Nortech Systems Reports Third Quarter Results

Nortech Systems Incorporated (NASDAQ: NSYS) today reported net sales of $26.0 million for the third quarter ended Sept. 30, 2010, compared to net sales of $18.7 million for the third quarter of 2009. Operating income for the third quarter was $166,000, compared to an operating loss of $1.1 million for the third quarter of 2009, which included one-time restructuring and impairment charges of $353,000.

For the third quarter of 2010, Nortech Systems reported net income of $127,000, or $0.05 per diluted common share. This compares with a net loss of $854,000, or $0.31 per diluted common share, for the third quarter of 2009.

Nortech Systems reported net sales of $72.4 million for the nine months ended Sept. 30, 2010. This compares with $60.1 million for the same period in 2009, an increase of 20 percent. Operating income for the first nine months of 2010 was $977,000, compared with an operating loss of $5.5 million reported for the same period in 2009, which included one-time restructuring and impairment charges of $998,000.

Net income for the nine-month period was $370,000, or $0.13 per diluted common share, compared with a net loss of $3.7 million, or $1.35 per diluted common share, reported for the same period in 2009.

“We’re encouraged by the overall trends and pleased to report our fourth consecutive quarter of rising sales and backlog levels,” said Mike Degen, president and CEO of Nortech Systems. “Customer confidence is returning across our core markets with sales in the quarter up 39 percent over 2009 levels.” He added that the company’s 90-day backlog position improved 10 percent during the third quarter of 2010, and is up 65 percent from Sept. 30, 2009.

Degen said that increased sales volumes, combined with continued cost-management and lean manufacturing initiatives, are having positive impacts on gross margins and profitability. Concluded Degen, “Our focus remains on strengthening the balance sheet and cash management, while investing in the maintenance of our core businesses and concentrating on our long-term objectives.”

Conference CallNortech Systems announces a conference call to be held at 10:00 a.m. (CST) on Thurs., Nov. 11, 2010, to discuss the company’s third quarter results. Anyone interested in participating in the conference can access the call by dialing 877-407-8033 from within the United States, or 201-689-8033 if calling internationally. An audio webcast and replay of this conference call can be accessed at the investor relations portion of Nortech Systems’ website at www.nortechsys.com or at www.investorcalendar.com. A podcast (MP3 download) will also be available. The telephone replay will be available through Nov. 25, 2010, by dialing 877-660-6853 (from U.S.) or 201-612-7415 (International). To access the replay, the account number 286 and conference ID 359776 are both required.

About Nortech Systems, IncorporatedNortech Systems Incorporated ( www.nortechsys.com), based in Wayzata, Minn., is a full-service electronics manufacturing services (EMS) provider of wire and cable assemblies, printed circuit board assemblies, and higher-level complete box build assemblies for a wide range of industries. Markets served include industrial equipment, aerospace/defense and medical. The company has manufacturing capabilities and operating partners in the U.S., Asia and Latin America. Nortech Systems Incorporated is traded on the NASDAQ Stock Market under the symbol NSYS.

Forward-Looking StatementsThis press release contains forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. While this release is based on management’s best judgment and current expectations, actual results may differ and involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: volatility in market conditions which may affect market supply of and demand for the company’s products; increased competition; changes in the reliability and efficiency of operating facilities or those of third parties; risks related to availability of labor; commodity and energy cost instability; general economic, financial and business conditions that could affect the company’s financial condition and results of operations; as well as risk factors listed from time to time in the company’s filings with the SEC.
 
 

Condensed Statements of Operations
       
Three months ended Sept. 30, Nine months ended Sept. 30,
Unaudited     Unaudited
2010   2009     2010   2009
Net Sales $ 25,957,327   $ 18,650,684 $ 72,393,274   $ 60,092,430
Income (Loss) from
Operations 166,190 (1,149,251 ) 976,942 (5,492,441 )
Income (Loss) before
Income Taxes 220,318 (1,376,694 ) 767,714 (5,998,694 )
 
Income Tax Expense
(Benefit) 93,000 (523,000 ) 398,000 (2,309,000 )
 

Net Income (Loss)
127,318 (853,694 ) 369,714 (3,689,694 )
 
Net Income (Loss) Per
Basic Common Share $ 0.05 ($0.31 ) $ 0.13 ($1.35 )
 
Weighted Average
Number of Common
Shares – Basic 2,742,992 2,738,989 2,742,186 2,738,972
Net Income (Loss) Per
Diluted Common Share $ 0.05 ($0.31 ) $ 0.13 ($1.35 )
 
Weighted Average
Number of Common
Shares – Diluted 2,742,992 2,738,989 2,742,186 2,738,972
 
     

Condensed Balance Sheets
Sept. 30, 2010 Dec. 31, 2009
(Unaudited)      
Current Assets $ 34,815,614 $ 31,884,977
Property and Other Long-term Assets   8,272,007   9,244,228
Total Assets $ 43,087,621 $ 41,129,205
Current Liabilities $ 21,993,123 $ 18,669,177
Long-Term Debt 1,960,568 3,733,176
Shareholders’ Equity   19,133,930   18,726,852
Total Liabilities and Shareholders’
Equity $ 43,087,621 $ 41,129,205

Copyright Business Wire 2010

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