Revenue growth and expanding backlog ($93.8M, +20%) suggest business momentum, but operating expenses are growing faster than gross profit, compressing margins. Watch the conference call for cost control plans and any FY2026 guidance—key for confirming whether the operating expense trend reverses. The flat net income and declining EBITDA on higher revenue indicate margin risk.
Price Chart
Executive Summary
Nortech Systems reported Q2 2026 revenue of $33.5M, up 9.3% YoY from $30.7M, and net income of $316K ($0.11/share), essentially flat compared to $313K ($0.12/share) in Q2 2025. While revenue growth and gross margin improvement (17.0% vs 15.8%) are positive, operating income declined to $623K from $742K and adjusted EBITDA decreased to $938K from $1.07M, signaling ongoing pressure from rising operating expenses. The cross-filing context shows the prior quarter's revenue growth and backlog trends continuing, but the earnings quality is deteriorating at the margin.
Key Financial Metrics
Key Facts
- Q2 2026 net sales $33.5M, +9.3% YoY vs $30.7M
- Net income $316K flat vs $313K YoY
- Basic EPS $0.11 vs $0.12 YoY (down 8.3%)
- Gross profit $5.7M, +17.9% YoY; gross margin 17.0% vs 15.8%
- Operating income $623K, down from $742K YoY (-16.0%)
- Operating expenses +24.1% YoY ($5.08M vs $4.10M)
- Adjusted EBITDA $938K vs $1.07M YoY (-12.6%)
- Total backlog $93.8M, +20% YoY; 90-day backlog $33.4M
- No guidance provided; conference call scheduled Aug 12
- Shares outstanding: 2.85M basic, 2.99M diluted (June 30, 2026)
Financial Impact
Q2 revenue growth of 9.3% ($2.9M) but EPS declined 8.3% ($0.01/share). Adjusted EBITDA fell by $135K. Backlog at $93.8M signals continued near-term demand.
Risk Factors
- Operating expenses grew 24.1% YoY, outpacing revenue growth, pressuring operating leverage
- Adjusted EBITDA declined 12.6% YoY despite higher revenue
- Cash used in operations was -$2.4M for H1 2026, though improved from -$2.8M H1 2025
- No formal guidance provided—management commentary only qualitative
- Net debt increased to ~$7.9M (line of credit) + $2.2M term loan vs $6.9M cash
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001493152-26-037337 |
| Document: form8-k.htm | 0001493152-26-037337 |
| Document: 0001493152-26-037337-index-headers.html | 0001493152-26-037337 |
| Document: 0001493152-26-037337-index.html | 0001493152-26-037337 |
| Document: 0001493152-26-037337.txt | 0001493152-26-037337 |
| 8-K Data (Synthetic) | 0001493152-26-037337 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 12, 2026 10w ago | 8-K | $12.75 | awaiting T+60 | — | $10.50 (−17.65%) |
May 13, 2026 23w ago | Press Release | $12.11 $14.64 | ▲ +20.89% | ▲ +17.30% | $10.50 (−13.29%) |
May 6, 2026 24w ago | Press Release | $12.52 $14.09 | ▲ +12.54% | ▲ +8.71% | $10.50 (−16.13%) |
Apr 15, 2026 27w ago | 10-K/A | $14.36 $13.65 | ▼ −4.94% | ▼ −11.99% | $10.50 (−26.88%) |
Apr 1, 2026 29w ago | DEFA14A | $12.92 $15.82 | ▲ +22.45% | ▲ +8.29% | $10.50 (−18.73%) |
Mar 26, 2026 30w ago | Press Release | $11.83 $15.76 | ▲ +33.22% | ▲ +17.15% | $10.50 (−11.24%) |
Mar 23, 2026 31w ago | Press Release | $10.33 $17.49 | ▲ +69.31% | ▲ +54.99% | $10.50 (+1.65%) |
Mar 6, 2026 33w ago | 8-K | $9.20 $17.66 | ▼ −91.96% | ▼ −79.18% | $10.50 (−14.13%) |
US Market Status
Subscribe to SecBot
Get Real-Time SEC Filing Intelligence
Comprehensive SEC filing analysis delivered the moment filings hit EDGAR. Sentiment scoring, impact analysis, and actionable insights for every material event.
Create a free account Live analysis, Telegram alerts, watchlists and the MCP server for subscribers