Q2 2025 Nortech Systems Inc Earnings Call
With me on the line today are J, Miller, President and Chief Executive Officer, and Andrew Lafrentz, Chief Financial Officer, and senior Vice President of Finance all lines have been placed on a listen only mode and the call will be opened for questions and comments following the management presentation.
Operator: 2025 Earnings Conference Call. With me on the line today are Jay D. Miller, President and Chief Executive Officer, and Andrew LaFrence, Chief Financial Officer and Senior Vice President of Finance. All lines have been placed on a listen-only mode, and the call will be open for questions and comments following the management presentation. At this time, it is my pleasure to turn the call over to Andy LaFrence.
At this time it is my pleasure to turn the call over to and dealer friends.
Thank you Jenny.
I would also 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 the <unk> second quarter 2025 financial results before turning it back over to Jay for his closing comments.
Andrew LaFrence: Thank you, Jenny. I would also 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. I will review Nortech's Q2 2025 financial results before turning it back over to Jay for his closing comments. 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, operating results, 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.
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 and operating results future plans opportunities and other company expectation.
These estimates plans and other forward looking statements involve unknown and known risks and uncertainties 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 made based upon information known by Nortek as of the date and time of this call and we assume no obligation to update the information in today's call you.
Andrew LaFrence: The statements made during this conference call are made 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 will find Nortech's complete safe harbor statements in our SEC filings. With that, I will turn it over to Jay for his opening comments. Jay?
You will find Nortek complete safe Harbor statements in our SEC filings.
And with that I will turn it over to Jay for his opening comments Jay.
You, Andy and good morning, everyone. We're glad you could join US today, our second quarter results are testament to the dedication resilience and execution of our entire team.
Jay D. Miller: Thank you, Andy. Good morning, everyone. We're glad you could join us today. Our Q2 results are a testament to the dedication, resilience, and execution of our entire team. Despite lower revenue compared with Q2 2024, we delivered improved earnings and positive EBITDA this quarter. Near-term clear evidence that our restructuring efforts and cost discipline are paying off. Increased plant utilization and improved manufacturing efficiencies across transfer programs are building the operational foundation we need for sustained performance improvement. Operationally, we have also made strategic inventory shifts, reducing raw materials while investing in finished goods to support key customer stocking programs. We are starting to see improvements in our manufacturing efficiencies as our teams are gaining experience manufacturing transferred production between plants on a recurring basis.
Lower revenue compared with the second quarter of 2024, we delivered improved earnings and positive EBITDA this quarter.
Near term clear evidence that our restructuring efforts and cost discipline are paying off.
Increased plant utilization and improved manufacturing efficiencies across transfer programs or building the operational foundation, we need for sustained performance improvement.
Operationally, we have also made strategic inventory shifts reducing raw materials, while investing in finished goods to support key customer stocking program stocking programs.
Further we are starting to see improvements in our manufacturing efficiencies as our teams are gaining experienced manufacturing transferred production between plants on a recurring basis.
As <unk> previously noted the first half of 2025 in the fourth quarter of 2024 revenues in our aerospace and defense market were negatively impacted by our closure of our Blue Earth facility and the transfer of customer programs to Bemidji due to unexpected delays as a result of slow customer approvals.
Jay D. Miller: As previously noted, the H1 2025 and the Q4 2024 revenues in our aerospace and defense market were negatively impacted by our closure of our Blue Earth facility and the transfer of customer programs to Bemidji due to unexpected delays as a result of slow customer approvals. We have made significant headway with our customers' approvals over the past quarter, and we fully expect our aerospace and defense business to get back to normal in the H2 2025. The team at Bemidji has been working very hard, and we're very encouraged by the progress the Bemidji team has made. Regarding our cost structure, we also continue to be very diligent in managing operating costs.
We have made significant headway with our customers' approvals over the past quarter, and we fully expect our aerospace and defense business to get back to normal in the second half of 2025.
The team at the midyear has been working very hard and we're very encouraged by the progress of the <unk>.
Magic team has made.
Regarding our cost structure. We also continued to be very diligent in managing operating costs over.
