Nortech Systems Inc. reported a decline in net sales for the third quarter and the first nine months of fiscal 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, net sales were $31,407,000, a decrease of 5.9% from $33,369,000 in 2023. For the nine months ended September 30, 2024, net sales totaled $99,513,000, down 3.6% from $103,278,000 in the prior year. The decrease in sales was attributed to a decline in industrial customer sales, which fell by 19.2% in Q3 2024, and a 9.7% decrease in medical customer sales over the nine-month period. However, sales to aerospace and defense customers increased by 23.3% for the nine months ended September 30, 2024.

Gross profit also saw a significant decline, with Q3 2024 gross profit at $3,835,000, down 27.9% from $5,319,000 in Q3 2023. For the nine-month period, gross profit decreased to $13,900,000 from $16,277,000, reflecting a 14.6% drop. Consequently, the company reported a loss from operations of $467,000 for Q3 2024, compared to an operating income of $1,124,000 in Q3 2023. The nine-month loss from operations was $1,032,000, down from a profit of $3,276,000 in the same period last year.

Nortech's net loss for Q3 2024 was $739,000, an improvement from a net loss of $1,207,000 in Q3 2023. For the nine months ended September 30, 2024, the net loss was $183,000, significantly reduced from $2,522,000 in the prior year. The net loss per share for Q3 2024 was $(0.27), compared to $(0.44) in Q3 2023.

On the balance sheet, total assets increased to $76,966,000 as of September 30, 2024, from $75,127,000 at the end of 2023. Current assets rose to $60,278,000, with cash increasing to $1,239,000 from $960,000. However, total long-term liabilities increased to $17,958,000 from $13,201,000, primarily due to an increase in the long-term line of credit, which rose to $9,508,000 from $5,815,000.

The company incurred restructuring charges of $267,000 in the first nine months of 2024 related to the closure of its Blue Earth, Minnesota production facility. Cash used in operating activities for the nine months ended September 30, 2024, was $(3,043,000), a stark contrast to the cash provided of $2,181,000 in the same period in 2023.

Overall, Nortech Systems Inc. is navigating a challenging market environment, with strategic adjustments in response to declining sales in key sectors while managing its financial obligations and restructuring efforts.