Nortech Systems Reports Third Quarter Results

Rhea-AI Summary

Nortech Systems (Nasdaq: NSYS) reported Q3 2025 results on November 13, 2025. Net sales were $30.5M in Q3 2025 vs. $31.4M in Q3 2024. The company reported a net loss of $(146)K, or $(0.05) per share, versus $(739)K, or $(0.27) per share a year ago. Adjusted EBITDA improved to $1.3M in Q3 2025 from $0.1M in Q3 2024. A 90-day backlog was $31.3M as of September 30, 2025 versus $29.6M a year earlier.

The company highlighted operational improvements and AS9100:D certification for its Monterrey, Mexico facility. A conference call and webcast was scheduled for November 13, 2025 at 3:30 p.m. CT to discuss results.

Positive

• Adjusted EBITDA +776% to $1.3M in Q3 2025
• Gross profit +31.0% QoQ to $5.0M in Q3 2025
• 90-day backlog increased to $31.3M as of Sept 30, 2025

Negative

• Net sales down 2.9% YoY in Q3 2025 to $30.5M
• YTD sales declined 11.5% to $88.1M through Sept 30, 2025
• YTD net loss $(1.149)M vs. net income $0.183M in prior year
• Current liabilities rose to $33.6M as of Sept 30, 2025, including a $12.0M line of credit

Insights

Corporate Finance Analyst

Q3 shows operational improvement but mixed financials: stronger EBITDA and backlog, modest sales decline and YTD deterioration.

Nortech Systems reported $30.5 million in Q3 net sales, down slightly from $31.4 million, with a Q3 net loss narrowed to $(146) thousand (basic loss per share $(0.05)) versus $(739) thousand a year earlier. The company generated positive EBITDA of $1.3 million and adjusted EBITDA of $1.3 million in Q3, an improvement from the prior-year quarter. The 90-day backlog increased to $31.3 million from $29.6 million, supporting near-term revenue visibility.

These facts show operative gains: gross profit improved to $5.0 million and operating expenses declined slightly to $4.08 million, indicating progress on restructuring and cost discipline. However, year-to-date net sales fell to $88.1 million from $99.5 million (11.5% decline) and YTD adjusted EBITDA declined versus prior-year, so overall performance remains mixed. Cash rose modestly to $1.27 million and accounts receivable increased, while current liabilities reflect a $12.03 million line of credit outstanding at period end.

Watch near-term indicators over the next quarter: sustained quarterly EBITDA, conversion of the larger backlog into revenue, and whether the AS9100:D certification for the Monterrey facility translates into additional aerospace/industrial contracts. Monitor Q4 2025 operational updates and the conference call for management’s commentary on customer approvals, plant utilization, and working capital trends.

MINNEAPOLIS, Nov. 13, 2025 (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 third quarter ended September 30, 2025.

2025 Q3 Highlights:

	●	Net sales of $30.5 million in Q3 2025 vs. $31.4 million in Q3 2024
	●	Net loss of $(146) thousand, or $(0.05) per basic share in Q3 2025 vs. $(739) thousand, or $(0.27) per basic share in Q3 2024
	●	Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of $1.3 million in Q3 2025 vs. $0.1 million in Q3 2024
	●	90-day backlog of $31.3 million as of September 30, 2025 vs. $29.6 million as of September 30, 2024

Management Commentary

“Nortech’s third quarter results reflect continued evidence our restructuring efforts combined with cost discipline are paying off. A planned positive shift from first builds to recurring production across programs transferred between our plants is due to increased manufacturing efficiencies. I am very proud of the entire team’s execution and focus to achieve our goals,” said President & CEO, Jay D. Miller.

“Further, we recently completed a significant regulatory milestone with our Monterrey, Mexico facility achieving AS9100:D certification.” Miller added, “This certification underscores Nortech’s capability to deliver complex, high-reliability products for demanding applications, enhancing our service offerings to both current and prospective clients in the aerospace and industrial markets. This achievement further supports our viewpoint that we are well positioned to continue to leverage our operational performance in the current nearshoring landscape with our North American and Asian footprint,” Miller said.

Summary Financial Information

The following table provides summary financial information comparing the third quarter 2025 (“Q3 2025”) financial results to the same quarter in 2024 (“Q3 2024”) as well as the nine-month period ended September 30, 2025 (“YTD 2025”) with the same period in 2024 (“YTD 2024”).

