Nortech Systems(NSYS) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2023, revenue totaled $35 million, representing a $7.7 million increase from $32.5 million in Q2 2022, marking an 8% year-over-year growth [47][32] - Adjusted EBITDA improved by over $9 million from a negative $2.3 million to a positive $6.8 million over the last 12 months [62] - Net income for Q2 2023 was $635,000 or $0.22 per diluted share, consistent with the prior quarter and Q2 2022 [57] Business Line Data and Key Metrics Changes - Revenue from the medical market increased by $2.1 million or 11.2% compared to 2022, primarily driven by medical component products [56] - Revenue from the aerospace and defense market rose by $829,000 or 18% from the prior year [56] - Total backlog exceeded $100 million, with bookings at the highest level in the past four quarters at $37 million [14][45] Market Data and Key Metrics Changes - The company noted a stabilization in the post-pandemic and supply chain crisis market, with strong bookings indicating a positive outlook [14][25] - There is cautious optimism regarding the economic environment, with sustained labor market strength and easing inflation contributing to higher GDP predictions [15] Company Strategy and Development Direction - The company is focusing on innovation and ESG objectives, believing that these can coexist and enhance each other [17][7] - Strategic investments in new technologies, such as the Active Optical Xtreme and Flex Faraday Xtreme platforms, are aimed at differentiating the company and providing a competitive advantage [26] Management's Comments on Operating Environment and Future Outlook - Management expressed guarded optimism about the future, noting that customers are working down their inventories, which may balance out shipping volumes [5] - The company is prepared to face future challenges and is confident in its financial foundation to support growth [40][50] Other Important Information - The company is in the process of searching for a new Chief Financial Officer, emphasizing the importance of this role for future growth [28] - The company has received all employee retention credits as of June 30, 2023, positively impacting its balance sheet and cash flow [57] Q&A Session Summary - There were no questions during the Q&A session, indicating a lack of immediate inquiries from participants [54]