Attached files
file | filename |
---|---|
EX-32 - SOLITRON DEVICES INC | v207585_ex32.htm |
EX-31 - SOLITRON DEVICES INC | v207585_ex31.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark
one)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended November 30, 2010
or
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from _______ to _______
Commission
File No. 1-4978
SOLITRON DEVICES,
INC.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
|
22-1684144
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
Incorporation
or Organization)
|
Identification
No.)
|
3301 Electronics Way, West Palm Beach,
Florida
|
33407
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(561)
848-4311
(Registrant’s
Telephone Number, Including Area Code)
Indicate
by check mark whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one)
Large
accelerated filer
|
¨
|
Accelerated
filer ¨
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No x
The
number of shares of the registrant’s common stock, $0.01 par value, outstanding
as of January 3, 2011 was 2,263,775.
SOLITRON
DEVICES, INC.
TABLE OF
CONTENTS
Page No.
|
||||
PART 1 - FINANCIAL INFORMATION | ||||
Item
|
1.
|
Financial
Statements (unaudited)
|
3
|
|
Condensed
Balance Sheets
|
3
|
|||
November
30, 2010 and February 28, 2010
|
||||
Condensed
Statements of Income
|
4
|
|||
Three
and Nine months ended November 30, 2010 and 2009
|
||||
Condensed
Statements of Cash Flows
|
5
|
|||
Nine
months ended November 30, 2010 and 2009
|
||||
Notes
to Condensed Financial Statements
|
6-12
|
|||
Item
|
2.
|
Management’s
Discussion and Analysis of Financial Condition and
|
||
Results
of Operations
|
13-16
|
|||
Item
|
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
17
|
|
Item
|
4.
|
Controls
and Procedures
|
18
|
|
PART
II – OTHER INFORMATION
|
||||
Item
|
6.
|
Exhibits
|
18
|
|
Signatures
|
18
|
2
PART I – FINANCIAL
INFORMATION
ITEM
1. FINANCIAL
STATEMENTS
SOLITRON
DEVICES, INC.
CONDENSED
BALANCE SHEETS
AS OF
NOVEMBER 30, 2010 (Unaudited) AND FEBRUARY 28, 2010
Nov 30,
|
Feb 28,
|
|||||||
2010
|
2010
|
|||||||
Unaudited
|
||||||||
(in thousands, except for shares)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 510 | $ | 400 | ||||
Treasury
bills
|
6,097 | 5,601 | ||||||
Accounts
receivable, less allowance for doubtful accounts of $2
|
851 | 685 | ||||||
Inventories,
net (Note 5)
|
2,977 | 2,809 | ||||||
Prepaid
expenses and other current assets
|
113 | 125 | ||||||
TOTAL
CURRENT ASSETS
|
10,548 | 9,620 | ||||||
PROPERTY,
PLANT AND EQUIPMENT, net
|
683 | 561 | ||||||
OTHER
ASSETS
|
65 | 52 | ||||||
TOTAL
ASSETS
|
$ | 11,296 | $ | 10,233 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable-Post-petition
|
$ | 252 | $ | 266 | ||||
Accounts
payable-Pre-petition, current portion
|
1,037 | 1,058 | ||||||
Customer
deposits
|
126 | 39 | ||||||
Accrued
expenses and other current liabilities (Note
8)
|
618 | 505 | ||||||
TOTAL
CURRENT LIABILITIES
|
2,033 | 1,868 | ||||||
LONG-TERM
LIABILITIES, net of current portion
|
138 | 148 | ||||||
TOTAL
LIABILITIES
|
2,171 | 2,016 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Preferred
stock, $.01 par value, authorized 500,000 shares, none
issued
|
- | - | ||||||
Common stock, $.01
par value, authorized 10,000,000 shares, 2,263,775 shares issued
and outstanding, net of 173,287 shares of treasury stock
|
23 | 23 | ||||||
Additional
paid-in capital
|
2,733 | 2,733 | ||||||
Retained
earnings
|
6,369 | 5,461 | ||||||
TOTAL
STOCKHOLDERS' EQUITY
|
9,125 | 8,217 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 11,296 | $ | 10,233 |
The
accompanying notes are an integral part of the condensed financial
statements.
3
SOLITRON DEVICES,
INC.