Over the past three quarters, we have undertaken significant actions to reduce our cost structure with the blue Earth facility closure and reduction of our headquarters lease space along with other actions during the first quarter of 2025 to further manage our head count based on our current operating metrics.
Jay D. Miller: Over the past 3 quarters, we have undertaken significant actions to reduce our cost structure with the Blue Earth facility closure, a reduction of our headquarters' lease space, along with other actions during Q1 2025 to further manage our headcount based on our current operating metrics. Meanwhile, the on-again, off-again imposition of tariffs may significantly impact manufacturers with facilities in China and Mexico, including Nortech. While the tariffs with Mexico are currently somewhat uncertain, it is important to note that Nortech is not the importer of record into the United States for goods produced in Mexico, as we operate under a Maquiladora structure for our customers. This materially reduces our direct exposure to these tariffs. As we expected, many of our customers are evaluating their supply chain strategies.
Meanwhile, the on again off again imposition of tariffs may significantly impact manufacturers with facilities in China, and Mexico, including Nortek.
While the tariffs with Mexico are currently somewhat uncertain. It is important to note that <unk> is not the importer of record into the United States for goods produced in Mexico, as we operate under a maquiladora structure for our customers.
This materially reduces our direct exposure to these tariffs.
As we expected many of our customers are evaluating their supply chain strategies.
We believe we are currently well positioned with our north American footprint as our Monterey Maquiladora operations in Minnesota facilities work under the framework of the U S. MCA.
Jay D. Miller: We believe we are currently well-positioned with our North American footprint as our Monterrey Maquiladora operations and Minnesota facilities work under the framework of the USMCA. As for China, as I've mentioned on past calls, much of our production work there is built in country for country and non-US markets, a nearshoring approach to better serve our customers in the global market with reduced shipping costs and time. As a result, our China tariff exposure is primarily related to piece parts imported from China rather than larger finished goods imported from China. As tariffs on Chinese imports may change, we are closely monitoring these impacts on our business and adjusting customer pricing as well as our sourcing strategies as needed to mitigate any adverse effects.
As for China, as I've mentioned on past calls much of our production work. There is built in country for country and non U S markets.
Near shoring approach to better serve our customers in the global market with reduced shipping costs and time.
As a result, our China tariff exposure is primarily related to the piece parts imported from China, rather than larger finished goods imported from China.
As tariffs on Chinese imports May change, we are closely monitoring these impacts on our business and adjusting customer pricing as well as our sourcing strategies as needed to mitigate any adverse effects.
As with our North American footprint.
And we are seeing opportunities in China with companies seeking to consolidate their manufacturing within China to serve the Chinese and Asian markets.
Jay D. Miller: As with our North American footprint, we are seeing opportunities in China with companies seeking to consolidate their manufacturing within China to serve the Chinese and Asian markets. All in all, we're working hard to have all hands on deck to proactively monitor the shifting landscape, trade policies, and uncertainties in the current geopolitical environment. We are continuing to work to execute our strategy to partner closely with customers to drive shorter lead times, tailored on-time delivery strategies, along with deeper customer partnerships that are fundamental to our long-term growth. As a result of the tariffs, we are also encouraged by the new flow of opportunities to quote onshore production in both North America under the USMCA, as well as in China. A key takeaway from today's call, and I want to make this very clear, is we remain cautiously optimistic.
All in all we are working hard to have all hands on deck to proactively monitor the shifting landscape trade policies and uncertainties in the current geopolitical environment.
As we.
We are continuing to work to execute our strategy to partner closely with customers to drive shorter lead times tailored on time delivery strategies along with deeper.
Customer partnerships they are fundamental to our long term growth.
As a result of the tariffs. We are also encouraged by the new flow of opportunities to quote onshore production in both North America onto the U S MCA as well as in China.
A key takeaway from today's call.
To make this very clear as we remain cautiously optimistic our position in the near shoring landscape, both in Mexico, and China is strong and recent news articles in the New York Times and Wall Street Journal underscores the strategic advantage Mexico holds in todays tariff environment.
Jay D. Miller: Our position in the nearshoring landscape, both in Mexico and China, is strong. Recent news articles in The New York Times and Wall Street Journal underscore the strategic advantage Mexico holds in today's tariff environment. Now I'll turn it over to Andy for a more in-depth look at our financial results. Andy?
