Nortech Systems Inc (NSYS) 2023 Q4 法說會逐字稿

(audio in progress) are Jay Miller, President and Chief Executive Officer; and Andrew LaFrence, Chief Financial Officer and Senior Vice President of Finance.

（音訊進行中）是總裁兼執行長 Jay Miller；財務長兼財務高級副總裁安德魯‧拉弗朗斯 (Andrew LaFrence)。

(Operator Instructions)

（操作員說明）

At this time, it is my pleasure to turn the call over to Andrew LaFrence.

此時，我很高興將電話轉給安德魯·拉弗倫斯。

Thank you, John.

謝謝你，約翰。

I'd also like to welcome everyone to today's conference call.

我還要歡迎大家參加今天的電話會議。

Jay will begin the call with a review of our operations, recent developments, and business outlook.

傑伊將在電話會議開始時回顧我們的營運、近期發展和業務前景。

Then I will review Nortech's fourth quarter and full-year 2023 financial results before turning it back over to Jay for his closing comments, then we will open up the call for your questions.

然後我將回顧 Nortech 的第四季和 2023 年全年財務業績，然後將其轉交給 Jay 進行總結評論，然後我們將開始徵求大家的問題。

Before we continue, please note that statements made during this call may be forward-looking statements regarding expected net sales, earnings, future plans, opportunities, and other company expectations.

在我們繼續之前，請注意，本次電話會議期間發表的聲明可能是有關預期淨銷售額、收益、未來計劃、機會和其他公司預期的前瞻性聲明。

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.

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有重大差異。

These risks, including those that are detailed in our most recent Form 10-K filed today, may be amended or supplemented.

這些風險，包括我們今天提交的最新表格 10-K 中詳細說明的風險，可能會進行修改或補充。

The statements made during this call are based upon information known by Nortech as of the date and time of this call, and we assume no responsibility or obligation to update information in today's call.

本次電話會議中所做的陳述基於 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責任或義務。

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

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

And now with that, I'll turn the call over to Jay for his opening comments.

現在，我將把電話轉給傑伊，請他發表開場白。

Thank you, Andy, and good afternoon, everyone.

謝謝你，安迪，大家下午好。

We're glad you could join us today.

我們很高興您今天能加入我們。

Since this is Andy's first conference call with Nortech, I'd like to take a minute and officially welcome him.

由於這是 Andy 第一次與 Nortech 舉行電話會議，我想花一點時間正式歡迎他。

Andy joined us in December as CFO and Senior VP of Finance, bringing a wealth of knowledge and experience.

Andy 於 12 月加入我們，擔任財務長兼財務高級副總裁，帶來了豐富的知識和經驗。

He's held C-suite positions with several public and private companies and has served on a number of corporate and non-profit Boards.

他曾在多家上市公司和私人公司擔任最高管理層職位，並曾在多家公司和非營利組織的董事會任職。

Andy also spent a number of years on the audit side as a partner at KPMG.

安迪也作為畢馬威會計師事務所的合夥人在審計方面工作了多年。

Nortech is very fortunate to have Andy on the team.

Nortech 非常幸運有 Andy 加入團隊。

Along with overseeing Nortech's financial operations, Andy will assist our leadership team and Board of Directors with strategic planning.

除了監督 Nortech 的財務營運外，Andy 還將協助我們的領導團隊和董事會進行策略規劃。

As I've mentioned on past calls, strategic planning at Nortech is an ongoing iterative process integrated into our DNA.

正如我在過去的電話中提到的，Nortech 的策略規劃是一個融入我們 DNA 的持續迭代過程。

Our strategic plan is not something we just dust off every three years before filing in a way.

我們的策略計劃並不是每三年重新整理一次，然後以某種方式提交。

We work on it diligently every year and take the process very seriously.

我們每年都在努力工作，並非常認真地對待這個過程。

Foundational to Nortech's strategic planning is an employee-first mindset.

Nortech 策略規劃的基礎是員工至上的理念。

Our employees are our most valuable assets, and Nortech's strategic plan reflects that.

員工是我們最寶貴的資產，Nortech 的策略計畫反映了這一點。

We would not have delivered our strong 2023 financial results without our team members' outstanding contributions, and the whole Nortech team deserves our sincere appreciation.

如果沒有團隊成員的傑出貢獻，我們不可能實現 2023 年強勁的財務業績，整個 Nortech 團隊值得我們真誠的讚賞。

While financial and operational improvements are measured on income and cash flow statements, balance sheets, and spreadsheets, it's much harder to quantify Nortech's culture and values.

雖然財務和營運改進是透過收入和現金流量表、資產負債表和電子表格來衡量的，但量化 Nortech 的文化和價值觀要困難得多。

But the whole team creates the right environment where such quantitative improvements can be realized.

但整個團隊創造了合適的環境，可以實現這種數量上的改進。

Everything starts and ends with how our employees live out Nortech's values of teamwork, excellence, commitment, innovation, and integrity every day.

一切的開始和結束都取決於我們的員工每天如何實踐 Nortech 的團隊合作、卓越、承諾、創新和誠信的價值觀。

Touching briefly on our financial results now.