CONDENSED STATEMENTS OF
INCOME
FOR THE THREE AND NINE
MONTHS ENDED NOVEMBER 30,
(Unaudited)
(In
thousands except for share and per share amounts)
Three months
|
Nine Months
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
Sales
|
$ | 2,281 | $ | 1,989 | $ | 6,690 | $ | 5,747 | ||||||||
Cost
of Sales
|
1,561 | 1,563 | 4,848 | 4,428 | ||||||||||||
Gross
Profit
|
720 | 426 | 1,842 | 1,319 | ||||||||||||
Selling,
General and Administrative Expenses
|
400 | 251 | 938 | 763 | ||||||||||||
Operating
Income
|
320 | 175 | 904 | 556 | ||||||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||
Other
Income (Expense), Net (Note 7)
|
(1 | ) | - | 1 | 9 | |||||||||||
Interest
Income
|
1 | 4 | 12 | 15 | ||||||||||||
Income
Tax Expense
|
(4 | ) | - | (9 | ) | - | ||||||||||
Other,
Net
|
(4 | ) | 4 | 4 | 24 | |||||||||||
Net
Income
|
$ | 316 | $ | 179 | $ | 908 | $ | 580 | ||||||||
Net
Income Per Share : Basic
|
$ | .14 | $ | .08 | $ | .40 | $ | .26 | ||||||||
:
Diluted
|
$ | .13 | $ | .07 | $ | .37 | $ | .24 | ||||||||
Weighted
Average
|
||||||||||||||||
Shares
Outstanding : Basic
|
2,263,775 | 2,263,775 | 2,263,775 | 2,263,775 | ||||||||||||
:
Diluted
|
2,466,310 | 2,453,356 | 2,469,130 | 2,453,107 |
The
accompanying notes are an integral part of the condensed financial
statements.
4
SOLITRON DEVICES,
INC.
CONDENSED STATEMENTS OF CASH
FLOWS
FOR THE NINE MONTHS ENDED
NOVEMBER 30,
(Unaudited)
(In
thousands)
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Income
|
$ | 908 | $ | 580 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
153 | 148 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
Decrease in:
|
||||||||
Accounts
receivable
|
(166 | ) | 74 | |||||
Inventories
|
(168 | ) | (105 | ) | ||||
Prepaid
expenses and other current assets
|
12 | 28 | ||||||
Other
non-current assets
|
(13 | ) | - | |||||
Increase
(Decrease) in:
|
||||||||
Accounts
payable – Post-petition
|
(14 | ) | (98 | ) | ||||
Accounts
payable – Pre-petition
|
(21 | ) | (21 | ) | ||||
Customer
deposits
|
87 | 11 | ||||||
Accrued
expenses and other current liabilities
|
113 | (200 | ) | |||||
Other
non-current liabilities
|
(10 | ) | (10 | ) | ||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
881 | 407 | ||||||
CASH
FLOW FROM INVESTING ACTIVITIES:
|
||||||||
Investment
in treasury bills
|
(496 | ) | (349 | ) | ||||
Purchases
of property, plant and equipment
|
(275 | ) | (123 | ) | ||||
NET
CASH (USED IN) INVESTING ACTIVITIES
|
(771 | ) | (472 | ) | ||||
NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
|
110 | (65 | ) | |||||
CASH
AT THE BEGINNING OF PERIOD
|
400 | 440 | ||||||
CASH
AT THE END OF PERIOD
|
$ | 510 | $ | 375 |
The
accompanying notes are an integral part of the condensed financial
statements.
5
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
1.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Nature of Operations and
Activities
Solitron
Devices, Inc., a Delaware corporation (the “Company” or “Solitron”), designs,
develops, manufactures, and markets solid-state semiconductor components and
related devices primarily for the military and aerospace markets. The
Company was incorporated under the laws of the State of New York in 1959 and
reincorporated under the laws of the State of Delaware in August
1987.
Basis of
Presentation
The
financial statements have been prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America. In management’s opinion, all adjustments necessary for a fair statement
of the results of the interim periods have been made. All adjustments are of a
normal, recurring nature.
Cash and Cash
Equivalents
Cash and
cash equivalents include demand deposits and money market accounts.
Investment in Treasury
Bills
Investment
in Treasury Bills includes treasury bills with maturities of one year or less
and is stated at market value.
Accounts
Receivable
Accounts
receivable consists of unsecured credit extended to the Company’s customers in
the ordinary course of business. The Company reserves for any amounts
deemed to be uncollectible based on past collection experiences and an analysis
of outstanding balances using an allowance account. The allowance
amount was $2,000 as of November 30, 2010 and February 28,
2010.
Shipping and
Handling
Shipping
and handling costs billed to customers are recorded in net
sales. Shipping costs incurred by the Company are recorded in cost of
sales.
Inventories
Inventories
are stated at the lower of cost or market. Cost is determined using
the “first-in, first-out” (FIFO) method. The Company buys raw
material only to fill customer orders. Excess raw material is created
only when a vendor imposes a minimum buy in excess of actual
requirements. Such excess material will usually be utilized to meet
the requirements of the customer’s subsequent orders. If excess
material is not utilized after two fiscal years it is fully
reserved. Any inventory item once designated as reserved is carried
at zero value in all subsequent valuation activities.
The
Company’s inventory valuation policy is as follows:
Raw
material /Work in process:
|
All
material purchased, processed, and/or used in the last two fiscal years is
valued at the lower of its acquisition cost or market. All
material not purchased/used in the last two fiscal years is fully reserved
for.
|
|
Finished
goods:
|
All
finished goods with firm orders for later delivery are valued (material
and overhead) at the lower or cost or market. All finished
goods with no orders are fully reserved.
|
|
Direct
labor costs:
|
|
Direct
labor costs are allocated to finished goods and work in process inventory
based on engineering estimates of the amount of man-hours required from
the different direct labor departments to bring each device to its
particular level of
completion.
|
6
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
Financial
Statement Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates,
and the differences could be material. Such estimates include
depreciable life, valuation allowance, and allowance for inventory
obsolescence.
