Nortech Systems Inc. (NASDAQ: NSYS) today reported net sales of $29.7 million for the third quarter ended September 30, compared with net sales of $30.4 million for the third quarter of 2015. For the nine months ended September 30, Nortech's net sales increased 5 percent to $87.6 million. Operating income for the third quarter was $190,000, compared with an operating loss of $66,000 for the third quarter of 2015. For the nine-month period, Nortech reported operating income of $301,000, compared with an operating loss of $751,000 for the same period in 2015. Nortech Systems reported net income in the third quarter of $63,000, or $.02 per diluted common share, compared with a net loss of $124,000, or $0.05 per diluted common share, for the same period last year. Third quarter results included an increase of $456,000 to the bad debt reserve for a customer that filed for Chapter 11 bankruptcy protection. For the nine months ended September 30, Nortech reported a net loss of $54,000, or $0.02 per diluted common share. This compares with a net loss of $695,000, or $0.25 per diluted common share, for the same period in 2015. "Our medical sales continued their strong momentum in the third quarter, up 9 percent sequentially and 27 percent year over year with backlog growing 35 percent over the prior year," said Rich Wasielewski, Nortech Systems' president and CEO. "We're successfully leveraging our cross-selling opportunities and early engagement design engineering capabilities to gain traction in the higher-growth medical market." Nortech's other two core markets are still experiencing mixed results. Industrial sales decreased 25 percent in the quarter, due primarily to transportation customers, while defense sales rose 6 percent. The overall corporate backlog increased 5 percent during the quarter, providing some additional momentum for the remainder of the year. "Our improved gross margin had a major impact on operating profits," explained Wasielewski, noting that the company's gross margin improved 320 basis points to 12.7 percent of sales in the third quarter, as compared to the prior year's third quarter. This increase was aided by the mix of medical products, greater engineering service activity and selective pricing actions.