現在簡要談談我們的財務表現。

We posted record net sales for the fourth quarter and the fiscal year 2023, along with continued improvements in gross margin.

我們第四季和 2023 財年的淨銷售額創下歷史新高，毛利率持續改善。

We work carefully with our customers as strategic partners to adjust pricing as needed to reflect market conditions and supply chain realities.

我們作為策略夥伴與客戶密切合作，根據需要調整定價，以反映市場狀況和供應鏈現實。

Our EBITDA levels were also solid at $3.2 million for the fourth quarter and $8 million for the year.

我們的 EBITDA 水準也穩定在第四季 320 萬美元和全年 800 萬美元。

Overall, we're seeing encouraging normalization trends in supply chain and customer ordering practices, factors that had influence our unusually high backlog levels a year ago.

總體而言，我們看到供應鏈和客戶訂購實踐出現了令人鼓舞的正常化趨勢，這些因素在一年前影響了我們異常高的積壓水平。

While we're not completely back to what it was -- what was considered normal, we believe these situations have mostly stabilized.

雖然我們還沒有完全恢復到原來的狀態——被認為是正常的狀態，但我們相信這些情況基本上已經穩定下來。

In supply chain dynamics, the concept of near-shoring is gaining attention recently.

在供應鏈動態中，近岸外包的概念最近越來越受到關注。

According to a January article by the global electronics trade association, IPC, last year, Mexico surpassed China for the first time in 20 years by contributing the highest percentage of US imports from any country.

根據全球電子貿易協會IPC 1月的一篇文章，去年墨西哥20年來首次超過中國，成為美國從所有國家進口中所佔比例最高的國家。

We have seen this trend at Nortech as well.

我們在 Nortech 也看到了這種趨勢。

Our three-tiered global strategy of manufacturing in the US, Mexico, and China gives Nortech customers flexibility in improving their own competitiveness.

我們在美國、墨西哥和中國的三層全球製造策略為 Nortech 客戶提供了提高自身競爭力的靈活性。

We can move production around based on factors like cost, operational requirements, quality control, and intellectual property concerns.

我們可以根據成本、營運要求、品質控制和智慧財產權問題等因素轉移生產。

Our customer teams and engineers evaluate each customer's needs to determine the most suitable location, which may also change over the course of a product's lifecycle.

我們的客戶團隊和工程師評估每個客戶的需求以確定最合適的位置，這也可能在產品生命週期的過程中發生變化。

In terms of China, as I've mentioned on past calls, much of our production work there is built in country for country, a near-shoring approach to better serve our customers and the global market including reduced shipping costs.

就中國而言，正如我在過去的電話中提到的那樣，我們在那裡的大部分生產工作都是在一個國家一個國家進行的，採用近岸方式更好地服務我們的客戶和全球市場，包括降低運輸成本。

To support Nortech's global operations, including our work with large multinational customers, we started a commercial banking relationship with Bank of America in 2017.

為了支持 Nortech 的全球運營，包括與大型跨國客戶的合作，我們於 2017 年與美國銀行建立了商業銀行關係。

We appreciate the flexibility this line of credit has provided, as well as the endorsement of our strategic direction by a world banking leader.

我們讚賞該信貸額度所提供的靈活性，以及​​世界銀行業領導者對我們策略方向的認可。

Recently, we made a change to the structure of that agreement in order to better support our operational needs.

最近，我們對該協議的結構進行了更改，以便更好地支援我們的營運需求。

Andy will give you more details in a few minutes.

安迪將在幾分鐘內為您提供更多詳細資訊。

On a final note, I'd like to recognize an important transition in our executive team.

最後一點，我想承認我們的執行團隊發生了重要轉變。

Congratulations and thank you to Curt Steichen who retired late last year after nearly 20 years at Nortech, most recently as Senior VP of Business Operations.

恭喜並感謝 Curt Steichen，他在 Nortech 工作了近 20 年後於去年年底退休，最近擔任業務營運資深副總裁。

During his tenure, Curt played a key role in Nortech's growth, both the expansion of our full-service solutions offerings and significant increase in our medical market sales.

在他任職期間，Curt 在 Nortech 的發展中發揮了關鍵作用，無論是我們全方位服務解決方案產品的擴展還是醫療市場銷售額的顯著增長。

Stepping in to fill Curt's role is Corey Hancock, who joined us last spring as Vice President of Sales and Business Development.

科里·漢考克 (Corey Hancock) 接替科特的職位，他於去年春天加入我們，擔任銷售和業務開發副總裁。

Previously, Corey is with Benchmark Electronics for nearly 24 years, most recently as Vice President of Strategic Accounts.

在此之前，Corey 在 Benchmark Electronics 工作了近 24 年，最近擔任的職位是策略客戶副總裁。

Benchmark is a recognized world leader in our industry, operating multiple facilities across the Americas, Asia, and Europe.

Benchmark 是我們行業公認的世界領導者，在美洲、亞洲和歐洲經營多個設施。

They were the 13th largest EMS provider in 2022.

2022 年，他們是第 13 大 EMS 提供者。

Given that background and his ability to build and lead sales teams, we are very pleased to have Corey join our leadership team.