Concentrations of Credit
Risk
Financial
instruments, which potentially subject the Company to concentration of credit
risk, consist principally of cash and trade receivables. The Company
places its cash with high credit quality institutions. At times, such
amounts may be in excess of the $250,000 FDIC insurance limits. The
Company has not experienced any losses in such account and believes that it is
not exposed to any significant credit risk on the account. As of
November 30 and February 28, 2010, $260,000 and $150,000 respectively, of the
Company’s cash reserves were subject to this risk as the Company had cash of
$510,000 and $400,000 on those dates. With respect to the trade
receivables, most of the Company’s products are custom made pursuant to
contracts with customers whose end-products are sold to the United States
Government. The Company performs ongoing credit evaluations of its
customers’ financial condition and maintains allowances for potential credit
losses. Actual losses and allowances have historically been within
management’s expectations.
2.
|
ENVIRONMENTAL
REGULATION:
|
While the
Company believes that it has the environmental permits necessary to conduct its
business and that its operations conform to present environmental regulations,
increased public attention has been focused on the environmental impact of
semiconductor manufacturing operations. The Company, in the conduct
of its manufacturing operations, has handled and does handle materials that are
considered hazardous, toxic or volatile under federal, state and local laws and,
therefore, is subject to regulations related to their use, storage, discharge
and disposal. No assurance can be made that the risk of accidental
release of such materials can be completely eliminated. In the event
of a violation of environmental laws, the Company could be held liable for
damages and the costs of remediation. In addition, the Company, along with the
rest of the semiconductor industry, is subject to variable interpretations and
governmental priorities concerning environmental laws and
regulations. Environmental statutes have been interpreted to provide
for joint and several liability and strict liability regardless of actual
fault. There can be no assurance that the Company will not be
required to incur costs to comply with, or that the operations, business or
financial condition of the Company will not be materially adversely affected by
current or future environmental laws or regulations.
3.
|
COMMITMENTS AND
CONTINGENCIES:
|
Environmental
The
Company entered into an Ability to Pay Multi-Site Settlement Agreement with the
United States Environmental Protection Agency (“USEPA”), effective February 24,
2006 (“Settlement Agreement”), to resolve the Company’s alleged liability to
USEPA at the following sites: Solitron Microwave Superfund Site, Port
Salerno, Florida (“Port Salerno Site”); Petroleum Products Corporation
Superfund Site, Pembroke Park, Florida; Casmalia Resources Superfund Site, Santa
Barbara, California (“Casmalia Site”); Solitron Devices Site, Riviera Beach,
Florida (the “Riviera Beach Site”); and City Industries Superfund Site,
Orlando, Florida (collectively, the “Sites”). The Settlement
Agreement required the Company to pay to USEPA the sum of $74,000 by February
24, 2009; the Company paid the entire sum of $74,000 to USEPA on February 27,
2006. In addition, the Company is required to pay to USEPA the sum of $10,000 or
5% of Solitron’s net after-tax income over the first $500,000, if any, whichever
is greater, for each year from fiscal years 2010-2013. For payment to
USEPA to be above $10,000 for any of these five years, the Company’s net income
must exceed $700,000 for such year, which has happened in fiscal year 2001,
fiscal year 2006, fiscal year 2009 and fiscal year 2010. In February
2010, the Company paid $10,000 to USEPA for fiscal year 2010 based on
preliminary net income projections. In July 2010, the Company paid an additional
$4,000 for fiscal year 2010 pursuant to its obligations under the Settlement
Agreement. The Company has accrued $30,000 for its remaining minimum obligations
under the Settlement Agreement. This amount is reflected in “Accrued
expenses and other current liabilities” on the Company’s balance sheets at
November 30, 2010. The Company has also accrued an additional $10,000 in current
liability to USEPA for the estimated amount due on net income in excess of
$700,000 for the current fiscal year.
7
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
In
consideration of the payments made by the Company under the Settlement
Agreement, USEPA agreed not to sue or take any administrative action against the
Company with regard to any of the Sites. The Company has also been
notified by a group of alleged responsible parties formed at the Casmalia Site
(“Casmalia PRP Group”) that, based on their review and lack of objection to the
Settlement Agreement, the Casmalia PRP Group does not anticipate pursuing
Solitron for cost recovery at the Casmalia site.
On
October 21, 1993, a Consent Final Judgment was entered into between the Company
and the Florida Department of Environmental Protection (“FDEP”) in the Circuit
Court of the Nineteenth Judicial Circuit of Florida in and for Martin County,
Florida, in Case No. 91-1232 CA (the “Consent Final Judgment”). The
Consent Final Judgment required the Company to remediate the Port Salerno and
Riviera Beach Sites, make monthly payments to escrow accounts for each Site
until the sale of the Sites to fund the remediation work, take all reasonable
steps to sell the two Sites and, upon the sale of the Sites, apply the net
proceeds from the sales to fund the remediation work. Both Sites have
been sold pursuant to purchase agreements approved by FDEP.