Now I'll turn it over to Andy for a more in depth look at our financial results Andy.
Thank you Jay.
The next few minutes I'll provide certain details of our financial performance in the second quarter of 2025.
Andrew LaFrence: Thank you, Jay. In the next few minutes, I will provide certain details of our financial performance in Q2 2025. 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 Form 10-Q, filed earlier this morning with the U.S. Securities and Exchange Commission. As a continued theme, we have historically noted 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's more important to review our business on a 12-month basis rather than focusing on quarterly performance. This approach will help normalize these potential anomalies and offer a better gauge of our strategy's long-term success.
I encourage you to review our form 8-K, containing our press release and non-GAAP measures as well as our quarterly report on Form 10-Q filed earlier this morning with the U S Securities and Exchange Commission.
Is it continued team we have historically noted our individual quarterly performance can be affected by outside factors. These may 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.
Sequentially, we believe it's more important to review our business on a 12 month basis, rather than focusing on quarterly performance. This approach will help normalize these potential anomalies and offer a better gauge of our strategy is long term success. So today well focus most of my comments on our second quarter results I will spend some time.
Andrew LaFrence: Today, while I will focus most of my comments on our Q2 results, I will spend some time reviewing trailing 12 months results for the business. Net sales for the Q2 of 2025 totaled $30.7 million. This represents a 9.5% decrease from the net sales of $33.9 million in the Q2 of 2024. Net sales in the Q2 of 2025 were negatively impacted by delays in aerospace defense customers' approvals of products transferred from our Blue Earth facility to our Bemidji facility, as well as manufacturing and plant utilization inefficiencies related to the movement of various production between plants. As Jay noted, we made significant headway with the transfer of these customer programs in the H1 of 2025. Our customer backlog at the end of the Q2 of 2025 grew approximately $10 million from 31 March 2025 to $78.4 million.
In reviewing trailing 12 months results for the business.
Net sales for the second quarter of 2025 totaled $37 million. This represents a nine 5% decrease from the net sales of $33 9 million in the second quarter of 2024.
Net sales in the second quarter of 2025 were negatively impacted by delays in aerospace <unk> defense customers approvals of products transferred from our <unk> facility to our <unk> facility as well as manufacturing and plant utilization inefficiencies related to the movement of various production between plants.
As Jay noted, we made significant headway with the transfer of these customer programs in the first half of 2025.
Our customer backlog at the end of the second quarter of 2025 grew approximately $10 million from March 31, 2025 to $78 $4 million.
Second quarter of 2025 gross profit totaled $4 $8 million or 15, 8% of net sales compared with gross profit of $4 6 million or 13, 6% net sales in the same prior year quarter.
Andrew LaFrence: Q2 2025 gross profit totaled $4.8 million or 15.8% of net sales, compared with gross profit of $4.6 million or 13.6% net sales in the same prior year quarter. The increase in gross profit as a percentage of net sales in the current year period was a result of increased facility utilization and increased manufacturing productivity, which was more than offset by lower net sales. Operating expenses for the Q2 were down $178,000 as compared with the prior year period as a result of higher selling expenses from the realignment of our customer-facing managers to a sales function reporting to business development that were previously included in cost of sales. This increase is more than offset by lower payroll costs and expense management, as well as reduced restructuring costs. We completed the sale of our Blue Earth facility in July, which further reduces our ongoing operating expenses.
The increase in gross profit as a percentage of net sales in the current year period was a result of increased facility utilization and increased manufacturing productivity, which was more than offset by lower net sales.
Operating expenses for the second quarter were down $178000 as compared with the prior year period as a result of higher selling expenses from the realignment of our customer facing managers to our sales function reporting to business development that were previously included in cost of sales.
This increase was more than offset by lower payroll costs and expense management as well as reduced restructuring costs.
We completed the sale of our <unk> facility in July, which further reduces our ongoing operating expenses.
Moving to the cash flow statement for the six months ended June 32025, net cash used in operating activities totaled $2 $8 million as compared with $1 5 million in the same period in 2024.