鑑於科里的背景以及他建立和領導銷售團隊的能力，我們非常高興科里加入我們的領導團隊。

Next, I'll turn it over to Andy for a more in-depth look at our financial results.

接下來，我將把它交給安迪，讓他更深入地了解我們的財務表現。

Andy?

安迪？

Thank you, Jay.

謝謝你，傑伊。

First, I would like to acknowledge the tremendous team at Nortech.

首先，我要感謝 Nortech 的優秀團隊。

When I started in early December, I had very high expectations based upon my interview process.

當我 12 月初開始工作時，根據面試過程，我抱持著很高的期望。

I can report that our leadership team, employees, and culture are top-notch.

我可以報告說，我們的領導團隊、員工和文化都是一流的。

In the next few minutes, I will provide certain details of our financial performance in 2023, but I will encourage you to review our press release and recently filed Form 10-K as it contains more information about our business operations and financial performance than we will cover on the call today.

在接下來的幾分鐘內，我將提供我們2023 年財務業績的某些詳細信息，但我鼓勵您查看我們的新聞稿和最近提交的10-K 表格，因為它包含的有關我們業務運營和財務業績的資訊比我們將要了解的更多。今天的電話會議。

As we have pointed out in the past, we believe that our individual quarters can be affected by outside factors.

正如我們過去指出的，我們相信我們的個別宿舍可能會受到外在因素的影響。

These may include timing, fluctuations, customer shipments, and supply chain issues.

這些可能包括時間安排、波動、客戶出貨和供應鏈問題。

Any of these could materially impact a particular quarter, either positively or negatively.

其中任何一個都可能對特定季度產生重大影響，無論是積極還是消極。

Consequently, we believe it's more appropriate to review our business on a 12-month basis rather than focusing on quarterly performance.

因此，我們認為以 12 個月為基礎審查我們的業務比關注季度業績更為合適。

This approach will help normalize these potential anomalies and offer a better gauge of our strategy's long-term success.

這種方法將有助於使這些潛在的異常現象正常化，並更好地衡量我們策略的長期成功。

So today, I will focus most of my comments on our full-year results.

因此，今天我的大部分評論將集中在我們的全年業績上。

As Jay noted earlier, in 2023, we anticipated demand levels to fluctuate as customers continued to work through their respective inventories.

正如 Jay 早些時候指出的，我們預計 2023 年需求水準會隨著客戶繼續處理各自的庫存而波動。

We saw this influence in the third-quarter net sales levels.

我們在第三季的淨銷售水準中看到了這種影響。

However, we were pleased to see this issue begin to resolve in the fourth quarter.

然而，我們很高興看到這個問題在第四季度開始解決。

Our year-over-year increase in fourth quarter net sales help us to drive nearly 4% increase in net sales for all of 2023 from the prior year.

第四季淨銷售額的年增率有助於我們推動 2023 年全年淨銷售額較上年增長近 4%。

Additionally, we did see sustained year over year 90-day backlog levels, gross margin expansion, and solid levels of net income and the EBITDA.

此外，我們確實看到了持續的 90 天積壓水準、毛利率擴張以及淨利潤和 EBITDA 的穩定水準。

In the balance of my comments, I will review key areas which drove our 2023 financial performance.

在我的評論中，我將回顧推動我們 2023 年財務表現的關鍵領域。

They include, first, our view of certain factors impacting our income statement; second, selected items which influences Nortech's cash statement.

首先，我們對影響損益表的某些因素的看法；其次，選擇影響Nortech現金報表的項目。

And lastly, a brief review of the balance sheet.

最後，對資產負債表進行簡要回顧。

As usual, if you have specific questions about these items or any of our quarterly or annual financial results, I will be happy to address them during our Q&A portion of this afternoon's call.

像往常一樣，如果您對這些項目或我們的任何季度或年度財務業績有具體問題，我將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 Q4 2023, net sales totaled $36.1 million.

2023 年第四季，淨銷售額總計 3,610 萬美元。

This represents a 1.2% increase from the net sales of $35.6 million in the fourth quarter of 2022 and is up approximately 8% on a sequential quarterly basis.

這比 2022 年第四季 3,560 萬美元的淨銷售額成長了 1.2%，較上季成長約 8%。

This performance is particularly noteworthy as it comes to strong results in the respective prior periods.

這一表現尤其值得注意，因為涉及到之前各個時期的強勁業績。

In 2023, net sales totaled $139.3 million, up nearly 4% from the prior year.

2023 年，淨銷售額總計 1.393 億美元，比上年增長近 4%。

Nortech's full-year 2023 net sales performance was driven by growth in all three of our major industry categories, medical, aerospace and defense, as well as industrial.

Nortech 2023 年全年淨銷售業績受到我們所有三個主要產業類別（醫療、航空航太和國防以及工業）成長的推動。

For the year, the medical market was up by $2.8 million, or 3.7%, as compared with 2022, with the majority of the increase coming from medical component products.

與 2022 年相比，今年醫療市場成長了 280 萬美元，即 3.7%，其中大部分成長來自醫療組件產品。

For the year, net sales from the aerospace and defense category totaled $20.5 million, a 5.1% increase from the prior year.

