Nortech Systems (NSYS) investor relations material

Executive summary

• Q3 2025 net sales were $30.5 million, down 2.9% year-over-year, with improved gross margin and operational efficiency driven by restructuring and cost discipline initiatives.

• Net loss for Q3 2025 narrowed to $146,000 ($0.05 per share), a significant improvement from Q3 2024, with adjusted EBITDA rising to $1.3 million.

• Strong quoting activity and customer backlog of $77.3 million as of September 30, 2025, with a 90-day shipment backlog of $31.3 million.

• Monterrey facility achieved AS9100:D and CMMC 2.0 certifications, enhancing aerospace, industrial, and defense market capabilities.

• Restructuring charges related to facility closure and staff reductions totaled $266,000 for the nine months ended September 30, 2025.

Financial highlights

• Q3 2025 net sales: $30.5 million (down 2.9% YoY); nine months: $88.1 million (down 11.5% YoY).

• Q3 2025 gross profit: $5.0 million (16.5% margin), up from $3.8 million (12.2%) in Q3 2024.

• Q3 2025 operating income: $945,000 (3.1% margin); net loss: $146,000; adjusted EBITDA: $1.3 million.

• Cash at September 30, 2025: $1.3 million; line of credit borrowings: $12 million.

• Inventory reduced to $18.4 million from $21.6 million at year-end 2024; accounts receivable rose to $18.8 million.

Outlook and guidance

• Management expects continued sales momentum, improved manufacturing efficiencies, and reduced borrowings in Q4 2025.

• Focus on strengthening the balance sheet, reducing inventory, and closing a new asset-backed credit line in early 2026.

• Liquidity is expected to be sufficient for the next twelve months, assuming successful refinancing of the Revolver.