Financial Performance - Net sales for the year ended December 31, 2024, were $128,133, a decrease of $11,199 or 8.0% compared to $139,332 in 2023[106] - Gross profit for the year ended December 31, 2024, was $16,722, down $6,382 or 27.6% from $23,104 in 2023, resulting in a gross margin percentage of 13.1%[111] - Operating loss for the year ended December 31, 2024, was $(195), compared to operating income of $5,953 in 2023, representing a decrease of 103.3%[115] - Net loss for 2024 was $1,295, or $0.47 per diluted share, compared to net income of $6,874, or $2.38 per diluted share in 2023[118] Order Backlog and Shipments - The total order backlog as of December 31, 2024, was $65,852, reflecting a 28.2% decrease from December 31, 2023[108] - The 90-day shipment backlog as of December 31, 2024, was $26,451, down 24.8% from December 31, 2023[107] Expenses and Charges - Selling expenses decreased by $152, or 4.2%, in 2024 compared to 2023 due to lower incentive compensation[113] - Restructuring charges for 2024 amounted to $571 related to the closure of the Blue Earth facility[114] Cash Flow and Financing - Cash used in operating activities for the year ended December 31, 2024 was $2,250, compared to cash provided by operations of $1,769 for 2023, indicating a significant decrease in operational cash flow[125] - Net cash provided by financing activities in 2024 was $2,765, mainly from net proceeds of $2,849 from the line of credit and $345 from notes payable, contrasting with cash used of $1,281 in 2023[127] - The company replaced its asset-backed line of credit with a $15,000 Senior Secured Revolving Line of Credit on February 29, 2024[120] - The financing agreement with China Construction Bank provides a line of credit of 10,000,000 RMB (approximately 1.4 million USD) expiring on September 9, 2025, with an interest rate of approximately 4% as of December 31, 2024[124] Assets and Inventory - As of December 31, 2024, the company recorded a contract asset of $13,792 for unbilled customer net sales included in net sales[132] - The company had an inventory reserve of $1,446 as of December 31, 2024, reflecting ongoing evaluations of slow-moving and excess inventory[135] Tax Positions - The reserve for uncertain tax positions was $97 as of December 31, 2024, indicating potential challenges in tax positions taken by the company[137] - A tax benefit of $2,600 was recorded in 2023 due to the reversal of a previously established valuation allowance against net U.S. deferred tax assets[136] - The company anticipates future adjustments to the deferred tax asset valuation allowance based on changes in expected realizations, which could materially affect financial results[136] Impairment and Valuation - The company has no long-lived asset impairment as of December 31, 2024, despite its common stock trading below net equity value[133]

Core Viewpoint - Nortech Systems Incorporated is set to discuss its fourth quarter and full year 2024 financial results in a live conference call on March 31, 2025, highlighting its ongoing commitment to transparency and stakeholder engagement [1]. Company Overview - Nortech Systems Incorporated is a leading provider of design and manufacturing solutions for complex electromedical devices and electromechanical systems, primarily serving the medical device, medical imaging, aerospace & defense, and industrial markets [2]. - The company's design services encompass the entire process from concept development to commercial design, including various engineering disciplines such as medical device, software, electrical, mechanical, and biomedical engineering [2]. - Nortech's manufacturing capabilities are vertically integrated, focusing on wire/cable/interconnect assemblies, printed circuit board assemblies, and system-level assembly, integration, and final testing [2]. - The company is headquartered in Maple Grove, Minnesota, and operates six manufacturing locations and design centers across the U.S., Latin America, and Asia [2]. - Nortech Systems is publicly traded on the NASDAQ under the symbol NSYS [2].

