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Nortech Systems Reports Third Quarter Results
NSYSNortech Systems(NSYS) GlobeNewswire News Room·2024-11-07 13:10

Core Insights - Nortech Systems Incorporated reported a net sales of 31.4millionforQ32024,adecreaseof5.931.4 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 739thousand,or739 thousand, or 0.27 per diluted share, compared to a net income of 1.2millioninthesamequarterlastyear[2][4]−AdjustedEBITDAforQ32024was1.2 million in the same quarter last year [2][4] - Adjusted EBITDA for Q3 2024 was 143 thousand, down 91.1% from 1.6millioninQ32023[2][4]FinancialPerformance−NetsalesfortheninemonthsendedSeptember30,2024,were1.6 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 103.3millioninthesameperiodof2023[4]−GrossprofitforQ32024was103.3 million in the same period of 2023 [4] - Gross profit for Q3 2024 was 3.8 million, down 27.9% from 5.3millioninQ32023[4]−Operatingexpensesincreasedby4.55.3 million in Q3 2023 [4] - Operating expenses increased by 4.5% to 4.5 million in Q3 2024 compared to 4.3millioninQ32023[4]ManagementCommentary−TheCEOnotedthatsaleswereimpactedbycustomersdelayingproductpurchasesandreducinginventory,whichhasaffectedthecontractmanufacturingindustry[2]−Thecompanyisconsolidatingfacilitiesandmovingprogramstolower−costlocationstoimproveefficiencyandreducecosts[2]−ManagementexpressedoptimismaboutthecustomerpipelineandthefutureofNortechSystemsdespitecurrentchallenges[2]BacklogandStrategicMoves−AsofSeptember30,2024,thecompanyreporteda90−daybacklogof4.3 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 1.2million,anincreasefrom1.2 million, an increase from 1.1 million at the end of Q3 2023 [13] - Total assets as of September 30, 2024, were 77.0million,comparedto77.0 million, compared to 75.1 million at the end of 2023 [11][12]