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Nortech Systems Posts Strong Results for 3Q
November 6, 2015 | Nortech SystemsEstimated reading time: 1 minute
Nortech Systems Inc. has reported net sales of $30.4 million for the third quarter ended September 30, up by 8.5 percent from the same period last year, and an increase of 13 percent sequentially. Backlog rose by 23 percent during the quarter. For the nine months ended September 30, Nortech’s net sales were $83.8 million, compared with $81.6 million for the same period in 2014.
"We're encouraged by the sales increase and double-digit backlog growth," said Rich Wasielewski, Nortech Systems’ president and CEO. "Industrial customers accounted for the majority of the revenue growth, with our engineering service acquisition also contributing to both the revenue and backlog increases."
Operating income for the third quarter was $23,000, due to increased revenue and ongoing cost-reduction efforts; the company had reported operating losses the prior two quarters.
Nortech Systems reported a net loss in the third quarter of $124,000, or $0.05 per diluted common share, compared with net income of $333,000, or $0.12 per diluted common share, for the same period last year. For the nine months ended September 30, Nortech reported a net loss of $695,000, or $0.25 per diluted common share. This compares with net income of $666,000, or $0.24 per diluted common share, for the same period in 2014. Net income in 2015 has been impacted by customer mix, external factors, acquisition expenses and ramp-up costs for growth and cost-reduction initiatives in Mexico and Asia.
"We're closely monitoring the timing and execution of our growth and cost-reduction initiatives," explained Wasielewski. "Despite our determined efforts in the third quarter, a challenging business environment meant our operational adjustments and gross margin improvements weren’t enough to restore bottom-line profitability. In the short term, we’ll remain vigilant and focused on increasing our gross margin and strengthening our balance sheet."
During the third quarter, Nortech moved its corporate headquarters to a location offering additional space for expansion and a more collaborative environment. Wasielewski added, "This new facility helps advance our ‘One Nortech’ solution that is gaining traction with customers."
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