今年，航空航太和國防類別的淨銷售額總計 2,050 萬美元，比上年增長 5.1%。

And net sales from Nortech's industrial category were $40.1 million, up $3.6 million from the prior year.

Nortech 工業類別的淨銷售額為 4,010 萬美元，比上年增加 360 萬美元。

Included in the financial performance for the full-year 2023, gross profit was $23.1 million, or 16.6%, compared with gross profit of $20.5 million, or 15.3% in the prior year.

在計入 2023 年全年財務表現後，毛利為 2,310 萬美元，即 16.6%，而前一年的毛利為 2,050 萬美元，即 15.3%。

Operating expenses totaled $17.2 million, a 3.4% increase from 2022 operating expense of $16.6 million.

營運費用總計 1,720 萬美元，比 2022 年的營運費用 1,660 萬美元增加 3.4%。

The $559,000 increase in year-over-year operating expense was driven primarily by a $929,000 increase in general and administrative expenses as we incurred merit wage increases plus investments in our back-office infrastructure to create efficiencies.

營運費用年增 559,000 美元，主要是由於一般和管理費用增加 929,000 美元，因為我們增加了績效工資，加上為提高效率而對後台基礎設施進行了投資。

This was offset by a $121,000 reduction in 2023 selling expenses and a $264,000 decrease in product research and development costs.

這被 2023 年銷售費用減少 121,000 美元以及產品研發成本減少 264,000 美元所抵消。

Despite the decline in year-over-year R&D expenses, we believe that this level of investment is sufficient to support new RDX technologies.

儘管研發費用年減，但我們相信這項投資水準足以支持新的 RDX 技術。

Based on our historical, continued, and consistent profitability over the past several years in our forecast of future performance, fourth-quarter 2023 GAAP net income, including non-cash income tax -- included a non-cash income tax benefit of $2.6 million related to the reversal of a previously established deferred income tax valuation allowance.

根據我們過去幾年的歷史、持續和一致的盈利能力對未來業績的預測，2023 年第四季度 GAAP 淨利潤（包括非現金所得稅）包括 260 萬美元的非現金所得稅收益撤銷先前設立的遞延所得稅估價津貼。

As a result of our performance in the fourth quarter and non-cash income tax benefit, net income in 2023 totaled $6.9 million, or $2.38 per diluted share, compared with $2 million or $0.70 per diluted share in 2022.

由於我們第四季度的業績和非現金所得稅優惠，2023 年淨利潤總計 690 萬美元，即稀釋後每股收益 2.38 美元，而 2022 年淨利潤為 200 萬美元，即稀釋後每股收益 0.70 美元。

Adjusted for the non-cash income tax benefit, net income would have totaled $4.3 million, or $1.48 per share, more than double the level of net income in 2022.

根據非現金所得稅優惠進行調整後，淨利潤總計為 430 萬美元，即每股 1.48 美元，是 2022 年淨利潤水準的兩倍多。

As noted in our press release distributed this afternoon, we are using earnings before interest, tax, depreciation, and amortization, or EBITDA, as a key performance indicator to manage our business.

正如我們今天下午發布的新聞稿中所指出的，我們使用息稅折舊攤提前利潤 (EBITDA) 作為管理我們業務的關鍵績效指標。

In the press release, we have provided a reconciliation of our financial performance determined in accordance with GAAP and EBITDA.

在新聞稿中，我們提供了根據 GAAP 和 EBITDA 確定的財務業績調整表。

For the year ended December 31, 2023, EBITDA increased 38.2% to $8 million, compared with $5.8 million for 2022.

截至 2023 年 12 月 31 日的年度，EBITDA 成長 38.2%，達到 800 萬美元，而 2022 年為 580 萬美元。

This increase is largely due to increased sales.

這一增長主要是由於銷量增加。

Moving to the balance sheet and cash flow statement, for the year ended December 31, 2023, net cash provided by operating activities totaled $1.8 million.

轉向資產負債表及現金流量表，截至2023年12月31日止年度，經營活動提供的淨現金總計180萬美元。

During the fourth quarter, as a result of the previously outlined normalization in the slowdown in customer demand, inventory levels of $21.7 million were materially unchanged from the prior quarter and down from $22.4 million as of December 31, 2022.

在第四季度，由於先前概述的客戶需求放緩正常化，庫存水準為 2,170 萬美元，與上一季相比基本沒有變化，低於截至 2022 年 12 月 31 日的 2,240 萬美元。

Receivables as of December 31, 2023, were $19.7 million, up from receivables of $16 million as of December 31, 2022.

截至2023年12月31日的應收帳款為1,970萬美元，高於截至2022年12月31日的應收帳款1,600萬美元。

This is in line with our strong fourth-quarter sales and the timing of customer payments.

這與我們強勁的第四季銷售和客戶付款時間一致。

Our contract asset, which represents revenue earned but not yet billed to customers, increased to $14.5 million as of December 31, 2023, as compared with $10 million at the end of 2022.

截至 2023 年 12 月 31 日，我們的合約資產（代表已賺取但尚未向客戶開立帳單的收入）增加至 1,450 萬美元，而 2022 年底為 1,000 萬美元。

This increase reflects the timing of customer shipments and the strong fourth-quarter net sales.

