$NSYS

NORTECH SYSTEMS INC

CIK:0000722313|SEC Filings

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Net sales	$ 33,540	$ 30,675	$ 63,856	$ 57,570
Cost of goods sold	27,837	25,838	53,451	49,655
Gross profit	5,703	4,837	10,405	7,915
Operating expenses:
Selling	1,484	1,204	2,815	2,388
General and administrative	3,250	2,589	6,264	5,504
Research and development	346	302	656	628
Restructuring charges				266
Total operating expenses	5,080	4,095	9,735	8,786
Income (loss) from operations	623	742	670	(871)
Other expense:
Interest expense, net	(197)	(257)	(453)	(471)
Income (loss) before income taxes	426	485	217	(1,342)
Income tax expense (benefit)	110	172	(65)	(339)
Net income (loss)	$ 316	$ 313	$ 282	$ (1,003)
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.11	$ 0.12	$ 0.10	$ (0.36)
Weighted average number of common shares outstanding - basic (in shares)	2,805,183	2,773,598	2,795,659	2,767,263
Diluted (in dollars per share)	$ 0.11	$ 0.12	$ 0.09	$ (0.36)
Weighted average number of common shares outstanding - diluted (in shares)	2,999,002	2,954,765	3,007,439	2,767,263
Other comprehensive income (loss)
Foreign currency translation	$ 21	$ 124	$ 90	$ 130
Comprehensive income (loss), net of tax	$ 337	$ 437	$ 372	$ (873)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 282	$ (1,003)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	618	678
Compensation on stock-based awards	320	235
Change in allowance for credit losses	(7)	10
Change in inventory reserves	(311)	351
Deferred taxes	(569)	(700)
Changes in current operating items:
Accounts receivable	(2,705)	(2,842)
Inventories	(3,530)	2,714
Contract assets	(1,795)	(1,192)
Prepaid expenses and other assets	338	(1,647)
Accounts payable	2,077	295
Accrued payroll and commissions	978	(94)
Customer deposits	1,463	36
Other accrued liabilities	392	386
Net cash used in operating activities	(2,449)	(2,773)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		9
Purchases of property and equipment	(323)	(367)
Net cash used in investing activities	(323)	(358)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines of credit	35,061	51,405
Payments to line of credit	(34,198)	(48,485)
Proceeds from term loan	2,200
Payments of debt issuance costs	(290)
Principal payments on term loan	(110)
Principal payments on financing leases	(124)	(85)
Stock award exercises	235	23
Net cash provided by financing activities	2,774	2,858
Effect of exchange rate changes on cash and restricted cash	17	9
Net change in cash and restricted cash	19	(264)
Cash and restricted cash - beginning of period	1,655	916
Cash and restricted cash - end of period	1,674	652
Reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets:
Cash	1,380	652
Restricted cash	294
Total cash and restricted cash reported in the condensed consolidated statements of cash flows	1,674	652
Supplemental disclosure of cash flow information:
Cash paid for interest	279	470
Cash (received) paid for income taxes	(135)	389
Supplemental noncash investing and financing activities:
Property and equipment purchases in accounts payable	17	27
Conversion of notes payable to finance leases		$ 637

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Current assets:
Cash	$ 1,380	$ 1,655
Restricted cash	294
Accounts receivable, less allowance for credit losses of $154 and $161, respectively	19,850	16,998
Inventories, net	24,512	20,695
Contract assets	16,979	15,184
Prepaid assets and other assets	1,279	1,618
Total current assets	64,294	56,150
Property and equipment, net	4,977	5,203
Operating lease assets, net	6,420	7,016
Deferred tax assets	3,963	3,394
Other intangible assets, net	147	156
Deferred line of credit issuance costs, net	244
Total assets	80,045	71,919
Current liabilities:
Lines of credit	7,868	7,000
Current portion of term loan, net of debt issuance costs	432
Accounts payable	14,949	12,809
Accrued payroll and commissions	2,808	1,822
Customer deposits	6,848	5,386
Current portion of operating leases	1,246	1,332
Current portion of finance lease obligations	243	274
Other accrued liabilities	1,644	1,221
Total current liabilities	36,038	29,844
Long-term liabilities:
Term loan, net of debt issuance costs	1,636
Long-term operating lease obligations	5,929	6,476
Long-term finance lease obligations	534	626
Other long-term liabilities	434	426
Total long-term liabilities	8,533	7,528
Total liabilities	44,571	37,372
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; 2,853,766 and 2,786,134 shares issued and outstanding, respectively	29	28
Additional paid-in capital	18,409	17,855
Accumulated other comprehensive loss	(619)	(709)
Retained earnings	17,405	17,123
Total shareholders’ equity	35,474	34,547
Total liabilities and shareholders’ equity	$ 80,045	$ 71,919