Group 1: Investor Relations Activity Overview - The investor relations activity was conducted on July 9, 2025, at the company's meeting room in Huzhou, Zhejiang Province, with 12 participants from various securities firms and individual investors [3] - The company was represented by key personnel including the Chairwoman, General Manager, and Financial Officer [3] Group 2: Company Performance and Projects - The fundraising projects have been fully completed, with an expected capacity increase of 70,000 tons, addressing the company's capacity bottleneck [4] - The launch of the 20,000-ton ultra-high voltage project positions the company among the few capable of mass production of high and ultra-high voltage cable materials, enhancing its technical level and industry status [4] - Sales of 110kV high voltage products have commenced, with ongoing efforts to test and produce 220kV products [4] Group 3: Market Environment and Strategy - The downstream market demand was initially sluggish due to the Spring Festival but began to improve from March onwards [5] - Upstream material prices have stabilized after a rapid decline since December, although fluctuations remain due to international circumstances [5] - The company plans to closely monitor market dynamics and adjust strategies to maximize operational efficiency [5] Group 4: Future Business Development - In the short term, the company will focus on the economic benefits of the "special cable environmentally friendly polymer material industrialization expansion project," as well as expanding its flame-retardant materials business and overseas markets [6] - The long-term strategy involves concentrating on niche markets within the stable and broad application market of the wire and cable industry, continuously enriching the product series and strengthening brand advantages [6]

Financial Data and Key Metrics Changes - Sales for the first quarter of 2025 were $195 million, exceeding the top end of guidance by $5 million, but still below prior year levels due to ongoing end market weakness [9][18] - Adjusted EBITDA margin was 17.3%, with cash from operations increasing by 7% year over year to $19 million despite sales contraction [10][24] - Diluted EPS was $0.22, down 21% from the previous year, primarily due to an 8% decline in sales [20] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 11% year over year, reflecting weakness in agriculture, mobile, and industrial end markets [21] - Electronics sales remained relatively unchanged, with growth in health and wellness and recreational markets offsetting declines in industrial and mobile sectors [23] - Gross margin for hydraulics contracted by 170 basis points, while electronics gross margin held steady [19][22] Market Data and Key Metrics Changes - Asia Pacific sales in the electronics segment increased by 24% year over year, driven by growth in the health and wellness end market [18] - Overall, sales declined in all regions compared to the previous year, highlighting persistent weakness in most end markets [18] Company Strategy and Development Direction - The company is refocusing on customer-centric initiatives to drive business success and improve shareholder returns [7][8] - A strategy to mitigate tariff impacts includes localizing production and leveraging existing manufacturing capabilities in China and the APAC region [30][31] - The company aims to capitalize on market share opportunities created by competitors relying on Chinese manufacturing [60][62] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the downstream effects of prolonged tariff escalations, including rising costs and pricing pressures [9] - Despite challenges, there are positive trends in order intake, with a focus on improving customer relationships and product offerings [12][13] - The company expects second quarter sales to range from $198 million to $206 million, indicating a sequential increase from the first quarter [35] Other Important Information - The company has reduced debt by 15% over the last twelve months and has a strong liquidity position with nearly $400 million available [11][27] - Capital expenditures for 2025 will focus on maintenance and productivity enhancements with evident returns on investment [26] Q&A Session Summary Question: Insights from the listening tour and specific actions taken - Management highlighted the importance of customer engagement and accountability, emphasizing a shift from a passive to a more aggressive sales approach [44][45] Question: Impact of tariffs on manufacturing and costs - The company is transferring manufacturing to mitigate tariff impacts, with minimal investment required due to existing operations in the region [49][50] Question: Competitive positioning around tariffs - Management sees market share gain opportunities due to competitors' reliance on Chinese imports, particularly in hydraulics and electronics [59][60] Question: Demand changes and guidance for Q2 - Management noted positive order intake trends and expects to see some revenue from tariff-related opportunities in Q2, but significant impacts are anticipated in the back half of the year [65][66] Question: Portfolio assessment and potential divestitures - The company is open to evaluating its portfolio for strategic fit and financial performance, focusing on debt reduction before considering acquisitions [85]