NORTECH SYSTEMS INC Segments Disclosure

NOTE 9. SEGMENT INFORMATION

 

Our results of operations for the years ended December 31, 2024 and 2023 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 servers. 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, 2024 and 2023:

 

SCHEDULE OF SEGMENT INFORMATION

		2024				2023
Net sales		$	128,133			$	139,332
Cost of goods sold			111,411				116,228
Gross profit			16,722				23,104
Operating expenses:
Selling			3,446				3,598
General and administrative			11,709				12,354
Research and development			1,191				1,199
Restructuring charges			571
Total operating expenses			16,917				17,151
(Loss) income from operations			(195	)			5,953
Other expense:
Interest expense			(744	)			(487	)
(Loss) income before income taxes			(939	)			5,466
Income tax expense (benefit)			356				(1,408	)
Net (loss) income		$	(1,295	)		$	6,874

 

 

The Company’s long-lived tangible assets, including the Company’s operating lease assets recognized on the consolidated balance sheets were located as follows:

 

 SCHEDULE OF LONG LIVED TANGIBLE ASSETS

		2024				2023
United States		$	10,429			$	9,421
Mexico			2,445				2,870
China			1,497				1,139
Total long-lived tangible assets		$	14,371			$	13,430

 

Export net from our U.S. domestic operations represent approximately 3.4% and 4.1% of consolidated net sales for the years ended December 31, 2024 and 2023, respectively. Net sales by our major EMS industry markets for the years ended December 31, 2024 and 2023 are as follows:

 

 SCHEDULE OF NET SALES BY EMS INDUSTRY MARKETS

		2024				2023
Medical Device		$	34,636			$	38,758
Medical Imaging			37,492				39,908
Industrial			35,517				40,113
Aerospace and Defense			20,488				20,553
Total net sales		$	128,133			$	139,332