Charles Griffith: Thanks, Brian. As mentioned earlier, the company's revenue totaled $5.9 million in the first quarter, compared with $7.1 million last year. We've had some level of difficulty filling opening manufacturing positions. Additionally, while we are cautiously optimistic that our quality issues have been resolved, we continue to run tests, which occupy machine time that would otherwise been spent on production for customers. We do, however, believe that strong demand across our other offerings should lead to top line growth as the year progresses. In addition, our Navy partner Kinetic Protection remains cautiously optimistic about additional work for other Navy ship classes with contracts possible later than 2024.

Gross profit in the first quarter totaled $0.9 million or approximately 15.3% of sales compared with $2.2 million or 31.6% of sales last year. This decrease was due to the lower sales volumes in Q1 2024 on consistent fixed costs as well as the aforementioned testing being done on the quality issues. That said, we anticipate gross margins to improve in the second-half of 2024. Selling, general and administrative or SG&A expenses totaled $1.2 million in the first quarter versus $1.6 million in the prior year period as we remain focused on cost controls, even while investing in new business development initiatives aimed to accelerate long-term growth. The company had an operating loss of $260,000 in the first quarter compared with operating income of approximately $694,000 last year, and we posted a net loss of $143,000 or $0.01 per share versus net income of $459,000 or $0.03 per diluted share in Q1 of fiscal 2023.

Turning to the balance sheet, we ended the quarter with $8.7 million of cash versus $8.8 million at the start of 2024. Trade accounts receivable as of March 30, 2024, totaled $3.8 million versus $4.4 million as of December 31, 2023. Inventories totaled $4.6 million at the end of the first quarter, essentially equivalent with the $4.6 million at the end of the fiscal year. Turning to the liability side, payables and accruals totaled $3.3 million at the end of the first quarter versus $3.6 million as of the end of December. Now Brian will provide a more in-depth discussion of the first quarter.

Brian Mackey: Thank you, Chuck. First of all, I would like to discuss CPS vision for the future. Over the last few years, we've invested significant amounts of time, energy and dollars to the growth of CPS, and we continue to do so. Today, we have three more salaried engineers and material scientists than we did in Q1 of 2023, including the addition of a lead for new product introduction in the first quarter of 2024. These additions provide more depth to our technical team, enable us to be more responsive to customer requests and improve our ability to win orders. Having said that, the financial return from these new personnel will take time to develop. As a direct example, in the first quarter, we completed and shipped eight new first articles.

This eight compares to two in the same period last year. These first articles are new parts, which CPS has not made in the past, but if done successfully will lead to significant production runs in the future. Some of these would be an expansion of our portfolio with an existing customer, while others indicate a business opportunity with a new customer. Producing these first articles is engineering-intensive, and this was certainly one factor in the lower margins we saw in Q1. Nevertheless, we believe that in current costs, such as these today will be a significant contributing factor to the growth of CPS in the future. Also, our manufacturing licensing agreement with Triton Systems for fiber reinforced aluminum composites or FRA, will soon set the stage for expanded offerings to address market needs, expanding our product portfolio heading into fiscal 2025.

Our relationships in the aerospace and defense markets provide insight into the market demand for strong, durable and lightweight materials. FRA composites address these needs. As a reminder, FRA composites are comprised of high-strength aluminum alloys discontinuously reinforced with short ceramic fibers. These materials have demonstrated high strength at elevated temperatures, lightweight and superior endorse characteristics, which will facilitate the introduction of many new products for our military, commercial and industrial end markets. We are on track to initiate our manufacturing trials for FRA composites later this quarter, and we have already begun speaking with customers about possible relevant applications. We're very excited to have these complementary products coming to market.

We also previously announced the award we recently received from the Massachusetts Manufacturing Accelerate Program. In response to customer demand for products requiring 5-axis machine capability, we requested and received $200,000 to support the purchase of a 5-axis CNC machine. These funds expand our manufacturing capabilities and enable us to be more responsive to customer requirements. We have ordered the CNC machine and also expect to have this up and running later this quarter. Again, this will pave the way for higher production of hermetic packaging and other products later this year. In addition, while our current Armor contract is coming to completion, we are cautiously optimistic that working with Kinetic Protection, new Navy orders may be forthcoming later in 2024.

