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 ...

Financial Data and Key Metrics Changes - For Q1 2024, net sales totaled $34.2 million, a 1.9% decrease from $34.9 million in Q1 2023 [16] - Gross margin improved to $5.4 million or 15.9% of net sales compared to $5.5 million or 15.7% in the prior year [9] - Net income for Q1 2024 was $765,000 or $0.26 per diluted share, up from $681,000 or $0.23 per diluted share in Q1 2023 [9] - EBITDA for Q1 2024 increased by 5.1% to $1.637 million compared to $1.558 million in Q1 2023 [20] Business Line Data and Key Metrics Changes - Net sales from the industrial category decreased by $8.1 million or 14.8% year-over-year [9] - Medical market sales were down by $1.1 million or 5.1%, primarily from medical component products [16] - Aerospace and defense category saw a significant increase, with net sales reaching $5.9 million, a 44.9% increase from the prior year [16] Market Data and Key Metrics Changes - The company noted reduced visibility to bookings in the upcoming quarters as customers balance their inventories [14] - There is a shift in customer ordering activities towards shorter lead times, impacting inventory management strategies [13] Company Strategy and Development Direction - The company is consolidating its Minnesota facilities, closing the Blue Earth facility by the end of 2024, and shifting operations to Bemidji [14][19] - A three-tier global manufacturing strategy in the US, Mexico, and China is aimed at providing flexibility to customers [7] - Focus on enhancing engineering capabilities and product innovation, particularly in fiber optic technology [25][26] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about technological developments supporting long-term sales momentum, aided by a stabilizing supply chain [28] - The company is focused on strengthening its balance sheet and aligning operations with market demand to drive sustainable EBITDA growth [22] Other Important Information - The company plans to reduce its Maple Grove headquarters space by approximately 30%, expecting annual savings of at least $1.6 million starting in 2025 [19] - Cash and cash equivalents increased to $4 million as of March 31, 2024, up from $1.7 million at the end of 2023 [21] Q&A Session Summary Question: Will the Blue Earth facility be put up for sale? - Yes, the company plans to market the facility after moving operations to Bemidji [31] Question: How does the Blue Earth facility compare to Bemidji and Mankato facilities? - The Blue Earth facility is older and less efficient compared to the newer Bemidji facility, which is certified for aerospace and defense [33] Question: What are the anticipated priorities for using cash going forward? - The company plans to pay down credit lines, invest in employee benefits, and continue funding innovations like fiber optic technologies [34] Question: What is the status of working capital or inventory levels among customers? - There is a mixed situation with some customers destocking while others transition to new product versions, reflecting a return to 2020-2021 buying habits [35] Question: What drove the strong growth in aerospace and defense? - The company does not provide granularity on specific projects or subsectors driving growth [36] Question: Why was Q4 margin significantly higher than Q1? - Variations in product mix and operating leverage related to fixed costs impacted margins, with adjustments for retirement benefits also affecting Q1 [38][39]

