SEC Info - Nortech Systems Inc. - ‘10-Q’ for 9/30/23

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM i 10-Q

(Mark One)

i ☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended i September 30, 2023

i ☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

i NORTECH SYSTEMS INCORPORATED

Commission file number i 0-13257

State of Incorporation: i Minnesota

IRS Employer Identification No. i 41-1681094

Executive Offices: i 7550 Meridian Circle N., Suite # 150, i Maple Grove, i MN i 55369

Telephone number: ( i 952) i 345-2244

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
i Common Stock, par value $.01 per share	i NSYS	i NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). i Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐		Accelerated Filer ☐
i Non-accelerated Filer ☒		Smaller Reporting Company i ☒
Emerging growth company i ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i ☐ No ☒

Number of shares of $.01 par value common stock outstanding at November 3, 2023 was i 2,739,377.

See Accompanying Condensed Notes to Condensed Consolidated Financial Statements

	SEPTEMBER 30,			DECEMBER 31,
	2023			2022⁽¹⁾
	(Unaudited)
ASSETS
Current Assets
Cash	$	i 699		$	i 1,027
Restricted Cash		i 422			i 1,454
Accounts Receivable, less allowances of $ i 316 and $ i 334		i 15,956			i 15,975
Employee Retention Credit Receivable		i -			i 2,650
Inventories, Net		i 21,467			i 22,438
Contract Assets, less allowances of $ i 22 and $ i 0		i 11,746			i 9,982
Income Taxes Receivable		i 388			i -
Prepaid Expenses		i 1,916			i 1,334
Total Current Assets		i 52,594			i 54,860

Property and Equipment, Net		i 6,135			i 6,408
Operating Lease Assets		i 6,955			i 7,850
Other Intangible Assets, Net		i 303			i 422
Total Assets	$	i 65,987		$	i 69,540

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current Portion of Finance Lease Obligations	$	i 401		$	i 390
Current Portion of Operating Lease Obligations		i 996			i 1,155
Accounts Payable		i 13,099			i 14,792
Accrued Payroll and Commissions		i 3,976			i 4,803
Income Taxes Payable		i 27			i 733
Customer Deposits		i 3,861			i 3,515
Other Accrued Liabilities		i 839			i 1,010
Total Current Liabilities		i 23,199			i 26,398

Long-Term Liabilities
Long Term Line of Credit		i 4,611			i 6,853
Long Term Finance Lease Obligations, Net		i 261			i 565
Long-Term Operating Lease Obligations, Net		i 6,835			i 7,549
Deferred Income Taxes		i 278			i -
Other Long-Term Liabilities		i 95			i 95
Total Long-Term Liabilities		i 12,080			i 15,062
Total Liabilities		i 35,279			i 41,460

Commitments and Contingencies		i			i

Shareholders' Equity
Preferred Stock, $ i i 1 / par value; i i 1,000,000 / Shares Authorized: i i i i 250,000 / / / Shares Issued and Outstanding		i 250			i 250
Common Stock - $ i i 0.01 / par value; i i 9,000,000 / Shares Authorized: i i 2,739,377 / and i i 2,690,633 / Shares Issued and Outstanding, respectively		i 27			i 27
Additional Paid-In Capital		i 16,801			i 16,347
Accumulated Other Comprehensive Loss		( i 688	)		( i 370	)
Retained Earnings		i 14,318			i 11,826
Total Shareholders' Equity		i 30,708			i 28,080
Total Liabilities and Shareholders' Equity	$	i 65,987		$	i 69,540

⁽¹⁾ The balance sheet at December 31, 2022 has been derived from the audited financial statements at that date

