Nortech Systems Incorporated is a full-service global EMS contract manufacturer specializing in complex electromedical, electromechanical devices, and serving markets including medical, aerospace, defense, and industrial sectors.

# Nortech Systems Incorporated - Company Summary

## Core Business
- **Type:** Full-service global Electronic Manufacturing Services (EMS) contract manufacturer
- **Industry Focus:** Medical Device, Medical Imaging, Aerospace and Defense, Industrial Markets
- **Specialization:** Engineering design and manufacturing of complex electromedical devices, electromechanical systems, assemblies, and components
- **Services:** 
  - Project management
  - Design and testing
  - Prototyping
  - Manufacturing
  - Supply chain management
  - Post-market services
- **Manufacturing Capabilities:** 
  - Complex electromedical and electromechanical products 
  - Wire and cable assemblies
  - Printed circuit board assemblies
  - Higher-level assemblies and box builds
- **Design Support:** Provides technical support, design-for-manufacturing, and testing to accelerate production and assure quality and cost standards

## Facilities
- **U.S. Locations:** Maple Grove (headquarters), Bemidji, Mankato, Milaca (Minnesota)
- **International Facilities:** Monterrey, Mexico; Suzhou, China
- **Certifications & Registrations:** 
  - ISO 9001, ISO 13485, AS9100 certifications
  - FDA registration at Milaca facility
  - China National Medical Imaging Administration certification for Suzhou operations

## Customer Base & Sales
- **Major Customers:** 
  - A very large customer accounted for 27.7% of net sales in 2024
  - Two other customers accounted for 25.7% and 10.3% in 2023
- **Market Share:** Over 50% of net sales from medical-related markets (Medical Device & Medical Imaging)
- **Revenue (2024):** Approximately **$128.1 million**
- **Net Income (2024):** Net loss of **$1.3 million** ($0.47 per share)
- **Net Sales (2023):** Approximately **$139.3 million**

## Employees
- **Total Employees:** 744 (701 full-time and 43 part-time/temporary)
- **Manufacturing & Support Staff:** 657 employees
- **Administrative Staff:** 44 employees

## Financial Highlights (2024)
- **Gross Margin:** 13.1% (decreased from 16.6% in 2023)
- **Net Operating Loss:** $0.2 million (compared to $5.95 million income in 2023)
- **Interest Expense:** $744,000
- **Effective Tax Rate:** -37.9% (due to tax benefits and valuation allowance adjustments)

## Operations
- **Sales Concentration:** One customer accounted for 27.7% of sales; two others collectively contributed significant portions
- **Backlog (as of 12/31/2024):** 
  - 90-day backlog: **$26.5 million** (down 24.8% from previous year)
  - Total order backlog: **$65.9 million** (down 28.2%)
- **Supply Chain & Procurement:** Purchases components globally; supply disruptions during COVID-19 led to shifts in procurement strategies
- **Restructuring:** Closed Blue Earth, Minnesota facility in December 2024; ongoing efforts to optimize operations and cost structures

## Key Markets Served
- Medical Device
- Medical Imaging
- Industrial
- Aerospace & Defense

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**Note:** Data reflects operational, financial, and market specifics from the fiscal year ending December 31, 2024, with details on revenues, employee numbers, and customer concentration as provided.

Nortech Systems Incorporated is an experienced contract manufacturing and engineering services provider specializing in complex medical and electromechanical devices, headquartered in Maple Grove, Minnesota.

# Company Overview: Nortech Systems Incorporated

## General Information
Nortech Systems Incorporated is a contract manufacturing and engineering services provider specializing in complex electromedical devices, electromechanical systems, assemblies, and components. The company was established in December 1990 and is headquartered in Maple Grove, Minnesota, with operational facilities located in Minnesota (U.S.), Monterrey (Mexico), and Suzhou (China).

## Services Offered

### Engineering and Technical Services
- **Full Range of Services**: Includes project management, design, testing, prototyping, manufacturing, supply chain management, and post-market services.
- **Products**: Complex electromedical and electromechanical devices, including:
  - Medical devices
  - Wire and cable assemblies
  - Printed circuit board assemblies
  - Higher-level assemblies and box builds

### Manufacturing Capabilities
- **Manufacturing Focus**: Primarily in medical, aerospace and defense, and industrial markets.
- **Contract Manufacturing Segment**: Functions under the Electronic Manufacturing Services (EMS) industry, with over 50% of net sales from medical device and product manufacturing.
- **Quality Assurance**: Certified under ISO 9001, ISO 13485, and AS9100 standards, with FDA registration for the Milaca facility.

## Customer Base
- **Major Clients**: The company services original equipment manufacturers (OEMs) across several industries.
- **Customer Concentration**: Two customers accounted for approximately 36% of net sales in 2023 (25.7% and 10.3% respectively), while one customer represented 26.9% in 2022.

## Financial Overview
- **Employee Count**: As of December 31, 2023, the company has 733 full-time employees and 42 part-time/temporary employees.
- **Operational Facilities**: Various manufacturing sites in the U.S., Mexico, and China ensure the global reach and flexibility to meet diverse market demands.

## Revenue and Income
- **Research & Development Investment**: The company invested approximately $1.2 million in R&D for the year ended December 31, 2023, focusing on developing proprietary manufacturing methods and technologies, especially in complex wire and cable interconnect technologies.
- **Sales Performance**: Significant reliance on larger customers poses a risk; however, the company's diverse market engagement helps mitigate the impact of market fluctuations.

## Strategic Initiatives
- **Business Transformation**: The company is evolving from a transactional price-driven model to a solution-based approach emphasizing value-added services.
- **Market Expansion**: Pursuing strategic opportunities, such as acquisitions and partnerships, to enhance service offerings and competitive advantages.

## Commitment to Quality
- **Quality Systems**: Active management of quality metrics throughout the product lifecycle aims to align with customer requirements and enhance product delivery. 

## Conclusion
Nortech Systems Incorporated is a well-positioned entity in the EMS industry, focusing on high-tech and regulated manufacturing solutions, primarily in the medical sector, while continuously adapting to market demands and improving operational excellence.

NORTECH SYSTEMS INC

10-K / March 31, 2025

10-K / March 20, 2024

10-K / March 31, 2025

Nortech Systems Incorporated - Company Summary

Core Business

Facilities

Customer Base & Sales

Employees

Financial Highlights (2024)

Operations

Key Markets Served