這一成長反映了客戶出貨的時機和強勁的第四季淨銷售額。

As a reminder, the majority of our net sales are generated from products contractually manufactured specifically to a customer's unique application.

提醒一下，我們的大部分淨銷售額來自專門為客戶的獨特應用合約製造的產品。

And as such, we recognize revenue in accordance with the US GAAP as we produce these products.

因此，我們在生產這些產品時根據美國公認會計準則確認收入。

We ended the fourth quarter with $9.4 million of borrowing capacity on our line of credit.

截至第四季末，我們的信用額度借款能力為 940 萬美元。

We recently placed our asset back line of credit with a cash flow back $15 million senior secured revolving line of credit, which will expire at the end of February 2027.

我們最近將我們的資產退回信用額度，並提供現金流回 1500 萬美元的優先擔保循環信用額度，該信用額度將於 2027 年 2 月底到期。

The new revolver allows for borrowings at a defined rate or at one, three, or six months secured overnight finance rate, or SOFR, plus a defined margin.

新的左輪手槍允許以規定的利率或一年、三個月或六個月的擔保隔夜融資利率（SOFR）加上規定的保證金借款。

We believe that overtime, this arrangement will be more beneficial to Nortech and provide greater flexibility in supporting our ongoing operations.

我們相信，隨著時間的推移，這種安排將對 Nortech 更加有利，並為支持我們的持續營運提供更大的靈活性。

Our evolution to a cash flow credit facility is a result of Nortech's focus on strengthening of its balance sheet and delivering sustained EBITDA growth.

我們向現金流信貸融資的演變是 Nortech 專注於加強其資產負債表和實現持續 EBITDA 成長的結果。

For a more detailed explanation of this new agreement, please see our explanation in the 2023 10-K.

有關此新協議的更詳細解釋，請參閱我們在 2023 10-K 中的解釋。

As of December 31, 2023, cash and cash equivalents totaled $1.7 million, up from $1.1 million at the end of the prior quarter and down from $2.5 million at the end of the prior year.

截至 2023 年 12 月 31 日，現金及現金等價物總額為 170 萬美元，高於上一季末的 110 萬美元，低於上年末的 250 萬美元。

The fluctuation in cash balances reflects timing of cash receipts, expenditures, combined with the timing of line of credit borrowings and repayments.

現金餘額的波動反映了現金收入、支出的時間，以及信用借款和還款的時間。

On a final note, our top financial priorities for 2024 remain unchanged.

最後一點，我們 2024 年的首要財務優先事項保持不變。

First, we are extremely focused on continuing to strengthen our balance sheet.

首先，我們非常注重繼續加強我們的資產負債表。

Next, we will take further advantage of opportunities to align our operations and infrastructure with market demand that we are seeing to deliver sustainable EBITDA growth, as well as driving improvements in free cash flow.

接下來，我們將進一步利用機會，使我們的營運和基礎設施與市場需求保持一致，以實現可持續的 EBITDA 成長，並推動自由現金流的改善。

Our confidence results from growing momentum as we saw in 2023.

正如我們在 2023 年看到的那樣，我們的信心來自於不斷增長的勢頭。

Coupled with disciplined lean operations, execution, expense management, and R&D innovation, we believe Nortech can deliver on our objectives.

加上嚴格的精實營運、執行、費用管理和研發創新，我們相信 Nortech 能夠實現我們的目標。

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

至此，我將把它轉回給傑伊作結束語。

Jay?

傑伊？

Thanks, Andy.

謝謝，安迪。

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.

在我們開始回答大家的問題之前，我想談談三個相關領域，它們共同為我們的客戶提供服務並幫助推進 Nortech 的企業管理：我們的工程專業知識、產品創新和永續發展計畫。

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.

在工程專業知識方面，我們擁有專門的工程服務團隊，專注於為客戶提高可製造性和可維護性、緩解供應鏈風險和成本效率。

Earlier in this call, I mentioned the benefits of our three-tier cost structure across the US, Mexico, and China, and how we can quickly adapt our global resources to fit our customers' changing needs.

在本次電話會議的早些時候，我提到了我們在美國、墨西哥和中國的三層成本結構的好處，以及我們如何快速調整我們的全球資源，以滿足客戶不斷變化的需求。

Nortech's engineering capabilities also further our research and development activities with advancements like the Expanded Beam Xtreme fiber-optic technology, or EBX, that we announced in January.

Nortech 的工程能力也透過我們在一月宣布的 Expanded Beam Xtreme 光纖技術 (EBX) 等先進技術進一步推進我們的研發活動。

EBX is designed for digital data transmission and offers improved speed, reliability, and security when compared to traditional copper.

EBX 專為數位資料傳輸而設計，與傳統銅纜相比，速度、可靠性和安全性均已提高。

At the simplest level, the vast majority of Nortech's products provide digital connectivity solutions that transmit data and power in various applications.

從最簡單的層面來說，Nortech 的絕大多數產品都提供在各種應用中傳輸資料和電力的數位連接解決方案。

As you may know, the Internet of Things, or IoT, integrates a variety of electronic components such as microcontrollers, sensors, actuators, and connectivity modules.

