© Nortech Systems Electronics Production | November 17, 2020
Nortech’s looking to create positive momentum for 2021
Nortech Systems reported net sales of USD 26.3 million for the third quarter, 2020, compared with USD 30.1 million for the third quarter of 2019.
Operating income for the third quarter of 2020 was USD 2.7 million which includes a gain on sale of property and equipment of USD 3.8 million; this compares with operating income of USD 0.7 million for the third quarter of 2019. Net income for the third quarter of 2020 was USD 2.0 million, compared with net income for the third quarter of 2019 of USD 0.4 million. Nortech’s backlog at the end of the third quarter 2020 was USD 45.8 million. The company closed on sale and leaseback agreements with Essjay Investment Company, regarding its manufacturing facilities in Bemidji and Mankato, Minnesota during the third quarter of 2020. The Company received net proceeds from the sale of approximately USD 6.0 million and recorded a gain on sale of property of equipment of USD 3.8 million. At the same time Nortech entered into a lease agreement for the Bemidji, Minnesota facility and the Mankato, Minnesota facility for an initial 15-year term, with multiple 5-year renewal options. “Although our third quarter revenue, gross profit and backlog have been impacted by the COVID-19 pandemic, we are pleased with our recent improving bookings trend, and the strides we have proactively made to improve our financial liquidity with our sale and leaseback closing, the PPP loan and the plant consolidation continuing as planned. We expect this will allow us to operate through the current COVID-19 pandemic, invest in the business, create positive momentum for 2021, and succeed long term,” says Jay D. Miller, Chief Executive Officer and President, in a press release. The company says that its Merrifield production facility consolidation is on track and expected to be complete on or before December 31, 2020. By the end of 2020, the Nortech will shift nearly all of its Printed Circuit Board (PCB) manufacturing to the Mankato, Minnesota production facility, Nortech’s PCB center of excellence, and much of its complex wire and cable assembly production to its Bemidji, Minnesota production facility, the company’s wire and cable assembly center of excellence. This consolidation is impacting approximately 60 employees, who have been offered positions at other Nortech facilities in Minnesota.