8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  November 14, 2018

NORTECH SYSTEMS INCORPORATED

(Exact name of registrant as specified in charter)

Minnesota	0-13257	41-16810894
(State or other jurisdiction	(Commission	IRS Employer
of incorporation)	File Number)	Identification No.)

7550 Meridian Circle N, Maple Grove, MN 55369

(Address of principal executive offices)

(952) 345-2244

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02 Results of Operations and Financial Condition

The Registrant issued a news release on November 14, 2018, entitled “Nortech Systems Reports Third Quarter Results” regarding its consolidated third quarter results and financial condition.  A copy of this news release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

99.1News Release dated November 14, 2018 (furnished)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 14, 2018

Nortech Systems Incorporated

(Registrant)

/s/ Constance M. Beck

Constance M. Beck

Chief Financial Officer

2

EX-99.1

Exhibit 99.1

Contact:	Connie Beck
	Nortech Systems Incorporated
	(952) 345-2244
	or
	Warren Djerf
	Brookside Communications Group
	952-920-3908 / warren@brookcomm.net

Nov. 14, 2018

Nortech Systems Reports Third Quarter Results

MINNEAPOLIS — Nortech Systems Inc. (NASDAQ: NSYS) today reported net sales of $29.6 million for the third quarter ended September 30, which includes $1.9 million of revenue recognized under new FASB accounting guidelines adopted this fiscal year. This compares with $28.3 million reported for the third quarter of 2017. On a pro forma basis to adjust for this change in accounting guidance, sales were $27.7 million for the third quarter of 2018.

For the nine months ended September 30, Nortech’s net sales were $84.5 million, which includes $4.2 million of revenue recognized under the new FASB guidelines. For the comparable period in 2017, net sales were $86.8 million.

Operating income for the third quarter was $649,000, compared with $284,000 for the third quarter of 2017. For the nine-month period, Nortech reported operating income of $1.3 million, compared with $500,000 for the same period in 2017.

Nortech Systems reported net income in the third quarter of $364,000, or $0.14 per diluted common share, compared with $43,000, or $0.02 per diluted common share, for the same period last year. For the nine months ended September 30, 2018, Nortech reported net income of $362,000, or $0.13 per diluted common share. This compares with net income of $13,000, or $0.00 per diluted common share, for the same period in 2017.

“We’re encouraged by our quarterly performance and continued profit improvement,” said Rich Wasielewski, Nortech Systems’ president and CEO. “Our customers remain optimistic and confident, influenced by a strong economy, an increase in defense spending and higher medtech investing.”

Nortech continues to face challenges related to electronic component shortages, which are expected to continue into next year. The company estimates these shortages had a negative revenue impact of approximately five percent in the third quarter, with profitability also affected by related inefficiencies in production and increased inventory levels. Nortech is working with its customers and supply chain partners to reduce this impact.

-more-

Two facility-related developments expected to provide long-term benefits are scheduled to conclude by year-end: the move of Nortech’s Monterrey, Mexico, operations into a new larger and more efficient facility and the relocation of the Devicix by Nortech medical device product development group to an expanded corporate headquarters building in Maple Grove, Minn.

“These improvements to our infrastructure and operations support our ongoing strategy of equipping the company for future growth and profitability,” concluded Wasielewski. He added that the company’s backlog position of $27.7 million — up double digits both sequentially and year-over-year — should help absorb investment-related costs and provide momentum to finish out the year.

Conference Call

Nortech Systems will hold a conference call at 10:00 a.m. (CST) on Thursday, November 15, 2018, to discuss the company’s third quarter results. Anyone interested in participating in the conference can access the call by dialing 877-407-0782 from within the United States, or 201-689-8567 if calling internationally.

An audio webcast and replay of this conference call can be accessed at the investor relations portion of Nortech Systems’ website at www.nortechsys.com or at www.investorcalendar.com. The telephone replay will be available through November 29, 2018, by dialing 877-481-4010 (from U.S.) or 919-882-2331 (International). To access the replay, the conference PIN #40286 is required.