Financial Data and Key Metrics Changes - Net sales for Q3 2024 totaled $31.4 million, a 5.9% decrease from $33.4 million in Q3 2023 [21] - Year-to-date net sales were $99.5 million, down 3.6% from $103.3 million in the same prior year period [21] - Gross profit for Q3 2024 was $3.8 million, or 12.2% of net sales, compared to $5.3 million, or 15.9% of net sales in Q3 2023 [24] - Adjusted EBITDA for Q3 2024 was $143,000, down from $1.6 million in Q3 2023 [31] - Cash and equivalents as of September 30, 2024, totaled $1.2 million, down from $1.7 million as of December 31, 2023 [32] Business Line Data and Key Metrics Changes - Revenue growth was strong in the Aerospace and Defense category, contrasting with softness in the industrial and medical markets [22] - Customer purchasing patterns have shifted towards shorter lead times, resulting in a reduction in customer backlog by the end of Q3 2024 [23] Market Data and Key Metrics Changes - The company faced headwinds from industrial customers due to market softness and delayed product launches [22] - Medical customers are aggressively reducing inventory investments, impacting revenue [22] Company Strategy and Development Direction - The company is focusing on consolidating its North American footprint and moving production to better fit customer needs [9] - Investments are being made in business development and facility optimization, expected to yield at least $1.6 million in annual savings starting in 2025 [11] - The company is pursuing a 3-tier global manufacturing strategy across the U.S., Mexico, and China to enhance competitiveness [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult quarter but remains optimistic about long-term growth and investments [14] - The company is adapting to supply chain nearshoring trends and is committed to improving operational efficiencies [7][8] - Future technological developments, particularly in fiber optic technology, are expected to support sales momentum in 2024 [48] Other Important Information - The closure of the Blue Earth facility is on track for December 2024, with production moving to Bemidji [10] - The company has incurred restructuring costs related to the Blue Earth closure, estimated between $650,000 and $750,000 for 2024 [27] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the call concluded without a Q&A segment [49]

Core Insights - Nortech Systems Incorporated reported a net sales of $31.4 million for Q3 2024, a decrease of 5.9% compared to $33.4 million in Q3 2023 [2][4] - The company experienced a net loss of $739 thousand, or $0.27 per diluted share, compared to a net income of $1.2 million in the same quarter last year [2][4] - Adjusted EBITDA for Q3 2024 was $143 thousand, down 91.1% from $1.6 million in Q3 2023 [2][4] Financial Performance - Net sales for the nine months ended September 30, 2024, were $99.5 million, a decline of 3.6% from $103.3 million in the same period of 2023 [4] - Gross profit for Q3 2024 was $3.8 million, down 27.9% from $5.3 million in Q3 2023 [4] - Operating expenses increased by 4.5% to $4.5 million in Q3 2024 compared to $4.3 million in Q3 2023 [4] Management Commentary - The CEO noted that sales were impacted by customers delaying product purchases and reducing inventory, which has affected the contract manufacturing industry [2] - The company is consolidating facilities and moving programs to lower-cost locations to improve efficiency and reduce costs [2] - Management expressed optimism about the customer pipeline and the future of Nortech Systems despite current challenges [2] Backlog and Strategic Moves - As of September 30, 2024, the company reported a 90-day backlog of $29.6 million [2] - The restructuring of back office and plant operations aims to enhance service delivery and product quality [2] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of Q3 2024 were $1.2 million, an increase from $1.1 million at the end of Q3 2023 [13] - Total assets as of September 30, 2024, were $77.0 million, compared to $75.1 million at the end of 2023 [11][12]