Prior to
the sale of the Port Salerno Site and Riviera Beach Site, USEPA took over from
FDEP as the lead regulatory agency for the remediation of the
Sites. At the closing of the sale of each Site, the net
proceeds of sale were distributed to USEPA and/or FDEP or other parties, as
directed by the agencies. In addition, upon the sale of the Riviera
Beach Site, the Riviera Beach Escrow Account was transferred to USEPA, as
directed by the agencies. The Company continues to maintain the Port
Salerno escrow account with a current balance of approximately $58,000 as of
November 30, 2010. At present, work at the Port Salerno Site is being
performed by USEPA. Work at the Riviera Beach Site is being performed
by Honeywell, Inc. (“Honeywell”), pursuant to an Administrative Order on Consent
entered into between Honeywell and USEPA. The Company has been
notified by FDEP that the successful performance of remediation work in
accordance with the Consent Final Judgment standards by USEPA at the Port
Salerno Site and by Honeywell at the Riviera Beach Site will be construed by
FDEP as discharging the Company’s remediation obligations under the Consent
Final Judgment.
There
remains a possibility that FDEP will determine at some time in the future that
the final remedy approved by USEPA and implemented at either, or both of, the
Port Salerno Site and Riviera Beach Site does not meet the State cleanup
requirements imposed by the Consent Final Judgment. If such a final
determination is made by FDEP, there is a possibility that FDEP will require the
Company to implement additional remedial action at either, or both of, the Port
Salerno Site and Riviera Beach Site.
By letter
dated November 16, 2006, FDEP notified the Company that FDEP has unreimbursed
expenses associated with the Port Salerno Site and Riviera Beach Site of
$214,800. In 2006, FDEP also notified the Company that FDEP required
the Company to resume payments under the Consent Final Judgment to ensure that
there are adequate funds to cover FDEP’s unreimbursed expenses and the Company’s
residual liability under the Consent Final Judgment. During a follow
up telephone conversation in 2006 with the Company’s attorney, FDEP advised the
Company that FDEP would prepare a justification for the asserted unreimbursed
expenses. Upon receipt of the cost reimbursement package, the Company
is required to transfer $55,000 from the Port Salerno Escrow Account to FDEP as
partial payment for FDEP’s unreimbursed expenses that are otherwise recoverable
under the Consent Final Judgment. FDEP further stated, during the
telephone conversation, that FDEP will work with the Company to establish a
reduced payment schedule for the Company to resume under the Consent Final
Judgment based on an appropriate showing by the Company of financial
hardship. The Company is currently awaiting receipt of FDEP’s cost
reimbursement package. Upon receipt of that documentation, the
Company will be required to provide a recommendation to FDEP for resumption of
payments to FDEP under the Consent Final Judgment based on the Company’s present
ability to pay.
8
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
On August
7, 2002, the Company received a Request for Information from the State of New
York Department of Environmental Conservation (“NYDEC”), seeking information on
whether the Company had disposed of certain wastes at the Clarkstown Landfill
Site located in the Town of Clarkstown, Rockland County, New York (The
Clarkstown Landfill Site”). By letter dated August 29, 2002, the
Company responded to the Request for Information and advised NYDEC that the
Company’s former Tappan, New York facility had closed in the mid-1980’s, prior
to the initiation of the Company’s bankruptcy proceedings described
below. The Company contends that, to the extent that NYDEC has a
claim against the Company as a result of the Company’s alleged disposal of
wastes at the Clarkstown Landfill Site prior to the closing of the Company’s
former Tappan facility in the mid-1980’s, the claim was discharged in bankruptcy
as a result of the Bankruptcy Court’s August 1993 Order. At NYDEC’s
request, the Company entered into a revised Tolling Agreement with NYDEC on
December 28, 2009, which provides for the tolling of applicable statutes of
limitation through the earlier of December 3, 2010, or the date the State
institutes a suit against the Company for any claims associated with the
Clarkstown Landfill Site. As of the date of this filing, NYDEC has not served
any such claim on Solitron Devices, Inc. in connection with the Clarkstown
Landfill Site. As of the date of this filing, no such claim has been
made by NYDEC. The Clarkstown Landfill Joint Defense Group (“Clarkstown JDG”), a
group of potentially responsible parties formed to respond to claims by NYDEC
for recovery of closure and clean-up response costs at the Clarkstown Landfill
Site, is negotiating with NYDEC to settle the claims of NYDEC against all
potentially responsible parties at the Clarkstown Landfill site that participate
in the Clarkstown JDG. In connection with those negotiations, the
Clarkstown JDG, by letter dated March 17, 2010, offered to pursue a settlement
of NYDEC’s potential claim against the Company in return for the Company’s
agreement to pay the sum of $125,000.00, representing the Company’s alleged
share of the overall settlement with NYDEC. The Company rejected the
settlement offer on March 29, 2010, based on its continuing contention that any
claim of NYDEC against the Company was discharged in bankruptcy as a result of
the Bankruptcy Court’s August 1993 Order.
