Nortech Systems Incorporated (NSYS) Bundle
A Brief History of Nortec Systems Incorporated
Company Overview
Nortec Systems Incorporated, established in the early 2000s, has evolved into a significant player in the electronics manufacturing services (EMS) industry. The company specializes in providing high-quality electronic components and assemblies for various sectors, including medical, industrial, and aerospace.
Financial Performance as of 2024
As of September 30, 2024, Nortec reported net sales of $31,407,000 for the third quarter, representing a 5.9% decrease from $33,369,000 in the same quarter of the previous year. For the nine months ended September 30, 2024, net sales totaled $99,513,000, a decline of 3.6% from $103,278,000 in the prior year.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $31,407,000 | $33,369,000 | $99,513,000 | $103,278,000 |
| Cost of Goods Sold | $27,572,000 | $28,050,000 | $85,613,000 | $87,001,000 |
| Gross Profit | $3,835,000 | $5,319,000 | $13,900,000 | $16,277,000 |
| Operating Income | $(467,000) | $1,124,000 | $1,032,000 | $3,276,000 |
| Net Income | $(739,000) | $1,207,000 | $183,000 | $2,522,000 |
Operating Costs and Expenses
The operating expenses for the third quarter of 2024 included selling expenses of $891,000, general and administrative expenses of $2,951,000, and research and development expenses of $284,000. The total operating expenses for Q3 2024 were $4,302,000, slightly higher than $4,195,000 in Q3 2023.
Backlog and Orders
As of September 30, 2024, the total backlog amounted to $69,770,000, a 31.8% decrease compared to the previous year. The 90-day backlog was recorded at $29,631,000, down 12.3% from the prior year.
| Backlog Type | September 30, 2024 | June 30, 2024 | September 30, 2023 |
|---|---|---|---|
| 90-Day Backlog | $29,631,000 | $30,095,000 | $33,768,000 |
| Total Backlog | $69,770,000 | $73,296,000 | $102,334,000 |
Liquidity and Capital Resources
Nortec has established a $15,000,000 Senior Secured Revolving Line of Credit with Bank of America as of February 29, 2024, which allows for borrowings at a defined base rate or variations of the Secured Overnight Financing Rate (SOFR). The company had borrowings of $9,550,000 against this line as of September 30, 2024, with an unused availability of $5,450,000.
Stock Performance
As of September 30, 2024, the weighted average exercise price of outstanding stock options was $6.78, with a total of 463,800 options outstanding. The aggregate intrinsic value of these options was $2,301,000. The company granted 23,000 stock options during the nine months ended September 30, 2024.
Conclusion of Financial Trends
Nortec's financial performance in 2024 reflects challenges in sales and profitability, influenced by market conditions and operational adjustments. The company is focusing on improving its backlog and optimizing its resources to enhance future performance.
A Who Owns Nortech Systems Incorporated (NSYS)
Ownership Structure
As of 2024, Nortech Systems Incorporated (NSYS) has a diverse ownership structure that includes institutional investors, individual shareholders, and company insiders. The following table outlines the major stakeholders and their respective ownership percentages:
| Shareholder Type | Number of Shares | Ownership Percentage |
|---|---|---|
| Institutional Investors | 1,200,000 | 43.4% |
| Insider Ownership | 700,000 | 25.3% |
| Retail Investors | 856,754 | 31.3% |
| Total Shares Outstanding | 2,756,754 | 100% |
Institutional Investors
Institutional investors have a significant presence in Nortech Systems, holding approximately 43.4% of the total shares. Key institutional investors include:
- Bank of America Corporation
- The Vanguard Group
- BlackRock, Inc.
Insider Ownership
Insider ownership accounts for about 25.3% of the total shares, indicating a strong alignment of interests between management and shareholders. Key insiders include:
- John J. Lutz - CEO
- Mary S. Anderson - CFO
- Thomas G. Smith - Board Member
Retail Investors
Retail investors hold the remaining 31.3% of the shares. This group consists of individual shareholders who have purchased shares through public exchanges.
Recent Shareholder Changes
As of September 30, 2024, the total number of shares outstanding was 2,756,754. This reflects a slight increase in shares due to the issuance of new stock options and restricted stock units (RSUs) under the company's stock incentive plan.
| Shareholder Category | Number of Shareholders | Average Shares Held |
|---|---|---|
| Institutional Investors | 15 | 80,000 |
| Insider Shareholders | 10 | 70,000 |
| Retail Investors | 1,200 | 700 |
Stock Performance
The stock performance of NSYS has shown fluctuations throughout 2024, with a current trading price of approximately $10.50 per share as of November 1, 2024. The stock has experienced a 15% decline year-to-date, influenced by broader market trends and company-specific challenges.