Financial Performance - Net sales for the three months ended September 30, 2024, were $31,407 thousand, a decrease of 5.9% compared to $33,369 thousand for the same period in 2023[4]. - Gross profit for the nine months ended September 30, 2024, was $13,900 thousand, down 14.5% from $16,277 thousand in the prior year[4]. - The company reported a net loss of $739 thousand for the three months ended September 30, 2024, compared to a net income of $1,207 thousand for the same period in 2023[4]. - The net income for the three months ended September 30, 2024, was $183, compared to a net income of $1,207 for the previous quarter, indicating a decline of about 85%[9]. - The company reported a net loss of $739 for the nine months ended September 30, 2024, compared to a net income of $2,522 for the same period in the previous year[9]. - Medical segment net sales for the nine months ended September 30, 2024 were $53,991 million, compared to $59,814 million for the same period in 2023, a decline of approximately 10%[25]. - Industrial segment net sales decreased by $2,001 or 19.2% in Q3 2024 compared to Q3 2023, and by $1,323 or 4.6% for the nine months ended September 30, 2024[63]. - Aerospace and defense segment net sales decreased by $173 or 3.4% in Q3 2024 compared to Q3 2023, but increased by $3,381 or 23.3% for the nine months ended September 30, 2024[62]. Operating Expenses - Operating expenses totaled $4,302 thousand for the three months ended September 30, 2024, compared to $4,195 thousand for the same period in 2023, reflecting an increase of 2.6%[4]. - Stock-based compensation expense for the three months ended September 30, 2024 was $127 million, compared to $80 million for the same period in 2023[41]. - Total compensation expense related to stock options was $61 and $184 for the three and nine months ended September 30, 2024, respectively, compared to $42 and $184 for the same periods in 2023[45]. - Restructuring charges of $267 were accrued during the first nine months of 2024 related to the closure of the Blue Earth production facility[54]. - Restructuring charges were $176 million and $267 million for the three and nine months ended September 30, 2024, respectively[73]. Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $3,043 thousand for the three months ended September 30, 2024, compared to a net cash provided of $2,181 thousand in the same period of 2023[6]. - As of September 30, 2024, cash balance was $1,239, with approximately $1,035 held in banks located in China[18]. - Cash used in operating activities was $3,043 million in the first nine months of 2024, compared to cash provided of $2,181 million in the same prior-year period[77]. - Cash provided by financing activities was $3,561 million in the first nine months of 2024, compared to cash used of $2,388 million in the same prior-year period[79]. - The company has $5,450 thousand of unused availability on the line of credit as of September 30, 2024[83]. Assets and Liabilities - The company had cash and cash equivalents of $1,239 thousand at the end of the period, compared to $1,121 thousand at the end of the same period in 2023[6]. - The company had contract assets of $15,058 million as of September 30, 2024, an increase from $14,481 million at the beginning of the year[27]. - Total lease liabilities as of September 30, 2024 were $9,378 million, an increase from $8,361 million as of December 31, 2023[37]. - The company’s total intangible assets as of September 30, 2024, were valued at $179, down from $263 as of December 31, 2023, indicating a decrease of approximately 32%[16]. - Amortization expense for finite life intangible assets for the nine months ended September 30, 2024, was $84, compared to $120 for the same period in 2023, reflecting a decrease of 30%[17]. Shareholder Equity - As of September 30, 2024, total shareholders' equity was $35,690, an increase from $30,708 as of June 30, 2023, reflecting a growth of approximately 16%[9]. Risk Factors - The company faces risks including supply chain disruptions, increased competition, and potential FDA noncompliance[87]. - There have been no material changes in risk factors from those disclosed in the Annual Report for the fiscal year ended December 31, 2023[93]. Accounting and Compliance - The company is currently evaluating the impact of new accounting standards issued by the FASB on its consolidated financial statements and related disclosures[13]. - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the reporting period[91]. - There was no change in internal control over financial reporting that materially affected the company during the most recently completed fiscal quarter[92]. Customer Concentration and Sales - One customer accounted for 28% of net sales for the three months ended September 30, 2024, highlighting a significant concentration of revenue[19]. - Revenue from contract manufacturing agreements recognized over time accounted for approximately 72% of net sales for the three months ended September 30, 2024[22]. - Export sales from the U.S. represented approximately 2% of net sales for both the three and nine months ended September 30, 2024, consistent with the previous year's performance[21].

