For Fiscal 2016, Sales and Profits Increase
Nortech Systems Incorporated (Nasdaq: NSYS), a leading provider
of full-service electronics manufacturing services (EMS), today
reported net sales of $29.0 million for the fourth quarter ended
December 31, 2016, compared with net sales of $31.4 million for the
fourth quarter of 2015. Net sales for the 2016 fiscal year ended
December 31 rose one percent, to $116.6 million, compared with
$115.2 million reported for fiscal 2015.
For the fourth quarter of 2016, the majority of the revenue
decline was from industrial customers in the transportation sector.
Profitability was aided by a favorable medical product and service
mix, which offset the volume impact. Operating income for the
fourth quarter was $328,000, compared with $329,000 for the fourth
quarter of 2015. Fourth quarter net income of $98,000, or $0.04 per
diluted common share, compares with $123,000, or $0.04 per diluted
common share, in the fourth quarter of 2015.
For fiscal 2016, operating income was $629,000, an improvement
of $1.1 million from a fiscal 2015 loss. Net income was $44,000, or
$0.02 per diluted common share, for fiscal 2016. This compares with
a net loss of $571,000, or $0.21 per diluted common share, for
fiscal 2015.
“We’re pleased with our progress transitioning into a more
global value-added and medical-focused EMS company,” said Rich
Wasielewski, Nortech Systems’ president and CEO. “Our strategy of
early engagement, engineering expertise and solutions selling is
also gaining traction with our industrial and defense
customers.”
During 2016, Nortech’s medical sales increased 30 percent and
defense sales rose 11 percent. Industrial sales declined 21
percent, impacted by the slow economic growth and softness in the
transportation and oil and gas sectors. The company’s overall
90-day backlog was $20.5 million at the end of 2016 compared with
$20.7 million at the end of 2015. The medical products and service
mix, cost improvements and selective pricing actions all
contributed to the 140-basis-point improvement in gross margin and
improved profitability in fiscal 2016. Net cash provided by
operating activities was $3.5 million in the year and debt was
lowered by $1.4 million.
“Looking ahead, we’re expecting the first quarter to be soft,”
explained Wasielewski, adding that the recent increased activity in
new projects and bookings – the strongest levels since 2009 – gives
the company optimism for profitable growth in 2017. Renewed U.S.
economic confidence, buoyed by the potential of tax reform, reduced
regulations and increased spending on infrastructure and defense,
contributes to this outlook.
Conference CallNortech
Systems will hold a conference call at 10:00 a.m. (CST) on
Thursday, March 9, 2017, to discuss the company’s fourth quarter
and fiscal year results. Anyone interested in participating in the
conference can access the call by dialing 866-682-6100 from within
the United States, or 862-255-5401 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 March 23, 2017, by dialing 877-481-4010 (from
U.S.) or 919-882-2331 (International). To access the replay, the
conference ID 10237 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 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
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 TWELVE MONTHS
ENDED DECEMBER 31 DECEMBER 31 Audited
Audited Audited
Audited 2016 2015 2016
2015 Net Sales $ 29,008,128 $ 31,441,746 $
116,621,719 $ 115,191,905 Income (Loss) From Operations
328,287 328,559 629,063 (422,048 ) Interest Expense (139,562 )
(124,226 ) (550,289 ) (465,374 ) Income (Loss) Before Income
Taxes 188,725 204,333 78,774 (887,422 ) Income Tax Expense
(Benefit) 91,000 81,000 35,000 (316,000 )
Net Income (Loss) $ 97,725 $ 123,333 $ 43,774
$ (571,422 ) Net Income (Loss) per Basic and Diluted
Common Shares $ 0.04 $ 0.04 $ 0.02 $ (0.21 )
Weighted Average Number of Common Shares Outstanding: Basic
2,747,832 2,746,325 2,747,424 2,745,759
Diluted 2,749,889 2,748,977 2,749,545
2,745,759
Condensed Balance Sheets
DECEMBER 31 2016 DECEMBER 31 2015
Audited Audited Cash $ 268,204 $ 887 Accounts
Receivable 17,320,784 18,431,746 Inventories 20,653,841 20,185,445
Other Current Assets 1,246,908 1,754,661 Property and Other
Long-term Assets 16,026,778 16,192,348 Total Assets $
55,516,515 $ 56,565,087 Accounts Payable $ 13,825,530 $
13,041,377 Other Current Liabilities 6,480,109 6,630,333 Line of
Credit – Long-term 7,315,262 7,691,237 Long-term Debt and Other
Long-term Liabilities 5,580,826 6,930,284 Shareholders’ Equity
22,314,788 22,271,856 Total Liabilities and Shareholders’
Equity $ 55,516,515 $ 56,565,087
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version on businesswire.com: http://www.businesswire.com/news/home/20170308006391/en/
Nortech Systems IncorporatedPaula Graff, 952-345-2244orBrookside
Communications GroupWarren Djerf,
952-920-3908warren@brookcomm.net
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