See Accompanying Condensed Notes to Condensed Consolidated Financial Statements

	NINE MONTHS ENDED
	SEPTEMBER 30
	2023			2022
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net Income	$	i 2,522		$	i 2,391
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities:
Depreciation and Amortization		i 1,539			i 1,440
Compensation on Stock-Based Awards		i 299			i 234
Deferred Income Taxes		i 288			i -
Change in Inventory Reserves		( i 8	)		( i 54	)
Other, Net		( i 169	)		( i 86	)
Changes in Current Operating Items
Accounts Receivable		( i 162	)		( i 1,115	)
Employee Retention Credit Receivable		i 2,650			i -
Inventories		i 899			( i 4,402	)
Contract Assets		( i 1,780	)		( i 1,188	)
Prepaid Expenses		( i 588	)		( i 213	)
Income Tax Receivable		( i 388	)		( i 22	)
Income Tax Payable		( i 696	)		( i 45	)
Accounts Payable		( i 1,636	)		i 1,659
Accrued Payroll and Commissions		( i 810	)		i 1,071
Customer Deposits		i 345			i 934
Other Accrued Liabilities		( i 124	)		i 396
Net Cash Provided By Operating Activities		i 2,181			i 1,000

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sale of Property and Equipment		i -			i 15
Purchase of Intangible Asset		i -			( i 43	)
Purchases of Property and Equipment		( i 1,121	)		( i 1,687	)
Net Cash Used In Investing Activities		( i 1,121	)		( i 1,715	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Line of Credit		i 95,783			i 88,673
Payments to Line of Credit		( i 98,035	)		( i 87,816	)
Principal Payments on Financing Leases		( i 291	)		( i 326	)
Stock Option Excercises		i 155			i 51
Net Cash (Used In) Provided By Financing Activities		( i 2,388	)		i 582

Effect of Exchange Rate Changes on Cash		( i 32	)		i -

Net Change in Cash and Restricted Cash		( i 1,360	)		( i 133	)
Cash and Restricted Cash - Beginning of Year		i 2,481			i 2,225
Cash and Restricted Cash - End of Period	$	i 1,121		$	i 2,092

Reconciliation of cash and restricted cash reported within the consolidated balance sheets
Cash	$	i 699		$	i 1,300
Restricted Cash		i 422			i 792
Total Cash and restricted cash reported in the consolidated statements of cash flows	$	i 1,121		$	i 2,092

See Accompanying Condensed Notes to Condensed Consolidated Financial Statements

Accumulated

Additional

Other

Preferred

Common

Paid-In

Comprehensive

Retained

Total Shareholders'

Stock

Capital

Loss

Earnings

Equity

BALANCE JUNE 30, 2022

i 250

i 27

i 16,136

( i 183

)

i 10,673

i 26,903

Net Income

i -

i 1,534

Foreign Currency Translation Adjustment

i -

( i 365

)

i -

( i 365

)

Stock option exercises

i -

i 18

i -

i 18

Compensation on Stock-Based Awards

i -

i 93

i -

i 93

BALANCE SEPTEMBER 30, 2022

i 250

i 27

i 16,247

( i 548

)

i 12,207

i 28,183

BALANCE DECEMBER 31, 2021

i 250

i 27

i 15,962

i 56

i 9,816

i 26,111

Net Income

i -

i 2,391

Foreign Currency Translation Adjustment

i -

( i 604

)

i -

( i 604

)

Compensation on Stock-Based Awards

i -

i 51

i -

i 51

Stock Option Exercises

i 234

BALANCE SEPTEMBER 30, 2022

i 250

i 27

i 16,247

( i 548

)

i 12,207

i 28,183

BALANCE JUNE 30, 2023

i 250

i 27

i 16,712

( i 611

)

i 13,111

i 29,489

Net Income

i -

i 1,207

Foreign Currency Translation Adjustment

i -

( i 77

)

i -

( i 77

)

Stock Option Exercises

i -

i 9

i -

i 9

Compensation on Stock-Based Awards

i -

i 80

i -

i 80

BALANCE SEPTEMBER 30, 2023

i 250

i 27

i 16,801

( i 688

)

i 14,318

i 30,708

BALANCE DECEMBER 31, 2022

i 250

i 27

i 16,347

( i 370

)

i 11,826

i 28,080

Net Income

i -

i 2,522

Foreign Currency Translation Adjustment

i -

( i 318

)

i -

( i 318

)