[Nortech Systems First Quarter 2024 Results](index=1&type=section&id=Nortech%20Systems%20First%20Quarter%202024%20Results) Nortech Systems reported solid first-quarter 2024 results, marked by improved profitability and strategic facility consolidations to optimize costs [Overview and Management Commentary](index=1&type=section&id=Overview%20and%20Management%20Commentary) Nortech Systems reported solid first-quarter 2024 results with a slight decrease in net sales but an increase in net income and EBITDA, driven by improved margins and expense management, alongside strategic facility consolidations in Minnesota to optimize costs Q1 2024 Financial Highlights vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $34.2 million | $34.9 million | -1.9% | | Net Income | $765 thousand | $681 thousand | +12.3% | | Diluted EPS | $0.26 | $0.23 | +13.0% | | Gross Margin | 15.9% | 15.7% | +20 bps | | EBITDA | $1.637 million | $1.559 million | +5.0% | | 90-day Backlog | $35.2 million | - | Consistent with year-end | - Management attributes the improved **net income** and **EBITDA** to better margins and effective expense management[4](index=4&type=chunk) - The company is undertaking significant facility consolidation to optimize its expense structure and plant capacity utilization: - Production from the Blue Earth, MN facility will be moved to the Bemidji, MN facility by the end of 2024, after which the Blue Earth plant will close - All employees from the Blue Earth facility will be offered jobs at other Minnesota locations - The Maple Grove, MN headquarters and engineering facility will be reduced in size by nearly **30%** to align with hybrid remote work arrangements[4](index=4&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) In Q1 2024, Nortech's net sales decreased by 1.9% year-over-year to $34.2 million, yet profitability improved with gross margin expanding to 15.9% and operating expenses falling, leading to increased net income and EBITDA [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) The condensed financial statements for Q1 2024 reflect stable financial health with increased net income despite slightly lower sales, marginal asset growth, reduced liabilities, and significantly improved cash from operating activities Condensed Income Statement Highlights (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $34,215 | $34,888 | | Gross profit | $5,448 | $5,484 | | Income from operations | $1,155 | $1,053 | | Net income | $765 | $681 | Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $59,116 | $58,793 | | Total assets | $75,452 | $75,127 | | Total current liabilities | $25,721 | $26,582 | | Total liabilities | $39,446 | $39,783 | | Total shareholders' equity | $36,006 | $35,344 | Condensed Cash Flow Statement Highlights (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,828 | $1,718 | | Net cash used in investing activities | ($735) | ($496) | | Net cash provided by (used in) financing activities | $274 | ($1,073) | | Net change in cash and cash equivalents | $2,353 | $152 | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes EBITDA, a non-GAAP measure, to provide investors with insight into ongoing performance, reporting an increase to $1.637 million in Q1 2024, with clear reconciliation from GAAP Net Income and notes on historical adjustments - **EBITDA** is used by management as it is believed to provide useful information to investors by reflecting ongoing performance and facilitating peer comparisons, excluding items like interest, taxes, depreciation, and amortization[11](index=11&type=chunk) Reconciliation of Net Income to EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $765 | $681 | | Interest | $167 | $110 | | Taxes | $223 | $262 | | Depreciation | $442 | $465 | | Amortization | $40 | $40 | | **EBITDA** | **$1,637** | **$1,558** | - Material adjustments to **EBITDA** in prior periods (2021) included benefits from the CARES Act Employee Retention Credit (ERC) and Paycheck Protection Program (PPP) loan forgiveness, as well as restructuring expenses[18](index=18&type=chunk) [Corporate Information and Forward-Looking Statements](index=2&type=section&id=Corporate%20Information%20and%20Forward-Looking%20Statements) Nortech Systems provides design and manufacturing solutions for complex electromedical and electromechanical products, serving medical, aerospace/defense, and industrial markets, and has scheduled a conference call to discuss results, while also including a standard safe harbor statement regarding forward-looking statements - Nortech Systems specializes in design and manufacturing for complex electromedical devices and electromechanical systems, primarily serving the **medical**, **aerospace & defense**, and **industrial sectors**[9](index=9&type=chunk) - A conference call to discuss Q1 2024 results was scheduled for **3:00 p.m. central time on May 16, 2024**[8](index=8&type=chunk) - The press release contains forward-looking statements concerning future financial results and operational changes, warning that actual results could differ materially due to risks such as commodity costs, supply chain disruptions, and market volatility[10](index=10&type=chunk)

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 ...

