CORRECTING and REPLACING Nortech Systems Reports Second Quarter Results; From First Quarter, Revenue Rises 5% and Operating Income Climbs 27%.Business Editors CORRECTION...by Nortech Systems MINNEAPOLIS--(BUSINESS WIRE)--July 29, 2003 In BW 5792 (MN-NORTECH-SYSTEMS) Reports Second Quarter Results, third graph, second sentence, should read xxx or $0.22 per share (sted $0.28). Also, in the first table, Net Income Per Share, Three months ended June 30, 2002, should read $0.22 (sted $0.28). The corrected release reads: NORTECH SYSTEMS REPORTS SECOND QUARTER RESULTS; FROM FIRST QUARTER, REVENUE RISES 5% AND OPERATING INCOME Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. CLIMBS 27% Nortech Systems Conference Call Announcement / 1-888-566-6168 Wednesday, July 30, at 10:00 a.m. (CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT ) Nortech Systems, Inc. (Nasdaq:NSYS) today reported second quarter results that represent sequential increases in both revenue and income. Compared with the first quarter of 2003, sales increased more than five percent and net operating income increased 27 percent. "These latest results reflect significant quarter-to-quarter improvements, a positive trend that we believe will continue through the rest of the year," says Mike Degen, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Nortech Systems. For the second quarter of 2003, Nortech Systems reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $14.5 million and net income of $226,786, or $0.09 per share. For the same period in 2002, sales were $15.2 million and net income was $534,269, or $0.22 per share. For the six-month period, the company reported net sales of $28.3 million and net income of $348,311, or $0.14 per share. For the same period in 2002, sales were $30.6 million and net income was $1,153,189, or $0.48 per share. "As we've anticipated, some softness continued into the second quarter, related primarily to customer order delays for our commercial wire and cable business," explains Degen "While these delays remain challenging, there are positive signs on the horizon. Quoting activity increased in all our divisions during the second quarter. We are also winning new business from both new and existing customers across a range of industries." Since January, the company's Commercial Wire Products group has added four new customers including a three-year, $1.5 million cable assemblies contract signed last week. The Aerospace Systems division, which serves U.S. defense contractors Noun 1. defense contractor - a contractor concerned with the development and manufacture of systems of defense armed forces, armed services, military, military machine, war machine - the military forces of a nation; "their military is the largest in the region"; , has also expanded its customer base during 2003. Programs supported by Aerospace Systems include mobile communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. , field training and flight navigation. "We're very pleased with this new business activity," Degen says. "Although the economic environment continues to make long-term predictions difficult, our outlook is cautiously optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op . The commercial wire business - a key element of our company - appears to be regaining its strength." Last month, Nortech Systems was cited by USA Today USA Today National U.S. daily general-interest newspaper, the first of its kind. Launched in 1982 by Allen Neuharth, head of the Gannett newspaper chain, it reached a circulation of one million within a year and surpassed two million in the 1990s. as a 'contrarian bet' for having a low share price in spite of strong five-year financial performance. The company ranked fifth in a list of ten companies with solid track records in three key financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. : revenue, earnings per share and return on shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . Over the past five years, Nortech Systems' average revenue growth was 13 percent, its average earnings per share growth was 16.2 percent and its average return on shareholders' equity was 19.5 percent, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. analysis by Multex and Lipper. About Nortech Systems Inc. Nortech Systems, Inc. (www.nortechsys.com), based in Wayzata, Minn., is a full-service electronics manufacturing services Electronic manufacturing services (EMS) is term used for companies that design, test, manufacture, distribute and provide return/repair services for electronic component and assemblies for original equipment manufacturers (OEMs). (EMS) provider of wire and cable assemblies, printed circuit board assemblies, higher-level assemblies and box builds for a wide range of industries. Markets served include medical, automotive, defense, computer, commercial, recreational, government and consumer. In Minnesota, Nortech Systems has additional facilities in Baxter, Bemidji, Fairmont and Merrifield. The company also has facilities in Augusta, Wis., and Monterrey, Mexico. Nortech Systems is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol NSYS. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. While this release is based on management's best judgment and current expectations, actual results may differ based on many factors, including the company's competitive performance and changes in market conditions. Conference Call: Nortech Systems announces a conference call to be held at 10:00 a.m. CDT on Wednesday, July 30, 2003, to discuss second quarter results. Anyone interested in participating in the conference call with Mike Degen, the president and CEO of Nortech Systems, can dial toll-free at 1- 888-566-6168 (Passcode "Second Quarter Results"). Beginning one hour after this conference call concludes, a taped replay will be available toll-free at 1-800-839-2234, until 5:00 p.m. on Wednesday, August 13.
Condensed Statements of Operations - Unaudited
Three months ended June 30, Six months ended June 30,
2003 2002 2003 2002
Net Sales $14,486,982 $15,243,680 $28,257,270 $30,606,576
Net Operating
Income 251,786 882,269 450,311 1,904,189
Tax Provision 25,000 348,000 102,000 751,000
Net Income 226,786 534,269 348,311 1,153,189
Net Income Per
Share $0.09 $0.22 $0.14 $0.48
Weighted Average
Number of
Shares 2,473,760 2,394,189 2,465,122 2,383,190
Condensed Balance Sheets
June 30, Dec. 31,
2003 2002
(unaudited) (audited)
Current Assets $22,049,640 $22,197,384
Property and Other Assets 7,180,718 7,405,016
Total Assets $29,230,358 $29,602,400
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Current Liabilities 7,091,680 7,931,326
Long-Term Debt 8,418,622 8,580,944
Shareholders' Equity 13,720,056 13,090,130
Total Liabilities & Shareholders' Equity $29,230,358 $29,602,400
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