Revenue up Eight Percent, Improved Operating
Performance
Nortech Systems Incorporated (NASDAQ: NSYS) today reported net
sales of $28.9 million for the second quarter ended June 30, 2016,
an eight percent increase over net sales of $26.8 million for the
second quarter of 2015. For the six months ended June 30, 2016,
Nortech Systems’ net sales increased nine percent to $57.9 million,
compared with $53.3 million for the same period in 2015.
For the second quarter of 2016, Nortech Systems reported an
operating loss of $110,000, an improvement of $373,000 compared to
the prior-year period. For the first six months of 2016, Nortech
Systems reported operating income of $111,000, an improvement of
$796,000 over the same period last year, when the operating loss
was $685,000.
For the second quarter of 2016, Nortech Systems reported a net
loss of $180,000, or $0.07 per diluted common share, compared with
a net loss of $378,000, or $0.14 per diluted common share, for the
same period last year. For the six months ended June 30, Nortech
Systems reported a net loss of $117,000, or $0.04 per diluted
common share. This compares with a net loss of $571,000, or $0.21
per diluted common share, for the first six months of 2015.
“The revenue improvement in the second quarter was led by
medical sales, up 40 percent year over year,” said Rich
Wasielewski, Nortech Systems’ president and CEO. “Our strategic
investment in engineering services helped our medical backlog
increase 28 percent during the second quarter, which bodes well for
continued future growth.”
Wasielewski cited ongoing volatility among Nortech Systems’
industrial customers, with transportation, semiconductor and
process control sectors experiencing economic headwinds throughout
the first half of the year; those conditions are expected to
persist this year. Quarterly defense sales improved, increasing 20
percent year over year amid signs of industry stabilization.
“Our overall backlog increased 12 percent during the second
quarter and we’re beginning to see early signs that our growth and
cost initiatives are taking hold,” Wasielewski explained. “Compared
to a year ago, we’re in a better position heading into the second
half of the year.”
Nortech Systems’ improved profitability for the quarter and
six-month period resulted from the overall revenue increase,
evolving product-service mix and cost-containment efforts.
Profitability was impacted by startup costs for new China
operations of $200,000 for the second quarter and $360,000 for the
six-month period.
This week Nortech Systems announced the closing of its facility
in Augusta, Wis., by year-end to improve asset utilization. The
company will consolidate operations at its other facilities and
serve customers without interruption.
“We are continuing to transform our business model with more
early-engagement opportunities and value-added services like
engineering, quick-turn prototyping and additional box-build
solutions,” concluded Wasielewski. “Our customers also appreciate
our competitive ‘One Nortech’ global options aided by our expansion
into China and investments in Mexico.”
Conference CallNortech
Systems announces a conference call to be held at 10:00 a.m. (CDT)
on Thursday, August 4, 2016, to discuss the company’s second
quarter results. Anyone interested in participating in the
conference can access the call by dialing 866-635-0172 from within
the United States, or 785-424-1629 if calling internationally. An
audio webcast and replay of this conference call can be accessed at
the investor relations portion of Nortech Systems’ 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 August 28, 2016, by dialing 877-481-4010 (from
U.S.) or 919-882-2331 (International). To access the replay, the
conference ID 10065 is required.
About Nortech Systems
IncorporatedNortech 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, medical and
aerospace/defense. 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
StatementsThis 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 SIX MONTHS ENDED
JUNE 30 JUNE 30 Unaudited Unaudited
2016 2015 2016 2015
Net Sales $ 28,945,135 $ 26,801,473 $ 57,895,177 $
53,341,095 Income (Loss) From Operations (109,936 ) (483,360
) 111,012 (684,961 ) Interest Expense (139,247 ) (112,002 )
(271,269 ) (207,188 ) Loss Before Income Taxes (249,183 )
(595,362 ) (160,257 ) (892,149 ) Income Tax Benefit (69,000
) (217,000 ) (43,000 ) (321,000 ) Net Loss $ (180,183 ) $
(378,362 ) $ (117,257 ) $ (571,149 ) Net Loss per Basic and
Diluted Common Shares $ (0.07 ) $ (0.14 ) $ (0.04 ) $ (0.21 )
Weighted Average Number of Common Shares Outstanding: Basic
2,747,700 2,746,325 2,747,012 2,745,183
Diluted 2,747,700 2,746,325 2,747,012
2,745,183
Condensed Balance Sheets
JUNE 302016
DECEMBER 312015
(Unaudited) Accounts Receivable $
18,101,914
$
18,431,746
Inventories 21,520,434 20,185,445 Other Current Assets 1,688,646
1,755,548 Property and Other Long-term Assets 16,363,969 16,192,348
Total Assets $
57,674,963
$
56,565,087
Accounts Payable $
14,164,865
$
13,041,377
Other Current Liabilities 6,513,628 6,630,333 Line of Credit
– Long-term 8,539,994 7,691,237 Long-term Debt and Other Long-term
Liabilities 6,321,270 6,930,284 Shareholders’ Equity
22,135,206 22,271,856 Total Liabilities and Shareholders’
Equity $
57,674,963
$
56,565,087
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version on businesswire.com: http://www.businesswire.com/news/home/20160803006674/en/
Nortech Systems IncorporatedPaula Graff, 952-345-2244orBrookside
Communications GroupWarren Djerf,
952-920-3908warren@brookcomm.net
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