Stock Option Exercises

i -

i 155

i -

i 155

Compensation on Stock-Based Awards

i -

i 299

i -

i 299

Cumulative Adjustment Related to the Adoption of ASC 326

i -

( i 30

)

( i 30

)

BALANCE SEPTEMBER 30, 2023

i 250

i 27

i 16,801

( i 688

)

i 14,318

i 30,708

See Accompanying Condensed Notes to Condensed Consolidated Financial Statements

We are a Minnesota, United States based full-service global EMS contract manufacturer in the Medical, Aerospace & Defense and Industrial markets offering a full range of value-added engineering, technical and manufacturing services and support including project management, design, testing, prototyping, manufacturing, supply chain management and post-market services. Our products are complex electromedical and electromechanical products including medical devices, wire and cable assemblies, printed circuit board assemblies, higher-level assemblies, and other box builds for a wide range of industries. We serve three major markets within the EMS industry: Aerospace and Defense, Medical, and the Industrial market, which includes industrial capital equipment, transportation, vision, agriculture, oil and gas. We maintain facilities in Bemidji, Blue Earth, Mankato, and Milaca, Minnesota; Monterrey, Mexico; and Suzhou, China. All of our facilities are certified to one or more of the ISO/AS standards, including 9001, AS9100 and 13485, with most having additional certifications based on the needs of the customers they serve.

The following table presents statements of operations data as percentages of total net sales for the periods indicated:

Net sales for the three months ended September 30, 2023 and 2022 were $33.4 million and $35.3 million, respectively, a decrease of $1.9 million or 5%. The decrease in net sales relates to demand fluctuations as customers work through inventory. The three months ended September 30, 2022 benefited from significant pricing actions ahead of material cost increases that contributed to record-high revenue in that period.

Net sales for the nine months ended September 30, 2023 and 2022 were $103.3 million and $98.5 million, respectively, an increase of $4.8 million or 5%. The increase in net sales is due to continued strong demand across our medical, industrial and defense market, and the impact of pricing actions taken in the second half of 2022.

Net sales by our major industry markets for the three months ended September 30, 2023 and 2022 were as follows (in millions):

Our 90-day shipment backlog as of September 30, 2023 was $33.8 million, a 1% decrease from the beginning of the quarter and a 8% decrease from September 30, 2022. Our 90-day backlog consists of firm purchase orders we expect to ship in the next 90 days, with any remaining amounts to be shipped within 180 days.

Our 90-day order backlog by market has decreased when compared to the prior quarter and the same period of the prior year. As the supply chain continues to normalize, lead times are reducing and customers are starting to return to their pre-pandemic ordering practices 90-day backlog varies due to order size, manufacturing delays, contract terms and conditions and timing from customer delivery schedules and releases. These variables cause inconsistencies in comparing the backlog from one period to the next.

90-day shipment backlog by our major industry markets are as follows (in millions):

Our total order backlog as of September 30, 2023 was $102.3 million, a 1% increase from $101.0 million the beginning of the quarter and a 1% decrease from September 30, 2022. Our total backlog remains strong.

The 90-day and total backlog at September 30, 2023 contain the contract asset value of $11.7 million which has been recognized as revenue.

Gross profit as a percent of net sales was 15.9% and 15.8% for the three and nine months ended September 30, 2023, respectively. Gross profit as a percent of net sales was 17.9% and 15.6% for the three and nine months ended September 30, 2022, respectively. The decrease in gross profit as a percentage of net sales for the three months ended September 30, 2023 compared to the same period of the prior year relates to decreased plant utilization, product mix, as well as continued material and labor cost inflation.

Selling expenses for the three and nine months ended September 30, 2023 were $0.9 million or 2.8% of sales and $2.8 million or 2.7% of sales, respectively. Selling expenses for the three and nine months ended September 30, 2022 were $1.0 million or 2.7% of sales and $2.8 million or 2.8% of sales, respectively.

General and administrative expenses for the three and nine months ended September 30, 2023 were $3.0 million or 8.9% of sales and $9.3 million or 9.0% of sales, respectively. General and administrative expenses for the three and nine months ended September 30, 2022 were $2.9 million or 8.4% of net sales and $8.3 million or 8.5% of net sales, respectively. The increase in general and administrative expense was mainly due to higher wages and professional fees.