Core Insights - Nortech Systems Incorporated will hold a live conference call and webcast on November 7, 2024, to discuss its third quarter financial results [1] - The call will be hosted by the CEO Jay D. Miller and CFO Andrew D. C. LaFrence [1] Company Overview - Nortech Systems is a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products [1] - The company serves the medical, aerospace & defense, and industrial markets [1] - Nortech's design services include concept development to commercial design, covering medical device, software, electrical, mechanical, and biomedical engineering [1] - The manufacturing capabilities are vertically integrated around wire/cable/interconnect assemblies, printed circuit board assemblies, and system-level assembly, integration, and final testing [1] - The company is headquartered in Maple Grove, Minnesota, and operates seven manufacturing locations and design centers across the U.S., Latin America, and Asia [1] - Nortech Systems is traded on the NASDAQ under the symbol NSYS [1]

Financial Data and Key Metrics Changes - In Q2 2024, net sales totaled $33.9 million, a 3.2% decrease from $35 million in Q2 2023 [10] - For the first six months of 2024, net sales were $68.1 million, down 2.6% from $69.9 million in the same period of 2023 [10] - Gross profit for Q2 2024 was $4.6 million, representing 13.6% of net sales, compared to $5.5 million or 15.6% in Q2 2023 [11] - Adjusted EBITDA for Q2 2024 was $919,000, down from $1.6 million in Q2 2023 [14] - Cash and cash equivalents as of June 30, 2024, totaled $1.5 million, down from $1.7 million at the end of 2023 [14] Business Line Data and Key Metrics Changes - Revenue from medical customers decreased due to inventory reductions and delayed product launches, while aerospace and defense categories showed strong revenue growth [10][11] - Operating expenses were marginally lower due to reduced incentive compensation accruals, offsetting increased payroll costs [12] Market Data and Key Metrics Changes - There was a noted reduction in customer backlog in Q2 2024 as purchasing patterns changed, with customers requesting shorter lead times [11] - The company is experiencing strong customer engagement as supply chain normalization encourages nearshoring [5] Company Strategy and Development Direction - The company is focusing on long-term growth through facility consolidation and investment in business development, expecting annual savings of at least $1.6 million starting in 2025 [6][12] - A three-tier global manufacturing strategy in the U.S., Mexico, and China is being utilized to enhance competitiveness and customer service [8] - The company is investing in engineering expertise and product innovation, particularly in fiber optic technology, to meet evolving customer needs [18][20] Management's Comments on Operating Environment and Future Outlook - Management noted challenges in visibility to customer orders and inventory balancing among medical and industrial customers, but remains optimistic about aerospace and defense sectors [4][10] - The company anticipates stabilization in supply chain and customer orders, supporting continued sales momentum in 2024 [22] Other Important Information - The closure of the Blue Earth facility is on schedule, with expected restructuring costs between $750,000 and $850,000 in 2024 [12] - The company is increasing inventory levels in anticipation of the transition of production from the Blue Earth facility to Bemidji [13] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with management expressing gratitude for participation and looking forward to the next earnings report in November [22][23]

MINNEAPOLIS, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Nortech Systems Incorporated (Nasdaq: NSYS) ("Nortech" or the "Company"), a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products serving the medical, industrial and defense markets, reported second quarter ended June 30, 2024 financial results. 2024 Q2 Highlights: ● Net sales of $33.9 million ● Net income of $157 thousand, or $0.06 per diluted share ● Adjusted earnings before interest, taxes, depr ...

Exhibit 99.1 Nortech Systems Reports First Quarter Results And Actions to Reduce Facility Costs MINNEAPOLIS – May 16, 2024 -- Nortech Systems Incorporated (Nasdaq: NSYS) ("Nortech" or, the "Company"), a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products serving the medical, industrial and defense markets, reported first quarter ended March 31, 2024 financial results. 2024 Q1 Highlights: Management Commentary "We posted solid results in the f ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to NORTECH SYSTEMS INCORPORATED Commission file number 0-13257 State of Incorporation: Minnesota IRS Employer Identification No. 41-1681094 Executive Offices ...