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]
Nortech Systems(NSYS) - 2024 Q4 - Annual Report