Andrew LaFrence: Moving to the cash flow statement, for the six months ended 30 June 2025, net cash used in operating activities totaled $2.8 million as compared with $1.5 million in the same period in 2024. The timing of revenue shipments as well as customer and vendor payments impacted operating cash flow for the periods. Further, we generated cash from the execution of our strategy to decrease inventory levels in Q2, and we plan to further reduce our investment in inventory during the remainder of 2025. As noted in our press release distributed this morning, we use earnings before interest, tax, depreciation, and amortization, or EBITDA, as well as adjusted EBITDA, which does not reflect the restructuring charges we incurred through Q2 related to our staff reductions and Blue Earth plant closures as key performance indicators to manage our business.
Timing of revenue shipments as well as customer and vendor payments impacted operating cash flow for the periods. Further we generated cash from the execution of our strategy to decrease inventory levels in the second quarter and we plan to further reduce our investment in inventory during the remainder of 2025.
As noted in our press release distributed this morning, we use earnings before interest tax depreciation and amortization or EBITDA as well as adjusted EBITDA, which does not reflect the restructuring charges, we incurred during the second quarter related to our staff reductions and Blue Earth plant closures as key.
<unk> indicators to manage our business well plant closure.
Yes.
Excuse me.
While EBITDA and adjusted EBITDA are non-GAAP measures. We believe these provide meaningful information regarding our underlying core business financial performance.
Andrew LaFrence: While EBITDA and adjusted EBITDA are non-GAAP measures, we believe these provide meaningful information regarding our underlying core business financial performance. In our press release, we have provided a reconciliation of our financial performance determined in accordance with US generally accepted accounting principles and EBITDA, as well as adjusted EBITDA. For Q2 ended 30 June 2025, adjusted EBITDA was $1.1 million as compared with $0.9 million in the same period in 2024. Turning to the balance sheet, as of 30 June 2025, cash totaled $652,000, down from $916,000 as of 31 December 2024. The fluctuation in cash balances reflects the timing of cash receipts, expenditures, distributions of earnings from our Chinese operations, and credit line borrowings, which aggregated $11.6 million as of the end of Q2.
In our press release, we have provided a reconciliation of our financial performance determined in accordance with U S. Generally accepted accounting principles and EBITDA as well as adjusted EBITDA for.
For the quarter ended June 32025, adjusted EBITDA was $1 $1 million as compared with <unk> nine.
$9 million in the same period in 2024.
Turning to the balance sheet as of June 30.
2025 cash totaled 652000 down from $916000 as of December 31, 2020 for the fluctuation in cash balances reflects the timing of cash receipts.
<unk> distributions of earnings from our Chinese operations, and credit line borrowings, which aggregated $11 $6 million as of the end of the quarter.
Counts receivable as of June 30th where were $17 $8 million up from $14 9 million as of December 31, 2020 for inventories were $18 $6 million as of June 32025, as compared with $21 6 million as of December 30 <unk>.
Andrew LaFrence: Accounts receivable as of June 30 were $17.8 million, up from $14.9 million as of December 31, 2024. Inventories were $18.6 million as of June 30, 2025, as compared with $21.6 million as of December 31, 2024. Our contract asset, which represents revenue earned but not yet billed to customers, increased to $15 million as of June 30, 2025, as compared with $13.8 million as the end of December 2024. This increase reflects the timing of customer shipments and our focus on increased production to reduce raw material balances and optimize plant operations. In our press release issued earlier today, we presented non-GAAP results including trailing 12 months financial data and EBITDA. For the 12 months ended June 30, 2025, net sales were $117.6 million, as compared with $137.5 million for the 12-month period ended June 30, 2024.
One 2024.
Our contracted asset, which represents revenue earned but not yet billed to customers increased to $15 million as of June 32025, as compared with $13 $8 million at the end of December 2024.
This increase reflects the timing of customer shipments and our focus on increased production to reduce raw material balances and optimized plant operations.
In our press release issued.
Yeah.
Earlier today, we are presenting non-GAAP results and cleans trailing 12 month financial data in EBITDA for the 12 months ended June 32025, net sales were $117 6 million as compared with $137 5 million for the 12 month period ended June 32024.