4.
|
EARNINGS PER
SHARE:
|
The
shares used in the computation of the Company’s basic and diluted earnings per
common share were as follows:
For the three months ended
November 30,
|
For the nine months ended
November 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Weighted
average common shares outstanding
|
2,263,775 | 2,263,775 | 2,263,775 | 2,263,775 | ||||||||||||
Dilutive
effect of employee stock options
|
202,535 | 189,581 | 205,355 | 189,332 | ||||||||||||
Weighted
average common shares outstanding, assuming dilution
|
2,466,310 | 2,453,356 | 2,469,130 | 2,453,107 |
Weighted
average common shares outstanding, assuming dilution, include the incremental
shares that would be issued upon the assumed exercise of stock
options. For the three and nine month periods ended November 30, 2010
and November 30, 2009, 13,500 shares (at $3.95) underlying the
Company's stock options were excluded from the calculation of diluted earning
per share because the exercise prices of the stock options were greater than or
equal to the average price of the common shares, and therefore their inclusion
would have been anti-dilutive.
5.
|
INVENTORIES:
|
As of
November 30, 2010, inventories consist of the following:
Gross
|
Reserve
|
Net
|
||||||||||
Raw
Materials
|
$ | 1,786,000 | $ | (430,000 | ) | $ | 1,356,000 | |||||
Work-In-Process
|
2,488,000 | (868,000 | ) | 1,620,000 | ||||||||
Finished
Goods
|
457,000 | (456,000 | ) | 1,000 | ||||||||
Totals
|
$ | 4,731,000 | $ | (1,754,000 | ) | $ | 2,977,000 |
9
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
As of
February 28, 2010, inventories consist of the following:
Gross
|
Reserve
|
Net
|
||||||||||
Raw
Materials
|
$ | 1,515,000 | $ | (379,000 | ) | $ | 1,136,000 | |||||
Work-In-Process
|
2,364,000 | (760,000 | ) | 1,604,000 | ||||||||
Finished
Goods
|
557,000 | (488,000 | ) | 69,000 | ||||||||
Totals
|
$ | 4,436,000 | $ | (1,627,000 | ) | $ | 2,809,000 |
6.
|
INCOME
TAXES:
|
At
November 30, 2010, the Company has net operating loss carryforwards of
approximately $14,918,000 that expire through 2024. Such net
operating losses are available to offset future taxable income, if
any. As the utilization of such net operating losses for tax purposes
is not assured, the deferred tax asset has been mostly reserved through the
recording of a 100% valuation allowance. Should a cumulative change
in the ownership of more than 50% occur within a three-year period, there could
be an annual limitation on the use of the net operating loss
carryforward.
Total net
deferred taxes were comprised of the following as of November 30 and February
28, 2010:
Deferred tax assets:
|
November 30,
2010
|
February 28,
2010
|
||||||
Loss
carryforwards
|
$ | 5,614,000 | $ | 6,005,000 | ||||
Allowance
for doubtful accounts
|
1,000 | 1,000 | ||||||
Inventory
allowance
|
660,000 | 612,000 | ||||||
Depreciation
|
107,000 | 109,000 | ||||||
Section
263A capitalized costs
|
126,000 | 126,000 | ||||||
Total
deferred tax assets
|
6,508,000 | 6,853,000 | ||||||
Valuation
allowance
|
(6,508,000 | ) | (6,853,000 | ) | ||||
Total
net deferred taxes
|
$ | 0 | $ | 0 |
The
change in the valuation allowance on deferred tax assets is due principally to
the utilization of the net operating loss for the quarter ended November 30,
2010 and for the year ended February 28, 2010.
A
reconciliation of the U.S. federal statutory tax rate to the Company’s effective
tax rate for the quarter ended November 30, 2010 and for the year ended
February 28, 2010 is as follows:
November 30,
2010
|
February 28,
2010
|
|||||||
U.S.
federal statutory rate
|
34.0 | % | 34.0 | % | ||||
Change
in valuation allowance
|
(34.0 | ) | (34.0 | ) | ||||
Effective
income tax rate
|
0.0 | % | 0.0 | % |
7.
|
OTHER
INCOME/(EXPENSE):
|
For the
quarters ended November 30, 2010 and 2009, other income/(expense) consisted of
the following:
November 30,
2010
|
November 30,
2009
|
|||||||
Interest
income
|
$ | 1,000 | $ | 4,000 | ||||
Income
tax benefit
|
2,000 | - | ||||||
Income
tax expense
|
(6,000 | ) | - | |||||
Loss
on disposal of asset
|
(1,000 | ) | - | |||||
Net
other income/(expense)
|
$ | (4,000 | ) | $ | 4,000 |
10
SOLITRON
DEVICES, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
8.
|
ACCRUED
EXPENSES:
|
As of
November 30, 2010 and February 28, 2010, accrued expenses and other liabilities
consisted of the following:
November 30,
2010
|
February 28,
2010
|
|||||||
Payroll
and related employee benefits
|
$ | 585,000 | $ | 469,000 | ||||
Other
liabilities
|
33,000 | 36,000 | ||||||
$ | 618,000 | $ | 505,000 |
9.
