Nortech Systems (NASDAQ:NSYS) Posts Quarterly Earnings Results

Nortech Systems (NASDAQ:NSYS) announced its quarterly earnings data on Thursday. The electronics maker reported $0.21 EPS for the quarter, FiscalAI reports. The firm had revenue of $33.05 million during the quarter. Nortech Systems had a net margin of 0.83% and a return on equity of 3.01%.

Here are the key takeaways from Nortech Systems’ conference call:

• Third-quarter net sales rose 8.4% to $33 million, gross margin expanded 130 basis points to 17.8%, and operating income increased to $1.4 million. Nortech returned to profitability, reporting net income of $637,000, or $0.21 per diluted share.
• Backlog was $92.8 million at quarter-end, up 20% year over year, with growth led by aerospace and defense and industrial; the 90-day shipment backlog was $31.5 million. The company noted that reported backlog includes $17.2 million of revenue already recognized in contract assets.
• China sales rose 56.5% in the quarter and accounted for about 25% of revenue, while year-to-date growth there offset declines in industrial, which faced customer inventory adjustments and production disruptions tied to the Monterrey transfer. Unfavorable sales mix and supplier-quality costs also weighed on margins, though Nortech expects the supplier issue to be resolved in the fourth quarter.
• Operating activities used $275,000 of cash in the first nine months, as receivables, contract assets, and inventory absorbed cash to support anticipated production. Nortech ended September with $3 million in cash, an $8 million revolver balance, and about $3 million of borrowing availability, and said improving cash generation remains a priority.
• Nortech received two U.S. patents for active optical cable designs aimed at high-speed connectivity in magnetic environments and cable-health monitoring in noise-sensitive systems. Management sees the protected technology as a potential advantage in medical imaging, aerospace, defense, and other high-reliability applications.

Nortech Systems Price Performance

Nortech Systems stock traded down $0.25 during trading hours on Friday, hitting $10.67. The stock had a trading volume of 7,261 shares, compared to its average volume of 16,875. The company has a debt-to-equity ratio of 0.06, a current ratio of 1.78 and a quick ratio of 1.10. The stock has a market capitalization of $30.41 million, a price-to-earnings ratio of 29.64 and a beta of -0.05. Nortech Systems has a 1-year low of $6.76 and a 1-year high of $18.01. The stock’s fifty day moving average is $11.02 and its two-hundred day moving average is $12.34.

Institutional Investors Weigh In On Nortech Systems

A hedge fund recently bought a new position in Nortech Systems stock. BlackRock Inc. purchased a new position in Nortech Systems Incorporated (NASDAQ:NSYS) in the second quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund purchased 4,456 shares of the electronics maker’s stock, valued at approximately $70,000. BlackRock Inc. owned about 0.16% of Nortech Systems as of its most recent SEC filing. Hedge funds and other institutional investors own 3.05% of the company’s stock.

Analysts Set New Price Targets

A number of research analysts have issued reports on NSYS shares. Weiss Ratings raised shares of Nortech Systems from a “hold (c-)” rating to a “hold (c)” rating in a report on Tuesday, August 18th. Wall Street Zen downgraded shares of Nortech Systems from a “strong-buy” rating to a “buy” rating in a research report on Saturday, August 15th. One investment analyst has rated the stock with a Hold rating. According to MarketBeat, Nortech Systems currently has a consensus rating of “Hold”.

About Nortech Systems

Nortech Systems Incorporated is an electronics manufacturing services and engineering company headquartered in Maple Plain, Minnesota. The company helps customers design, develop, manufacture, and support complex electromechanical products and systems. Its capabilities include printed circuit board assembly, cable and wire harness assembly, electromechanical assembly, box-build manufacturing, system integration, prototyping, testing, and related engineering and supply-chain services. Nortech works with customers from product development through production and ongoing support.