Nortech Systems Reports Second Quarter Results
Rhea-AI Summary
Nortech Systems (Nasdaq:NSYS) reported Q2 2026 net sales of $33.5 million, up 9.3% from $30.7 million in Q2 2025. Net income was $316 thousand, or $0.11 per basic share, compared with $313 thousand, or $0.12 per basic share, a year earlier. EBITDA was $938 thousand versus $1.1 million, a 12.6% decline, while gross profit rose 17.9% to $5.7 million as operating expenses increased 24.1% to $5.1 million.
For the first six months of 2026, net sales grew 10.9% to $63.9 million, and net income improved to $282 thousand from a $1.0 million loss in 2025. The 90‑day backlog reached $33.4 million and total backlog was $93.8 million, up 20% year over year. Operating cash flow for the first half was a use of $2.4 million.
Positive
- Q2 2026 net sales up 9.3% year over year to $33.5 million
- YTD 2026 net sales up 10.9% to $63.9 million versus $57.6 million
- YTD 2026 net income $282 thousand versus $1.0 million loss in 2025
- Q2 2026 gross profit up 17.9% year over year to $5.7 million
- Total backlog $93.8 million as of June 30, 2026, up 20% year over year
- 90‑day backlog $33.4 million versus $26.6 million a year earlier
Negative
- Q2 2026 EBITDA down 12.6% year over year to $938 thousand
- Q2 2026 operating expenses up 24.1% to $5.1 million
- YTD 2026 operating cash flow used $2.4 million versus $2.8 million used in 2025
- Lines of credit balance increased to $7.9 million from $7.0 million
- Total liabilities rose to $44.6 million from $37.4 million at year‑end 2025
News Explained
At June 30, Nortech reported $1,674 cash and restricted cash, $7,868 in lines of credit, and 2,853,766 common shares outstanding.
Nortech Systems’
It also reports
If that higher count reflects additional share issuance, the supplied definition of dilution means existing holders’ percentage ownership would be reduced absent offsetting changes.
The June 30 common-stock and debt line items are the specific balances to compare in the next quarterly filing.
Market reaction after 2Q26 earnings report: NSYS -4.67%
Following this news, NSYS has declined 4.67%, reflecting a moderate negative market reaction. The stock is currently trading at $14.50.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 13 | Q1 earnings report | Positive | -13.3% | Sales and gross profit improved while the quarterly loss narrowed materially. |
| Mar 26 | Q4 earnings report | Positive | +19.9% | Profitability returned as gross profit and adjusted EBITDA improved year over year. |
| Nov 13 | Q3 earnings report | Negative | -21.1% | Sales declined and the company reported a net loss despite improved adjusted EBITDA. |
| Aug 07 | Q2 earnings report | Negative | +3.2% | Revenue declined even as net income and adjusted EBITDA increased year over year. |
| May 14 | Q1 earnings report | Negative | -1.7% | Sales fell sharply and the company reported a substantially larger quarterly loss. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings reactions averaged -2.61% and varied despite recurring improvements in profitability and backlog.
Key Terms
ebitda financial
adjusted ebitda financial
nearshoring technical
contract assets financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
MINNEAPOLIS, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Nortech Systems Incorporated (Nasdaq: NSYS) (“Nortech” or the “Company”), a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products serving the medical imaging, medical device, industrial, and aerospace & defense markets, reported financial results for the second quarter ended June 30, 2026.
2026 Q2 Highlights:
| ● | Net sales of | |
| ● | Net income of | |
| ● | Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of | |
| ● | 90-day backlog of | |
| ● | Total backlog of | |
Management Commentary
“Nortech delivered a solid second quarter, with year-over-year revenue growth, improved gross margins, and continued positive operating income reflecting the benefits of our restructuring actions and disciplined execution,” said President & CEO, Jay D. Miller.
“We are encouraged by the continued strength of our bookings and our backlog, which we view as an important leading indicator of future business prospects, including opportunities in attractive markets such as Aerospace and Defense as well as Medical. We are also seeing continued customer interest in nearshoring and regional manufacturing strategies, where our North American footprint, combined with our China operations, positions Nortech well to support customers’ evolving supply chain needs. As we move through the second half of 2026, we remain focused on converting strong customer engagement into sustainable growth and long-term value.”