Financial Data and Key Metrics Changes - In Q4 2023, net sales totaled $36.1 million, a 1.2% increase from $35.6 million in Q4 2022 and up approximately 8% sequentially [9] - For the full year 2023, net sales reached $139.3 million, up nearly 4% from the prior year, driven by growth in medical, aerospace and defense, and industrial sectors [10] - Gross profit for 2023 was $23.1 million or 16.6%, compared to $20.5 million or 15.3% in 2022, indicating gross margin expansion [11] - Operating expenses totaled $17.2 million, a 3.4% increase from $16.6 million in 2022, primarily due to increased general and administrative expenses [12] - Fourth quarter 2023 GAAP net income was $6.9 million or $2.38 per diluted share, compared to $2 million or $0.70 per diluted share in 2022 [15] - EBITDA for 2023 increased 38.2% to $8 million, compared to $5.8 million in 2022, largely due to increased sales [17] Business Line Data and Key Metrics Changes - Medical market sales increased by $2.8 million or 3.7% in 2023, primarily from medical component products [10] - Aerospace and defense category net sales totaled $20.5 million, a 5.1% increase from the prior year [11] - Industrial category net sales were $40.1 million, up $3.6 million from the prior year [11] Market Data and Key Metrics Changes - The company noted a normalization in supply chain and customer ordering practices, which had previously influenced backlog levels [34] - The trend of near-shoring is gaining attention, with Mexico surpassing China in U.S. imports for the first time in 20 years [35] Company Strategy and Development Direction - The company emphasizes an employee-first mindset in its strategic planning, recognizing employees as valuable assets [31] - Nortech's three-tiered global manufacturing strategy in the U.S., Mexico, and China allows flexibility in production based on customer needs [36] - The company is focused on strengthening its balance sheet and delivering sustained EBITDA growth [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage challenges and continue growth, citing strong employee dedication and strategic planning [74] - The company anticipates continued sales momentum in 2024, supported by stabilization in supply chain and customer orders [71] Other Important Information - The company replaced its asset-backed line of credit with a cash flow-backed $15 million senior secured revolving line of credit, expiring in February 2027 [21][22] - Cash and cash equivalents as of December 31, 2023, totaled $1.7 million, reflecting fluctuations due to timing of cash receipts and expenditures [46] Q&A Session Summary Question: Comment on Nortech's accomplishments in the last five years and future direction - Management highlighted significant changes in the business, emphasizing employee dedication and a focus on strategic planning for continued growth [73] Question: What drove the improvement in gross margins? - The improvement was attributed to increased revenue covering fixed costs and effective cost management, alongside operational excellence [59][62] Question: Is the sales improvement sustainable? - Management expressed confidence in the ability to manage the business effectively and expand margins, indicating a positive outlook for future sales [78] Question: Insights on backlog normalization and sales improvement - Management noted that while backlog normalization was expected, the company has proven its ability to execute better than competitors and anticipates closing more business [79]

Exhibit 99.1 Nortech Systems Reports Fourth Quarter and Full Year 2023 Results Full Year Net Sales Up Nearly 4% from Prior Year; Gross Margin Increase 130 Basis Points from Prior Year EBITDA Increases to $8.0 million, Up 38.2% from Prior Year Management Commentary "As expected, we ended 2023 strong, including record revenue both in the fourth quarter and the year, continued expense management and solid margins," said Jay D. Miller, President and CEO of Nortech. "We saw encouraging normalization trends in su ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2023 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 (Exact name of registrant as specified in its charter) Commission file number 0-13257 State of Incorporation: Minnesota ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☐ 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: 7550 Meridian Circle N., Suite # 150, Maple Grove, MN 55369 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ...

Financial Data and Key Metrics Changes - In Q2 2023, revenue totaled $35 million, representing a $7.7 million increase from $32.5 million in Q2 2022, marking an 8% year-over-year growth [47][32] - Adjusted EBITDA improved by over $9 million from a negative $2.3 million to a positive $6.8 million over the last 12 months [62] - Net income for Q2 2023 was $635,000 or $0.22 per diluted share, consistent with the prior quarter and Q2 2022 [57] Business Line Data and Key Metrics Changes - Revenue from the medical market increased by $2.1 million or 11.2% compared to 2022, primarily driven by medical component products [56] - Revenue from the aerospace and defense market rose by $829,000 or 18% from the prior year [56] - Total backlog exceeded $100 million, with bookings at the highest level in the past four quarters at $37 million [14][45] Market Data and Key Metrics Changes - The company noted a stabilization in the post-pandemic and supply chain crisis market, with strong bookings indicating a positive outlook [14][25] - There is cautious optimism regarding the economic environment, with sustained labor market strength and easing inflation contributing to higher GDP predictions [15] Company Strategy and Development Direction - The company is focusing on innovation and ESG objectives, believing that these can coexist and enhance each other [17][7] - Strategic investments in new technologies, such as the Active Optical Xtreme and Flex Faraday Xtreme platforms, are aimed at differentiating the company and providing a competitive advantage [26] Management's Comments on Operating Environment and Future Outlook - Management expressed guarded optimism about the future, noting that customers are working down their inventories, which may balance out shipping volumes [5] - The company is prepared to face future challenges and is confident in its financial foundation to support growth [40][50] Other Important Information - The company is in the process of searching for a new Chief Financial Officer, emphasizing the importance of this role for future growth [28] - The company has received all employee retention credits as of June 30, 2023, positively impacting its balance sheet and cash flow [57] Q&A Session Summary - There were no questions during the Q&A session, indicating a lack of immediate inquiries from participants [54]