如您所知，物聯網（IoT）整合了各種電子元件，例如微控制器、感測器、致動器和連接模組。

These components in turn enable IoT connected devices to collect, parse, transmit, and receive data.

這些元件反過來使物聯網連接設備能夠收集、解析、傳輸和接收資料。

More and more today, that data is being evaluated and analyzed using artificial intelligence for improved performance and data management for our customers as well as for their customers.

如今，越來越多的數據正在使用人工智慧進行評估和分析，以改善我們的客戶及其客戶的效能和數據管理。

More data means better data pipelines, and that's where Nortech comes in.

更多數據意味著更好的數據管道，這就是 Nortech 的用武之地。

Technologies like our EBX smart cables helps collect and distribute this data faster, more cost effectively, and more securely across these sophisticated networks.

我們的 EBX 智慧電纜等技術有助於在這些複雜的網路中更快、更經濟、更安全地收集和分發這些資料。

We see strong opportunities for growth here.

我們在這裡看到了巨大的成長機會。

For example, industrial IoT applications are expected to experience impressive double-digit annual growth from 2023 to 2030 according to Fortune Business Insights.

例如，根據《財富商業洞察》的預測，從 2023 年到 2030 年，工業物聯網應用預計將實現令人印象深刻的兩位數年成長。

Our pivot to more fiber-optic technology improves product performance for our customers by offering unparalleled speed and reliability.

我們轉向更多的光纖技術，透過提供無與倫比的速度和可靠性來提高客戶的產品性能。

It also aligns with the sustainability goals we share with many of those customers.

它也符合我們與許多客戶共同的永續發展目標。

When compared with traditional fiber -- traditional copper, fiber optics offer significant environmental benefits during both production and operation, including improved energy efficiency and less material usage, while decreasing the carbon footprint of complex cables we manufacture.

與傳統光纖（傳統銅）相比，光纖在生產和營運過程中具有顯著的環境效益，包括提高能源效率和減少材料使用，同時減少我們製造的複雜電纜的碳足跡。

For example, aerospace and defense customers are adopting fiber-optic technology due to these key advantages: reduce size, weight, and power requirements, immunity to electromagnetic interference, improved security, and greater durability in harsh environments.

例如，航空航太和國防客戶正在採用光纖技術，因為它具有以下關鍵優勢：減小尺寸、重量和功率需求、抗電磁幹擾、提高安全性以及在惡劣環境中提高耐用性。

Harsh environments, of course, are very common in aerospace and defense applications.

當然，惡劣環境在航空航太和國防應用中非常常見。

Nortech has a proud history of serving these customers' unique needs dating back roughly 30 years.

Nortech 在滿足這些客戶的獨特需求方面擁有令人自豪的歷史，其歷史可以追溯到大約 30 年前。

It's the smallest of our three core markets by net sales, but very important for our diversification.

以淨銷售額計算，這是我們三個核心市場中最小的一個，但對我們的多元化非常重要。

Our contributions to our national defense are source of great pride for Nortech employees.

我們對國防的貢獻讓 Nortech 員工感到非常自豪。

The majority of our aerospace and defense cables are still traditional black, rounded, and molded type common in legacy defense systems such as shipboard missile launchers, but we are looking to the future with fiber optics and evolving along with our customers.

我們的大多數航空航天和國防電纜仍然是傳統防禦系統（例如艦載飛彈發射器）中常見的傳統黑色、圓形和模製類型，但我們正在展望光纖的未來，並與我們的客戶一起發展。

In closing, we are excited about technological developments across all of our markets and expect them to support our continued sales momentum in 2024, aided by stabilization in supply chain and customer orders.

最後，我們對所有市場的技術發展感到興奮，並期望在供應鏈和客戶訂單穩定的幫助下，它們將支持我們 2024 年持續的銷售動能。

Last month, IPC cited improving sentiment among global electronics manufacturers with stronger demand and shipments reported in January.

上個月，IPC 指出，全球電子製造商的情緒有所改善，一月份的需求和出貨量增加。

Our progress over these quarters -- over recent quarters confirms that outlook.

我們在最近幾季的進展證實了這個前景。

Now, we'll open up the call to your questions.

現在，我們將打開電話詢問您的問題。

John, please open the lines.

約翰，請打開線路。

(Operator Instructions) Thor Mickelson, Private Investor.

（操作員說明）Thor Mickelson，私人投資者。

Jay and Andrew, congratulations on a great quarter.

傑伊和安德魯，祝賀你們取得了出色的季度業績。

We really appreciate that.

我們真的很感激。

Thank you.

謝謝。

This is a question for Jay.

這是傑伊的問題。

Congratulations, Jay, on your five-year anniversary with Nortech.

恭喜 Jay，與 Nortech 合作五週年。

As a shareholder, I'm delighted for your tenure at Nortech.

身為股東，我很高興您在 Nortech 任職。

Could you please briefly comment on what you've seen Nortech accomplished in these last five years, your perspectives on that and where you see Nortech going now?

