Nortech Systems(US:NSYS)2024-11-07 13:05Financial Performance - Net sales for Q3 2024 were $31.4 million, a decrease of 5.9% compared to $33.4 million in Q3 2023[5] - The company reported a net loss of $739 thousand, or $0.27 per diluted share, compared to a net income of $1.2 million, or $0.44 per diluted share in Q3 2023[5] - Adjusted EBITDA for Q3 2024 was $143 thousand, down 91.1% from $1.6 million in Q3 2023[5] - Gross profit decreased by 27.9% to $3.8 million in Q3 2024 from $5.3 million in Q3 2023[5] - Net income for the three months ended September 30, 2024, was $183 thousand, a significant decrease from $2,522 thousand in the same period of 2023[12] - Adjusted EBITDA for the nine months ended September 30, 2024, was $2,699 thousand, down from $4,815 thousand in the same period of 2023, indicating a decline of 43.9%[13] - The company reported a gross profit margin of 14.9% for Q3 2024, down from 16.6% in Q4 2023[15] Operational Changes - The company is consolidating facilities and moving programs to lower-cost, higher-margin locations to improve efficiency and reduce costs[3] - The restructuring of back office and plant operations aims to enhance service delivery and product quality[3] - Management expressed optimism about the customer pipeline and the future growth of the company despite current headwinds[3] - The company is focused on strengthening customer relationships as a key strategy for achieving long-term objectives[3] Financial Position - Total current assets increased to $60,278 thousand as of September 30, 2024, compared to $58,793 thousand at December 31, 2023, reflecting a growth of 2.5%[11] - Total liabilities rose to $41,276 thousand as of September 30, 2024, compared to $39,783 thousand at December 31, 2023, marking an increase of 3.8%[11] - The current portion of finance lease obligations increased to $492 thousand from $356 thousand, reflecting a rise of 38.1%[11] Cash Flow - Cash and cash equivalents at the end of the period were $1,239 thousand, an increase from $1,121 thousand at the end of September 2023[12] - Net cash used in operating activities was $(3,043) thousand for the three months ended September 30, 2024, compared to $2,181 thousand provided in the same period of 2023[12] - Proceeds from the line of credit amounted to $99,888 thousand in Q3 2024, compared to $95,783 thousand in Q3 2023, showing an increase of 3.3%[12] Backlog and Demand - The 90-day backlog as of September 30, 2024, was $29.6 million, indicating ongoing demand despite current challenges[3] - Operating expenses increased by 4.5% to $4.5 million in Q3 2024 compared to $4.3 million in Q3 2023[5] - The company accrued $267 thousand in retention bonuses and other expenses related to the closure of its Blue Earth facility, impacting adjusted EBITDA[14]