Correcting Nortech Systems Second Quarter Earnings Release Issued August 12; Corrected Figures Show $0.12 E.P.S. for Quarter vs. $0.09 in 1998.In BW0273 from August 12 (MN-NORTECH-SYSTEMS) reports second quarter results, E.P.S. should read $0.12 (sted $0.09). An overstatement o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o of the tax rate for the second quarter ended June June: see month. 30, 1999, negatively affected the reported quarterly net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , the income per share from continuing operations and the overall income per share. Six-month figures issued August 12, 1999 are correct. The complete corrected release follows. -0-
( BW)(MN-NORTECH-SYSTEMS)(NSYS) Nortech Systems Reports Second Quarter
Results; Announces Intended Sales of Imaging Technologies and Medical
Services Operations
Business Editors
MINNEAPOLIS--(BUSINESS WIRE)--Aug. 16, 1999--
Nortech Systems, Inc. (Nasdaq:NSYS) reported net sales of
$9,421,813 from continuing operations for the second quarter ended
June 30, 1999, compared with net sales of $8,374,280 for the same
period in 1998, an increase of 12.5 percent. Nortech Systems also
reported net income from continuing operations for the second quarter
of $275,744, or $0.12 per share, compared with $221,468, or $.09 per
share, for the same period in 1998.
For the six months ended June 30, 1999, Nortech Systems reported
net sales from continuing operations of $18,889,152, compared with
$17,603,629 for the same period in 1998, an increase of seven percent.
Net income from continuing operations for the six-month period ended
June 30, 1999, was $630,542, or $.27 per share, compared with
$502,173, or $.22 per share, for the same period in 1998.
The company also announced its intent to sell both its Imaging
Technologies Division and medical service bureau subsidiary. The two
transactions are expected to be completed during the third quarter.
Accordingly, the company has treated these two entities as
discontinued operations for accounting purposes, and the company has
recognized the expected costs of concluding these transactions in the
second quarter.
Including discontinued operations, the company reported a net
loss of $1,159,464, or $.49 per share, for the quarter ended June 30,
1999. For the six-month period, the company reported a net loss of
$910,757, or $.39 per share. The net loss for the second quarter
includes a non-cash, non-recurring charge estimated at $1.2 million on
the sale of discontinued operations.
"We decided to sell Imaging after carefully evaluating a range of
options," says Quent Finkelson, Chairman, President & CEO of Nortech
Systems. "Consolidation in the monitor industry and downward price
pressure during the past 18 months have greatly reduced profit margins
in this business. Also, the accelerating pace of technological change
in the industry will require significant ongoing research and
development investment to keep pace.
"As mentioned at the annual shareholders meeting in May, and as
reported by industry analysts such as Technology Forecasters, the
electronics contract manufacturing industry is growing more than 20
percent annually," comments Finkelson. "With this outlook, we are
confident the best long-term strategy for our company is to focus on
the core contract manufacturing operations, which remain strong,"
notes Finkelson.
"We are certain we can achieve greater shareholder value by
continuing to grow this core business through improved operational
performance and internally generated profits," says Finkelson. "We
will also consider acquisitions that would enhance the existing
synergy among our five contract manufacturing facilities." Adds
Finkelson, "We believe that our broad manufacturing capabilities
position us well to benefit from the ongoing growth in outsourcing by
many of our OEM customers."
During the first half of 1999, revenue for the Contract
Manufacturing group grew 7.3 percent to $18,889,152, representing 91.8
percent of corporate revenue for the six-month period. During fiscal
1998, revenue for the Contract Manufacturing group grew 7.5 percent,
representing 88 percent of corporate revenue.
Nortech Systems, Inc., based in Wayzata, Minn., is a manufacturer
of wire harnesses, cable and electromechanical assemblies, printed
circuit board assemblies and higher-level assemblies for a wide range
of commercial and defense industries. Nortech Systems has additional
Minnesota facilities in Aitkin, Bemidji, Fairmont and Merrifield; and
facilities in Augusta, Wis.
Nortech Systems is traded on the Nasdaq Stock Market under the
symbol NSYS.
Fax-On-Demand Information: To receive this press release or other
Nortech Systems company information by fax, call Nortech Systems' free
"Fax On Demand" service toll-free at 1-888-286-8106 and follow the
easy, step-by-step instructions. To receive the most recent press
release, press 1. For an index of all available information, press 2.
If you already have an index and wish to place an order, press 3.
-0-
TABLE 1: Segment Reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four Information -- Six-Month Figures June 30, 1999 June 30, 1998 (unaudited) (unaudited) Business Segment Net Revenues Contract Manufacturing $18,889,152 $17,603,629 Display Products 1,458,500 2,264,580 Medical Management 210,071 206,360 ------- ------- Total $20,557,723 $20,074,569 Business Segment Profit/(Loss) Contract Manufacturing $630,542 $502,173 Display Products (308,673) (22,360) Medical Management (52,626) (45,543) -------- -------- Total $269,243 $434,270 Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statements of Operations - Unaudited 2nd quarter ended Six months ended June 30, June 30, 1999 1998 1999 1998 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 $9,421,813 $8,374,280 $18,889,152 $17,603,629 Net 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. - 424,223 367,417 970,064 831,378 Continuing Ops. Tax Provision 148,479 145,949 339,522 329,205 Net Income - 275,744 221,468 630,542 502,173 Continuing Ops. Income Per Share - $0.12 $0.09 $0.27 $0.22 Continuing Ops. Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: Ops., Net of Income Taxes Net Income/ (Loss) (255,208) (33,630) (361,299) (67,903) from Operations Estimated (Loss) (1,180,000) 0 (1,180,000) 0 on Sale of Operations Total Discontinued (1,435,208) (33,630) (1,541,299) (67,903) Ops., Net of Taxes Income/ (Loss) Per ($0.61) ($0.01) ($0.66) ($.03) Share - Discontinued Ops. Net Income/ (Loss) ($1,159,464) $187,838 ($910,757) $434,270 Net Income/ (Loss) ($0.49) $0.08 ($0.39) $0.19 Per Share Weighted Average 2,351,377 2,345,262 2,351,377 2,345,262 Number of Shares Condensed Balance Sheets June 30, Dec. 31, 1999 1998 (unaudited) (audited) Current Assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. $16,586,351 $16,201,487 Property and Other Assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 8,381,132 8,527,075 Total Assets $24,967,483 $24,728,562 ----------- ----------- Current Liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. 6,747,276 5,217,454 Long-Term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. 10,765,383 11,146,537 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. 7,454,824 8,364,571 Total Liabilities & Shareholders' Equity $24,967,483 $24,728,562 ----------- ----------- |
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