Nortech Systems Attains Improved Fiber Optic Efficiency

Financial Performance: Nortech Systems reported Q3 2025 net sales of $30.5 million, a decrease from $31.4 million in Q3 2024, but showed improvement in net loss, reducing it to $(146) thousand from $(739) thousand year-over-year.

Operational Efficiency: The company highlighted successful restructuring efforts and increased manufacturing efficiencies, leading to a significant rise in adjusted EBITDA to $1.3 million in Q3 2025 compared to $0.1 million in Q3 2024.

Regulatory Achievement: Nortech's Monterrey, Mexico facility achieved AS9100:D certification, enhancing its capabilities in delivering high-reliability products for aerospace and industrial markets.

Future Outlook: Management expressed optimism about leveraging operational performance in the nearshoring landscape, supported by a 90-day backlog of $31.3 million as of September 30, 2025, up from $29.6 million a year earlier.

Nortech Achieves AS9100:D Certification: Nortech Systems' Monterrey, Mexico facility has received AS9100:D certification, enhancing its ability to deliver high-reliability products for the aerospace and industrial markets.

Significance of Certification: This certification reflects Nortech's commitment to quality and operational excellence, reinforcing its position as a trusted partner for aerospace and industrial customers.

Scope of Certification: The AS9100 certification covers contract manufacturing of wire harnesses, cable assemblies, and electromechanical assemblies, complementing the facility's existing ISO 9001:2015 certification.

Company Overview: Nortech Systems specializes in design and manufacturing solutions for complex electromedical devices and electromechanical systems, serving various markets including medical imaging and aerospace.

Advancements in Fiber Optic Technology: Nortech Systems has achieved low insertion loss of ≤ 0.35dB per mated pair using US Conec's Multimode MT Elite® ferrules, enhancing performance in medical imaging, aerospace, and defense applications.

Benefits of Fiber Optics: The company emphasizes the advantages of fiber optic technology over traditional copper solutions, including weight reduction, faster data transmission, and improved environmental sustainability, crucial for mission-critical environments.

Expertise and Training: Nortech's engineering team has undergone extensive training on US Conec's components, enabling them to implement best practices for reliable fiber optic connections and meet the growing demand for high-speed data transmission.

Strategic Positioning: By investing in fiber optic technology and maintaining vertically integrated manufacturing capabilities, Nortech strengthens its role as a key partner for customers needing advanced interconnect solutions in various high-precision industries.

Revenue and Earnings Performance: Nortech Systems reported a 9.5% decline in revenue to $30.7 million for Q2 2025, while net income rose significantly by 99.4% to $313,000, reflecting improvements in operational efficiency despite ongoing demand challenges.

Future Outlook and Key Focus Areas: The company is focusing on expanding its fiber optic connectivity solutions and managing working capital effectively, with cautious optimism regarding backlog levels and improvements in the aerospace and defense sectors, although no explicit financial guidance was provided for upcoming quarters.

Management Insights: Nortech Systems reported a 21.4% decrease in net sales for Q1 2025, attributed to customer order headwinds and inventory reductions, but management expressed optimism about the stabilization of their customer backlog and expects normalization in aerospace and defense revenues by the second half of 2025.

Financial Performance: The company's gross profit also declined to $3.1 million (11.1% of net sales), with ongoing restructuring costs impacting overall financial results; however, cash reserves increased slightly, indicating some stability amidst challenges.

Conference Call Announcement: Nortech Systems Incorporated will hold a live conference call on May 14, 2025, at 3:30 p.m. Central Time to discuss its first quarter 2025 financial results, hosted by CEO Jay D. Miller and CFO Andrew D. C. LaFrence.

Company Overview: Nortech Systems is a provider of engineering and manufacturing solutions for complex electromedical and electromechanical products, serving various markets including medical devices and aerospace, with operations across the U.S., Latin America, and Asia.