NORTECH SYSTEMS INC — Interim / Quarterly Report 1998

Aug 10, 1998

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities exchange Act of 1934 For the quarterly period ended June 30, 1998. ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition period from __ to __. Commission File Number 0-13257. NORTECH SYSTEMS INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its chapter) MINNESOTA 41-1681094 - --------------------------------- ------------------------ (State of other jurisdiction (I.R.S. Employer of Incorporation or organization) Identification No.) 641 EAST LAKE ST. SUITE 244, WAYZATA, MN 55391 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Codes) (612) 473-4102 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE - ------------------------------------------------------------------------------- Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.01 per share per value. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ---------------- ------------------ PAGE 1 APPLICABLE ONLY TO CORPORATE REGISTRANTS; Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of latest practicable data. As of July 31, 1998, there were 2,345,262 shares of the Company's $.01 per share par value common stock outstanding. (The remainder of this page was intentionally left blank.) PAGE 2 NORTECH SYSTEMS INCORPORATED FORM 10-Q QUARTER ENDED JUNE 30, 1998 INDEX PAGE PART I - FINANCIAL INFORMATION Item 1 - Financial Statements 4-8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION Item 2 - Exhibits and Reports on Form 8-K 10 SIGNATURES 11 PAGE 3 NORTECH SYSTEMS INCORPORATED BALANCE SHEETS ASSETS FOR THE SIX MONTHS ENDED JUNE 30, 1998 and DECEMBER 31, 1997

PAGE 4 NORTECH SYSTEMS INCORPORATED BALANCE SHEETS LIABILITIES FOR THE SIX MONTHS ENDED JUNE 30, 1998 and DECEMBER 31, 1997

PAGE 5 NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

PAGE 6 NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

PAGE 7 NORTECH SYSTEMS INCORPORATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

PAGE 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS FOR PERIOD ENDED JUNE 30, 1998 For the quarter ended June 30, 1998, the Company had revenues of $9,582,777 compared to revenues of $9,039,176 for the quarter ended June 30, 1997. The increase in revenues resulted primarily from the additional revenues generated from internal growth. The net income for the three months ended June 30, 1998 was $187,840 or $.08 per share, compared to a net income of $167,252 or $.07 per share, for the three months ended June 30, 1997. The net income for the quarter ended June 30, 1998 was primarily impacted by increased gross profit from the increased revenue. For the six month period ended June 30, 1998, the Company had revenue of $20,074,569 compared to revenue of $17,604,022 for the six months ended June 30, 1997. The net income for the six months ended June 30, 1998 was $434,270 of $.19 per share compared to a net income of 300,007 or $.13 per share, for the six months ended June 30, 1997. Company's 90 day order backlog was $8,159,000 as of June 30, 1998, compared to $7,900,000 at the beginning of the quarter. Based on the current conditions, the Company anticipates revenue levels in the third quarter of 1998 to be slightly higher than the second quarter of 1998. LIQUIDITY AND CAPITAL RESOURCES. The Company's working capital increased to $10,989,219 during the second quarter of 1998, compared to $9,670,225 as of December 31, 1997. The Company believes that its financial stability will continue to improve during 1998 and would expect that its operating cash flow and available credit faculities will be sufficient to fund the expected growth in the near term. PAGE 9 PART II - OTHER INFORMATION ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K. None (The remainder of this page was intentionally left blank.) PAGE 10 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: AUGUST 6, 1998 NORTECH SYSTEMS INCORPORATED -------------- BY: QUENTIN E. FINKELSON ---------------------------------- Quentin E. Finkelson Its President and Chief Executive Officer BY: GARRY M. ANDERLY ---------------------------------- Garry M. Anderly Principal Financial Officer and Principal Accounting Officer PAGE 11