|
EXPORT SALES AND MAJOR
CUSTOMERS:
|
Revenues
from domestic and export sales to unaffiliated customers for the three months
ended November 30, 2010 are as follows:
Power
|
Field Effect
|
Power
|
||||||||||||||||||
Geographic Region
|
Transistors
|
Hybrids
|
Transistors
|
MOSFETS
|
Totals
|
|||||||||||||||
Europe
and Australia
|
$ | 8,000 | $ | 384,000 | $ | 1,000 | $ | 0 | $ | 393,000 | ||||||||||
Canada
and Latin America
|
0 | 0 | 0 | 1,000 | 1,000 | |||||||||||||||
Far
East and Middle East
|
0 | 0 | 23,000 | 82,000 | 105,000 | |||||||||||||||
United
States
|
345,000 | 1,021,000 | 160,000 | 256,000 | 1,782,000 | |||||||||||||||
Totals
|
$ | 353,000 | $ | 1,405,000 | $ | 184,000 | $ | 339,000 | $ | 2,281,000 |
Revenues
from domestic and export sales to unaffiliated customers for the three months
ended November 30, 2009 are as follows:
Power
|
Field Effect
|
Power
|
||||||||||||||||||
Geographic Region
|
Transistors
|
Hybrids
|
Transistors
|
MOSFETS
|
Totals
|
|||||||||||||||
Europe
and Australia
|
$ | 0 | $ | 237,000 | $ | 0 | $ | 0 | $ | 237,000 | ||||||||||
Canada
and Latin America
|
8,000 | 0 | 4,000 | 0 | 12,000 | |||||||||||||||
Far
East and Middle East
|
2,000 | 0 | 0 | 22,000 | 24,000 | |||||||||||||||
United
States
|
164,000 | 1,113,000 | 152,000 | 287,000 | 1,716,000 | |||||||||||||||
Totals
|
$ | 174,000 | $ | 1,350,000 | $ | 156,000 | $ | 309,000 | $ | 1,989,000 |
Revenues
from domestic and export sales are attributed to global geographic region
according to the location of the customer’s primary manufacturing or operating
facilities.
For the
quarters ended November 30, 2010 and 2009, sales to the Companies top two
customers consisted of the following:
November 30,
2010
|
November 30,
2009
|
|||||||
Raytheon
Company
|
24 | % | 48 | % | ||||
BAE
Systems Australia
|
17 | % | 12 | % | ||||
Totals
|
41 | % | 60 | % |
11
10.
|
MAJOR
SUPPLIERS:
|
For the
quarters ended November 30, 2010 and 2009, purchases from the Companies top two
vendors consisted of the following:
November 30,
2010
|
November 30,
2009
|
|||||||
Egide,
USA
|
10 | % | ||||||
Platronics
Seals
|
17 | % | ||||||
WUXI
Streamtek
|
9 | % | 14 | % | ||||
Totals
|
19 | % | 31 | % |
12
Item
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Overview:
Solitron
Devices, Inc., a Delaware corporation (the “Company” or “Solitron”), designs,
develops, manufactures and markets solid-state semiconductor components and
related devices primarily for the military and aerospace markets. The
Company manufactures a large variety of bipolar and metal oxide semiconductor
(“MOS”) power transistors, power and control hybrids, junction and power MOS
field effect transistors and other related products. Most of the
Company’s products are custom made pursuant to contracts with customers whose
end products are sold to the United States government. Other
products, such as Joint Army/Navy transistors, diodes and Standard Military
Drawings voltage regulators, are sold as standard or catalog items.
The
following discussion and analysis of factors which have affected the Company's
financial position and operating results during the periods included in the
accompanying Condensed Financial Statements should be read in conjunction with
the Financial Statements and the related Notes to Financial Statements and
Management’s Discussion and Analysis of Financial Condition and Results of
Operations included in the Company’s Annual Report on Form 10-K for the year
ended February 28, 2010 and the Condensed Financial Statements and the related
Notes to Condensed Financial Statements included in Part I, Item 1 of this
Quarterly Report on Form 10-Q.
Significant Accounting
Policies:
The
discussion and analysis of our financial condition and results of operations are
based upon the Condensed Financial Statements included in Part I, Item 1 of this
Quarterly Report on Form 10-Q which are prepared in accordance with accounting
principles generally accepted in the United States. Preparing financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates
and assumptions are affected by management’s application of accounting policies.
Our significant accounting policies include inventories, valuation of property,
plant and equipment, revenue recognition and accounting for income taxes. A
discussion of all of these significant accounting policies can be found in Note
1 of the “Notes To Financial Statements” in Part I, Item 8 of our Annual Report
on Form 10-K for the fiscal year ended February 28, 2010.