We continue to believe these ballistic solutions have a large potential market across different types of ship classes as well as other military markets. We also continue to work with another customer on providing ballistic protection against higher threat levels. At the same time, we know that further SBIR opportunities, including follow-on contracts, are possible in the weeks and months to come. At the moment, we have six submitted proposals awaiting funding decisions from the DOE, DOD and NASA including four Phase 1s and two Phase 2s. These ongoing R&D efforts are enabling us to directly address clearly defined market requirements. I'd like to share some details from our most recently completed SBIR program, which effectively demonstrates our ability to address problems identified by our customers, in this case, the Department of Energy.

CPS was initially funded $200,000 by the DOE in response to our proposal entitled Modular Radiation Shielding for Transportation and Use of Microreactors. The problem statement focused on the ability to produce lightweight and low complexity radiation shielding that would be of paramount importance to the deployment of advanced nuclear microreactors. Lower shielding density promotes higher power density during transit for power, remote or mobile applications, including mining operations, disaster relief efforts, shipping and defense. During the nine-month Phase 1 period, which ended just last week, CPS successfully incorporated its proprietary techniques related to both injection molding and metal matrix composites or MMCs. We designed, fabricated and evaluated a novel MMC consisting of an aluminum matrix with both tungsten and boron-carbide reinforcement particles.

The resulting composite offers both neutron and gamma radiation shielding in an elegant compact solution as opposed to relying on multiple layers of dissimilar materials. Although further optimization is necessary, our baseline composite material demonstrated the capacity for neutron shielding and was highly effective at shielding gamma radiation at much lower mass compared to traditional materials. In fact, as a barrier to gamma radiation, our composite demonstrated performance similar to lead or tungsten, but with a reduction in mass of more than 55%. Our MMC design to be easily modified to suit different protection needs with variable volumes of both gamma and neutron absorbers. Our proposed solution will greatly reduce the massive material needed while being highly customizable in size, shape and composition.

The novel CPS process improves upon existing research to fabricate integrated radiation fields by achieving greater reinforcement loading with a robust, cost-effective and mature processing technology. It's a great accomplishment, especially for just a Phase 1 program. Our technical team was invited to present its results just last week at the National Reactor Innovation Center Program Review at Idaho National Laboratory. We're now following up on several leads which developed from that event. The feedback that our presentation received also highlighted the value of our approach for stationary applications, i.e., building construction due to the dramatically reduced weight requirements. We are also awaiting DOE's response to our Phase 2 proposal, which if awarded would provide an additional $1.1 million in funding over a 24-month period.

It should come as no surprise, we're very pleased with the results of this to date, which has already generated meaningful dialog related to near-term opportunities for fielding our solution. DOD initiatives like Project Pele, which is working to demonstrate a mobile nuclear reactor for U.S. military applications, again demonstrate the potential dual uses for our novel material solutions. Although we do not control the timing of when our proprietary offerings will enter the market, we continue to build our portfolio and service to our customers. Within the last few years, CPS has redoubled efforts to expand its products to meet new technology-based requirements. One key element of this has been our participation in the SBIR programs of various federal agencies.

Within the past three years, five of our 14 Phase 1 proposals have been selected for award. Historically, the government's rate of funding Phase 1 proposals for all applicants has been about 20%, and this has been even more competitive in recent years, perhaps down to 15%. So, we're very pleased with our award rate so far, which is over 35%. This speaks volumes as to the capabilities of our team and our existing intellectual property. But more importantly, we see these awards as the affirmation that we are addressing the problem statements of our customers as they define them within the context of the SBIR format. We know that providing such technical solutions will provide real growth opportunities going forward, many of which have potential applications with both commercial and military customers.

In the meantime, we continue to fulfill the long-term supply agreement announced last year, providing power module components and systems for a variety of rail and other applications to a multinational semiconductor manufacturer. We remain on track for the shipment of product under this contract over the course of 2024. As I said earlier, we are actively bidding on opportunities to accelerate growth in the future, while mitigating the negative impact this year due to the completion of our current Naval Armor contract. We continue to believe that expansion across other product lines should cover roughly half of the $2 million quarterly revenue shortfall in 2024 related to Armor, setting the stage for growth next year and beyond. We'd now like to open the call up for questions.

Operator?

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