Nortech Systems(NSYS) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 2025 were $30.7 million, a decrease of 9.5% compared to Q2 2024's $33.9 million[5] - Net income for Q2 2025 was $313 thousand, or $0.12 per diluted share, representing a 99.4% increase from $157 thousand in Q2 2024[6] - Adjusted EBITDA for Q2 2025 was $1.1 million, up 16.8% from $919 thousand in Q2 2024[5] - Gross profit for Q2 2025 was $4.8 million, a 4.8% increase from $4.6 million in Q2 2024[5] - Adjusted EBITDA for the six months ended June 30, 2025, was $73 million, down from $2,556 million in the same period of 2024[17] - The adjusted gross margin for the last twelve months ended June 30, 2025, was 12.4%, compared to 11.9% for the same period in 2024[18] Operational Efficiency - Operating expenses decreased by 4.2% to $4.1 million in Q2 2025 from $4.3 million in Q2 2024[5] - The company is experiencing improved manufacturing efficiencies and increased plant utilization, contributing to operational performance[2] - The company reported a 90-day backlog of $26.6 million as of June 30, 2025, indicating strong order growth[6] Strategic Initiatives - The company is focusing on nearshoring in Mexico and China to leverage strategic advantages in the current tariff environment[3] - The shift from copper to fiber materials is aimed at reducing costs and aligning with long-term sustainability goals[3] Asset and Liability Management - Total assets increased to $74,825 million as of June 30, 2025, up from $72,435 million at December 31, 2024, representing a growth of 3.3%[14] - Long-term liabilities increased to $19,829 million as of June 30, 2025, compared to $17,002 million at December 31, 2024, reflecting a rise of 16.5%[14] - Total current liabilities rose to $21,608 million, up from $21,428 million, indicating an increase of 0.8%[14] - Accounts receivable increased to $17,810 million as of June 30, 2025, from $14,875 million at December 31, 2024, a growth of 19.5%[14] - Inventories decreased to $18,628 million from $21,638 million, a decline of 13.9%[14] Cash Flow - Cash at the end of the period decreased to $652 million from $916 million at the beginning of the period, a decline of 28.8%[16] - The company reported a net cash used in operating activities of $2,773 million for the six months ended June 30, 2025, compared to $1,458 million for the same period in 2024[16] Management Outlook - Management remains cautiously optimistic about future growth, supported by rising customer approvals and enhanced logistics performance[3] - Net loss for the six months ended June 30, 2025, was $1,003 million, compared to a net income of $922 million for the same period in 2024[16]