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Nortech Systems Reports Second Quarter Results
August 5, 2015 | Nortech SystemsEstimated reading time: 2 minutes
Nortech Systems Incorporated today reported net sales of $26.8 million for the second quarter ended June 30, 2015, compared with net sales of $27.4 million reported in the second quarter of 2014. For the six-month period ended June 30, 2015, Nortech's net sales were $53.3 million, compared with $53.6 million for the same period in 2014.
"Our performance and results varied across markets and customers," said Rich Wasielewski, Nortech Systems' president and CEO. "However, we're seeing signs of improvement, including our backlog rising six percent during the second quarter."
Second quarter results were impacted by a less profitable sales mix, ramp-up costs on new programs and expenses to support growth initiatives. These initiatives included adding printed circuit board assembly capabilities to Nortech's Mexico facility and expansion into China. Challenging external factors included slowdowns with several large customers tied to the global economic volatility and the oil and gas industry.
For the second quarter of 2015, Nortech Systems reported a net loss of $378,000, or $0.14 per diluted common share, compared with net income of $247,000, or $0.09 per diluted common share, for the same period last year. For the six months ended June 30, Nortech reported a net loss of $571,000, or $0.21 per diluted common share. This compares with net income of $333,000, or $0.12 per diluted common share, for the same period in 2014.
"We are increasing our focus on costs and elements in our control," Wasielewski noted. "And we will continue to support and evaluate our long-term strategic investments." Nortech expects its new Mexico capabilities to be accretive starting in the fourth quarter; China operations should be up and contributing by the middle of next year. After the second quarter of 2015, Nortech solidified its full-service medical device capabilities by acquiring Devicix, LLC, of Eden Prairie, Minn., a leading multi-disciplinary engineering firm. "This is a major strategic piece to accelerating our growth and profitability in the expanding medical market," he added.
"We're cautiously optimistic heading into the second half of 2015 with our growing backlog, lower ramp-up costs and the actions taken to improve gross margin," concluded Wasielewski. "Timing and execution are now the critical factors."
About Nortech Systems Incorporated
Nortech Systems Incorporated (www.nortechsys.com), based in Maple Grove, 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 operations in the U.S., Latin America and Asia. Nortech Systems Incorporated is traded on the NASDAQ Stock Market under the symbol NSYS.
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