MINNEAPOLIS, March 26, 2026 (GLOBE NEWSWIRE) -- Nortech Systems Incorporated (NASDAQ:NSYS) ("Nortech" or the "Company"), a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products serving the medical imaging, medical device, industrial, and aerospace & defense markets, reported financial results for the fourth quarter ended December 31, 2025.

2025 Q4 Highlights:

	●	Net sales of $30.3 million in Q4 2025 vs. $28.6 million in Q4 2024
	●	Net income of $897 thousand, or $0.32 per basic share in Q4 2025 vs. $(1,478) thousand, or $(0.54) per basic share in Q4 2024
	●	Adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") of $1.2 million in Q4 2025 vs. ($585) thousand loss in Q4 2024
	●	90-day backlog of $27.3 million as of December 31, 2025 vs. $26.5 million as of December 31, 2024
	●	Company closes on $17.2 million debt financing

Management Commentary

"Nortech delivered another quarter of meaningful operational and financial progress, marking our third consecutive period of positive operating and EBITDA results reflecting the positive execution of our strategic restructuring initiatives. The continued improvements we are seeing in gross margins, manufacturing efficiency, and world-class quality metrics reflect the disciplined execution of our long-term strategy and the dedication of our global team," said President & CEO, Jay D. Miller.

"Our growing customer backlog, combined with the successful transfer of key programs to our optimized facilities, is strengthening the foundation for sustained performance improvement. We are especially proud of the AS9100:D certification achieved at our Monterrey facility - a significant milestone that further enhances our competitiveness in aerospace, and other high-reliability markets. With the closure of our new debt financing last week, and our strong North American and Asian footprint, we believe we are well-positioned to support customers pursuing nearshore manufacturing strategies. I am grateful for the hard work of our employees across the globe, and we remain optimistic about the opportunities ahead as we continue to execute our strategy into 2026," Miller said.

Summary Financial Information

The following table provides summary financial information comparing the fourth quarter 2025 ("Q4 2025") financial results to the same quarter in 2024 ("Q4 2024") as well as the year ended December 31, 2025 ("2025") with the year ended December 31, 2024 ("2024").

($ in thousands)	Q4 2025		Q4 2024			% Change			2025			2024			% Change
Net sales	$	30,313	$	28,620			5.9	%	$	118,365		$	128,133			(7.6	)%
Gross profit	$	5,066	$	2,822			79.5	%	$	18,006		$	16,722			7.7	%
Operating expenses	$	4,165	$	4,049			2.9	%	$	17,031		$	16,917			0.7	%
Net income (loss)	$	897	$	(1,478	)		160.7	%	$	(252	)	$	(1,295	)		(80.5	)%
EBITDA	$	1,203	$	(889	)		235.3	%	$	2,263		$	1,543			46.7	%
Adjusted EBITDA	$	1,203	$	(585	)		305.6	%	$	2,529		$	2,114			19.6	%

Conference Call

The Company will hold a live conference call and webcast at 7:30 a.m. central time on Friday, March 27, to discuss the Company's 2025 fourth quarter results. The call will be hosted by Jay D. Miller, Chief Executive Officer and President and Andrew D. C. LaFrence, Chief Financial Officer and Senior Vice President of Finance. To access the live audio conference call, US participants may call 888-506-0062 and international participants may call 973-528-0011. Participant Access Code: 726639. Participants may also access the call via webcast at: https://www.webcaster5.com/Webcast/Page/2814/53646.

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About Nortech Systems Incorporated

Nortech Systems is a leading provider of design and manufacturing solutions for complex electromedical devices, electromechanical systems, assemblies, and components. Nortech primarily serves the medical imaging, medical device, aerospace & defense, and industrial markets. Its design services span concept development to commercial design, and include medical device, software, electrical, mechanical, and biomedical engineering. Its manufacturing and supply chain capabilities are vertically integrated around wire, cable, and interconnect assemblies, printed circuit board assemblies, as well as system-level assembly, integration, and final test. Headquartered in Maple Grove, Minn., Nortech currently has six 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 including without limitation statements regarding future financial results including increased gross margin, our ability to generate positive EBITDA, increased plant utilization and manufacturing efficiency, growth of our backlog, continuing improvement of quality metrics, success in moving production from on facility to another Company owned facility, nearshoring as a strategic advantage, successful execution of our long-term strategy, our enhanced competitiveness in aerospace, defense, and other high-reliability markets, effects of restructuring and consolidating manufacturing facilities, sustained long-term health and growth, and optimism about customer pipeline. While this release is based on management's best judgment and current expectations, actual results may differ materially from those expressed or implied 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: (1) commodity cost increases coupled with challenges in raising prices and/or customer pressure to reduce prices; (2) supply chain disruptions leading to shortages of critical components; (3) volatility in market conditions which may affect demand for the Company's products; (4) increased competition and/or reduced demand; (5) changes in the reliability and efficiency of operating facilities or those of third parties; (6) risks related to the availability of labor; (7) the unanticipated loss of any key member of senior management; (8) geopolitical, economic, financial and business conditions including changing tariff environment; (9) the Company's ability to steadily improve manufacturing output and product quality; (10) the impact of global health epidemics on our customers, employees, manufacturing facilities, suppliers, the capital markets and our financial condition; (11) challenges with customers with respect to moving production from one facility to another Company-owned facility or (12) financing cost increases and continued availability. Some of the above-mentioned factors are described in further detail in the section entitled "Risk Factors" in our annual and quarterly reports, as applicable. You should assume the information appearing in this document is accurate only as of the date hereof, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since such date. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the United States Securities and Exchange Commission, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