Summary Financial Information
The following table provides summary financial information comparing the second quarter 2026 (“Q2 2026”) financial results to the same quarter in 2025 (“Q2 2025”) as well as the six-month period ended June 30, 2026 (“YTD 2026”) with the same period in 2025 (“YTD 2025”).
| ($ in thousands) | Q2 2026 | Q2 2025 | % Change | YTD 2026 | YTD 2025 | % Change | ||||||||||||||||||
| Net sales | $ | 33,540 | $ | 30,675 | 9.3 | % | $ | 63,856 | $ | 57,570 | 10.9 | % | ||||||||||||
| Gross profit | $ | 5,703 | $ | 4,837 | 17.9 | % | $ | 10,405 | $ | 7,915 | 31.5 | % | ||||||||||||
| Operating expenses | $ | 5,080 | $ | 4,095 | 24.1 | % | $ | 9,735 | $ | 8,786 | 10.8 | % | ||||||||||||
| Net income (loss) | $ | 316 | $ | 313 | 1.0 | % | $ | 282 | $ | (1,003 | ) | (128.1 | )% | |||||||||||
| EBITDA | $ | 938 | $ | 1,073 | (12.6 | )% | $ | 1,288 | $ | (193 | ) | (767.4 | )% | |||||||||||
| Adjusted EBITDA | $ | 938 | $ | 1,073 | (12.6 | )% | $ | 1,288 | $ | 73 | 1,664 | % | ||||||||||||
Conference Call
The Company will hold a live conference call and webcast at 3:30 p.m. central time on Wednesday, August 12, to discuss the Company’s 2026 second quarter results. The call will be hosted by Jay D. Miller, Chief Executive Officer and President and Andrew D. C. LaFrence, Chief Financial Officer and Senior Vice President of Finance. To access the live audio conference call, US participants may call 888-506-0062 and international participants may call 973-528-0011. Participant Access Code: 979013. Participants may also access the call via webcast at: https://www.webcaster5.com/Webcast/Page/2814/54239.
###
About Nortech Systems Incorporated
Nortech Systems is a leading provider of design and manufacturing solutions for complex electromedical devices, electromechanical systems, assemblies, and components. Nortech primarily serves the medical imaging, medical device, aerospace & defense, and industrial markets. Its design services span concept development to commercial design, and include medical device, software, electrical, mechanical, and biomedical engineering. Its manufacturing and supply chain capabilities are vertically integrated around wire, cable, and interconnect assemblies, printed circuit board assemblies, as well as system-level assembly, integration, and final test. Headquartered in Maple Grove, Minn., Nortech currently has six manufacturing locations and design centers across the U.S., Latin America, and Asia. Nortech Systems is traded on the NASDAQ Stock Market under the symbol NSYS. Nortech’s website is www.nortechsys.com.
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 including without limitation statements regarding strength and growth of bookings and backlog, future business prospects, opportunities in aerospace and defense and medical markets, converting strong customer engagement into sustainable growth and long-term value, future financial results including increased gross margin, our ability to generate positive EBITDA, nearshoring as a strategic advantage, successful execution of our long-term strategy, our enhanced competitiveness in aerospace, defense, and other high-reliability markets, and effects of restructuring and consolidating manufacturing facilities. While this release is based on management's best judgment and current expectations, actual results may differ materially from those expressed or implied 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: (1) commodity cost increases coupled with challenges in raising prices and/or customer pressure to reduce prices; (2) supply chain disruptions leading to shortages of critical components; (3) volatility in market conditions which may affect demand for the Company's products; (4) increased competition and/or reduced demand; (5) changes in the reliability and efficiency of operating facilities or those of third parties; (6) risks related to the availability of labor; (7) the unanticipated loss of any key member of senior management; (8) geopolitical, economic, financial and business conditions including changing tariff environment; (9) the Company's ability to steadily improve manufacturing output and product quality; (10) the impact of global health epidemics on our customers, employees, manufacturing facilities, suppliers, the capital markets and our financial condition; (11) challenges with customers with respect to moving production from one facility to another Company owned facility or (12) financing cost increases and continued availability. Some of the above-mentioned factors are described in further detail in the section entitled "Risk Factors" in our annual and quarterly reports, as applicable. You should assume the information appearing in this document is accurate only as of the date hereof, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since such date. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the United States Securities and Exchange Commission, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
Reconciliation of Generally Accepted Accounting Principles (“GAAP”) Measures to Non-GAAP Financial Measure
EBITDA is a non-GAAP financial measure used by management that we believe provides useful information to investors because it reflects ongoing performance excluding certain non-recurring items during comparable periods and facilitates comparisons between peer companies since interest, taxes, depreciation, and amortization can differ greatly between different organizations as a result of differing capital structures and tax strategies. EBITDA is defined as net income (loss) plus interest expense, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Adjusted EBITDA reflects the impact of restructuring and non-recurring items. EBITDA and Adjusted EBITDA are not a measurement of our financial performance under GAAP and should not be considered an alternative to net sales or net income (loss), as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA and Adjusted EBITDA have limitations as an analytical metric, and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP.
NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
| THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
| JUNE 30, | JUNE 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net sales | $ | 33,540 | $ | 30,675 | $ | 63,856 | $ | 57,570 | ||||||||
| Cost of goods sold | 27,837 | 25,838 | 53,451 | 49,655 | ||||||||||||
| Gross profit | 5,703 | 4,837 | 10,405 | 7,915 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 1,484 | 1,204 | 2,815 | 2,388 | ||||||||||||
| General and administrative | 3,250 | 2,589 | 6,264 | 5,504 | ||||||||||||
| Research and development | 346 | 302 | 656 | 628 | ||||||||||||
| Restructuring charges | - | - | - | 266 | ||||||||||||
| Total operating expenses | 5,080 | 4,095 | 9,735 | 8,786 | ||||||||||||
| Income (loss) from operations | 623 | 742 | 670 | (871 | ) | |||||||||||
| Other expense: | ||||||||||||||||
| Interest expense, net | (197 | ) | (257 | ) | (453 | ) | (471 | ) | ||||||||
| Income (loss) before income taxes | 426 | 485 | 217 | (1,342 | ) | |||||||||||
| Income tax expense (benefit) | 110 | 172 | (65 | ) | (339 | ) | ||||||||||
| Net income (loss) | $ | 316 | $ | 313 | $ | 282 | $ | (1,003 | ) | |||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic (in dollars per share) | $ | 0.11 | $ | 0.12 | $ | 0.10 | $ | (0.36 | ) | |||||||
| Weighted average number of common shares outstanding - basic (in shares) | 2,805,183 | 2,773,598 | 2,795,659 | 2,767,263 | ||||||||||||
| Diluted (in dollars per share) | $ | 0.11 | $ | 0.12 | $ | 0.09 | $ | (0.36 | ) | |||||||
| Weighted average number of common shares outstanding - diluted (in shares) | 2,999,002 | 2,954,765 | 3,007,439 | 2,767,263 | ||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation | $ | 21 | $ | 124 | $ | 90 | $ | 130 | ||||||||
| Comprehensive income (loss), net of tax | $ | 337 | $ | 437 | $ | 372 | $ | (873 | ) | |||||||
NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2026 AND DECEMBER 31, 2025
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
| JUNE 30, 2026 | DECEMBER 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,380 | $ | 1,655 | ||||
| Restricted cash | 294 | - | ||||||
| Accounts receivable, less allowance for credit losses of | 19,850 | 16,998 | ||||||
| Inventories, net | 24,512 | 20,695 | ||||||
| Contract assets | 16,979 | 15,184 | ||||||
| Prepaid assets and other assets | 1,279 | 1,618 | ||||||
| Total current assets | 64,294 | 56,150 | ||||||
| Property and equipment, net | 4,977 | 5,203 | ||||||
| Operating lease assets, net | 6,420 | 7,016 | ||||||
| Deferred tax assets | 3,963 | 3,394 | ||||||
| Other intangible assets, net | 147 | 156 | ||||||
| Deferred line of credit issuance costs, net | 244 | - | ||||||
| Total assets | $ | 80,045 | $ | 71,919 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Lines of credit | $ | 7,868 | $ | 7,000 | ||||
| Current portion of term loan, net of debt issuance costs | 432 | - | ||||||
| Accounts payable | 14,949 | 12,809 | ||||||
| Accrued payroll and commissions | 2,808 | 1,822 | ||||||
| Customer deposits | 6,848 | 5,386 | ||||||
| Current portion of operating leases | 1,246 | 1,332 | ||||||
| Current portion of finance lease obligations | 243 | 274 | ||||||
| Other accrued liabilities | 1,644 | 1,221 | ||||||
| Total current liabilities | 36,038 | 29,844 | ||||||
| Long-term liabilities: | ||||||||
| Term loan, net of debt issuance costs | 1,636 | - | ||||||
| Long-term operating lease obligations | 5,929 | 6,476 | ||||||
| Long-term finance lease obligations | 534 | 626 | ||||||
| Other long-term liabilities | 434 | 426 | ||||||
| Total long-term liabilities | 8,533 | 7,528 | ||||||
| Total liabilities | 44,571 | 37,372 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, | 250 | 250 | ||||||
| Common stock - | 29 | 28 | ||||||
| Additional paid-in capital | 18,409 | 17,855 | ||||||
| Accumulated other comprehensive loss | (619 | ) | (709 | ) | ||||
| Retained earnings | 17,405 | 17,123 | ||||||
| Total shareholders’ equity | 35,474 | 34,547 | ||||||