Research and development expenses for the three and nine months ended September 30, 2023 were $0.3 or 0.9% of net sales and $0.9 million or 0.9% of net sales, respectively. Research and development expenses for the three and nine months ended September 30, 2022 were $0.5 or 1.3% of net sales and $1.2 million or 1.2% of net sales, respectively.

Income from operations was $1.1 million and $3.3 million for the three and nine months ended September 30, 2023, respectively. Income from operations was $1.9 million and $3.1 million for the three and nine months ended September 30, 2022. The decrease in income from operations for the comparable three month periods relates to the decreased revenue and gross margin in the third quarter of 2023.

Interest expense was $0.1 million for both the three months ended September 30, 2023 and 2022. Interest expense was $0.4 and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively.

On a quarterly basis, we estimate what our effective tax rate will be for the full fiscal year and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction.

Our effective tax rate for the three and nine months ended September 30, 2023 was (21%) and 13%, respectively. Our effective tax rate for the three and nine months ended September 30, 2022 was 16% and 15%, respectively. The primary drivers of the change in the effective tax rate for both the three and nine month periods relates to the change in valuation allowance on the United States deferred tax assets due to return to provision adjustments partially offset by increased taxes on foreign entities.

Net income for the three months ended September 30, 2023 was $1.2 million or $0.44 per basic common share and $0.42 per diluted common share. Net income for the three months ended September 30, 2022 was $1.5 million or $0.57 per basic common share and $0.53 per diluted common share. The decrease in net income for the three month period was driven by the decrease in sales and gross margin.

Net income for the nine months ended September 30, 2023 was $2.5 million or $0.93 per basic and $0.87 per diluted common share. Net income for the nine months ended September 30, 2022 was $2.4 million or $0.89 per basic common share and $0.83 per diluted common share. The increase in net income for the nine month period was driven by the higher revenue and lower effective tax rate.

We believe that our existing financing arrangements, anticipated cash flows from operations and cash on hand will be sufficient to satisfy our working capital needs for the next twelve months, capital expenditures and debt repayments.

We have a credit agreement with Bank of America, which was entered into on June 15, 2017 and provides for a line of credit arrangement of $16,000 that expires on June 15, 2026.

Under the amended Bank of America credit agreement signed December 31, 2021, the line of credit is subject to variations in the Bloomberg Short-Term Bank Yield (BSBY) index rate. Our line of credit bears interest at a weighted-average interest rate of 8.2% and 5.2% as of September 30, 2023 and December 31, 2022, respectively. We had borrowings on our line of credit of $4.6 million and $6.9 million outstanding as of September 30, 2023 and December 31, 2022, respectively. There are no subjective acceleration clauses under the credit agreement that would accelerate the maturity of our outstanding borrowings. The line of credit is shown net of debt issuance costs of $34 thousand and $44 thousand on the consolidated balance sheet for the periods ended September 30, 2023 and December 31, 2022, respectively.

The line of credit with Bank of America contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures.

The Bank of America Credit Agreement provides for, among other things, a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0, for the twelve months ending December 31, 2020 and each Fiscal Quarter end thereafter subject only during a trigger period commencing when our availability under our line is less than $2.0 million until availability is above that amount for 30 days. The Company met the covenants for the period ended September 30, 2023.

At September 30, 2023, we had unused availability under our line of credit of $7.5 million supported by our borrowing base. The line is secured by substantially all of our assets.

We have not engaged in any off-balance sheet activities as defined in Item 303(a)(4) of Regulation S-K.

Our significant accounting policies and estimates are summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022. Some of our accounting policies require us to exercise significant judgment in selecting the appropriate assumptions for calculating financial estimates. Such judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, known trends in our industry, terms of existing contracts and other information from outside sources, as appropriate. Actual results could differ from these estimates.

