NORTECH SYSTEMS INC Segments Disclosure
NOTE 9. SEGMENT INFORMATION
Our results of operations for the years ended December 31, 2025 and 2024 represent a single operating and reporting segment referred to as Contract Manufacturing within the EMS industry. The Company operates in the Medical Device, Medical Imaging, Aerospace and Defense, and Industrial markets with over 50% of its net sales coming from the medical-related markets. We strategically direct production between our various manufacturing facilities based on a number of considerations to best meet our customers’ needs. Our plants generate net sales over several of the markets the Company serves. We share resources for sales, marketing, engineering, supply chain, information services, human resources, payroll, and all corporate accounting functions. Our chief operating decision maker (the “CODM”) is the Company’s President and Chief Executive Officer. The CODM regularly evaluates financial information on a consolidated basis to assess performance and allocate resources.
The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Net sales | $ | 118,365 | $ | 128,133 | ||||
| Cost of goods sold | 100,359 | 111,411 | ||||||
| Gross profit | 18,006 | 16,722 | ||||||
| Operating expenses: | ||||||||
| Selling | 4,803 | 3,446 | ||||||
| General and administrative | 10,790 | 11,709 | ||||||
| Research and development | 1,172 | 1,191 | ||||||
| Restructuring charges | 266 | 571 | ||||||
| Total operating expenses | 17,031 | 16,917 | ||||||
| Income (loss) from operations | 975 | (195 | ) | |||||
| Other expense: | ||||||||
| Interest expense | (964 | ) | (744 | ) | ||||
| Income (loss) before income taxes | 11 | (939 | ) | |||||
| Income tax expense | 263 | 356 | ||||||
| Net loss | $ | (252 | ) | $ | (1,295 | ) | ||
The Company’s long-lived tangible assets, including the Company’s operating lease assets recognized on the consolidated balance sheets were geographically located as follows as of December 31:
| 2025 | 2024 | |||||||
| United States | $ | 8,876 | $ | 10,429 | ||||
| Mexico | 2,015 | 2,445 | ||||||
| China | 1,328 | 1,497 | ||||||
| Total long-lived tangible assets | $ | 12,219 | $ | 14,371 | ||||
Export net from our U.S. domestic operations represent approximately 3.3% and 3.4% of consolidated net sales for the years ended December 31, 2025 and 2024, respectively. Net sales by our major EMS industry markets are as follows for the years ended December 31:
| 2025 | 2024 | |||||||
| Medical Device | $ | 31,930 | $ | 34,636 | ||||
| Medical Imaging | 39,999 | 37,492 | ||||||
| Industrial | 30,940 | 35,517 | ||||||
| Aerospace and Defense | 15,496 | 20,488 | ||||||
| Total net sales | $ | 118,365 | $ | 128,133 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.