[November 02, 2016] |
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Nortech Systems Reports Third Quarter Results
Nortech Systems (News - Alert) Inc. (NASDAQ: NSYS) today reported net sales of $29.7
million for the third quarter ended September 30, compared with net
sales of $30.4 million for the third quarter of 2015. For the nine
months ended September 30, Nortech's net sales increased 5 percent to
$87.6 million.
Operating income for the third quarter was $190,000, compared with an
operating loss of $66,000 for the third quarter of 2015. For the
nine-month period, Nortech reported operating income of $301,000,
compared with an operating loss of $751,000 for the same period in 2015.
Nortech Systems reported net income in the third quarter of $63,000, or
$.02 per diluted common share, compared with a net loss of $124,000, or
$0.05 per diluted common share, for the same period last year. Third
quarter results included an increase of $456,000 to the bad debt reserve
for a customer that filed for Chapter 11 bankruptcy protection. For the
nine months ended September 30, Nortech reported a net loss of $54,000,
or $0.02 per diluted common share. This compares with a net loss of
$695,000, or $0.25 per diluted common share, for the same period in 2015.
"Our medical sales continued their strong momentum in the third quarter,
up 9 percent sequentially and 27 percent year over year with backlog
growing 35 percent over the prior year," said Rich Wasielewski, Nortech
Systems' president and CEO. "We're successfully leveraging our
cross-selling opportunities and early engagement design engineering
capabilities to gain traction in the higher-growth medical market."
Nortech's other two core markets are still experiencing mixed results.
Industrial sales decreased 25 percent in the quarter, due primarily to
transportation customers, while defense sales rose 6 percent. The
overall corporate backlog increased 5 percent during the quarter,
providing some additional momentum for the remainder of the year.
"Our improved gross margin had a major impact on operating profits,"
explained Wasielewski, noting that the company's gross margin improved
320 basis points to 12.7 percent of sales in the third quarter, as
compared to the prior year's third quarter. This increase was aided by
the mix of medical products, greater engineering service activity and
selective pricing actions.
"These results show we're making progress in Nortech's transformation,"
added Wasielewski. "Our strategic investments the past two years have
positioned us to better capitalize on growth opportunities. We've also
improved our competitiveness by strengthening our global footprint."
The company is targeting the medical market with full-service solutions
from product development, design transfer and production manufacturing
services, along with FDA expertise. For industrial and defense markets,
Nortech is focused on improving asset utilization and profitability
while supporting early engagement including design for manufacturability
and rapid prototyping.
Conference Call Nortech Systems
announces a conference call to be held at 10:00 a.m. (CDT (News - Alert)) on Thursday,
November 3, 2016, to discuss the company's third quarter results, which
will be released after the market closes on November 2. Anyone
interested in participating in the conference can access the call by
dialing 866-320-0174 from within the United States, or 785-424-1631 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 17, 2016, by dialing 877-481-4010
(from U.S.) or 919-882-2331 (International). To access the replay, the
conference ID 10126 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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NINE MONTHS ENDED
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SEPTEMBER 30
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SEPTEMBER 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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29,718,414
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$
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30,409,064
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$
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87,613,591
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$
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83,750,159
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Income (Loss) From Operations
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189,764
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(65,646
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)
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300,776
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(750,607
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)
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Interest Expense
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(139,458
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)
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(133,960
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)
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(410,727
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)
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(341,148
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)
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Income (Loss) Before Income Taxes
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50,306
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(199,606
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)
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(109,951
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)
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(1,091,755
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)
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Income Tax Benefit
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(13,000
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)
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(76,000
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)
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(56,000
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)
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(397,000
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)
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Net Income (Loss)
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$
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63,306
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$
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(123,606
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)
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$
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(53,951
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)
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$
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(694,755
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)
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Net Income (Loss) per Basic and Diluted Common Shares
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$
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0.02
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$
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(0.05
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)
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$
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(0.02
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)
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$
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(0.25
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)
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Weighted Average Number of Common Shares Outstanding:
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Basic
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2,747,832
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2,746,325
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2,747,288
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2,745,568
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Diluted
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2,749,944
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2,746,325
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2,747,288
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2,745,568
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Condensed Balance Sheets
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SEPTEMBER 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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17,688,678
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$
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18,431,746
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Inventories
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21,742,523
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20,185,445
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Other Current Assets
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1,699,705
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1,755,548
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Property and Other Long-term Assets
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16,079,531
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16,192,348
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Total Assets
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$
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57,210,437
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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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14,875,460
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$
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13,041,377
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Other Current Liabilities
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5,822,314
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6,630,333
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Line of Credit - Long-term
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8,213,268
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7,691,237
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Long-term Debt and Other Long-term Liabilities
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6,100,883
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6,930,284
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Shareholders' Equity
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22,198,512
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22,271,856
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Total Liabilities and Shareholders' Equity
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$
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57,210,437
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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/20161102006635/en/
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