Those statements in the foregoing report that are not historical facts are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

The factors identified above are believed to be important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Discussion of these factors is also incorporated in Part I, Item 1A, “Risk Factors,” and should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Unpredictable or unknown factors not discussed herein could also have material adverse effects on forward-looking statements. All forward-looking statements included in this Form 10-K are expressly qualified in their entirety by the forgoing cautionary statements. We undertake no obligations to update publicly any forward-looking statement (or its associated cautionary language) whether as a result of new information or future events.

Please refer to forward-looking statements and risks as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). These controls and procedures are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation of these disclosure controls and procedures as of the date of the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective.

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are subject to various legal proceedings and claims that arise in the ordinary course of business.

We are affected by the risks specific to us as well as factors that affect all businesses operating in a global market. The significant factors known to us that could materially adversely affect our business, financial condition or operating results or could cause our actual results to differ materially from our expectations are described in our annual report on Form 10-K for the fiscal year ended under the heading “Part I – Item 1A.Risk Factors.” There have been no material changes in the risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022.

Our share repurchase program has expired, and no additional amounts are available for repurchase.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PART I - FINANCIAL INFORMATION
					PAGE
	Item 1	-	Financial Statements

				Condensed Consolidated Statements of Operations and Comprehensive Income	3

				Condensed Consolidated Balance Sheets	4

				Condensed Consolidated Statements of Cash Flows	5

				Condensed Consolidated Statements of Shareholders’ Equity	7

				Condensed Notes to Consolidated Financial Statements	8-21

	Item 2	-	Management's Discussion and Analysis of Financial Condition And Results of Operations		22-27

	Item 3	-	Quantitative and Qualitative Disclosures About Market Risk		28

	Item 4	-	Controls and Procedures		28

PART II - OTHER INFORMATION

	Item 1	-	Legal Proceedings		29

	Item 1A.	-	Risk Factors		29

	Item 2	-	Unregistered Sales of Equity Securities, Use of Proceeds		29

	Item 3	-	Defaults on Senior Securities		29

	Item 4	-	Mine Safety Disclosures		29

	Item 5	-	Other Information		29

	Item 6	-	Exhibits		30

SIGNATURES					31

	NINE MONTHS ENDED
	SEPTEMBER 30
	2023		2022
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Period for Interest	$	i 388	$	i 328
Cash Paid During the Period for Income Taxes		i 1,242		i 122

Supplemental Noncash Investing and Financing Activities:
Property and Equipment Purchases in Accounts Payable		i 23		i 332

	September 30,			December 31,
	2023			2022
Raw Materials	$	i 20,551		$	i 21,673
Work in Process		i 1,220			i 1,238
Finished Goods		i 828			i 671
Reserves		( i 1,132	)		( i 1,144	)

Total	$	i 21,467		$	i 22,438

Balance outstanding at December 31, 2022	$	i 9,982
Increase (decrease) attributed to:
Amounts transferred over time to contract assets		i 76,225
Allowance for current expected credit losses		( i 22	)
Amounts invoiced during the period		( i 74,439	)
Balance outstanding at September 30, 2023	$	i 11,746

	Three Months Ended September 30,		Three Months Ended September 30,
Lease Cost	2023		2022
Operating lease cost	$	i 576	$	i 572
Finance lease interest cost		i 9		i 14
Finance lease amortization expense		i 182		i 182
Total lease cost	$	i 767	$	i 768

Nortech Systems Inc. – ‘10-Q’ for 9/30/23

On: Tuesday, 11/14/23, at 4:17pm ET · For: 9/30/23 · Accession #: 1437749-23-31982 · File #: 0-13257

Previous ‘10-Q’: ‘10-Q’ on 8/9/23 for 6/30/23 · Latest ‘10-Q’: This Filing

Quarterly Report — Form 10-Q

Filing Table of Contents

‘10-Q’ — Quarterly Report

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Dates Referenced Herein and Documents Incorporated by Reference

Year	Amount
Remainder of 2023	$	i 40
2024		i 87
2025		i 14
2026		i 14
Thereafter		i 38
Total	$	i 193

