Nortech Systems Inc. Files 10-Q for Q1 2024

TL;DR

<b>Nortech Systems Inc. filed its Q1 2024 10-Q, detailing financial activities, agreements, and stock-based compensation.</b>

AI Summary

NORTECH SYSTEMS INC (NSYS) filed a Quarterly Report (10-Q) with the SEC on May 14, 2024. Nortech Systems Inc. reported on its Q1 2024 performance, ending March 31, 2024. The company is involved in an agreement with Marpe Technologies LTD Member and The BIRD Foundation. Payments were received for the delivery of EMS products to Abilitech Medical Inc. A loss on a long-term purchase commitment related to Abilitech Medical Inc. was noted. Details on restricted stock, RSUs, and employee stock options under the 2017 Stock Incentive Plan were provided.

Why It Matters

For investors and stakeholders tracking NORTECH SYSTEMS INC, this filing contains several important signals. The filing provides a quarterly update on Nortech's financial health and operational activities, crucial for investors to assess performance. Specific mentions of agreements and payments related to Marpe Technologies LTD Member and Abilitech Medical Inc. highlight key business relationships and potential revenue streams.

Risk Assessment

Risk Level: low — NORTECH SYSTEMS INC shows low risk based on this filing. The filing is a standard quarterly report with no immediate red flags, indicating a low level of immediate risk.

Analyst Insight

Monitor future filings for updates on the agreements with Marpe Technologies LTD Member and Abilitech Medical Inc., and track the performance of stock-based compensation plans.

Key Numbers

• 2024-03-31 — Report End Date (Q1 2024)
• 2024-05-14 — Filing Date (10-Q Filing)
• 1990-12-17 — Name Change Date (Former Company Name Change)
• 1988-11-13 — Name Change Date (Former Company Name Change)

Key Players & Entities

• NORTECH SYSTEMS INC (company) — Filer
• Marpe Technologies LTD Member (company) — Agreement Party
• The BIRD Foundation (company) — Agreement Party
• Abilitech Medical Inc (company) — Customer/Commitment Party
• David Kunin (person) — Member
• Bank of America (company) — Lender

FAQ

Risk Factors

• Loss on Long-Term Purchase Commitment [medium — financial]: The company recognized a loss on a long-term purchase commitment related to Abilitech Medical Inc.

Industry Context

Nortech Systems Inc. operates in the Electronic Components, NEC industry, which involves the manufacturing and distribution of electronic components.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring regular disclosures of financial and operational information to the SEC.

What Investors Should Do

1. Analyze the financial statements for revenue trends and profitability in the upcoming filings.
2. Investigate the nature and impact of the 'Loss on Long-Term Purchase Commitment' with Abilitech Medical Inc.
3. Track the vesting and exercise of stock options and RSUs as disclosed in the filing.

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-05-14: Filing Date — Date the 10-Q was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a snapshot of the company's financial condition and performance during the quarter.)

RSU

Restricted Stock Unit, a form of equity-based compensation. (Indicates how the company compensates its employees and executives, impacting dilution and expenses.)

Year-Over-Year Comparison

This is the initial filing analyzed, so no comparison to a previous filing is available.

Filing Documents

• nsys20240331_10q.htm (10-Q) — 839KB
• ex_667418.htm (EX-31.1) — 13KB
• ex_667419.htm (EX-31.2) — 13KB
• ex_667420.htm (EX-32) — 8KB
• 0001437749-24-016630.txt (&nbsp;) — 4871KB
• nsys-20240331.xsd (EX-101.SCH) — 45KB
• nsys-20240331_def.xml (EX-101.DEF) — 316KB
• nsys-20240331_lab.xml (EX-101.LAB) — 308KB
• nsys-20240331_pre.xml (EX-101.PRE) — 344KB
• nsys-20240331_cal.xml (EX-101.CAL) — 51KB
• nsys20240331_10q_htm.xml (XML) — 687KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION PAGE Item 1 -

Financial Statements

Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income 3 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Cash Flows 5-6 Condensed Consolidated Statements of Shareholders' Equity 7 Condensed Notes to Consolidated Financial Statements 8-15 Item 2 -

Management's Discussion and Analysis of Financial Condition And Results of Operations

Management's Discussion and Analysis of Financial Condition And Results of Operations 15 Item 3 -

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 19 Item 4 -

Controls and Procedures

Controls and Procedures 20

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1 -

Legal Proceedings

Legal Proceedings 21 Item 1A. -

Risk Factors

Risk Factors 21 Item 2 - Unregistered Sales of Equity Securities, Use of Proceeds 21 Item 3 - Defaults on Senior Securities 21 Item 4 - Mine Safety Disclosures 21 Item 5 - Other Information 21 Item 6 - Exhibits 22

SIGNATURES

SIGNATURES 23 2 PART

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE DATA) THREE MONTHS ENDED MARCH 31, 2024 2023 Net sales $ 34,215 $ 34,888 Cost of goods sold 28,767 29,404 Gross profit 5,448 5,484 Operating expenses: Selling expenses 805 890 General and administrative expenses 3,170 3,265 Research and development expenses 318 276 Total operating expenses 4,293 4,431 Income from operations 1,155 1,053 Other expense Interest expense ( 167 ) ( 110 ) Total other expense ( 167 ) ( 110 ) Income before income taxes 988 943 Income tax expense 223 262 Net income $ 765 $ 681 Income per common share: Basic $ 0.28 $ 0.25 Weighted average number of common shares outstanding - basic 2,742,511 2,692,033 Diluted $ 0.26 $ 0.23 Weighted average number of common shares outstanding - dilutive 2,908,457 2,903,635 Other comprehensive income Foreign currency translation (loss) gain ( 183 ) 40 Comprehensive income, net of tax $ 582 $ 721 See Accompanying Condensed Notes to Condensed Consolidated Financial Statements. 3 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECMEBER 31, 2023 (IN THOUSANDS, EXCEPT SHARE DATA) MARCH 31, 2024 DECEMBER 31, 2023 (1) ASSETS Current assets: Cash $ 4,028 $ 960 Restricted cash - 715 Accounts receivable, less allowances of $ 292 and $ 358 , respectively 16,051 19,279 Inventories, net 22,951 21,660 Contract assets 14,194 14,481 Prepaid assets and other assets 1,892 1,698 Total current assets 59,116 58,793 Property and equipment, net 6,134 6,513 Operating lease assets, net 7,339 6,917 Deferred tax assets 2,640 2,641 Other intangible assets, net 223 263 Total assets $ 75,452

View Full Filing

View this 10-Q filing on SEC EDGAR