Earnings Labs

Nortech Systems Incorporated (NSYS)

Q3 2016 Earnings Call· Sun, Nov 6, 2016

$13.80

-3.16%

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Transcript

Operator

Operator

Good day everyone and welcome to today's program. At this time, all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question and answer session. [Operator Instructions] It is now my pleasure to turn the conference over to Ms. Paula Graff. Please go ahead ma'am.

Paula Graff

Analyst

Thank you. Good morning and welcome to Nortech Systems' third quarter 2016 conference call. I'm Paula Graff, Vice President and CFO and with me is Rich Wasielewski, Nortech's President and CEO. Following my introduction, Rich will offer comments on our third quarter results, our industry and the markets we serve. Then we’ll open up the call for all your questions. Before we begin, please be advised that the statements made during this call may be forward-looking and are subject to risk factors and uncertainties. Please see the complete Safe Harbor statements in our press release and our SEC filings. Now I will turn over the call to Rich Wasielewski. Rich.

Richard Wasielewski

Analyst

Thank you, Paula, and good morning everyone. Yesterday we reported net sales of $29.7 million for the third quarter, up slightly from the prior year period. Sequentially sales were up 3% with continued mixed performance across customers and markets. For the nine months sales increased 5% to $87.6 million. And our overall backlog grew by 5% sequentially and provides us with some momentum as we move into the fourth quarter. Our third quarter results began to show signs of progress as we continue to focus on delivering on our business strategies of growing our medical market and improving our profitable and asset management with our defense and industrial customers. The medical revenue grew 27% year-over-year in the quarter and that's the first overlapping period since we purchased Devicix in July of 2015. This is the first experienced growth we had. The Devicix revenue in the quarter was $1.8 million compared to $1 million last year accounted for 25% of the medical increase, while our other core medical customers accounted for the other 75. The overall medical revenue is now up 34% for the nine months. We continue to promote our full-service solutions including product development engineering, design transfer to manufacturing and production. The medical backlog continues to grow and increasing 7% sequentially and 35% year-over-year for all medical customers. The defense markets were up 6% in the quarter compared to prior year and 16% for the nine months. Although backlog is down 25% in the third quarter we're seeing good quoting activity in larger and longer term opportunities. It's DoD funding season so we are focused on filing the money and growing the backlog in the next several months. For industrial customers again it was mixed results. On a sequential basis sales were up 2% for the quarter. Year-over-year the…

Operator

Operator

Richard Wasielewski

Analyst

Well, I would like to thank everyone and we're going to finish out the year here and then probably see you some time - talk to you sometimes in the middle of March. Thank you for your interest and we look forward to updating you then. Have a great day.