About Nortech Systems Incorporated

Nortech Systems Incorporated (www.nortechsys.com), based in Maple Grove, Minn., is a full-service electronics manufacturing services (EMS) provider of wire and cable assemblies, printed circuit board assemblies and higher-level complete box build assemblies for a wide range of industries.  Markets served include industrial, medical and aerospace/defense. The company has operations in the U.S., Mexico and China. Nortech Systems Incorporated is traded on the NASDAQ Stock Market under the symbol NSYS.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.  While this release is based on management’s best judgment and current expectations, actual results may differ and involve a number of risks and uncertainties.  Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: volatility in market conditions which may affect market supply of and demand for the company’s products; increased competition; changes in the reliability and efficiency of operating facilities or those of third parties; risks related to availability of labor; commodity and energy cost instability; general economic, financial and business conditions that could affect the company’s financial condition and results of operations; as well as risk factors listed from time to time in the company’s filings with the SEC.

2

Condensed Consolidated Statements of Operations

(in thousands, except for share data)

	As Reported						As Reported					Pro Forma as if the previous accounting guidance was in effect
	THREE MONTHS ENDED						NINE MONTHS ENDED					THREE MONTHS ENDED		NINE MONTHS ENDED
	SEPTEMBER 30,						SEPTEMBER 30,					SEPTEMBER 30,
	Unaudited			Unaudited			Unaudited		Unaudited			Unaudited		Unaudited
	2018			2017			2018		2017			2018		2018
Net Sales	$	29,558		$	28,310		84,543		$	86,762		27,665		$	80,323
Cost of Goods Sold	26,171			24,794			74,311		76,789			24,454		70,291
Gross Profit	3,387			3,516			10,232		9,973			3,211		10,032
	11.5		%	12.4		%	12.1	%	11.5		%	11.6	%	12.5		%
Operating Expenses
Selling Expenses	717			1,144			2,792		3,676			717		2,792
General and Administrative Expenses	2,021			2,088			6,177		6,152			2,021		6,177
Gain on Sale of Property and Equipment	—			—			—		(355		)	—		—
Total Operating Expenses	2,738			3,232			8,969		9,473			2,738		8,969
Income From Operations	649			284			1,263		500			472		1,063
Other Expense
Loss on Extinguishment of Debt	—			—			—		(175		)	—		—
Interest Expense	(170		)	(172		)	(551	)	(453		)	(170	)	(551		)
Income (Loss) Before Income Taxes	479			112			712		(128		)	303		512
Income Tax Expense (Benefit)	115			69			350		(141		)	115		350
Net Income	$	364		$	43		362		$	13		188		$	162
Income Per Common Share - Diluted	$	0.14		$	0.02		0.13		$	0.00		0.07		$	0.06
Weighted Average Number of Common Shares Outstanding - Diluted	2,682,901			2,748,533			2,702,503		2,748,973			2,682,901		2,702,503

Condensed Consolidated Balance Sheets

(in thousands)

	SEPTEMBER 30, 2018		DECEMBER 31, 2017
	Unaudited		Audited
Cash	$	397	$	473
Restricted Cash	236		306
Accounts Receivable	18,979		17,417
Inventories	15,236		18,527
Contract Assets	7,076		—
Prepaid Expenses and Other Current Assets	1,380		1,044
Property and Other Long-term Assets	10,124		10,204
Goodwill and Other Intangible Assets, Net	3,953		4,114
Total Assets	$	57,381	$	52,085
Accounts Payable	$	16,887	$	11,699
Other Current Liabilities	6,222		6,346
Long Term Line of Credit	8,058		8,503
Long-term Debt and Other Long-term Liabilities	4,931		5,712
Shareholders’ Equity	21,283		19,825
Total Liabilities and Shareholders’ Equity	$	57,381	$	52,085

3