Jay Miller: Thanks, again, Alan. Before we open the call up to your questions, there are three topics I’d like to touch on, inflation, ESG and Nortech’s peer comparisons. First, over the past couple of years, unfortunately, inflation is nothing new. We’ve been carefully managing through its impact on both wages and raw materials. For wages, our team members received across-the-board pay increases this past April. We feel strongly about taking care of the financial well-being of our team members and their families. By the way, I should add that staffing levels are good across all Nortech locations. As a company, we addressed inflation somewhat early, including the price increases we made during the third quarter of 2022.
In calculating these price adjustments, we consider both inflation trends and the fact that our pricing for certain technologies and services was not in line with the market because of timing issues for price increases relative to expense recognition, quarterly margin comparisons will fluctuate. However, if you look at the trailing 12-month chart we included in our press release, it shows a tremendous expansion in gross margin levels over the past 2 years. Going forward, we expect gross margins will continue to increase through a combination of strategic pricing actions and operational improvements. Second, our ESG efforts, environmental, social and governance continue to follow a methodical measured approach. Guided by our long-term vision, we are in the early stages of activities, specifically baseline measurements for Nortech’s emissions, both direct and indirect through our supplier partners.
We expect to post ESG updates to the Nortech website early 2024, being proactive with ESG positions Nortech well with our own customers, many of which are already actively engaged in ESG efforts. Early on this call, I mentioned the growing importance in the medical market for Nortech. This market, including the larger life science health care sector is the most engaged in preparing for future ESG disclosure requirements according to a Deloitte survey published late last year, over 70% of such customers are actively involved. And finally, for our industry and comparisons with Nortech peers, we’ve described on past calls how we operate under our low-volume, high-mix business model. We make a wide array of complex, highly technical assemblies, sometimes in relatively low commodities.
Most of the large publicly traded electronic manufacturing systems firms like Foxconn and Jabil and Benchmark are the reverse, high volume and low mix, think cellphones, smartwatches and personal computers. These are very different products than the ones we manufacture that include things like complete medical devices as well as very complex cable systems with printed circuit boards for the defense and industrial markets. However, all EMS companies operate in a similar macroeconomic environment and face related challenges and industry trends. According to data from new research – new venture research published by the trade organization, IPC, the global EMS market in 2022 grew by 3.2%. By contrast, Nortech substantially outpaced the industry.
Our goal remains to outperform our peer group, both in terms of revenue and profitability. And finally, today, I want to express my sincere gratitude to our dedicated shareholders for their support and loyalty. Many have been with Nortech for decades. I hope all our shareholders share the team’s enthusiasm for Nortech’s direction and our vision, aspiring to be the global market leader in digital connectivity and data management, engineering and manufacturing. Along with delivering on this vision, I can speak for Nortech management team, team members and Board of Directors in saying that Nortech also remains firmly committed to delivering positive financial value for our shareholders. That concludes our presentation. And now we’ll open the call up for your questions.
Paul, please open the line.
Operator:
Jay Miller: Thank you, Paul and thanks everyone for joining us today. We look forward to talking to you next March when we present our fourth quarter 2023 results. Thank you again and goodbye.
Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.
