Nortech Systems (NASDAQ:NSYS) Releases Quarterly Earnings Results

Nortech Systems (NASDAQ:NSYS) announced its earnings results on Wednesday. The electronics maker reported $0.11 earnings per share for the quarter, FiscalAI reports. Nortech Systems had a return on equity of 3.04% and a net margin of 0.83%.The company had revenue of $33.54 million during the quarter.

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

• Revenue and margins improved: Second-quarter sales rose 9.3% year over year to $33.5 million, while gross margin expanded to 17% from 15.8%, supported by higher production and better manufacturing-cost absorption.
• Backlog reached record levels: The 90-day shipment backlog increased 25.8% year over year to $33.4 million, and total backlog rose 19.8% to $93.8 million, led by aerospace and defense and medical imaging orders.
• Nortech returned to profitability on a year-to-date basis, reporting $670,000 in operating income and $282,000 in net income for the first six months, compared with an operating loss and net loss in the prior-year period. Management also said its facilities have capacity to support growth without significant near-term capital expenditures.
• Cash flow and working capital remain concerns: Operating activities used $2.4 million in the first half, with substantial cash tied up in receivables, contract assets, and inventory; cash was $1.7 million against $7.6 million of revolver borrowings and $3.6 million of remaining availability.
• Higher incentive and stock-based compensation increased operating expenses and pressured second-quarter operating income despite stronger gross profit. Industrial and aerospace and defense sales also declined during the quarter, while tariff recovery timing and amounts remain uncertain and no recoveries have yet been recognized.

Nortech Systems Price Performance

Shares of NSYS traded down $0.20 during trading hours on Friday, hitting $12.55. 16,953 shares of the company were exchanged, compared to its average volume of 19,702. The company has a market capitalization of $35.01 million, a PE ratio of 34.86 and a beta of -0.03. The firm has a fifty day simple moving average of $15.09 and a 200-day simple moving average of $12.85. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.84 and a quick ratio of 1.12. Nortech Systems has a one year low of $6.50 and a one year high of $18.01.

Analyst Upgrades and Downgrades

A number of research firms have recently weighed in on NSYS. Wall Street Zen raised shares of Nortech Systems to a “strong-buy” rating in a research report on Saturday, June 6th. Weiss Ratings raised shares of Nortech Systems from a “sell (d-)” rating to a “hold (c-)” rating in a report on Thursday, June 11th. One analyst has rated the stock with a Hold rating, Based on data from MarketBeat, Nortech Systems presently has an average rating of “Hold”.

Institutional Inflows and Outflows

An institutional investor recently bought a new position in Nortech Systems stock. BlackRock Inc. acquired a new position in shares of Nortech Systems Incorporated (NASDAQ:NSYS) in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund acquired 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 filing with the Securities and Exchange Commission. 3.05% of the stock is owned by hedge funds and other institutional investors.

Nortech Systems Company Profile

Nortech Systems, Inc is a specialized engineering and manufacturing company that designs, develops and produces custom gas distribution and control solutions. Its core offerings include cryogenic valves and regulators, gas distribution panels and manifolds, and precision instrumentation for monitoring and controlling the delivery of industrial, specialty and medical gases. The company leverages in-house engineering, machining and assembly capabilities to tailor products to the exact specifications of its customers.

In addition to its mechanical product lines, Nortech Systems provides electronic monitoring and control systems.