Good day everyone. And welcome to the CPS Technologies Third Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Chuck Griffith, Chief Financial Officer of CPS Technologies. Sir, the floor is yours.

Thank you, Matthew, and good morning, everyone. Today I’m joined by Brian Mackey, our President and CEO. We look forward to discussing our third quarter results with you. But first, Chris Witty, our Investor Relations Advisor, will provide a brief Safe Harbor statement. Chris?

Thanks, Chuck, and good morning, everyone. Before we begin the business portion of today’s call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and should be considered as subject to the many uncertainties that exist in CPS’ operations and environment. These uncertainties include, but are not limited to, the wars in Ukraine and Israel, other geopolitical events, economic conditions, market demands, and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statement. Additional information can be found in our filings with the SEC. I will now turn the call over to Brian to offer his perspective on the third quarter highlights, after which Chuck will review the financial results in greater detail. Brian?

Thank you, Chris. Good morning. Third quarter revenue was $4.2 million, with an operating loss of approximately $1.5 million. Revenue declined year-over-year, primarily due to the end of our U.S. Navy Armor contract with Kinetic Protection, as we’ve previously discussed. While another major customer also purchased significantly less year-over-year, as it worked through some excess inventory. Chuck will review this further in a moment. While the quarter’s results were negatively impacted by such factors, as well as third shift startup costs and supply chain issues, we have recently improved product throughput, and with recent wins under our belt, are much more optimistic about the fourth quarter and beyond. I’ll now turn the call over to Chuck to provide further details about our financial results, after which I’ll provide some additional perspective.

Thanks, Brian. As was just mentioned, the company’s revenue totaled $4.2 million in the third quarter, compared with $6.3 million last year. Most of the year-over-year change was due to the end of our contract with Kinetic Protection, as expected, related to the Armor shipments for the U.S. Navy fleet of aircraft carriers. We previously announced that the completion of this program would negatively impact results by approximately $2 million in revenue per quarter. Kinetic Protection does remain cautiously optimistic about landing additional work for other naval ship classes in the coming year and is focused on bringing advanced ballistic shielding to the remainder of the surface fleet. We reported a gross loss in the third quarter of approximately $0.5 million or negative 12% of sales, compared with a gross profit of $1.2 million or 20% of sales last year. This decrease was due to lower overall revenue and reduced manufacturing efficiencies, along with costs associated with hiring and training the third shift that began operating the last week of August, as I just mentioned. During the quarter, this new staff worked alongside other workers for training, impacting overall cost of goods sold, with virtually no corresponding topline revenue component in the quarter. We anticipate that gross margins will improve as volumes climb in the fourth quarter and fiscal 2025. As previously discussed, we did incur the expenses of hiring and training our third shift, but saw only very limited impact on the revenue in Q3. However, our first four weeks of Q4 are off to a solid start, especially relative to the first four weeks of Q3. This is attributable both to the addition of the third shift, as well as abnormally low shipments early in Q3. Given our expanding manufacturing capability and recent new contracts, we’re optimistic about further growth in fiscal 2025, along with the operating leverage and improved margins that that should bring. While we’ll continue to work to stabilize our increased manufacturing operations, many of the initiatives necessary to increase output are showing results. Selling, general and administrative expenses, SG&A, totaled $1 million in the third quarter versus $1.1 million in the prior year period, as we did remain focused on controlling costs, even while investing in new business development initiatives aimed to accelerate long-term growth. The company posted an operating loss of $1.5 million in the third quarter, compared with operating income of approximately $0.1 million last year. And we reported a net loss of $1.0 million or $0.07 per share versus net income of $0.2 million or $0.01 per diluted share in Q3 of fiscal 2023. Turning to the balance sheet, we ended the quarter with $4.7 million in cash and $1 million in marketable securities versus $8.8 million in cash and no marketable securities at the start of 2024. Trade accounts receivable as of September 28 totaled $3.7 million versus $4.4 million at the end of December 2023. Inventories also totaled $4.4 million at the end of the third quarter, compared with $4.6 million at the start of the fiscal year. Turning to the liability side, payables and accruals totaled $3.3 million at the end of the third quarter versus $3.6 million as of December 31, 2023. Now I’ll turn the call back over to Brian and he will provide a more in-depth discussion of the period.

