MINNEAPOLIS — (BUSINESS WIRE) — April 1, 2019 — Nortech Systems Incorporated (Nasdaq: NSYS), a leading provider of full-service electronics manufacturing services (EMS), reported net sales of $113.4 million for the year ended December 31, 2018, compared with $112.3 million for fiscal 2017.
Operating income for fiscal 2018 was $1.2 million, which compares with an operating loss of $1.3 million for fiscal 2017, which included a year-end goodwill impairment charge of $0.9 million. Net income for fiscal 2018 was $0.2 million, or $0.06 per diluted common share. This compares with a net loss for fiscal 2017 of $2.4 million, or $0.89 per diluted common share, which included $1.4 million of unfavorable impact from tax reform and discrete tax-related adjustments.
For the fourth quarter of 2018, net sales were $28.8 million, compared with $25.6 million for the prior-year period. The fourth quarter operating loss was $14,000; this compares with an operating loss of $1.8 million in the prior-year period, which included the $0.9 goodwill write-off cited earlier.
The fourth quarter net loss of $0.2 million, or $0.07 per diluted common share, compares with a net loss of $2.5 million, or $0.90 per diluted common share, for the fourth quarter of 2017, which included the significant year-end, non-cash charges.
Nortech will no longer be hosting quarterly conference calls due to the low attendance. Nortech will continue its investor communications by issuing relevant news releases and SEC disclosures and responding to direct investor inquiries.
Nortech’s mission is to be the most trusted, innovative and nimble engineering and manufacturing services and solutions company in its chosen markets and to take great care of its employees, customers and supplier partners.
About Nortech Systems Incorporated
Nortech
Systems (
www.nortechsys.com),
based in Maple Grove, Minn., is a full-service engineering and
electronics manufacturing services (EMS) provider of complex
interconnect solutions, printed circuit board assemblies, higher-level
assemblies and box builds. Markets served include medical device,
industrial and commercial equipment, aerospace and defense. Nortech has
a range of specialized, high-tech facilities in the U.S., Latin America
and Asia used for customized design, manufacture, testing and repair of
its solutions. Nortech Systems is traded on the NASDAQ Stock Market
under the symbol NSYS.
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. While this release is based on management’s best judgment and
current expectations, actual results may differ 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: volatility in market conditions which may
affect market supply of and demand for the company’s products; increased
competition; changes in the reliability and efficiency of operating
facilities or those of third parties; risks related to availability of
labor; commodity and energy cost instability; general economic,
financial and business conditions that could affect the company’s
financial condition and results of operations; as well as risk factors
listed from time to time in the company’s filings with the SEC.
|
Condensed Consolidated Statements of Operations (in thousands, except for share data) |
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| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||
| DECEMBER 31, | DECEMBER 31, | |||||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net Sales | $ | 28,827 | $ | 25,573 | $ | 113,370 | $ | 112,335 | ||||||||
| Cost of Goods Sold | 25,748 | 23,428 | 100,059 | 100,217 | ||||||||||||
| Gross Profit | 3,079 | 2,145 | 13,311 | 12,118 | ||||||||||||
| 10.7 | % | 8.4 | % | 11.7 | % | 10.8 | % | |||||||||
| Operating Expenses | ||||||||||||||||
| Selling Expenses | 837 | 1,071 | 3,629 | 4,747 | ||||||||||||
| General and Administrative Expenses | 2,256 | 1,934 | 8,433 | 8,086 | ||||||||||||
| Impairment of Goodwill | - | 908 | - | 908 | ||||||||||||
| Gain on Sale of Property and Equipment | - | - | (355 | ) | ||||||||||||
| Total Operating Expenses | 3,093 | 3,913 | 12,062 | 13,386 | ||||||||||||
| Income (Loss) From Operations | (14 | ) | (1,768 | ) | 1,249 | (1,268 | ) | |||||||||
| Other Expense | ||||||||||||||||
| Loss on Extinguishment of Debt | - | - | (175 | ) | ||||||||||||
| Interest Expense | (206 | ) | (175 | ) | (757 | ) | (628 | ) | ||||||||
| Income (Loss) Before Income Taxes | (220 | ) | (1,943 | ) | 492 | (2,071 | ) | |||||||||
| Income Tax Expense (Benefit) | (23 | ) | 516 | 326 | 375 | |||||||||||
| Net Income | $ | (197 | ) | $ | (2,459 | ) | $ | 166 | $ | (2,446 | ) | |||||
| Income Per Common Share - Diluted | $ | (0.07 | ) | $ | (0.90 | ) | $ | 0.06 | $ | (0.89 | ) | |||||
| Weighted Average Number of Common Shares Outstanding - Diluted | 2,676,573 | 2,739,650 | 2,699,614 | 2,745,602 | ||||||||||||
|
Condensed Consolidated Balance Sheets (in thousands) |
||||||
| DECEMBER 31, 2018 | DECEMBER 31, 2017 | |||||
| Unaudited | Audited | |||||
| Cash | $ | 480 | $ | 473 | ||
| Restricted Cash | 467 | 306 | ||||
| Accounts Receivable | 20,093 | 17,417 | ||||
| Inventories | 17,004 | 18,527 | ||||
| Contract Assets | 6,431 | - | ||||
| Prepaid Expenses and Other Current Assets | 1,381 | 1,044 | ||||
| Property and Other Long-term Assets | 10,206 | 10,204 | ||||
| Goodwill and Other Intangible Assets, Net | 3,898 | 4,114 | ||||
| Total Assets | $ | 59,960 | $ | 52,085 | ||
| Accounts Payable | $ | 18,142 | $ | 11,699 | ||
| Other Current Liabilities | 6,750 | 6,346 | ||||
| Long Term Line of Credit | 9,264 | 8,503 | ||||
| Long-term Debt and Other Long-term Liabilities | 4,714 | 5,712 | ||||
| Shareholders’ Equity | 21,090 | 19,825 | ||||
| Total Liabilities and Shareholders’ Equity | $ | 59,960 | $ | 52,085 | ||
