Nortech Systems Reports Third Quarter Results
MINNEAPOLIS — Nortech Systems Incorporated (NASDAQ: NSYS) ("Nortech" or the "Company"), known for its engineering and manufacturing solutions in electromedical and electromechanical products, has reported its financial results for the third quarter, showcasing its resilience in the face of challenges.
2024 Q3 Highlights:
- Net sales reached $31.4 million.
- The Company reported a net loss of $739 thousand, translating to a loss of $0.27 per diluted share.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $143 thousand.
- A robust 90-day backlog of $29.6 million was recorded as of September 30.
Management Commentary
President and CEO Jay D. Miller remarked, "The third quarter saw our net sales impacted by ongoing delays in customers' purchasing decisions and efforts to reduce inventory levels. This has been a challenge for many in the contract manufacturing sector in recent quarters. We view these challenges as an opportunity to deepen our customer relationships, which are vital to realizing our long-term strategic goals. Despite substantial headwinds throughout 2024, we are navigating these challenges by consolidating operations and transferring multiple projects to more cost-effective, higher-margin locations along with introducing key new capabilities. Our efforts are aimed at positioning Nortech for sustained growth and health in the long term."
Furthermore, Miller noted, "We completed a significant restructuring of both our back office and plant operations. This restructuring is designed to enhance service delivery, ensuring our customers receive high-quality products promptly and with reduced lead times. We are encouraged by the advancements made during Q3 to consolidate Nortech's North American footprint, allowing us to meet customer requirements more effectively. These strategic moves are designed to scale our business efficiently while optimizing our cost structure. We remain optimistic about our pipeline and the future of Nortech Systems."
Summary Financial Overview
Below is a concise financial summary comparing Q3 of 2024 with Q3 of 2023, as well as year-to-date comparisons:
| ($ in thousands) | Q3 2024 | Q3 2023 | % Change | YTD 2024 | YTD 2023 | % Change |
|---|---|---|---|---|---|---|
| Net sales | $31,407 | $33,369 | (5.9%) | $99,513 | $103,278 | (3.6%) |
| Gross profit | $3,835 | $5,318 | (27.9%) | $13,900 | $16,277 | (14.6%) |
| Operating expenses | $4,518 | $4,325 | 4.5% | $13,416 | $13,365 | (0.38%) |
| Net income | (739) | $1,206 | (161.3%) | $183 | $2,523 | (92.8%) |
| Adjusted EBITDA | $143 | $1,637 | (91.1%) | $2,699 | $4,815 | (44.6%) |
Conference Call Invitation
Nortech Systems invites enthusiasts and investors to a live conference call at 7:30 a.m. Central Time to discuss third-quarter results. Key executives will lead the call, including CEO Jay D. Miller and CFO Andrew D. C. LaFrence. Participants in the U.S. can join by dialling 888-506-0062, while international participants can call 973-528-0011 (access code: 277848).
About Nortech Systems Incorporated
Nortech Systems is a prominent provider of design and manufacturing solutions for intricate electromedical devices and systems. The company primarily targets the medical, aerospace & defense, and industrial sectors. With services spanning from concept development through commercial implementation, including software, electrical, and mechanical design, Nortech operates multiple manufacturing facilities and design centers throughout the United States, Latin America, and Asia. Its equity is listed on the NASDAQ under the symbol NSYS.
Contact
For inquiries, please reach out to:
Andrew D. C. LaFrence
Chief Financial Officer and Senior Vice President of Finance
alafrence@nortechsys.com
952-345-2243
Frequently Asked Questions
1. What were the key highlights of Nortech Systems' Q3 report?
The key highlights include net sales of $31.4 million, a net loss of $739 thousand, and an adjusted EBITDA of $143 thousand.
2. What challenges did Nortech Systems face in Q3?
Nortech faced challenges due to customers delaying product purchases and efforts to reduce inventories, affecting sales.
3. How is the company addressing its operational challenges?
Nortech is consolidating facilities and relocating programs to lower-cost, higher-margin sites to improve efficiency.
4. Who can be contacted for more information about Nortech Systems?
Contact Andrew D. C. LaFrence, CFO, at alafrence@nortechsys.com or call 952-345-2243.
5. Where can I find Nortech Systems' stock information?
Nortech Systems is traded on the NASDAQ under the ticker symbol NSYS.
