjusted EBITDA has improved by over $9 million from a negative $2.3 million to a positive $6.8 million. We're very proud of these numbers.

最重要的是，我們過去 12 個月調整後的 EBITDA 已改善超過 900 萬美元，從負 230 萬美元增至正 680 萬美元。我們對這些數字感到非常自豪。

That concludes our presentation. And now, we'll open the call up for questions. Operator?

我們的演講到此結束。現在，我們將開始提問。操作員？

(Operator Instructions) There are no questions in queue.

（操作員說明）隊列中沒有問題。

Thank you, Holly, and thanks to everyone for joining us today. We look forward to talking to you next in November with our third quarter 2023 results. Thank you, and goodbye.

謝謝你，霍莉，也感謝大家今天加入我們。我們期待在 11 月份與您討論 2023 年第三季度的業績。謝謝，再見。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Goodbye.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。再見。