您能否簡要評論 Nortech 在過去五年中所取得的成就、您對此的看法以及您認為 Nortech 現在的發展方向？

Yeah.

是的。

Thank you, Thor.

謝謝你，托爾。

That's a really good question and I appreciate.

這是一個非常好的問題，我很感激。

Look, the business has changed quite a bit in the past five years, but what has not changed is the dedication and the focus of the employees here.

看，這五年來，業務發生了很大的變化，但沒有改變的是這裡員工的奉獻和專注。

We have great employees; we have great customers; we have great supplier partners.

我們有優秀的員工；我們有很棒的客戶；我們有優秀的供應商夥伴。

And candidly, it was for those reasons why I took the job to begin with.

坦白說，正是因為這些原因，我才開始接受這份工作。

Now we've gotten a lot more disciplined about managing our balance sheet.

現在，我們在管理資產負債表方面變得更加自律。

We've done a lot -- as you've seen, we've done a lot of cleanup of our balance sheet over the past five years.

我們做了很多工作——正如你所看到的，過去五年我們對資產負債表進行了大量清理。

And now, we're much more on a growth trajectory.

現在，我們正處於成長軌道上。

Our expectation is that we will take it from here.

我們的期望是我們將從這裡開始。

Our expectation is we'll continue to grow the top line, and candidly, we'll grow the bottom line faster.

我們的期望是我們將繼續增加收入，坦白說，我們將更快地增加利潤。

And I am very confident this team can do that.

我非常有信心這個團隊能夠做到這一點。

I mentioned in my remarks our strategic planning process, which we take very, very seriously.

我在發言中提到了我們的策略規劃過程，我們非常非常重視這個過程。

And we execute very, very -- we're very focused on the execution of that plan.

我們非常非常專注於該計劃的執行。

We very seldom, if ever, deviate from our strategic plan.

我們很少（如果有的話）偏離我們的策略計劃。

Now, plans are never perfect, and we have to make adjustments along the way, but this team has proven that it can make great adjustments along the way to deliver good top-line growth and really good bottom-line growth.

現在，計劃永遠不會完美，我們必須一路做出調整，但這個團隊已經證明，它可以一路做出巨大的調整，以實現良好的營收成長和真正良好的利潤成長。

So look, I'm thrilled with how things have gone.

所以看，我對事情的進展感到興奮。

If I look back at where I thought we would be five years from the time I took this business, candidly, I don't think we -- I would have thought we would have made this much progress.

坦白說，如果我回顧一下我接手這項業務五年後我們會取得的成就，我認為我們不會有這麼大的進展。

And I didn't know anything about COVID, and we didn't predict the global supply chain crisis.

我對新冠病毒一無所知，我們也沒有預測到全球供應鏈危機。

So the fact that this business has done so well through COVID, in fact, gotten stronger through COVID in a lot of ways, and managed the global supply chain crisis as gracefully as it has, I can't tell you I couldn't be any more proud of the people at Nortech for what they've done.

因此，事實上，這家企業在新冠疫情期間表現如此出色，事實上，在很多方面都透過新冠疫情變得更加強大，並且優雅地應對了全球供應鏈危機，我不能告訴你我不能為Nortech 員工所做的一切感到更加自豪。

So thanks for the question.

謝謝你的提問。

This may be a question for Andrew or Jay to jump in, but looking at the margin for this last -- gross margin.

這可能是安德魯或傑伊介入的問題，但要看看最後的利潤率——毛利率。

If I'm reading that correctly, I'm seeing there's a 300-basis-point improvement over the last quarter, and I see generally your operating expenses have been well controlled.

如果我沒看錯的話，我發現比上個季度提高了 300 個基點，而且我發現你們的營運費用總體上得到了很好的控制。

Could you comment on what drove -- if that's correct, what drove and what's been driving -- you mentioned last quarter you're expecting improved gross margins.

您能否評論一下推動因素 - 如果這是正確的，推動因素以及一直在推動的因素 - 您上季度提到您預計毛利率會有所提高。

Is there something specific happening there?

那裡有什麼具體的事情發生嗎？

Yeah, it's a really good question, Thor.

是的，這是一個非常好的問題，托爾。

A combination of things that really drove it.

真正推動它發展的因素組合在一起。

One is just an increase of revenue coming out of fixed cost structure was helpful.

一是固定成本結構所帶來的收入增加是有幫助的。

As we did note in earlier calls, we have been really hyperfocused on costs and also customer relationships and making sure that we are sending those costs back to customers where we've had supply costs.

正如我們在之前的電話中指出的那樣，我們非常關注成本和客戶關係，並確保我們將這些成本返還給我們有供應成本的客戶。

So I think it's a combination of us getting in front of some historical cost curves, but as importantly, understanding the leverage of the business, especially, a couple of years out here from some consolidation of our plans.

因此，我認為這是我們了解一些歷史成本曲線的結合，但同樣重要的是，了解業務的槓桿作用，特別是幾年後我們對計劃進行了一些整合。

So it really just was everybody was operating well.

所以這確實只是每個人都運作得很好。

We had a minor mix improvement as well in the fourth quarter.

