The Eastern Company

deepen and diversify our customer relationships to position us to capture emerging opportunities, reduce volatility, and support sustainable long-term performance. Turning to our balance sheet, we have repurchased approximately 118,000 shares through the end of the third quarter. This represents almost 2% of our outstanding shares and demonstrates our ongoing commitment to allocating capital to benefit our shareholders. We also reduced debt by $7 million and and entered into a new $100 million revolving credit facility with Citizens Bank that provides us with additional flexibility to enhance our priorities, including continued investments into long-term growth initiatives and potential M&A opportunities. Given the proactive steps we have taken and our historically strong balance sheet, we are confident that Eastern Company is well equipped to weather the cyclical market downturn and to capitalize on opportunities when our markets return to healthier positions. With that, I'll hand it over to Nick to dig a little deeper into the quarter. Nick?

Thanks, Ryan. I'll focus my review today on the company's financial results from continuing operations for the third quarter of 2025. Net sales in the third quarter of 2025 decreased 22% to $55.3 million from $71.3 million in last year's third quarter. The decline was primarily due to decreased sales of returnable transport packaging products and truck mirror assemblies of 9.9 million and 6.4 million respectively. Our backlog as of September 27, 2025 decreased 23.6 million or 24% to 74.3 million from 97.2 million as of September 28, 2024. driven by decreased orders for returnable transport packaging products of $15.2 million, latch and handle assemblies of $4.7 million, and truck and mirror assemblies of $3.6 million. Gross margin as a percentage of net sales was 22.3% for the third quarter of 2025 compared to 25.5% for the prior year period. The decrease was primarily due to an increase in raw material costs incurred as we transitioned from customer-provided material to in-house sourcing on a mirror project, as well as the impact of reduced volumes. As a percentage of net sales, product development costs were 1.6 percent for the first nine months of 2025 compared to 1.8 percent for the 2024 period. Selling general and administrative expenses decreased 0.7 million or 6.5% in the third quarter of 2025 compared to the last year's period. The decrease was primarily due to 1.1 million of lower compensation charges offset by restructuring charges of 0.3 million. Other expenses increased 0.1 million in the third quarter of 2025 compared to the same period in 2024. The increase was the result of lower lease income. Net income from continuing operations for the third quarter of 2025 was $0.6 million, or $0.10 per diluted share, compared to net income of $4.7 million, or $0.75 per diluted share, for the 2024 period. Now turning to a non-GAAP measure, Adjusted net income from continuing operations for the third quarter of 2025 was $0.8 million, or $0.13 per diluted share, compared to net income of $4.7 million, or $0.75 per diluted share, for the prior year period. At the end of Q3 2025, our senior net leverage ratio was 1.64 compared to 1.23 to 1 at the end of 2024. In addition, we paid dividends of $0.7 million in this year's third quarter. Subsequent to the quarter close, we entered into a new $100 million revolving credit facility with Citizens Bank. As of September 27, 2025, inventories totaled $56.8 million or $1.6 million up from the end of 2024. During the third quarter of 2025, we repurchased 36,413 shares of common stock under the share repurchase program Eastern's board authorized in April 2025. To date, we have repurchased 118,000 shares or approximately 2% of our outstanding stock. This completes my financial review.

I'm going to turn the call back over to Ryan.