Nortech Systems Reports Modest Sales Drop in Q4 FY 2016


Reading time ( words)

Nortech Systems Incorporated reported net sales of $29.0 million for the fourth quarter ended December 31, 2016, compared with net sales of $31.4 million for the fourth quarter of 2015. Net sales for the 2016 fiscal year ended December 31 rose one percent, to $116.6 million, compared with $115.2 million reported for fiscal 2015.

For the fourth quarter of 2016, the majority of the revenue decline was from industrial customers in the transportation sector. Profitability was aided by a favorable medical product and service mix, which offset the volume impact. Operating income for the fourth quarter was $328,000, compared with $329,000 for the fourth quarter of 2015. Fourth quarter net income of $98,000, or $0.04 per diluted common share, compares with $123,000, or $0.04 per diluted common share, in the fourth quarter of 2015.

For fiscal 2016, operating income was $629,000, an improvement of $1.1 million from a fiscal 2015 loss. Net income was $44,000, or $0.02 per diluted common share, for fiscal 2016. This compares with a net loss of $571,000, or $0.21 per diluted common share, for fiscal 2015.

“We’re pleased with our progress transitioning into a more global value-added and medical-focused EMS company,” said Rich Wasielewski, Nortech Systems’ president and CEO. “Our strategy of early engagement, engineering expertise and solutions selling is also gaining traction with our industrial and defense customers.”

During 2016, Nortech’s medical sales increased 30 percent and defense sales rose 11 percent. Industrial sales declined 21 percent, impacted by the slow economic growth and softness in the transportation and oil and gas sectors. The company’s overall 90-day backlog was $20.5 million at the end of 2016 compared with $20.7 million at the end of 2015. The medical products and service mix, cost improvements and selective pricing actions all contributed to the 140-basis-point improvement in gross margin and improved profitability in fiscal 2016. Net cash provided by operating activities was $3.5 million in the year and debt was lowered by $1.4 million.

“Looking ahead, we’re expecting the first quarter to be soft,” explained Wasielewski, adding that the recent increased activity in new projects and bookings – the strongest levels since 2009 – gives the company optimism for profitable growth in 2017. Renewed U.S. economic confidence, buoyed by the potential of tax reform, reduced regulations and increased spending on infrastructure and defense, contributes to this outlook.

About Nortech Systems Incorporated

Nortech Systems Incorporated, based in Maple Grove, Minn., is a full-service electronics manufacturing services (EMS) provider of wire and cable assemblies, printed circuit board assemblies, and higher-level complete box build assemblies for a wide range of industries. Markets served include industrial equipment, aerospace/defense and medical. The company has operations in the U.S., Latin America and Asia. Nortech Systems Incorporated is traded on the NASDAQ Stock Market under the symbol NSYS.

Share


Suggested Items

Top 10 Most-Read SMT Articles of 2017

12/29/2017 | I-Connect007
Every year, we like to take a look back at the most popular SMT news and articles. These are the top 10 most-read SMT articles from the past year.

Industry 4.0 and the Platform-Based Approach to Testing

12/19/2017 | Stephen Las Marias, I-Connect007
Chandran Nair, the vice president for Asia Pacific at National Instruments, explains how the Industry 4.0 vision will change electronics manufacturing. He discusses key technology enablers that would drive the evolution of manufacturing processes, and how a platform-based approach can help improve test and measurement.

Sourcing PCBA: Can Your EMS Supplier Do More?

08/23/2017 | Patty Rasmussen, East West Manufacturing
You're in the market for some PCB assemblies for your new product and you need to find the right supplier. You've looked online, gotten recommendations from friends, and the choices are dizzying. Should you look domestically or overseas? What do you do now? Sourcing PCBA doesn't have to be difficult, but there are questions you need to answer.



Copyright © 2018 I-Connect007. All rights reserved.