Nortech Systems reported third‑quarter 2025 revenue of $30.5 million, a 2.9% year‑over‑year decline that reflects continued headwinds in the aerospace and defense sector and delays in customer approvals. The decline was driven by a 4.2% drop in the Aerospace & Defense segment, offset by a modest 1.5% increase in the Medical Imaging segment, which benefited from a small uptick in diagnostic equipment orders.
Net loss per share narrowed to $0.05, compared with a $0.27 loss per share in Q3 2024. The improvement stems from disciplined cost management and operational restructuring that reduced manufacturing overhead, while the company’s focus on high‑margin product lines helped stabilize earnings. Gross profit margin expanded to 16.5% from 12.2% in the prior year, driven by a shift toward higher‑margin industrial and medical device revenue and improved pricing power in those segments.
Management guided that fiscal 2025 and 2026 will continue to post losses, citing persistent demand softness in defense programs and the need to invest in nearshoring initiatives. The company’s AS9100:D certification for its Monterrey, Mexico facility is positioned to strengthen its aerospace and industrial capabilities, but the certification alone is insufficient to offset the broader market slowdown. The 90‑day backlog rose to $31.3 million, indicating near‑term revenue visibility but also highlighting the lag between order intake and revenue recognition.
Investor sentiment was negative following the release. Market participants focused on the revenue decline, the continued per‑share loss, and the forward guidance that projects ongoing losses for the next two fiscal years. These factors outweighed the margin improvement and cost‑control achievements highlighted by management.
CEO Jay D. Miller emphasized that the company’s restructuring efforts and cost discipline are paying off, noting that “the planned positive shift from first builds to recurring production across programs transferred between our plants is due to increased manufacturing efficiencies.” He added that the AS9100:D certification “underscores Nortech’s capability to deliver complex, high‑reliability products for demanding applications,” reinforcing the company’s strategic positioning in the nearshoring landscape.
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