Core Insights - Nortech Systems Incorporated reported a significant decline in financial performance for Q1 2025 compared to Q1 2024, with net sales dropping by 21.4% to $26.9 million and a net loss of $1.3 million [6][10]. Management Commentary - The company has successfully transitioned and stabilized its operations, focusing on profitability and growth in core market segments, particularly aerospace & defense and medical imaging [2]. - Management acknowledged that tough decisions have led to short-term revenue and EBITDA declines but are expected to position the company for long-term growth [2]. - Delays in customer approvals for production transfers from the closed Blue Earth facility to the Bemidji plant are being addressed, with expectations to clear the backlog in Q2 2025 [2]. Financial Performance - Q1 2025 financial results showed net sales of $26.9 million, a gross profit of $3.1 million, and operating expenses of $4.7 million, leading to a net loss of $1.3 million [6][10]. - Adjusted EBITDA for Q1 2025 was a loss of $1.0 million, compared to a profit of $1.6 million in Q1 2024, reflecting a significant decline of 161.1% [6][10]. - The company reported a 90-day backlog of $26.7 million as of March 31, 2025, indicating potential future revenue [10]. Operational Strategy - Nortech is focusing on consolidating operations to improve efficiency and reduce costs, which is part of a strategic repositioning to better respond to customer needs and near-shore supply chains [4]. - The company is committed to innovation in fiber optic technologies, evidenced by the issuance of two new patents in the past year [2]. Summary Financial Information - Key financial metrics for Q1 2025 compared to Q1 2024 include: - Net sales: $26.9 million (down from $34.2 million) - Gross profit: $3.1 million (down from $5.4 million) - Operating expenses: $4.7 million (up from $4.3 million) - Net loss: $1.3 million (compared to a profit of $0.8 million) [6][10].