[August 03, 2016] |
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Nortech Systems Reports Second Quarter Results
Nortech Systems (News - Alert) 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 (News - Alert), 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 Call Nortech Systems
announces a conference call to be held at 10:00 a.m. (CDT (News - Alert)) 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 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, 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 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 (News - Alert).
Condensed Statement of Operations
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THREE MONTHS ENDED
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SIX MONTHS ENDED
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JUNE 30
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JUNE 30
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Unaudited
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Unaudited
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2016
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2015
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2016
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2015
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Net Sales
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$
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28,945,135
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$
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26,801,473
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$
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57,895,177
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$
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53,341,095
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Income (Loss) From Operations
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(109,936
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)
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(483,360
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)
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111,012
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(684,961
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)
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Interest Expense
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(139,247
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)
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(112,002
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)
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(271,269
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)
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(207,188
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)
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Loss Before Income Taxes
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(249,183
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)
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(595,362
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)
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(160,257
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)
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(892,149
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)
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Income Tax Benefit
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(69,000
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)
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(217,000
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)
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(43,000
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)
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(321,000
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)
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Net Loss
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$
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(180,183
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)
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$
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(378,362
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)
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$
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(117,257
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)
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$
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(571,149
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)
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Net Loss per Basic and Diluted Common Shares
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$
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(0.07
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)
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$
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(0.14
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)
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$
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(0.04
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)
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$
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(0.21
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)
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Weighted Average Number of Common Shares Outstanding:
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Basic
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2,747,700
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2,746,325
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2,747,012
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2,745,183
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Diluted
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2,747,700
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2,746,325
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2,747,012
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2,745,183
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Condensed Balance Sheets
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JUNE 30 2016
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DECEMBER 31 2015
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(Unaudited)
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Accounts Receivable
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$
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18,101,914
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$
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18,431,746
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Inventories
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21,520,434
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20,185,445
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Other Current Assets
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1,688,646
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1,755,548
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Property and Other Long-term Assets
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16,363,969
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16,192,348
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Total Assets
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$
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57,674,963
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$
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56,565,087
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Accounts Payable
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$
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14,164,865
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$
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13,041,377
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Other Current Liabilities
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6,513,628
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6,630,333
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Line of Credit - Long-term
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8,539,994
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7,691,237
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Long-term Debt and Other Long-term Liabilities
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6,321,270
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6,930,284
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Shareholders' Equity
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22,135,206
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22,271,856
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Total Liabilities and Shareholders' Equity
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$
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57,674,963
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$
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56,565,087
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160803006674/en/
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