SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  March 19, 2020

 

NORTECH SYSTEMS INCORPORATED

(Exact name of registrant as specified in charter)

 

Minnesota

 

0-13257

 

41-16810894

(State or other jurisdiction

 

(Commission

 

IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

7550 Meridian Circle N, Maple Grove, MN 55369

(Address of principal executive offices)

 

(952) 345-2244

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed from last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

 

 Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock, par value $.01 per share

 

NSYS

 

NASDAQ Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

The Registrant issued a news release on March 19, 2020, entitled “Nortech Systems Reports 2019 Results” regarding its consolidated fiscal year results and financial condition.  A copy of this news release is attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits

 

99.1

News Release dated March 19, 2020 (furnished)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 23, 2020

 

 

Nortech Systems Incorporated

 

(Registrant)

 

 

 

/s/ Constance M. Beck

 

Constance M. Beck

Chief Financial Officer

 

 

 

 

2

ex_178504.htm

Exhibit 99.1

 

 

March 19, 2020

 

Nortech Systems Reports 2019 Results

 

MINNEAPOLIS – Nortech Systems Incorporated (Nasdaq: NSYS), a leading provider of engineering and manufacturing solutions for complex electromechanical products serving the medical, industrial and aerospace and defense markets, reported net sales of $116.3 million for the year ended December 31, 2019, an increase of 3%, compared to $113.4 million for fiscal 2018.

Operating income for fiscal 2019 was $224,000, compared to $1.3 million for fiscal 2018. Net loss for fiscal 2019 was $1.2 million, or $0.45 per diluted common share. Fiscal 2018 had net income of $166,000, or $0.06 per diluted common share.

For the fourth quarter of 2019, net sales were $30.8 million, an increase of 7%, compared with $28.8 million for the prior-year period. The fourth quarter operating income was $805,000 compared to the prior-year period operating loss of $14,000. The fourth quarter net income of $271,000, or $0.10 per diluted common share, compares with a net loss of $197,000, or $0.07 per diluted common share, for the fourth quarter of 2018. December 31, 2019 backlog was $49.7 million vs. $45.0 million at December 31, 2018.

“We are pleased with our improvements in margin and operating income for the last half of the year. Revenue for 2019 met our expectations and backlog remains strong,“ said Jay D. Miller, president and CEO.

Nortech uses intelligence, innovation, speed and global expertise to provide manufacturing and engineering solutions in partnership with our medical, industrial and defense customers, enabling them to be leaders in digital connectivity and data management to achieve their business goals. Nortech strives to be a premier workplace that fosters valued relationships internally and in our communities.

 

Efforts to Address COVID-19

 

Nortech recognizes the seriousness of the current pandemic and is determined to play its role in addressing the outbreak and in minimizing the impact of the coronavirus disease (COVID-19).  Nortech’s highest priority is the safety and well-being of its employees and other members in the Nortech community.  In all of Nortech’s locations, teams have been working diligently to take precautions to ensure a clean and safe environment. Nortech is opting for virtual meetings, minimizing travel, and when possible, asking its team members to work remotely. 

      Nortech is also working closely with its suppliers and customers to ensure that it is taking every feasible step to minimize disruption and to continue to deliver the products our customers' need.

      The COVID-19 situation is changing rapidly.  Be assured Nortech will continue to monitor the most up to date information from regulatory authorities in the United States, China and Mexico, where its facilities are located.  Nortech senior management is in constant contact and will adapt its response as information is available. 

 

About Nortech Systems Incorporated Nortech Systems is a leading provider of design and manufacturing solutions for complex electromechanical systems, assemblies, and components. Nortech Systems primarily serves the medical, aerospace & defense, and industrial markets. Its design services span concept development to commercial design, and include software, electrical, mechanical, and biomedical engineering. Its manufacturing and supply chain capabilities are vertically integrated around wire/cable/interconnect assemblies, printed circuit board assemblies, as well as system-level assembly, integration, and final test. Headquartered in Maple Grove, Minn., Nortech currently has seven manufacturing locations and design centers across the U.S., Latin America, and Asia. Nortech Systems is traded on the NASDAQ Stock Market under the symbol NSYS. Nortech’s website is www.nortechsys.com.

 

 

 

 

Forward-Looking Statements This press release contains forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. While this release is based on management’s best judgment and current expectations, actual results may differ and involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: volatility in market conditions which may affect market supply of and demand for the company’s products; increased competition; changes in the reliability and efficiency of operating facilities or those of third parties; risks related to availability of labor; commodity and energy cost instability; general economic, financial and business conditions that could affect the company’s financial condition and results of operations; as well as risk factors listed from time to time in the company’s filings with the SEC.

 

Condensed Consolidated Statements of Operations

 

(in thousands, except for share data)

 

   

THREE MONTHS ENDED

   

TWELVE MONTHS ENDED

 
   

December 31,

   

December 31,

 
   

Unaudited

   

Unaudited

   

Unaudited

   

Audited

 
   

2019

   

2018

   

2019

   

2018

 
                                 

Net Sales

  $ 30,820     $ 28,827     $ 116,333     $ 113,370  
                                 

Cost of Goods Sold

    27,164       25,748       103,757       100,059  
                                 

Gross Profit

    3,656       3,079       12,576       13,311  
      11.9 %     10.7 %     10.8 %     11.7 %
                                 

Operating Expenses

                               

Selling Expenses

    576       837       2,723       3,629  

General and Administrative Expenses

    2,275       2,256       9,629       8,433  

Total Operating Expenses

    2,851       3,093       12,352       12,062  
                                 

Income (Loss) from Operations

    805       (14 )     224       1,249  
                                 

Interest Expense

    (244 )     (206 )     (1,043 )     (757 )
                                 

Income (Loss) Before Income Taxes

    561       (220 )     (819 )     492  
                                 

Income Tax Expense (Benefit)

    287       (23 )     409       326  
                                 

Net Income (Loss)

  $ 274     $ (197 )   $ (1,228 )   $ 166  
                                 

Income (Loss) Per Common Share - Diluted

  $ 0.10     $ (0.07 )   $ (0.46 )   $ 0.06  
                                 

Weighted Average Number of Common Shares Outstanding - Diluted

    2,665,165       2,676,573       2,665,165       2,699,614  

 

 

 

  

Condensed Consolidated Balance Sheets

 

(in thousands)

 

 

   

December 31, 2019

   

December 31, 2018

 
   

Unaudited

   

Audited

 

Cash

  $ 351     $ 480  

Restricted Cash

    309       467  

Accounts Receivable

    18,558       20,093  

Inventories

    14,279       17,004  

Contract Assets

    7,659       6,431  

Prepaid Expenses and Other Current Assets

    2,128       1,381  

Property and Other Long-term Assets

    14,408       10,178  

Goodwill and Other Long-term Assets, Net

    3,718       3,926  

Total Assets

  $ 61,410     $ 59,960  
                 

Accounts Payable

  $ 14,014     $ 18,142  

Current Portion of Lease Obligation

    1,415       337  

Other Current Liabilities

    6,803       6,413  

Long Term Line of Credit

    10,088       9,264  

Long-term Debt and Other Long-term Liabilities

    3,297       4,714  

Long Term Operating Lease Obligation, Net

    5,817       0  

Shareholders’ Equity

    19,976       21,090  

Total Liabilities and Shareholders’ Equity

  $ 61,410     $ 59,960