Nortech Systems (NSYS) Q1 2026 earnings summary

Executive summary

• Achieved fourth consecutive quarter of positive operating and EBITDA results, driven by strategic restructuring and operational improvements in late 2024 and early 2025.

• Net sales for Q1 2026 rose 12.7% year-over-year to $30.3 million, with significant growth in Medical Device, Medical Imaging, and Aerospace and Defense markets.

• Income from operations improved by $1.7 million year-over-year, with operating income of $47,000 compared to a $1.6 million loss in Q1 2025.

• Net loss narrowed to $34,000 ($0.01/share) from $1.3 million ($0.48/share) in Q1 2025.

• Customer backlog reached $90.8 million as of May 31, 2026, up 32.9% year-over-year, with a 90-day backlog of $31.5 million.

Financial highlights

• Net sales for Q1 2026 were $30.3 million, up 12.7% year-over-year.

• Gross profit increased 52.8% year-over-year to $4.7 million, with gross margin improving to 15.5% (up 410 basis points year-over-year).

• Operating income was $47,000, reversing a $1.6 million loss in Q1 2025.

• Adjusted EBITDA was $350,000, versus a $1 million loss in Q1 2025.

• Cash and restricted cash at quarter end totaled $2.2 million; revolving line of credit balance was $7.2 million.

Outlook and guidance

• Increased backlog provides strong visibility into future revenue and supports a positive outlook for 2026.

• Management expects continued improvement in gross margins, manufacturing efficiency, and quality metrics.

• Existing financing, cash flows, and cash on hand are expected to be sufficient for working capital, capital expenditures, and debt repayments for the next year.

• Nearshoring and a strong North American and Asian footprint position the company to support evolving customer strategies.

• The company is evaluating the impact of new global tariffs and seeking reimbursement for prior tariffs.