MINNEAPOLIS -- EMS firm Nortech Systems returned to first-quarter profitability despite flat net sales of $21.7 million.

For the period ended March 31, Nortech reported a net profit of $95,284, up from a net loss of $1.3 million in the first quarter of 2009.Operating income increased to $325,782, compared with a loss of $2.1 million in 2009. The 90-day backlog at quarter's end was $19 million, up 25% from a year ago.

The company had sales of $21.6 million in the first quarter 2009.

“We’re encouraged by the quarterly results and start to the 2010 fiscal year in sales, operating income and profitability,” said Mike Degen, president and CEO. “The necessary restructuring activities we undertook last year proved effective in better aligning our infrastructure and capacity with customer demand.”

Degen cited progress in plant utilization, ongoing cost-reduction projects and process-improvement efforts, with positive results shown in gross margins.

“Many of our customers are demonstrating greater confidence, indicated by our increasing backlog,” said Degen. “Industrial and medical customers impacted by the economic slowdown are now exhibiting signs of recovery.”

Last week Nortech Systems acquired additional design and manufacturing capabilities by purchasing an electronics manufacturer in Milaca, Minn., that specializes in medical devices. The acquisition is expected to be accretive starting in 2011 as synergies develop and strengthen.

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