Trends and
Uncertainties:
During
the three months ended November 30, 2010, the Company’s book-to-bill ratio was
approximately .77 as compared to approximately 1.12 for the three months ended
November 30, 2009, reflecting a decrease in the volume of orders
booked. Generally, the intake of orders varies greatly from period to
period as a result of the fluctuations in the general economy, variations in
defense spending on programs the Company supports, and the timing of contract
awards by the Department of Defense and subsequently by its prime
contractors. For example, in December 2010 alone, after the quarter ended
November 30, 2010, the Company booked approximately $2,100,000 of new orders,
representing approximately 24% of the year-to-date bookings. This fluctuation in
the intake of orders has existed for the past 18 years and is expected to
continue over the next 24 months. The Company continues its efforts to reduce
its variable manufacturing costs to offset the potential impact of low volume of
orders to be shipped. However, should order intake fall drastically
below the level experienced in the last twenty four months, the Company might be
required to implement further cost cutting or other downsizing measures to
continue its business operations.
Inventories
Inventories
are stated at the lower of cost or market. Cost is determined using
the “first-in, first-out” (FIFO) method. The Company buys raw
material only to fill customer orders. Excess raw material is created
only when a vendor imposes a minimum buy in excess of actual
requirements. Such excess material will usually be utilized to meet
the requirements of the customer’s subsequent orders. If excess
material is not utilized after two fiscal years it is fully
reserved. Any inventory item once designated as reserved is carried
at zero value in all subsequent valuation activities.
13
The
Company’s inventory valuation policy is as follows:
Raw
material /Work in process:
|
All
material purchased, processed and/or used in the last two fiscal years
is
valued at the lower of its acquisition cost or market. All
material not purchased/used
in the last two fiscal years is fully reserved
for.
|
|
Finished
goods:
|
All
finished goods with firm orders for later delivery are valued (material
and overhead) at the lower of cost or market. All finished
goods with no orders are fully reserved.
|
|
Direct
labor costs:
|
Direct
labor costs are allocated to finished goods and work in process inventory
based on engineering estimates of the amount of man hours required from
the different direct labor departments to bring each device to its
particular level of
completion.
|
Results of Operations-Three
Months Ended November 30, 2010 Compared to Three Months Ended November 30,
2009:
Net sales
for the three months ended November 30, 2010 increased 15% to $2,281,000 as
compared to $1,989,000 for the three months ended November 30,
2009. This increase was primarily attributable to a higher level of
orders that were shipped in accordance with customer requirements.
Cost of
sales for the three months ended November 30, 2010 decreased to $1,561,000 from
$1,563,000 for the comparable period in 2009, primarily due to improved yields
and recovery of scrap precious metal. Expressed as a percentage of
sales, cost of sales decreased to 68% from 79% for the same period in
2009. This decrease in percentage was due primarily to a decrease in
cost of raw materials percentage.
Gross
profit for the three months ended November 30, 2010 increased to $720,000 from
$426,000 for the three months ended November 30, 2009, primarily due to an
increase in net sales and lower cost of materials as described
above. Accordingly, gross margins on the Company’s sales
increased to 32% for the three months ended November 30, 2010 in comparison to
21% for the three months ended November 30, 2009. This percentage
increase was due primarily to higher sales and lower cost of raw materials
percentage.
For the
three months ended November 30, 2010, the Company shipped 24,491 units as
compared to 46,687 units shipped during the same period of the prior
year. It should be noted that since the Company manufactures a wide
variety of products with an average sales price ranging from less than one
dollar to several hundred dollars, such periodic variations in the Company’s
volume of units shipped should not be regarded as a reliable indicator of the
Company’s performance.
As of
November 30, 2010, the Company’s backlog of open orders increased 8% to
$5,989,000 as compared to the end of the same quarter in 2009. As of November
30, 2009, the Company’s backlog of open orders decreased 18% to $5,556,000 as
compared to the end of same quarter in 2008. Changes in backlog
reflect changes in the intake of orders and in the delivery requirements of
customers.
The
Company has experienced a decrease of 21% to $1,759,000 in the level of bookings
during the quarter ended November 30, 2010 as compared to the same period in the
prior year. For the three months ended November 30, 2009, the Company
experienced a 26% decrease to $2,223,000 in the level of bookings as compared to
the same period in the prior year. The decrease in bookings for the current
quarter is principally as a result of delays in the placement of orders by key
customers, a decrease in defense spending, resulting in a decrease in the
monetary value of, and timing differences in the placement of contracts by the
Department of Defense and its prime contractors.
Selling,
general, and administrative expenses increased to $400,000 for the three months
ended November 30, 2010 from $251,000 for the comparable period in
2009. The increase reflects higher labor and sales commission
expenses. During the three months ended November 30, 2010, selling, general, and
administrative expenses as a percentage of net sales increased to 18% as
compared with 13% for the three months ended November 30, 2009. The
percentage increase was due primarily to an increase in labor and sales
commission expenses.
Operating
income for the three months ended November 30, 2010 increased to
$320,000 as compared to $175,000 for the three months ended November 30,
2009. This increase is due primarily to higher net sales and lower cost of
materials.