And adjust in addition, adjusted EBITDA for the 12 month period ended June 32025 was negative <unk> 4 million as compared with $7 3 million and 12 months period ended June 32024, as we noted over the past year, we have experienced revenue and resulting earnings headwinds from.
Andrew LaFrence: In addition, adjusted EBITDA for the 12-month period ended 30 June 2025, was -$0.4 million, as compared with $7.3 million in the 12-month period ended 30 June 2024. As we noted, over the past year, we have experienced revenue and resulting earning headwinds from changes in customer ordering patterns, medical device customers post-COVID rebalancing inventory levels, and delays in aerospace and defense programs from being moved from Blue Earth to Bemidji. We believe that our Q2 2020 performance and recent improved customer backlog, as compared with the end of 2024, are leading indicators of tailwinds in our future revenues. Our top financial priorities for 2025 remain unchanged. First, we are extremely focused on continuing to strengthen our balance sheet, including our plan to further reduce our inventory investments in 2025.
Changes in customer ordering patterns knuckle device customers post COVID-19 rebalancing inventory levels and delays in aerospace and defense programs from <unk>.
<unk> moved from <unk> to <unk>, we believe that our second quarter 2020 performance and recent improve customer backlog as compared with the end of 2024 are leading indicators of tailwind and our future revenues.
Our top financial priorities for 2025 remain unchanged first we are extremely focused on continuing to strengthen our balance sheet, including our plan to further reduce our inventory investments in 2025 next we will focus on driving efficiencies in our manufacturing process process, especially for those programs.
Andrew LaFrence: Next, we will focus on driving efficiencies in our manufacturing process, especially for those programs we have transferred over the past year to new facilities, to deliver sustainable long-term EBITDA growth, as well as driving improvements in free cash flow. Coupled with disciplined lean operation execution, expense management, and R&D innovation, we believe Nortech can deliver on our objectives. With that, I will now turn it back over for Jay for his closing comments. Jay?
We have transferred over the past year to new facilities to deliver sustainable long term EBITDA growth as well as driving improvements in free cash flow, coupled with disciplined lean operation execution expense management and R&D innovation, we believe nortek can deliver on our objectives.
With that I'll now turn it back over for Jay for his closing comments Jay.
Thanks, Andy before we open the call to your questions I'm going to highlight once again three related areas that together serve our customers and help advance north, Texas, corporate stewardship or tech engineering expertise product innovation focus and sustainability.
Jay D. Miller: Thanks, Andy. Before we open the call to your questions, I want to highlight once again three related areas that together serve our customers and help advance Nortech's corporate stewardship, Nortech's engineering expertise, product innovation focus, and sustainability plans. As for engineering expertise, we have a dedicated engineering services team focused on enhanced manufacturability, serviceability, supply chain risk mitigation, and cost efficiency for our customers. Our 3-tier cost structure across the US, 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 Expanded Beam Xtreme fiber optic technology, or EBX, that we announced in January.
As for engineering expertise, we have a dedicated engineering services team focused on enhanced manufacturer ability serviceability supply chain risk mitigation and cost efficiency for our customers our three tier cost structure across the U S, Mexico, and China allows us to quickly adopt our global engineering.
To fit our customers' changing needs.
Our core goal of our long term strategic plan focuses on unique innovation. This is somewhat unusual for most contract manufacturers, nor techs engineering capabilities and innovation skills further our research and development activities with advancements like expanded beam extreme fiber optic technology or <unk> that we announced in January.
<unk> is designed for digital data transmission through the very complex custom cable systems, we manufacturer in office improved speed reliability and security when compared to traditional copper.
Jay D. Miller: EBX is designed for digital data transmission through the very complex custom cable systems we manufacture and offers improved speed, reliability, and security when compared to traditional copper. We're also excited about our Active Optical Xtreme, or AOX, hybrid power plus data fiber optic 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 providing state-of-the-art solutions to 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 complex custom digital connectivity solutions that transmit data and power in various applications.
We're also excited about our active optical extreme or.
Hybrid power plus data fiber optic technology that works and sophisticated magnetic environment, a testament to our team's dedication to innovation hard work and excellence in the field of digital connectivity solutions.
