The Eastern Company

Good day, ladies and gentlemen, and welcome to your Eastern Company first quarter 2020 earnings call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Chris Moulton, head of corporate development. Sir, the floor is yours.

Thank you. Good morning, and thank you, everyone, for joining us today. will be Eastern's President and CEO, Gus Flack, as well as our CFO, John Sullivan. After that, we'll open the call for questions. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements about the company's future financial performance and business prospects, including, without limitation, statements regarding revenue, gross margins, operating expenses, other income and expense, taxes, and business outlook. These forward-looking statements are subject to risk, Thank you very much. as supplemental measures of Eastern's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. With that, I'll turn the call over to Gus for opening remarks.

Thanks, Chris, and good morning to those of you who have joined us on the phone and also those participating via the web. We released Eastern's first quarter results last Wednesday and the full Form 10-Q yesterday afternoon. I would like to start by taking a moment to thank our employees around the world for their sacrifices, hard work, and openness to embrace new ways of working during this very difficult time. And I would also like to acknowledge the exemplary efforts of our healthcare professionals and workers on the front lines. We are very appreciative of their commitment to keep us all healthy and safe. I want to highlight The efforts of our team at Big Three Precision who partnered with Trienda to manufacture thousands of frames for emergency and disaster relief beds under an incredibly tight timeframe. These beds have been used across the country, including in the field hospital in the Boston Convention Center. In addition, I want to tell you about our UK-based subsidiary for its efforts in designing and manufacturing molds for COVID-19 test tubes that are going to be part of COVID-19 testing kits. As difficult as this time has been, the way in which our leadership and our teams across our company have stepped up is really impressive and deserves to be recognized. That brings me to where things stand today. There is clearly still a significant amount of uncertainty in the macroeconomic environment as a result of COVID-19 and the financial impact that the measures to respond to it are having and could continue to have on our company. In late January, when news of COVID-19 in China began to surface and when we were starting to see the impact across our operations in China, We spoke with you and mentioned that we had already implemented a series of mitigation steps there to reduce the risk to our China employees. Unfortunately, COVID-19 would soon spread rapidly across the world, requiring all of us to react extremely quickly. Across our businesses, we have since then implemented a broad range of policies and procedures to ensure that employees at all of our locations remain safe. We listened to and we learned a great deal from our colleagues in China and took necessary action early on across our North American operations. These include implementing social distancing measures, staggering staff and shifts, enabling work from home for as many employees as possible, implementing enhanced cleaning programs across all of our sites, and strongly advising our employees on personal hygiene and the importance of wearing face masks to reduce the spread of COVID-19. In some locations, we've even rented private buses, which enable us to ensure that our employees have access to clean, safe transportation to and from work. All of our businesses are learning, sharing and working together to protect everyone who shows up to work. As governments continue to offer guidance to commercial operations, we will continue to ensure compliance with these directives in order to maintain business continuity for our operations. Importantly, the majority of our businesses are deemed essential and accordingly have remained open, albeit at reduced levels. Beginning the last week of April, Many of our customers who had closed had begun to open up and by the middle of this month, we expect that the vast majority of our customers who had previously closed will have resumed operations at some level. Importantly, until now, disruption in our supply chain has been minimal and we're continuously working with our suppliers to make sure that we are ready to meet our customers' needs. It's worth adding that while some of our customers closed plants and stopped manufacturing products, the engineering departments continue to work on new products, and our engineers have kept pace to support with this new product development, which will help us launch new products later on in the year. Now turning to the financial highlights for the quarter, net sales for the first quarter increased by 7% to $65.3 million. from $60.9 million in the first quarter of 2019, driven primarily by the addition of Big Three Precision, which we acquired in August of 2019. This was our third acquisition in as many years. Net income for the first quarter increased to $2.9 million or $0.46 per diluted share, and that's from $1.6 million or $0.25 per diluted share for the first quarter of 2019. I'll now turn the call over to John to go over the details of our financial results. Thank you, Gus.