MINNEAPOLIS – Nortech Systems today reported net sales of $27 million for the fourth quarter, down 7.84% year-over-year.

Net income totaled $76,970, down nearly 85% compared to the same period in 2007.

Operating income was $200,000, down 82% year-over-year.

Operating profits and net income for the fourth quarter reflect a $337,000 increase in the reserve for doubtful accounts for a past-due customer.

For 2008, the company reported record net sales of $121.9 million, up 3.2% over 2007.

Net income for the year increased 11% year-over-year to $1.8 million.

Operating income of $3.5 million was down a slight 2.8% compared to 2007.

“Our sales growth during 2008 was led by the defense sector, along with medical cable and wire customers, which offset softness in our industrial customer base,” said Mike Degen, Nortech’s president and CEO. “We delivered a modest improvement in gross profit percentage in 2008, despite commodity-price pressures in the first half of the year and a challenging economic environment in the second half.

“We are fully aware of the challenges facing us in 2009 due to the economic conditions,” said Degen.

The company’s 90-day order backlog on Dec. 31 was $18.2 million, down 33% compared to Dec. 31, 2007. The majority of this change comes from a reduction of past dues, order mix, and the overall slowdown in the global economy.