<unk> represents a significant advancement in our product offerings and underscores our commitment to providing state of the art solutions to 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 <unk> products provide complex custom 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 electronic components, such as Microcontrollers sensors acts.
Jay D. Miller: As you may know, the Internet of Things, or IoT, integrates a variety of electronic 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 evaluated and analyzed using combined artificial and human intelligence for improved performance and data management for our customers, as well as for their customers. For Nortech, we see AI capabilities as a clear opportunity to streamline and improve our processes, make our employees more productive, and serve our customers better. You'll hear more about our innovations in AI in future conference calls. More data needs better and faster data pipelines, and that's where Nortech comes in. Technology like our EBX smart cables helps collect and distribute this data faster, more cost-effectively, and more securely across these sophisticated networks.
<unk> 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 evaluated and analyzed using combined artificial on human intelligence for improved performance and data management for our customers as well as for their customers.
For <unk>, we see AI capabilities, as a clear opportunity to streamline and improve our processes make our employees more productive and serve our customers better you'll hear more about our innovations in AI in future conference calls.
More data means needs better and faster data pipelines natural nortek thumbs in technology like our <unk> smart cables collect helps collect and distribute this date, a faster more cost effectively and more securely across these sophisticated networks we.
We see strong opportunities for growth with <unk> smart tables.
Jay D. Miller: We see strong opportunities for growth with EBX smart cables. Our pivot to more fiber optic technology improves product performance for our customers by offering unparalleled speed and reliability. It also aligns with the global sustainability goals we share with many of those customers. When compared with traditional copper, fiber optics offers significant environmental benefits during both production and operations, including improved energy efficiency and less material usage, while significantly decrease the carbon footprint of the complex cables we manufacture. One might think that our customers no longer care about their carbon footprint. We're listening carefully to our customers. For a range of important business reasons, we know they still do care. We also know our aerospace and defense customers are adopting fiber optic technology due to these key advantages: reduced size, weight, and power requirements, immunity to electromagnetic interference, and greater ruggedization in harsh environments.
Our pivot to more of a fiber optic technology improves product performance for our customers by offering unparalleled speed and reliability. It also aligns with this global sustainability goals, we shared with many of those customers when.
When compared with traditional copper fiber optics offer significant environmental benefits during both production and operations, including improved energy efficiency and less material usage, while significantly decrease the carbon footprint of the complex cables we manufacturer.
One might think that our customers no longer care about their carbon footprint, but we're listening carefully to our customers and for a range of important business reasons, we know they still do care.
We also know our aerospace and defense customers are adopting fiber optic technology due to these key advantages reduced size weight and power requirements immunity to electromagnetic interference and greater legalisation in harsh environments.
Harsh environments of course are very common for aerospace and defense applications Nortek has a proud history of serving these customers unique needs Dana back roughly 30 years.
Jay D. Miller: Harsh environments, of course, are very common for aerospace and defense applications. Nortech has a proud history of serving these customers' unique needs dating back roughly 30 years. It's the smallest of our four core markets by net sales, but it's our fastest-growing segment and very important for our diversification and future growth. Our contributions to our national defense are also a source of great pride for the Nortech team. The majority of our aerospace and defense cables are still the traditional type common in legacy defense systems, such as shipboard missile launchers for the Navy. We're looking for the future with ruggedized fiber optics, MT and 38999 connectors, and evolving along with our customers.
It's the smallest of our four core markets by net sales, but it is our fastest growing segment and very important for our diversification and future growth.
Our contributions to our National Defense are also a source of great pride in our tech team.
The majority of our aerospace and defense cables are still the traditional type common and legacy defense systems, such as shipboard missile launches for the Navy.
But we're looking for the future with Ruggedized fiber optics empty and 30, a triple non connectors and evolving along with our customers.
In closing.
We are excited about these technological developments across all of our markets and expect them to support our continued sales momentum in 2025 and beyond aided by stabilization of the supply chain and customer orders.
