Jeff Knutson: Thanks, John. Good morning, everyone. We delivered sales of $63.6 million for the quarter, up $7.6 million or 13.7% from the prior year as overall demand remained strong as shipments increased. Net loss attributable to Twin Disc for the quarter was $1.2 million or $0.09 per diluted share compared to a loss of $1.4 million or $0.11 per diluted share in the first quarter of fiscal ’23. Gross profit margin increased to 26.2% compared to [indiscernible] for the same period of fiscal ’23. Gross profit was negatively impacted by a $3.1 million noncash accounting item related to the sale of an asset during the quarter. Both marine and propulsion systems and land-based transmissions reported a double-digit growth, while industrial sales declined.
Looking at top line distribution across geographies, sales increased significantly across the Asia Pacific and European regions compared to the prior year, supported by robust demand, while North American sales declined. We continue to strengthen our balance sheet through the solid cash generation delivered in the first quarter. We reduced net debt by approximately $4.1 million to $1.2 million and ended the quarter with a cash balance of $20.4 million, $7.2 million higher versus the prior quarter end. EBITDA is up significantly to $2.3 million from $600,000 during the same period last year due to higher revenues, favorable product mix, the impact of prior pricing actions and the successful execution of our operational playbook. Furthermore, we continued to decrease our leverage ratio this quarter to below 1x EBITDA.
Gross profit margin of 26.2% increased approximately 240 basis points from the prior year period. Adjusting for the noncash impairment I previously mentioned, gross profit margin for the first quarter would be approximately 30%. This reflects the benefit of prior pricing actions, continued easing of supply chain headwinds, a favorable product mix and successful execution of our operational playbook. With regards to inflationary headwinds, commodities have largely stabilized, and we have also seen some reductions in freight and fuel surcharges. As John highlighted, we are pleased to be in a position to resume paying a quarterly cash dividend in the amount of $0.04 per share this quarter, payable on December 1 to shareholders of record on November 17.
Consistent with the additional priorities outlined in our capital allocation framework, we are actively exploring acquisition opportunities, focusing on marine technology, industrial and the hybrid electric space. And currently, we will continue to make investments within the business in the form of research and development, geographic diversification and enhancement of our marketing initiatives. We will continue to evaluate our capital allocation strategy and priorities as the economic backdrop in our operating environment continue to evolve. I’d like to now turn the call back over to John to share some closing remarks.
John Batten: Thanks, Jeff. Before we open the line for questions, I’d like to highlight a few key takeaways from our first quarter performance. In summary, we’re seeing stable end market demand supporting our robust margin expansion and strong cash generation that supported the reinstatement of our quarterly dividend. Operationally, we continue to increase backlog by taking a disciplined approach to inventory management, with inventory as a percentage of backlog declining. Supply chain headwinds have generally subsided largely due to effective actions taken by management over the prior quarters. With all of these factors combined, we have enhanced our financial profile and strengthened our balance sheet, giving us the flexibility to manage through any challenges that may come along in this uncertain operating environment.
We continue to make progress towards our target, solidifying our financial position and driving long-term value creation for our shareholders. That concludes our prepared remarks. Jeff and I will be happy to take your questions.
Operator:
John Batten: Thanks, Josh. We hope that Jeff and I have answered all of your questions today, if not, please feel free to reach out to us directly, and we look forward to talking to you in February after the close of our third quarter conference call. Thanks, Josh.
Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect.
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