Nortech Systems Reports Q2 2026 Earnings with Mixed Performance Across Segments
Nortech Systems (NSYS) reported second-quarter earnings for fiscal year 2026, showing mixed results across its business segments. Revenue increased to $33.5 million, up 9.3% from the prior period, driven by strong demand in medical device and imaging markets. Medical Device revenue grew 36%, while Medical Imaging rose 12.2%. However, Industrial segment sales fell 4.7% due to customer inventory adjustments and production disruptions during a manufacturing transfer to Mexico. Aerospace and Defense revenue declined 12.8% for the quarter but increased by 8.7% year-to-date. The company's gross margin improved to 17%, up 120 basis points, reflecting better cost absorption from higher production activity. Operating income dropped slightly to $623,000 compared with $742,000 in the prior-year period due to increased incentive compensation expenses. Net interest expense decreased to $197,000 as a result of lower average borrowings and new financing arrangements. Nortech ended Q2 2026 with a total backlog of $93.8 million, up 19.8% year over year, driven by aerospace and defense orders.