($ in thousands)		Q3 2025				Q3 2024				% Change				YTD 2025				YTD 2024				% Change
Net sales		$	30,482			$	31,407				(2.9	)%		$	88,052			$	99,513				(11.5	)%
Gross profit		$	5,025			$	3,835				31.0	%		$	12,940			$	13,900				(6.9	)%
Operating expenses		$	4,080			$	4,302				(5.2	)%		$	12,866			$	12,868				0.0	%
Net (loss) income		$	(146	)		$	(739	)			80.2	%		$	(1,149	)		$	183				(727.9	)%
EBITDA		$	1,253			$	(33	)			3,897	%		$	1,060			$	2,432				(56.4	)%
Adjusted EBITDA		$	1,253			$	143				776.2	%		$	1,326			$	2,699				(50.9	)%

Conference Call

The Company will hold a live conference call and webcast at 3:30 p.m. central time on Thursday, November 13, to discuss the Company’s 2025 third quarter results. The call will be hosted by Jay D. Miller, Chief Executive Officer and President and Andrew D. C. LaFrence, Chief Financial Officer. 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: 107099. Participants may also access the call via webcast at: https://www.webcaster4.com/Webcast/Page/2814/52858.

###

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 future financial results, our ability to generate positive EBITDA, increased plant utilization, growth of our backlog, gaining approval of customers relating to moving production from one facility to another Company-owned facility, improving logistics, nearshoring as a strategic advantage Mexico holds in today’s tariff environment, effect of our intellectual property on financial performance, financial impact of shifting production focus from copper to fiber over time, effects of restructuring and consolidating manufacturing facilities, sustained long-term health and growth, and optimism about customer pipeline. 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 (LOSS) INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

		THREE MONTHS ENDED								NINE MONTHS ENDED
		SEPTEMBER 30,								SEPTEMBER 30,
		2025				2024				2025				2024
Net sales		$	30,482			$	31,407			$	88,052			$	99,513
Cost of goods sold			25,457				27,572				75,112				85,613
Gross profit			5,025				3,835				12,940				13,900
Operating expenses:
Selling			1,221				891				3,609				2,605
General and administrative			2,593				2,951				8,097				9,103
Research and development			266				284				894				893
Restructuring charges			-				176				266				267
Total operating expenses			4,080				4,302				12,866				12,868
Income (loss) from operations			945				(467	)			74				1,032
Other expense:
Interest expense			(273	)			(216	)			(744	)			(548	)
Income (loss) before income taxes			672				(683	)			(670	)			484
Income tax expense			818				56				479				301
Net (loss) income		$	(146	)		$	(739	)		$	(1,149	)		$	183
Net (loss) income per common share:
Basic (in dollars per share)		$	(0.05	)		$	(0.27	)		$	(0.41	)		$	0.07
Weighted average number of common shares outstanding - basic (in shares)			2,785,541				2,760,438				2,773,401				2,754,389
Diluted (in dollars per share)		$	(0.05	)		$	(0.27	)		$	(0.41	)		$	0.06
Weighted average number of common shares outstanding - diluted (in shares)			2,785,541				2,760,438				2,773,401				2,931,343
Other comprehensive (loss) income
Foreign currency translation			(21	)			223				109				(135	)
Comprehensive (loss) income, net of tax		$	(167	)		$	(516	)		$	(1,040	)		$	48

NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)

		SEPTEMBER 30, 2025				DECEMBER 31, 2024
ASSETS
Current assets:
Cash		$	1,271			$	916
Accounts receivable, less allowances of $186 and $196, respectively			18,810				14,875
Inventories, net			18,425				21,638
Contract assets			15,328				13,792
Prepaid assets and other assets			5,372				4,094
Total current assets			59,206				55,315
Property and equipment, net			5,322				6,232
Operating lease assets, net			7,306				8,139
Deferred tax assets			2,763				2,575
Other intangible assets, net			160				174
Total assets		$	74,757			$	72,435
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Line of credit		$	12,030			$	-
Accounts payable			11,678				11,582
Accrued payroll and commissions			2,402				1,841
Customer deposits			4,716				5,140
Current portion of operating lease obligations			1,319				1,175
Current portion of finance lease obligations			239				143
Notes payable			-				344
Other accrued liabilities			1,221				1,203
Total current liabilities			33,605				21,428
Long-term liabilities:
Long-term line of credit			-				8,634
Long-term operating lease obligations, net of current portion			6,795				7,773
Long-term finance lease obligations, net of current portion			713				311
Other long-term liabilities			287				284
Total long-term liabilities			7,795				17,002
Total liabilities			41,400				38,430
Shareholders’ equity:
Preferred stock, $1 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding			250				250
Common stock - $0.01 par value; 9,000,000 shares authorized; 2,786,134 and 2,760,793 shares issued and outstanding, respectively			28				28
Additional paid-in capital			17,721				17,329
Accumulated other comprehensive loss			(868	)			(977	)
Retained earnings			16,226				17,375
Total shareholders’ equity			33,357				34,005
Total liabilities and shareholders’ equity		$	74,757			$	72,435

NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

		NINE MONTHS ENDED SEPTEMBER 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income		$	(1,149	)		$	183
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization			986				1,400
Compensation on stock-based awards			369				334
Deferred income taxes			(189	)			-
Change in accounts receivable allowance			(10	)			(72	)
Change in inventory reserves			346				194
Other, net			-				9
Changes in current operating assets and liabilities:
Accounts receivable			(3,875	)			2,727
Inventories			2,823				(922	)
Contract assets			(1,536	)			(577	)
Prepaid expenses and other assets			(1,244	)			(2,888	)
Accounts payable			165				(3,609	)
Accrued payroll and commissions			555				(1,198	)
Customer deposits			(424	)			1,195
Other accrued liabilities			318				181
Net cash used in operating activities			(2,865	)			(3,043	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment			504				9
Purchases of equipment			(517	)			(980	)
Net cash used in investing activities			(13	)			(971	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit			76,215				99,888
Payments to line of credit			(72,880	)			(96,185	)
Proceeds from financing leases			-				198
Principal payments on financing leases			(140	)			(304	)
Share repurchases			-				(67	)
Stock option exercises			23				31
Net cash provided by financing activities			3,218				3,561
Effect of exchange rate changes on cash			15				17
Net change in cash			355				(436	)
Cash - beginning of period			916				1,675
Cash - end of period		$	1,271			$	1,239

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA

		THREE MONTHS ENDED SEPTEMBER 30,								NINE MONTHS ENDED SEPTEMBER 30,
		2025				2024				2025				2024
($ in thousands)
Net (loss) income		$	(146	)		$	(739	)		$	(1,149	)		$	183
Interest			273				216				744				548
Taxes			818				56				479				301
Depreciation			303				430				972				1,316
Amortization			5				4				14				84
EBITDA			1,253				(33	)			1,060				2,432
Restructuring charges			-				176				266				267
ADJUSTED EBITDA		$	1,253			$	143			$	1,326			$	2,699

There were no material adjustments to EBITDA in the quarter ended September 30, 2025. Adjustment to EBITDA in the nine months ended September 30, 2025 includes ($ in thousands):

	●	During the first quarter of 2025, we incurred $235 of severance charges for a February 2025 reduction in force to align staffing to our forecasted net sales and $31 of expenses related to our closed Blue Earth facility, which expense amount is not included in Adjusted EBITDA.

Adjustment to EBITDA in 2024 includes ($ in thousands):

●

In connection with the Blue Earth facility closure, we accrued $176 and $267 of retention bonus and other expenses in the three and nine-months ended September 30, 2024, respectively, which expense amount is not included in Adjusted EBITDA.

($ in millions)		Last Twelve Months (“LTM”) Ended in Quarter
		Q3 2022				Q4 2022				Q1 2023				Q2 2023				Q3 2023				Q4 2023				Q1 2024				Q2 2024				Q3 2024				Q4 2024				Q1 2025				Q2 2025				Q3 2025
Net Sales		$	132.0			$	134.1			$	138.3			$	140.8			$	138.9			$	139.3			$	138.7			$	137.5			$	135.6			$	128.1			$	120.8			$	117.6			$	116.7
Gross Profit $ - Adjusted			18.1				20.5				21.9				22.4				21.4				23.1				23.1				22.2				20.7				16.7				14.4				14.6				15.8
Gross Margin % - Adjusted			13,7	%			15.3	%			15.8	%			15.9	%			15.4	%			16.6	%			16.6	%			16.1	%			14.9	%			13.1	%			11.9	%			12.4	%			13.5	%
EBITDA - Adjusted		$	4.2			$	5.8			$	6.7			$	6.8			$	6.0			$	8.0			$	8.1			$	7.3			$	5.9			$	2.1			$	(0.5	)		$	(0.4	)		$	0.7

Contact

Andrew D. C. LaFrence
Chief Financial Officer and Senior Vice President of Finance
alafrence@nortechsys.com
952-345-2243

FAQ

What were Nortech (NSYS) Q3 2025 net sales and net loss?

Q3 2025 net sales were $30.5M and net loss was $(146)K (or $(0.05) per share).

How did Nortech's adjusted EBITDA for Q3 2025 compare to Q3 2024?

Adjusted EBITDA rose to $1.3M in Q3 2025 from $0.1M in Q3 2024.

What is Nortech's backlog as of September 30, 2025 and why does it matter for NSYS?

The 90-day backlog was $31.3M as of Sept 30, 2025; backlog signals near-term revenue visibility for NSYS.

Did Nortech announce any operational certifications that impact aerospace work?

Yes, the Monterrey, Mexico facility achieved AS9100:D certification, supporting aerospace and high-reliability programs.

When and how can investors access Nortech's Q3 2025 earnings call for NSYS?

The live call and webcast was scheduled for Nov 13, 2025 at 3:30 p.m. CT and accessible via the company's webcast link and dialing the conference lines.

What balance sheet items should NSYS investors watch after Q3 2025 results?

Investors should monitor current liabilities at $33.6M and the use of a $12.0M line of credit as of Sept 30, 2025.