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Nortech Systems (NSYS) investor relations material

Nortech Systems Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2025 earnings summary7 Aug, 2025

Executive summary

  • Net sales for Q2 2025 were $30.7M, down 9.5% year-over-year, but net income rose to $313K from $157K in Q2 2024, reflecting improved earnings and positive EBITDA from restructuring and cost discipline.

  • Operational improvements included increased plant utilization, manufacturing efficiencies, and strategic inventory shifts to support customer programs.

  • Restructuring charges and facility closure expenses, mainly from the Blue Earth facility, impacted results in the first half of 2025.

  • Backlog increased by $10M during the quarter, reaching $78.4M, with growth outpacing industry trends.

  • Company remains cautiously optimistic, leveraging nearshoring in Mexico and China to mitigate tariff risks and capitalize on new quoting opportunities.

Financial highlights

  • Gross profit for Q2 2025 was $4.8M (15.8% margin), up from $4.6M (13.6% margin) year-over-year, driven by better facility utilization and productivity.

  • Adjusted EBITDA for Q2 2025 was $1.1M (3.5% margin), up 29.6% from Q2 2024; trailing twelve months adjusted EBITDA was -$0.4M versus $7.3M prior year.

  • Q2 2025 net income was $313K ($0.12/share basic), up from $157K ($0.06/share) in Q2 2024; six-month net loss was $1.0M compared to $922K income last year.

  • Cash at June 30, 2025 was $652K, down from $916K at year-end 2024; inventories reduced to $18.6M from $21.6M.

  • Interest expense increased to $257K in Q2 2025 from $165K in Q2 2024 due to higher borrowings.

Outlook and guidance

  • Management expects plant optimization and cost-cutting initiatives to improve results in the second half of 2025.

  • Expectation for aerospace and defense business to return to normal in 2025 as customer approvals are secured.

  • Company believes it has sufficient capital and liquidity to operate for at least twelve months from the filing date.

  • Focus remains on strengthening the balance sheet, reducing inventory, and driving manufacturing efficiencies for sustainable EBITDA growth.

  • Strategic focus is shifting from copper to fiber to address cost pressures and align with long-term growth.

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Frequently asked questions

Nortech Systems Inc. is a manufacturing services company that provides a range of engineering, technical, and manufacturing solutions to various industries. The company specializes in offering contract manufacturing services, including complex cable assemblies, printed circuit board assemblies, and higher-level complete box build systems. Nortech serves industries such as medical, aerospace, industrial, and defense, providing customized solutions to meet the specific needs of its clients. The company is headquartered in Maple Grove, Minnesota, and its shares are listed on the NASDAQ.

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