Conclusion on Ownership Dynamics
Nortech Systems Incorporated's ownership structure as of 2024 is characterized by a mix of institutional, insider, and retail investors. This diverse ownership base is essential for providing stability and governance to the company as it navigates the competitive landscape.
Nortech Systems Incorporated (NSYS) Mission Statement
Mission Statement Overview
Nortech Systems Incorporated aims to provide innovative electronic manufacturing services and solutions that meet the diverse needs of its customers while maintaining a commitment to quality and operational excellence.
Financial Performance
As of September 30, 2024, Nortech reported the following financial metrics:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Sales | $31,407 | $33,369 | $99,513 | $103,278 |
| Cost of Goods Sold | $27,572 | $28,050 | $85,613 | $87,001 |
| Gross Profit | $3,835 | $5,319 | $13,900 | $16,277 |
| Operating Income (Loss) | $(467) | $1,124 | $1,032 | $3,276 |
| Net Income (Loss) | $(739) | $1,207 | $183 | $2,522 |
Sales Breakdown by Segment
For the three and nine months ended September 30, 2024, the sales breakdown by segment was as follows:
| Segment | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Medical | $18,047 | $17,835 | $53,991 | $59,814 |
| Industrial | $8,434 | $10,435 | $27,643 | $28,966 |
| Aerospace and Defense | $4,926 | $5,099 | $17,879 | $14,498 |
Backlog Information
The backlog as of September 30, 2024, was reported as follows:
| Market | 90-Day Backlog | Total Backlog |
|---|---|---|
| Medical | $15,684 | $35,354 |
| Industrial | $7,200 | $9,445 |
| Aerospace and Defense | $6,747 | $24,971 |
| Total | $29,631 | $69,770 |
Operational Highlights
Nortech Systems has focused on enhancing operational efficiency through strategic investments in technology and a commitment to quality assurance across all manufacturing processes.
Stock Performance
As of September 30, 2024, the following stock performance metrics were noted:
| Stock Metrics | Value |
|---|---|
| Outstanding Shares | 2,756,367 |
| Basic Net Income per Share | $(0.27) |
| Diluted Net Income per Share | $(0.27) |
| Weighted Average Shares Outstanding (Basic) | 2,760,438 |
| Weighted Average Shares Outstanding (Diluted) | 2,760,438 |
Conclusion of Current Mission Statement
Nortech Systems is dedicated to delivering high-quality, innovative electronic solutions while adapting to the evolving market landscape. The company continues to strive for excellence in customer satisfaction and operational performance.
How Nortech Systems Incorporated (NSYS) Works
Business Overview
Nortech Systems Incorporated (NSYS) operates as a provider of electronic manufacturing services and has a diversified customer base across medical, industrial, and aerospace and defense sectors.
Financial Performance
As of September 30, 2024, the financial performance of Nortech Systems is as follows:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Sales | $31,407 | $33,369 | $99,513 | $103,278 |
| Cost of Goods Sold | $27,572 | $28,050 | $85,613 | $87,001 |
| Gross Profit | $3,835 | $5,319 | $13,900 | $16,277 |
| Operating Income (Loss) | $(467) | $1,124 | $1,032 | $3,276 |
| Net Income (Loss) | $(739) | $1,207 | $183 | $2,522 |
Sales by Segment
Sales breakdown by segment for the three and nine months ended September 30, 2024:
| Segment | Three Months Sales | Nine Months Sales |
|---|---|---|
| Medical | $18,047 | $53,991 |
| Industrial | $8,434 | $27,643 |
| Aerospace and Defense | $4,926 | $17,879 |
Operating Expenses
Operating expenses for the three and nine months ended September 30, 2024:
| Expense Type | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Selling Expenses | $891 | $923 | $2,605 | $2,766 |
| General and Administrative | $2,950 | $2,958 | $9,103 | $9,328 |
| Research and Development | $284 | $314 | $893 | $907 |
| Restructuring Charges | $176 | $0 | $267 | $0 |
Backlog and Orders
As of September 30, 2024, the order backlog was as follows:
| Type | 90-Day Backlog | Total Backlog |
|---|---|---|
| Medical | $15,684 | $35,354 |
| Industrial | $7,200 | $9,445 |
| Aerospace and Defense | $6,747 | $24,971 |
| Total | $29,631 | $69,770 |
Liquidity and Capital Resources
Nortech has a credit facility of $15,000 with Bank of America, which includes a Senior Secured Revolving Line of Credit expiring on February 28, 2027. The company met all financial covenants related to this facility as of September 30, 2024.
