MINNEAPOLIS -- Nortech Systems reported third quarter revenue of $33.4 million, down 5.4% from the same period in 2022.

GAAP net income was $1.2 million, down 21% versus $1.5 million in the same period in 2022.

Gross margin for the period ended Sept. 30 was 15.9%, up 30 basis points from the second quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) was flat sequentially at $1.6 million and down 32% from a year ago.

Quarter-end backlog of $102 million was up slightly from the prior quarter end.

"Our team’s focused execution enabled us to increase third quarter gross margin sequentially and maintain EBITDA levels," said Jay D. Miller, president and CEO, Nortech Systems. "As we have previously discussed, we had anticipated demand levels to fluctuate as customers work through inventory. We saw this influence third quarter revenue as primarily two large customers pushed out their orders to manage their inventory levels, however we expect this issue to get resolved in the near term as new business bookings remain strong. Year-over-year comparisons were also impacted by significant pricing actions in the third quarter of 2022, ahead of material cost increases, that contributed to record-high revenue in that period.

"In the third quarter, our bookings and backlog levels remained robust," added Miller. "We are encouraged by promising opportunities across our medical, industrial and defense markets.

"Despite the impact of delayed customer shipments on third quarter revenue, we expect to finish the year strong," said Miller. "We are guardedly optimistic as we look ahead to 2024."

The medical market is Nortech’s largest and fastest-growing, accounting for over half of 2022 revenue.