| Total liabilities and shareholders’ equity | $ | 80,045 | $ | 71,919 | ||||
NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
| SIX MONTHS ENDED JUNE 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | 282 | $ | (1,003 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 618 | 678 | ||||||
| Compensation on stock-based awards | 320 | 235 | ||||||
| Change in allowance for credit losses | (7 | ) | 10 | |||||
| Change in inventory reserves | (311 | ) | 351 | |||||
| Deferred taxes | (569 | ) | (700 | ) | ||||
| Changes in current operating items: | ||||||||
| Accounts receivable | (2,705 | ) | (2,842 | ) | ||||
| Inventories | (3,530 | ) | 2,714 | |||||
| Contract assets | (1,795 | ) | (1,192 | ) | ||||
| Prepaid expenses and other assets | 338 | (1,647 | ) | |||||
| Accounts payable | 2,077 | 295 | ||||||
| Accrued payroll and commissions | 978 | (94 | ) | |||||
| Customer deposits | 1,463 | 36 | ||||||
| Other accrued liabilities | 392 | 386 | ||||||
| Net cash used in operating activities | (2,449 | ) | (2,773 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from sale of property and equipment | - | 9 | ||||||
| Purchases of property and equipment | (323 | ) | (367 | ) | ||||
| Net cash used in investing activities | (323 | ) | (358 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from lines of credit | 35,061 | 51,405 | ||||||
| Payments to line of credit | (34,198 | ) | (48,485 | ) | ||||
| Proceeds from term loan | 2,200 | - | ||||||
| Payments of debt issuance costs | (290 | ) | - | |||||
| Principal payments on term loan | (110 | ) | - | |||||
| Principal payments on financing leases | (124 | ) | (85 | ) | ||||
| Stock award exercises | 235 | 23 | ||||||
| Net cash provided by financing activities | 2,774 | 2,858 | ||||||
| Effect of exchange rate changes on cash and restricted cash | 17 | 9 | ||||||
| Net change in cash and restricted cash | 19 | (264 | ) | |||||
| Cash and restricted cash - beginning of period | 1,655 | 916 | ||||||
| Cash and restricted cash - end of period | $ | 1,674 | $ | 652 | ||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net income (loss) | $ | 316 | $ | 313 | $ | 282 | $ | (1,003 | ) | |||||||
| Interest | 197 | 257 | 453 | 471 | ||||||||||||
| Taxes | 110 | 172 | (65 | ) | (339 | ) | ||||||||||
| Depreciation | 311 | 327 | 609 | 669 | ||||||||||||
| Amortization | 4 | 4 | 9 | 9 | ||||||||||||
| EBITDA | 938 | 1,073 | 1,288 | (193 | ) | |||||||||||
| Restructuring charges | - | - | - | 266 | ||||||||||||
| ADJUSTED EBITDA | $ | 938 | $ | 1,073 | $ | 1,288 | $ | 73 | ||||||||
There were no material adjustments to EBITDA in the three or six months ended June 30, 2026 and the three months ended June 30, 2025. Adjustment to EBITDA for the six months ended June 30, 2025 include ($ in thousands):
| ● | During the first quarter of 2025, we incurred |
| ($ in millions) | Last Twelve Months (“LTM”) Ended in Quarter(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | ||||||||||||||||||||||||||||||||||||||||
| Net Sales | $ | 140.8 | $ | 138.9 | $ | 139.3 | $ | 138.7 | $ | 137.5 | $ | 135.6 | $ | 128.1 | $ | 120.8 | $ | 117.6 | $ | 116.7 | $ | 118.4 | $ | 121.8 | $ | 124.7 | ||||||||||||||||||||||||||
| Gross Profit $ - Adjusted | 22.4 | 21.4 | 23.1 | 23.1 | 22.2 | 20.7 | 16.7 | 14.4 | 14.6 | 15.8 | 18.0 | 19.6 | 20.5 | |||||||||||||||||||||||||||||||||||||||
| Gross Margin % - Adjusted | 15.9 | % | 15.4 | % | 16.6 | % | 16.6 | % | 16.1 | % | 15.3 | % | 13.1 | % | 11.9 | % | 12.4 | % | 13.5 | % | 15.2 | % | 16.1 | % | 16.4 | % | ||||||||||||||||||||||||||
| EBITDA - Adjusted | $ | 6.8 | $ | 6.0 | $ | 8.0 | $ | 8.1 | $ | 7.3 | $ | 5.9 | $ | 2.1 | $ | (0.5 | ) | $ | (0.4 | ) | $ | 0.7 | $ | 2.5 | $ | 3.9 | $ | 3.7 | ||||||||||||||||||||||||
| (1 | ) | For the last twelve-month periods ended June 30, 2026 and June 30, 2025, the Company recorded management incentive compensation expense (reversal of expense) of | |
Contact
Andrew D. C. LaFrence
Chief Financial Officer and Senior Vice President of Finance
alafrence@nortechsys.com
952-345-2243
