MINNEAPOLIS--(BUSINESS WIRE)--Nortech Systems Inc. (NASDAQ: NSYS) today reported net sales of $30.4 million for the third quarter ended September 30, compared with net sales of $28.0 million for the third quarter of 2014, up 8.5 percent over the prior year and 13 percent sequentially. Backlog rose 23 percent during the quarter. For the nine months ended September 30, Nortech’s net sales were $83.8 million, compared with $81.6 million for the same period in 2014.
“We’re encouraged by the sales increase and double-digit backlog growth,” said Rich Wasielewski, Nortech Systems’ president and CEO. “Industrial customers accounted for the majority of the revenue growth, with our engineering service acquisition also contributing to both the revenue and backlog increases.”
Operating income for the third quarter was $23,000, due to increased revenue and ongoing cost-reduction efforts; the company had reported operating losses the prior two quarters.
Nortech Systems reported a net loss in the third quarter of $124,000, or $0.05 per diluted common share, compared with net income of $333,000, or $0.12 per diluted common share, for the same period last year. For the nine months ended September 30, Nortech reported a net loss of $695,000, or $0.25 per diluted common share. This compares with net income of $666,000, or $0.24 per diluted common share, for the same period in 2014. Net income in 2015 has been impacted by customer mix, external factors, acquisition expenses and ramp-up costs for growth and cost-reduction initiatives in Mexico and Asia.
“We’re closely monitoring the timing and execution of our growth and cost-reduction initiatives,” explained Wasielewski. “Despite our determined efforts in the third quarter, a challenging business environment meant our operational adjustments and gross margin improvements weren’t enough to restore bottom-line profitability. In the short term, we’ll remain vigilant and focused on increasing our gross margin and strengthening our balance sheet.”
During the third quarter, Nortech moved its corporate headquarters to a location offering additional space for expansion and a more collaborative environment. Wasielewski added, “This new facility helps advance our ‘One Nortech’ solution that is gaining traction with customers.”
Conference Call
Nortech Systems
announces a conference call to be held at 10:00 a.m. (CST) on Thursday,
November 5, 2015, to discuss the company’s third quarter results, which
will be released after the market closes on November 4. Anyone
interested in participating in the conference can access the call by
dialing 877-407-8031 from within the United States, or 201-689-8031 if
calling internationally. An audio webcast and replay of this conference
call can be accessed at the investor relations portion of Nortech’s
website at www.nortechsys.com
or at www.investorcalendar.com.
A podcast (MP3 download) will also be available. The telephone replay
will be available through November 19, 2015, by dialing 877-660-6853
(from U.S.) or 201-612-7415 (International). To access the replay, the
conference ID 13622797 is required.
About Nortech Systems Incorporated
Nortech
Systems Incorporated (www.nortechsys.com),
based in Maple Grove, Minn., is a full-service electronics manufacturing
services (EMS) provider of wire and cable assemblies, printed circuit
board assemblies, and higher-level complete box build assemblies for a
wide range of industries. Markets served include industrial equipment,
aerospace/defense and medical. The company has operations in the U.S.,
Latin America and Asia. Nortech Systems Incorporated is traded on the
NASDAQ Stock Market under the symbol NSYS.
Forward-Looking Statements
This
press release contains forward-looking statements made pursuant to the
safe harbor provision of the Private Securities Litigation Reform Act of
1995. While this release is based on management’s best judgment and
current expectations, actual results may differ and involve a number of
risks and uncertainties. Important factors that could cause actual
results to differ materially from the forward-looking statements
include, without limitation: volatility in market conditions which may
affect market supply of and demand for the company’s products; increased
competition; changes in the reliability and efficiency of operating
facilities or those of third parties; risks related to availability of
labor; commodity and energy cost instability; general economic,
financial and business conditions that could affect the company’s
financial condition and results of operations; as well as risk factors
listed from time to time in the company’s filings with the SEC.
Condensed Statement of Operations |
||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
Unaudited |
Unaudited | |||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
Net Sales | $30,409,064 | $28,037,865 | $83,750,159 | $81,595,474 | ||||||||
Income (Loss) from Operations | 22,543 | 473,490 | (662,418) | 1,056,888 | ||||||||
Other Expense |
(222,149) |
(102,793) |
(429,337) |
(318,333) |
||||||||
Income (Loss) before Income Taxes | (199,606) | 370,697 | (1,091,755) | 738,555 | ||||||||
Income Tax Expense (Benefit) |
(76,000) |
38,000 |
(397,000) |
73,000 |
||||||||
Net Income (Loss) | (123,606) | 332,697 | (694,755) | 665,555 | ||||||||
Net Income (Loss) per Basic and Diluted Common Share | $(0.05) | $0.12 | $(0.25) | $0.24 | ||||||||
Weighted Average Number of Common Shares: | ||||||||||||
Basic | 2,746,325 | 2,742,992 | 2,745,568 | 2,742,992 | ||||||||
Diluted | 2,746,325 | 2,747,943 | 2,745,568 | 2,747,552 | ||||||||
Condensed Balance Sheets |
||||||
September 30, 2015 | December 31, 2014 | |||||
Unaudited | ||||||
Accounts Receivable | $19,193,424 | $17,367,668 | ||||
Inventories | 20,262,206 | 18,528,418 | ||||
Other Current Assets | 2,649,159 | 1,784,382 | ||||
Property and Other Long-term Assets | 16,180,786 | 11,005,844 | ||||
Total Assets | $58,285,575 | $48,686,312 | ||||
Accounts Payable | $14,296,078 | $9,008,426 | ||||
Other Current Liabilities | 7,697,256 | 4,361,405 | ||||
Line of Credit – Long-term | 6,896,452 | 7,998,184 | ||||
Long-term Debt and Other Long-term Liabilities | 7,249,255 | 4,489,905 | ||||
Shareholders’ Equity | 22,146,534 | 22,828,392 | ||||
Total Liabilities and Shareholders’ Equity | $58,285,575 | $48,686,312 | ||||