Jay D. Miller: In closing, we are excited about these technological developments across all of our markets and expect them to support our continued sales momentum in 2025 and beyond, aided by stabilization of supply chain and customer orders. We're seeing an increase in our fiber optics capabilities from our customers. Nortech is well-positioned to capitalize on these trends with our advanced fiber optic capabilities. Our EBX and AOX technologies align perfectly with the industry's move toward more efficient and reliable fiber optic solutions. EBX offers non-physical contact connectors for applications in harsh environments, while AOX combines fiber optics with copper to provide EMI-immune, high-speed data transmission, low-speed signals, and power delivery in one hybrid cable. By integrating digital diagnostics with fiber optic cables, we're able to generate real-time cable and system performance data.
Okay.
We're seeing an increased interest in our fiber optics capabilities from our customers.
<unk> is well positioned to capitalize on these trends with our advanced fiber optic capabilities, our <unk> and <unk> technologies aligned perfectly with the industry's move towards more efficient and reliable fiber optic solutions.
<unk> offers non physical contact connectors for applications in harsh environments, while <unk> combines fiber optics with copper to provide EMI immune high speed data transmission, most low speed signals and power delivery and one hybrid cable.
By integrating digital diagnostics with fiber optic cables were able to generate real time cable and system performance data.
These digital diagnostic cables advance our customers' ability to monitor their systems and devices and evolved from preventative maintenance predictive maintenance to minimize downtime and costs.
Jay D. Miller: These digital diagnostic cables advance our customers' ability to monitor their systems and devices and evolve from preventative maintenance to predictive maintenance to minimize downtime and costs. With our intellectual property in fiber optic and digital technologies, we're well-aligned with projected future demand for fiber products in the aerospace and defense market. We're also taking a forward-looking stance on materials, shifting focus from copper to fiber to mitigate cost pressures and align with our long-term strategic strategy to produce lighter, faster, and more sustainable, and potentially more affordable technology. Now we'll open up the call for questions. Jenny, please open the lines.
With our intellectual property in fiber optic in digital technologies, we're well aligned with projected future demand for fiber products in the aerospace and defense market.
We're also taking a forward looking stance on materials shifting focus from copper to fiber to mitigate cost pressures and align with our long term strategic.
Our strategy to produce lighter faster and more sustainable.
And potentially more affordable technology.
Now we will open up the call for questions Jenny Please open the lines.
Thank you very much we are now conducting a question and answer session.
Operator: Thank you very much. We are now conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it may be necessary to pick up your handset before you press the keys. One moment whilst we poll for questions. Okay, that's just a reminder, it's star 1 on your phone keypad if you would like to ask a question. Okay, I'm not seeing any questions come into the queue just at this moment, but we can hang on a second just in case. Okay. I'm not seeing any questions in the queue. I will hand back over to Jay for any further comments.
I'd like to ask a question. Please press star one on your phone keypad now a confirmation time will indicate that your line is and the key you May Press star two if you would like to remove your question from Nicky.
Using speaker equipment, it may be necessary to pick up your handset before your question Keith.
Maybe it must be poll for questions.
Okay. That's just a reminder.
One on your keypad, if he was asked the question.
Yeah.
Any questions come in to the key.
And just in case.
Okay.
Thanks.
Any questions in the queue.
Gene.
I will hand back over to Jay for any further comments.
Very good thank you Jenny and thanks, everyone for joining US today, we look forward to talking with you in November We report our third quarter 2025 results again, thank you and goodbye.
Jay D. Miller: Very good. Thank you, Jenny. Thanks everyone for joining us today. We look forward to talking with you in November when we report our Q3 2025 results. Again, thank you and goodbye.
Thank you very much. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a lovely day. Thank you for your participation.
Operator: Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a lovely day. We thank you for your participation.
Speaker #1: Welcome to Access Newswire Conferencing. Please hold and operator will be with you momentarily. Welcome to Access Newswire Conferencing. Please.
Speaker #2: Hello. Hello. May I have your passcode? 760771? Nothing currently live under that code. This line's for live conferences only. Were you trying to get in?
Speaker #2: I'm ry? it's not a c this line is for live conferences only. Let me check the schedule to see what time that call took place, if it was in our system.
Speaker #2: One moment. Yes, Nortech was at 8:30 AM Eastern Time. It did happen on this bridge, but that was for the live call. Mm-hmm. The call is over.