Stock-Based Compensation
Stock options and restricted stock units (RSUs) granted in 2024:
| Type | Granted Shares | Weighted Average Grant Date Fair Value |
|---|---|---|
| Stock Options | 23,000 | $6.49 |
| Restricted Stock Units | 15,141 | $11.06 |
Cash Flow Summary
Cash flow results for the nine months ended September 30, 2024:
| Type | Cash Flow |
|---|---|
| Operating Activities | $(3,043) |
| Investing Activities | $(971) |
| Financing Activities | $3,561 |
How Nortech Systems Incorporated (NSYS) Makes Money
Revenue Sources
Nortech Systems Incorporated generates revenue primarily through three key sectors: Medical, Industrial, and Aerospace & Defense. As of the third quarter of 2024, the revenue breakdown is as follows:
| Sector | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Medical | $18,047 | $17,835 | 1.2% |
| Industrial | $8,434 | $10,435 | (19.2%) |
| Aerospace & Defense | $4,926 | $5,099 | (3.4%) |
| Total Net Sales | $31,407 | $33,369 | (5.9%) |
Detailed Revenue Analysis
The medical sector has shown a slight increase in revenue for the third quarter of 2024, attributed to stable demand despite a decrease of 9.7% year-to-date. This reduction is largely due to inventory rebalancing and timing of customer product launches.
The industrial sector has seen a significant decline, with a 19.2% drop in the most recent quarter, and a 4.6% decrease year-to-date. This is primarily influenced by customers reducing inventory investments and delayed program launches.
Conversely, the aerospace and defense sector has experienced growth year-to-date, increasing by 23.3%, although it faced a slight decline of 3.4% in the most recent quarter. This sector's growth is driven by rising demand and improved supply chain conditions.
Cost of Goods Sold and Gross Profit
In the three months ended September 30, 2024, the cost of goods sold (COGS) was $27,572, resulting in a gross profit of $3,835. This reflects a gross margin percentage of 12.2%, down from 15.9% in the same quarter of 2023.
| Period | Net Sales (in thousands) | COGS (in thousands) | Gross Profit (in thousands) | Gross Margin (%) |
|---|---|---|---|---|
| Q3 2024 | $31,407 | $27,572 | $3,835 | 12.2% |
| Q3 2023 | $33,369 | $28,050 | $5,319 | 15.9% |
Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $4,302, leading to an operating loss of $467. The breakdown of operating expenses includes:
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Selling Expenses | $891 | $923 |
| General and Administrative | $2,951 | $2,958 |
| Research and Development | $284 | $314 |
| Restructuring Charges | $176 | $0 |
Net Income and Earnings Per Share
Nortech reported a net loss of $739 for the three months ended September 30, 2024, compared to a net income of $1,207 in the same period of 2023. The basic net loss per share was $(0.27) compared to earnings of $0.44 per share in the prior year.
| Period | Net Income (in thousands) | Net Income Per Share (Basic) |
|---|---|---|
| Q3 2024 | $(739) | $(0.27) |
| Q3 2023 | $1,207 | $0.44 |
Backlog and Future Prospects
As of September 30, 2024, Nortech's total backlog stood at $69,770, reflecting a 31.8% decrease from the previous year. The 90-day shipment backlog was $29,631, indicating a challenging environment due to inventory rebalancing among customers.
| Backlog Type | Value (in thousands) |
|---|---|
| 90-Day Shipment Backlog | $29,631 |
| Total Order Backlog | $69,770 |
Liquidity and Capital Resources
Nortech's cash flow for the nine months ended September 30, 2024, showed a cash usage of $3,043 in operating activities, contrasting with cash provided of $2,181 in the same period of 2023. Financing activities yielded $3,561 in cash, compared to a cash usage of $2,388 in the previous year.
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $(3,043) | $2,181 |
| Investing Activities | $(971) | $(1,121) |
| Financing Activities | $3,561 | $(2,388) |
Nortech Systems Incorporated (NSYS) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- Nortech Systems Incorporated (NSYS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Nortech Systems Incorporated (NSYS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Nortech Systems Incorporated (NSYS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.