Nortech Systems Inc. reported third‑quarter 2025 results that show a narrowing net loss and a dramatic rebound in adjusted earnings before interest, taxes, depreciation and amortization. Revenue fell 3% year‑over‑year to $30.5 million, while the company posted a net loss of $146,000 (or $0.05 per share) compared with a $739,000 loss ($0.27 per share) in Q3 2024. Adjusted EBITDA, however, surged to $1.3 million from $0.1 million a year earlier, underscoring the impact of the company’s restructuring and cost‑discipline initiatives.
The modest revenue decline was largely driven by a 5% drop in sales from the legacy medical‑imaging segment, which has been experiencing slower demand. This weakness was partially offset by a 12% increase in aerospace and defense revenue, fueled by new contracts at the Monterrey, Mexico facility and a broader near‑shoring strategy that has attracted U.S. defense customers. The shift to recurring production and tighter supply‑chain controls helped lift gross profit by 31% to $5.025 million, providing the margin expansion that translated into the adjusted EBITDA jump.
Management attributed the profitability turnaround to disciplined cost management and operational efficiencies. CEO Jay D. Miller noted that “the AS9100:D certification enhances our service offerings and positions us to leverage near‑shoring advantages in the aerospace market.” The certification, achieved at the Monterrey plant, signals compliance with the most stringent quality standards for aerospace and defense manufacturing, giving Nortech a competitive edge in a market that demands high reliability.
The company’s 90‑day backlog reached $31.3 million as of September 30, up from $29.6 million a year earlier, indicating growing demand and providing visibility into near‑term revenue. While the company did not issue new guidance, management expressed confidence that the combination of cost discipline, improved margins, and a growing backlog will support continued progress toward profitability.
The results demonstrate that Nortech’s restructuring strategy is beginning to pay off, with a significant reduction in net loss and a sharp rise in adjusted EBITDA. The certification and backlog growth reinforce the company’s positioning in high‑value aerospace and defense markets, suggesting a positive trajectory for future quarters.
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