Nortech Systems Reports Third Quarter Results

MINNEAPOLIS – Nov. 5, 2014 – Nortech Systems Incorporated (NASDAQ: NSYS) today reported net sales of $28 million for the third quarter ended Sept. 30, 2014, compared with net sales of $27.4 million for the third quarter of 2013. Operating income for the third quarter of 2014 was $473,000, a 26 percent increase over the third quarter of 2013.

The company’s net income for the third quarter of 2014 was $333,000, or $0.12 per diluted common share. This compares to $218,000, or $0.08 per diluted common share, for the third quarter of 2013.

For the nine months ended Sept. 30, 2014, Nortech Systems reported net sales of $81.6 million, compared with $81.8 million for the same period in 2013. Net income for the nine-month period ended Sept. 30, 2014, was $666,000, or $0.24 per diluted common share, compared with $546,000, or $0.20 per diluted common share, for the same period in 2013.

“Our order activity increased nicely, evidenced by our backlog rising for the third straight quarter and our pipeline growing,” said Rich Wasielewski, Nortech Systems’ president and CEO. Nortech’s 90-day backlog has increased 30 percent from December 31, 2013, and 11 percent from the third quarter of 2013.

“We’re very pleased with our increases in backlog, pipeline and profitability – our positive momentum has been building throughout 2014,” he added.

As contributing factors, Wasielewski cited an overall strengthening in the economy, pent-up demand from industrial and medical customers impacted by weather-related delays earlier in the year, the company’s ongoing process improvements and increased capacity utilization.

Conference Call
Nortech Systems announces a conference call to be held at 10:00 a.m. (CST) on Thursday, November 6, 2014, to discuss the company’s third 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 November 30, 2014, by dialing 877-660-6853 (from U.S.) or 201-612-7415 (International). To access the replay, the conference ID 13593820 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 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 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 Sept. 30, Nine months ended Sept. 30,
Unaudited Unaudited
2014 2013 2014 2013

Net Sales

$28,037,865 $27,389,275 $81,595,474 $81,765,375

Income from Operations

473,490 376,181 1,056,888 972,909

Other Expenses

(102,793) (71,264) (318,333) (710,226)

Income before
Income Taxes

370,697 304,917 738,555 710,226

Income Tax Expense

38,000 87,000 73,000 164,000

Net Income

332,697 217,917 665,555 546,226

Net Income Per
Basic & Diluted
Common Share

$0.12 $0.08 $0.24 $0.20

Weighted Avg
Number of
Common Shares
Basic

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

Weighted Avg
Number of
Common Shares
Diluted

2,747,943 2,742,992 2,747,552 2,742,992

 

Condensed Balance Sheets

Sept. 30, 2014
Unaudited
December 31, 2013

Accounts Receivable

$15,606,066 $16,030,848

Inventories

20,416,199 17,427,470

Other Current Assets

2,261,135 1,457,524

Property and
Other Long-term
Assets

11,152,171 11,159,579

Total Assets

$49,435,571 $46,075,421

Line of Credit-Current

$ – $7,234,983

Accounts Payable

9,346,406 8,185,012

Other Current
Liabilities

4,959,569 3,946,543

Line of Credit-Long Term

7,831,089

Long-Term Liabilities

4,675,059 4,773,435

Shareholders’ Equity

22,623,448 21,935,448

Total Liabilities and
Shareholders’ Equity

$49,435,571 $46,075,421

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