MINNEAPOLIS, Dec. 17 -- EMS provider Nortech Systems today provided improved guidance for its fourth-quarter and fiscal 2004 revenue, saying that it expects sales of $19 million to $20 million. However, the company lowered its year-end earnings outlook, citing diminished margins and expenses for labor and raw materials.

Last year, Nortech reported fourth-quarter revenue of $15.6 million.

The firm guided for earnings of $0.05 to $0.07 per diluted share for the quarter ending Dec. 31, compared to a loss of $0.06 per diluted share last year.

Year-end revenue is expected to increase by 21 to 24% over 2003, to $70 million to $72 million, slightly above previous guidance. Nortech guided for fiscal year earnings to be in the range of $0.20 to $0.22. It previously guided for $0.26 to $0.29 expected earlier. Last year Nortech Systems earned $0.25 per diluted share.

"While we're pleased with our sustained revenue growth, we continue to face margin pressures impacting our profitability," says Mike Degen, President and CEO. "The fourth quarter earnings are being negatively impacted by a mix of lower-margin product, material cost increases and higher than anticipated labor costs and expenses related to some of our domestic and international operations."

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