Thanks, Chuck. While the third quarter saw lower revenue both year-over-year and sequentially versus Q2, we are now optimistic about the outlook for CPS. Obviously, the completion of the Armor contract with Kinetic Protection will continue to be a headwind while we pursue a follow-on order from the United States Navy. However, there were certain challenges that are now largely behind us. First, as previously mentioned, one customer was holding off on additional purchases as it worked through existing inventory. Orders have now resumed, and we anticipate growth in the coming months and quarters. At the same time, we’ve successfully trained a third shift of operators and are now able to successfully turn orders into shipments at an increased rate, something that has constrained us the past few quarters. While our manufacturing operations remain clean and efficient, we have a greater ability to improve our capacity utilization, and at the same time, have recently won several orders that position us well for the remainder of this year and beyond. Specifically, I’m referring to the Phase II SBIR award with the Department of Energy, which we’ve discussed in the past. The new $12 million contract with our existing semiconductor customer and a new development contract with the Navy that was secured very recently. The DOE Phase II award provides funding of $1.1 million over 24 months for CPS to continue its development effort for Modular Radiation Shielding for Transportation and Use of Microreactors. This is the second Phase II award since June and a great recognition for our team, as it acknowledges our ability to develop and deliver novel yet practical solutions in response to well-defined requirements. We’re committed to addressing critical customer needs, in this case, lightweight shielding for nuclear radiation for a host of agencies and their mission-critical programs. With regard to the semiconductor customer, the new contract represents a larger agreement than we’ve had in recent years and it is expected to significantly boost revenue in fiscal 2025. As we announced concurrently with earnings, the contract for power module components is cancelable by either party in light of the ongoing negotiations and the manufacturing ramp-up that is required. Today, the signed contract enables us to continue these discussions about future volume and pricing requirements, even as we meet the near-term production requirements of our long-term customer. Under the contract, deliveries are scheduled to take place over a 12-month period starting now, with components to be utilized primarily in high-speed rail, wind turbines, and EV or HEV applications. This is a very positive development for CPS Technologies, as we work out final details on pricing and delivery to ensure the best outcome for us and our shareholders, as well as our customers. Recently, we’ve also received a new contract from the U.S. Navy for further application of our Metal Matrix Composite Solutions. This contract, valued at $200,000, provides funding for development work at CPS over the next 12 months. Our research will focus on addressing the requirements of the Naval Air Systems Command or NAVAIR, specifically by providing lightweight, high-strength materials. CPS’s MMC solutions, in this case, fibrous materials infiltrated with aluminum, provide higher strength than neat aluminum without the increased weight of steel. We also remain cautiously optimistic about the likelihood of Kinetic Protection winning new Armor orders for additional classes of naval vessels in fiscal 2025, as our ballistic solutions address a large market across various types of ships, as well as other military applications. We continue to be actively involved in seeking out other SBIR opportunities, as well as bidding on new applications with an expanding array of customers, and we are awaiting word on proposals submitted to U.S. agencies, including several within the DoD, as well as with NASA. We’re also optimistic about our expanded product line that now includes Fiber Reinforced Aluminum or FRA composites. Manufacturing trials have been going well, and we’re continuing to speak with customers in the aerospace and defense industry about FRA capabilities for stronger, more durable, and lighter-weight applications comprised of high-strength aluminum alloys discontinuously reinforced with short ceramic fibers. We expect to begin the commercialization of FRA in fiscal 2025. In addition to the SBIR Phase II on radiation shielding, we’ve been in discussions with other potential customers regarding our capabilities in this area. These discussions could lead to the generation of additional revenue in 2025, over and above our SBIR funding for this part of the portfolio. Finally, with our new 5-axis CNC machine up and running, we’re ready for higher production of hermetic packaging and other products in Q4 and beyond. Overall, given our expanded manufacturing capabilities, the third shift being up and running, and with several significant contract wins under our belt, the company is better positioned for growth and improved results than at any time within the past 12 months. We’re moving into a new era of expansion and are optimistic about the quarters to come. We appreciate our investors’ patience and passion as we’ve navigated this year and the many challenges it entails, many of which have now largely been addressed. We look forward to the future and the many opportunities that 2025 will bring. We can now open the call up for questions.

Certainly. Thank you. That concludes our Q&A session. I’ll now hand the conference back to Brian Mackey for closing remarks. Please go ahead.

Thank you for joining us today and for your ongoing interest in CPS Technologies. We look forward to speaking with you again after the end of our fourth quarter. If you have any questions in the interim, please reach out to our Investor Relations Advisor. Thank you.

Thank you, everyone. This concludes today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.