Reconciliation of Generally Accepted Accounting Principles ("GAAP") Measures to Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure used by management that we believe provides useful information to investors because it reflects ongoing performance excluding certain non-recurring items during comparable periods and facilitates comparisons between peer companies since interest, taxes, depreciation, and amortization can differ greatly between different organizations as a result of differing capital structures and tax strategies. EBITDA is defined as net income (loss) plus interest expense, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Adjusted EBITDA reflects the impact of restructuring and non-recurring items. EBITDA and Adjusted EBITDA are not a measurement of our financial performance under GAAP and should not be considered an alternative to net sales or net income (loss), as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA and Adjusted EBITDA have limitations as an analytical metric, and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP.

NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	THREE MONTHS ENDED						YEARS ENDED
	DECEMBER 31,						DECEMBER 31,
	2025			2024			2025			2024

Net sales	$	30,313		$	28,620		$	118,365		$	128,133
Cost of goods sold		25,247			25,798			100,359			111,411
Gross profit		5,066			2,822			18,006			16,722
Operating expenses
Selling		1,194			841			4,803			3,446
General and administrative		2,693			2,606			10,790			11,709
Research and development		278			298			1,172			1,191
Restructuring charges		-			304			266			571
Total operating expenses		4,165			4,049			17,031			16,917
Income (loss) from operations		901			(1,227	)		975			(195	)
Other expense
Interest expense		(220	)		(196	)		(964	)		(744	)
Income (loss) before income taxes		681			(1,423	)		11			(939	)
Income tax (benefit) expense		(216	)		55			263			356
Net income (loss)	$	897		$	(1,478	)	$	(252	)	$	(1,295	)

Net income (loss) per common share:
Basic (in dollars per share)	$	0.32		$	(0.54	)	$	(0.09	)	$	(0.47	)
Weighted average number of common shares outstanding - basic (in shares)		2,786,134			2,756,943			2,776,680			2,755,041
Diluted (in dollars per share)	$	0.31		$	(0.54	)	$	(0.09	)	$	(0.47	)
Weighted average number of common shares outstanding - diluted (in shares)		2,906,977			2,756,943			2,776,680			2,755,041

Other comprehensive income (loss)
Foreign currency translation		159			(310	)		268			(445	)
Comprehensive income (loss), net of tax	$	1,056		$	(1,788	)	$	16		$	(1,740	)

NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2025 AND DECEMBER 31, 2024

(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE DATA)

	DECEMBER 31, 2025			DECEMBER 31, 2024
ASSETS
Current assets:
Cash	$	1,655		$	916
Accounts receivable, less allowances of $161 and $196, respectively		16,998			14,875
Inventories, net		20,695			21,638
Contract assets		15,184			13,792
Prepaid assets and other assets		1,618			4,094
Total current assets		56,150			55,315
Property and equipment, net		5,203			6,232
Operating lease assets		7,016			8,139
Deferred tax assets		3,394			2,575
Other intangible assets, net		156			174
Total assets	$	71,919		$	72,435

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit	$	7,000		$	-
Accounts payable		12,809			11,582
Accrued payroll and commissions		1,822			1,841
Customer deposits		5,386			5,140
Current portion of operating leases		1,332			1,175
Current portion of finance lease obligations		274			143
Other accrued liabilities		1,221			1,547
Total current liabilities		29,844			21,428
Long-term liabilities:
Long-term line of credit		-			8,634
Long-term operating lease obligations, net of current portion		6,476			7,773
Long-term finance lease obligations, net of current portion		626			311
Other long-term liabilities		426			284
Total long-term liabilities		7,528			17,002
Total liabilities		37,372			38,430
Shareholders' equity:
Preferred stock, $1 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding		250			250
Common stock - $0.01 par value; 9,000,000 shares authorized; 2,786,134 and 2,760,793 shares issued and outstanding, respectively		28			28
Additional paid-in capital		17,855			17,329
Accumulated other comprehensive loss		(709	)		(977	)
Retained earnings		17,123			17,375
Total shareholders' equity		34,547			34,005
Total liabilities and shareholders' equity	$	71,919		$	72,435

NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN THOUSANDS)

	YEARS ENDED DECEMBER 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(252	)	$	(1,295	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,288			1,738
Compensation on stock-based awards		503			461
Deferred taxes		(558	)		(12	)
Change in accounts receivable allowance		(35	)		(162	)
Change in inventory reserves		401			280
Gain on disposal of property and equipment		-			(23	)
Changes in current operating items
Accounts receivable		(1,951	)		4,405
Inventories		485			(400	)
Contract assets		(1,393	)		689
Prepaid expenses and other assets		2,482			(2,049	)
Income taxes		(29	)		(333	)
Accounts payable		1,346			(3,956	)
Accrued payroll and commissions		(30	)		(2,289	)
Customer deposits		244			1,071
Other accrued liabilities		242			(375	)
Net cash provided by (used in) operating activities		2,743			(2,250	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		504			7
Purchases of property and equipment		(661	)		(1,270	)
Net cash used in investing activities		(157	)		(1,263	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit		101,785			129,793
Payments to line of credit		(103,480	)		(126,944	)
Proceeds from notes payable		-			345
Principal payments on financing leases		(195	)		(367	)
Share repurchases		-			(100	)
Stock award exercises		23			38
Net cash (used in) provided by financing activities		(1,867	)		2,765

Effect of exchange rate changes on cash		20			(11	)

Net change in cash		739			(759	)
Cash - beginning of year		916			1,675
Cash - end of year	$	1,655		$	916

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

	THREE MONTHS ENDED DECEMBER 31,						YEARS ENDED DECEMBER 31,
	2025			2024			2025			2024

($ in thousands)
Net income (loss)	$	897		$	(1,478	)	$	(252	)	$	(1,295	)
Interest		220			196			964			744
Taxes		(216	)		55			263			356
Depreciation		298			333			1,270			1,649
Amortization		4			5			18			89
EBITDA		1,203			(889	)		2,263			1,543
Restructuring charges		-			304			266			571
ADJUSTED EBITDA	$	1,203		$	(585	)	$	2,529		$	2,114

There were no material adjustments to EBITDA in the quarter ended December 31, 2025. Adjustment to EBITDA for the year ended December 31, 2025 include ($ in thousands):

	●	During the first quarter of 2025, we incurred $235 of severance charges for a February 2025 reduction in force to align staffing to our forecasted net sales and $31 of expenses related to our closed Blue Earth facility, which expense amount is not included in Adjusted EBITDA.

Adjustment to EBITDA in 2024 include ($ in thousands):

	●	In connection with the Blue Earth facility closure, we incurred $304 and $571 of retention bonus and other expenses in the quarter and year ended December 31, 2024, respectively, which expense amount is not included in Adjusted EBITDA.

($ in millions)	Last Twelve Months ("LTM") Ended in Quarter
	Q4 2022			Q1 2023			Q2 2023			Q3 2023			Q4 2023			Q1 2024			Q2 2024			Q3 2024			Q4 2024			Q1 2025			Q2 2025			Q3 2025			Q4 2025
Net Sales	$	134.1		$	138.3		$	140.8		$	138.9		$	139.3		$	138.7		$	137.5		$	135.6		$	128.1		$	120.8		$	117.6		$	116.7		$	118.4

Gross Profit $ - Adjusted		20.5			21.9			22.4			21.4			23.1			23.1			22.2			20.7			16.7			14.4			14.6			15.8			18.0
Gross Margin % - Adjusted		15.3	%		15.8	%		15.9	%		15.4	%		16.6	%		16.6	%		16.1	%		15.3	%		13.1	%		11.9	%		12.4	%		13.5	%		15.2	%

EBITDA - Adjusted	$	5.8		$	6.7		$	6.8		$	6.0		$	8.0		$	8.1		$	7.3		$	5.9		$	2.1		$	(0.5	)	$	(0.4	)	$	0.7		$	2.5

Contact

Andrew D. C. LaFrence

Chief Financial Officer and Senior Vice President of Finance

alafrence@nortechsys.com

952-345-2243

Nortech Systems Reports Fourth Quarter Results