	Nine Months Ended September 30,		Nine Months ended September 30,
Lease Cost	2023		2022
Operating lease cost	$	i 1,735	$	i 1,731
Finance lease interest cost		i 32		i 50
Finance lease amortization expense		i 546		i 547
Total lease cost	$	i 2,313	$	i 2,328

	Balance Sheet Location	September 30, 2023		December 31, 2022
Assets
Operating lease assets	Operating lease assets	$	i 6,955	$	i 7,850
Finance lease assets	Property, Plant and Equipment		i 817		i 1,363
Total leased assets		$	i 7,772	$	i 9,213

Weighted-average remaining lease term (years)
Operating leases	i 8.7
Finance leases	i 2.0
Weighted-average discount rate
Operating leases	i 7.8	%
Finance leases	i 5.3	%

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net Sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of Goods Sold		84.1			82.1			84.2			84.4
Gross Profit		15.9			17.9			15.8			15.6

Selling Expenses		2.8			2.7			2.7			2.8
General and Administrative Expenses		8.8			8.4			9.0			8.5
Research and Development Expenses		0.9			1.3			0.9			1.2
Gain on Sale of Property and Equipment		0.0			0.0			0.0			0.0
Income from Operations		3.4			5.5			3.2			3.1

Interest Expense		(0.4	)		(0.3	)		(0.4	)		(0.3	)
Income Before Income Taxes		3.0			5.2			2.8			2.8

Income Tax (Benefit) Expense		(0.6	)		0.8			0.4			0.4
Net Income		3.6	%		4.4	%		2.4	%		2.4	%

	Three months Ended September 30,							Nine months Ended September 30,
	2023		2022		% Change			2023		2022		% Change
Medical	$	17.8	$	20.5		(13.2	)	$	59.8	$	54.3		10.1
Industrial		10.5		10.9		(3.7	)		29.0		29.0		-
Aerospace and Defense		5.1		3.9		30.8			14.5		15.2		(4.6	)
Total Net Sales	$	33.4	$	35.3		(5.4	)	$	103.3	$	98.5		4.9

	90 Day Backlog as of the Period Ended
	September 30		June 30		September 30
	2023		2023		2022
Medical	$	16.8	$	18.3	$	22.8
Industrial		9.7		9.7		8.3
Aerospace and Defense		7.3		6.3		5.8
Total 90-Day Backlog	$	33.8	$	34.3	$	36.9

	Total Backlog as of the Period Ended
	September 30		June 30		September 30
	2023		2023		2022
Medical	$	51.4	$	51.9	$	58.4
Industrial	19.7			21.0		22.8
Aerospace and Defense		31.2		28.1		22.1
Total Backlog	$	102.3	$	101.0	$	103.3

Date: November 14, 2023	by	/s/ *Jay D. Miller*

		Jay D. Miller
		Chief Executive Officer and President
		Nortech Systems Incorporated

Date: November 14, 2023	by	/s/ *Alan K. Nordstrom*

		Alan K. Nordstrom
		Acting Chief Financial Officer and Corporate Controller
		Nortech Systems Incorporated

This ‘10-Q’ Filing	Date	Other Filings

	2/27/28
	6/15/26
	2/27/24
	12/31/23
Filed on:	11/14/23
	11/3/23
For Period end:	9/30/23
	6/30/23	10-Q
	1/1/23
	12/31/22	10-K, SD
	9/30/22	10-Q
	6/30/22	10-Q
	1/1/22
	12/31/21	10-K, SD
	3/1/21
	12/31/20	10-K, SD
	3/27/20	DEF 14A
	6/15/17	8-K
		List all Filings

Nortech Systems Inc. – ‘10-Q’ for 9/30/23

On: Tuesday, 11/14/23, at 4:17pm ET · For: 9/30/23 · Accession #: 1437749-23-31982 · File #: 0-13257

Previous ‘10-Q’: ‘10-Q’ on 8/9/23 for 6/30/23 · Latest ‘10-Q’: This Filing

Quarterly Report — Form 10-QFiling Table of Contents

‘10-Q’ — Quarterly Report

This is an HTML Document rendered as filed. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Form 10-Q

Filing Table of Contents