Nortech Systems Reports Second Quarter Results
Sales Increase 10 Percent over Prior Quarter

MINNEAPOLIS – Aug. 7, 2013 – Nortech Systems Incorporated (NASDAQ: NSYS) today reported net sales of $28.5 million for the second quarter ended June 30, 2013, a 10 percent sequential increase from the prior quarter and a one percent increase over the second quarter of 2012. Operating income for the second quarter of 2013 rose 67 percent from the first quarter of 2013 and 17 percent over the second quarter of 2012.

The company’s net income for the second quarter of 2013 was $187,000, or $0.07 per diluted common share. This is a 49 percent increase from the second quarter of 2012, when net income was $126,000, or $0.05 per diluted common share.

For the six months ended June 30, 2013, Nortech Systems reported net sales of $54.4 million, compared with $56.4 million for the same period in 2012. Net income for the six-month period ended June 30, 2013, was $328,000, or $0.12 per diluted common share, compared with $249,000, or $0.09 per diluted common share, for the same period in 2012.

Nortech Systems’ improved profitability for the second quarter and six months was aided by continuous improvement from lean workouts, the implementation of automation technology and increased plant utilization.

“We’re pleased to report profitable sales growth for the quarter,” said Mike Degen, Nortech Systems’ CEO, adding that the company’s overall 90-day backlog rose 11 percent year over year. “Sales to defense customers were particularly strong in the quarter as we launched several new programs and a number of new customized cable assemblies.”

Degen concluded, “Our performance so far this year positions us well for the second half of the year.”

Conference Call
Nortech Systems announces a conference call to be held at 10:00 a.m. (CDT) on Thurs., Aug. 8, to discuss the company’s second quarter results. Anyone interested in participating in the conference can access the call by dialing 877-407-8031 from within the United States, or 201-689-8031 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 Aug. 22, 2013, by dialing 877-660-6853 (from U.S.) or 201-612-7415 (International). To access the replay, the conference ID 418253 is required.

About Nortech Systems Incorporated
Nortech 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 in the U.S and Latin America. Nortech Systems is traded on the NASDAQ Stock Market under the symbol NSYS.

Forward-Looking Statements
This 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 Income

Three months ended June 30, Six months ended June 30,
Unaudited Unaudited
2013 2012 2013 2012

Net Sales

$28,450,699 $28,033,345 $54,376,100 $56,394,259

Income from Operations

373,105 318,586 596,727 647,016

Other Expenses

(87,886) (116,661) (191,419) (263,286)

Income before
Income Taxes

285,219 201,925 405,308 383,730

Income Tax Expense

98,000 76,000 77,000 135,000

Net Income

187,219 125,925 328,308 248,730

Net Income Per
Basic & Diluted
Common Share

$0.07 $0.05 $0.12 $0.09

Weighted Avg Number
of Common Shares
Basic & Diluted

2,742,992 2,742,992 2,742,992 2,742,992

Condensed Balance Sheets

June 30, 2013 – Unaudited December 31, 2012

Current Assets

$35,818,260 $32,691,371

Property and Other Long-Term Assets

11,364,952 11,823,528

Total Assets

$47,183,212 $44,514,899

Current Liabilities

$21,213,868 $20,131,441

Long-Term Debt

4,500,304 3,248,227

Shareholders’ Equity

21,469,040 21,135,231

Total Liabilities and Shareholders’ Equity

$47,183,212 $44,514,899

Contact:
Richard Wasielewski
Nortech Systems Inc. (952) 345-2244
Warren Djerf
Brookside Communications Group
(952) 920-3908 / warren@brookcomm.net