我們在第四季的產品組合也取得了微小的改善。

But the team, John Lindeen and his team just operated very, very well and executed.

但約翰·林丁和他的團隊運作得非常非常好，執行力也非常好。

And do you think that's sustainable?

您認為這是可持續的嗎？

I mean, you've been doing a path here, but is that continuous?

我的意思是，你一直在這裡走一條路，但那是連續的嗎？

Well, Jay had a very (multiple speakers) Yeah, Jay had a very important concept here is that since he's been here, there's been continuous improvement in terms of the stability of the balance sheet and the performance metrics.

嗯，傑伊有一個非常（多個發言者）是的，傑伊在這裡有一個非常重要的概念，那就是自從他來到這裡以來，資產負債表的穩定性和績效指標一直在不斷改進。

And one of the things that's really become important for us is our ability to manage this business, and we will continue to look for opportunities to expand the margin.

對我們來說真正重要的事情之一是我們管理這項業務的能力，我們將繼續尋找擴大利潤的機會。

We are, as you all know, hitting also the other side of the curve here where we're starting to see some limited cases of deflation and similar costs.

眾所周知，我們也到達了曲線的另一邊，我們開始看到一些有限的通貨緊縮和類似成本的情況。

But we'll keep in front of those, make sure we manage our customer relationships, so that we can eventually continue to drive more volume through the facilities, which is really the key to drive those margins up.

但我們將保持領先地位，確保我們管理我們的客戶關係，以便我們最終能夠繼續透過設施推動更多銷量，這確實是提高利潤的關鍵。

Maybe just one last question.

也許只是最後一個問題。

I was surprised, Jay, you talked about improved sales.

傑伊，我很驚訝你談到了銷量的提高。

I've not heard you talking a lot about sales as much, but you're seeing some improved sales, and it looks like your backlog is improving.

我沒有聽到你談論太多關於銷售的事情，但你看到銷售有所改善，而且看起來你的積壓工作正在改善。

A lot of other operators are seeing challenges burning off inventory.

許多其他業者都面臨著庫存消耗的挑戰。

So you're seeing perhaps an inflection point here?

所以你在這裡看到了一個拐點？

Yeah.

是的。

I mean, we've seen that too, by the way.

我的意思是，順便說一句，我們也看到了這一點。

And Andy touched on that.

安迪談到了這一點。

I think we both touched on that in the remarks.

我想我們在發言中都談到了這一點。

We've seen our backlog kind of normalize.

我們已經看到我們的積壓工作已趨於正常化。

Candidly, we expected our backlog would have -- when I say normalize, gotten back to a more regular level.

坦白說，我們預計我們的積壓工作會——當我說正常化時，會恢復到更正常的水平。

It obviously took off and went up quite a bit during COVID as we were experiencing global supply chain crisis.

由於我們正在經歷全球供應鏈危機，在新冠疫情期間，它顯然開始起飛並上升了很多。

But actually, we've seen a little less of that, I'll use quotes, normalization, than we expected.

但實際上，我們看到的情況比我們預期的要少一些，我將使用引號、標準化。

Look, I think we have proven that we can execute better than most of our competitors.

看，我認為我們已經證明我們可以比大多數競爭對手執行得更好。

We have challenges.

我們面臨挑戰。

We face challenges every day, but we manage those challenges pretty darn well.

我們每天都面臨挑戰，但我們很好地應對這些挑戰。

And that's our expectation that we're going to close more business, not only from existing customers, but also from a number of new customers which we are -- have been reasonably successful at doing.

這就是我們的期望，我們將關閉更多業務，不僅來自現有客戶，還來自一些新客戶，我們在這方面已經相當成功。

I'm very proud of the business development team.

我為業務開發團隊感到非常自豪。

I'm very proud, as I mentioned in the comments, that we transitioned so gracefully from Curt Steichen to Corey Hancock that went even better than I could have imagined.

正如我在評論中提到的，我非常自豪我們從 Curt Steichen 如此優雅地過渡到 Corey Hancock，甚至比我想像的還要好。

And that team is doing a great job right now.

該團隊現在做得很好。

And of course, we expect more out of them moving forward.

當然，我們對他們的未來寄予更多期望。

Thank you so much.

太感謝了。

Congratulations.

恭喜。

Yeah.

是的。

Thank you, Thor.

謝謝你，托爾。

(Operator Instructions) Okay, looks like we have no further questions in queue.

（操作員說明）好的，看起來我們隊列中沒有其他問題了。

I'd like to turn the floor back to Jay Miller for any closing remarks.

我想請傑伊·米勒 (Jay Miller) 發表結束語。

Thank you, John, and thanks to everyone for joining us today.

謝謝約翰，也謝謝大家今天加入我們。

We look forward to talking to you in May when we report our first-quarter 2024 results.

我們期待在 5 月報告 2024 年第一季業績時與您交談。

Again, thank you and goodbye.

再次謝謝你，再見。

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

今天的會議到此結束，此時您可以掛斷電話了。

Thank you for your participation.

感謝您的參與。

Thanks, John.

謝謝，約翰。

Thanks, John.

謝謝，約翰。

Thank you, gentlemen.

謝謝你們，先生們。

Take care.

小心。