14
The
Company recorded net other expense of $4,000 for the three months ended November
30, 2010 as compared to net other income of $4,000 for the three months ended
November 30, 2009. Included in net other income was $1,000 of
interest income on investment in treasury bills net of changes in market value
for the three months ended November 30, 2010 minus $4,000 of income tax expense
minus a $1,000 loss on disposal of a fixed asset. For the three
months ended November 30, 2009, the Company recorded $4,000 of interest income
on investment in treasury bills net of changes in market value. The
increase in interest income is due primarily to higher rates of return on
invested funds.
Net
income for the three months November 30, 2010 increased to $316,000 as compared
to $179,000 for the same period in 2009. This increase is due
primarily to higher net sales and lower cost of materials.
Results of Operations-Nine
months ended November 30, 2010 Compared to Nine months ended
November 30, 2009:
Net sales
for the nine months ended November 30, 2010 increased 16% to $6,690,000 as
compared to $5,747,000 for the nine months ended November 30,
2009. This increase was primarily attributable to a higher level of
orders that were shipped in accordance with customer requirements.
Cost of
sales for the nine months ended November 30, 2010 increased to $4,848,000 from
$4,428,000 for the comparable period in 2009, primarily due to an increase in
net sales. Expressed as a percentage of sales, cost of sales
decreased to 72% from 77% for the same period in 2009. This
percentage decrease was due primarily to an increase in net sales and a lower
cost of raw materials as a result of improved yields and scrap precious metal
recovery.
Gross
profit for the nine months ended November 30, 2010 increased to
$1,842,000 from $1,319,000 for the nine months ended November 30, 2009,
primarily due to an increase in net sales and lower cost of raw materials. Gross
margins on the Company’s sales increased to 28% from 23% for the same period in
2009. This percentage increase was primarily due to an increase in
net sales and lower cost of raw materials as described above.
For the
nine months ended November 30, 2010, the Company shipped 110,614 units as
compared to 127,367 units shipped during the same period of the prior
year. It should be noted that since the Company manufactures a wide
variety of products with an average sales price ranging from less than one
dollar to several hundred dollars, such periodic variations in the Company’s
volume of units shipped should not be regarded as a reliable indicator of the
Company’s performance.
As of
November 30, 2010, the Company’s backlog of open orders increased 8% to
$5,989,000 as compared to the end of the same quarter in 2009. As of November
30, 2009, the Company’s backlog of open orders decreased 18% to $5,556,000 as
compared to the end of same quarter in 2008. Changes in backlog
reflect changes in the intake of orders and in the delivery requirements of
customers.
The
Company has experienced an increase of 35% to $6,750,000 in the level of
bookings during the nine months ended November 30, 2010 when compared with the
nine months ended November 30, 2009. The increase occurred principally as a
result of a shift in defense spending priorities, resulting in an increase in
the monetary value of, and timing differences in the placement of contracts by
the Department of Defense and its prime contractors. The increase occurred
primarily during the three months ended May 31, 2010.
Selling,
general, and administrative expenses increased to $938,000 for the nine months
ended November 30, 2010 from $763,000 for the comparable period in 2009,
primarily due to higher sales commissions and general labor
costs. During the nine months ended November 30, 2010, selling,
general, and administrative expenses as a percentage of net sales increased to
14% as compared to 13% for the nine months ended November 30,
2009. This percentage increase was primarily due to increases in
sales commissions and general labor costs as mentioned above.
Operating
income for the nine months ended November 30, 2010 increased to $904,000 from
$556,000 for the nine months ended November 30, 2009. This increase is due
primarily to an increase in net sales and lower cost of raw materials offset by
an increase in selling, general and administrative expenses.
The
Company recorded net other income of $4,000 for the nine months ended November
30, 2010 as compared to net other income of $24,000 for the nine months ended
November 30, 2009. Included in net other income was interest income
of $12,000 for the nine months ended November 30, 2010, $1,000 of net other
income, and $9,000 of income tax expense. Included in net other income for the
nine months ended November 30, 2009 was $15,000 of interest income, and $16,000
of income tax benefit offset by $7,000 of expense from receivables adjustments.
Interest income has decreased by $3,000 due to lower T-Bill rates.
15
Net
income for the nine months ended November 30, 2010 increased to $908,000 from
$580,000 for the same period in 2009. This increase was due primarily
to an increase in net sales and a decrease in cost of sales percentage as
discussed above.
Liquidity and Capital
Resources:
Subject
to the following discussion, the Company expects its sole source of liquidity
over the next twelve months to be cash from operations. The Company anticipates
that its capital expenditures required to sustain operations will be
approximately $250,000 during the current fiscal year and will be funded from
operations.
Based
upon (i) management’s best information as to current national defense
priorities, future defense programs, as well as management’s expectations as to
future defense spending, (ii) a fluctuation in the intake of orders as discussed
above (see Part I, Item 2 of this Quarterly Report on Form 10-Q), and an
increase in the cost of recently procured raw materials and operations that will
result in the potential erosion of profit levels and continued price pressures
due to severe price lowering pressures by defense customers, and (iii) the
continued intense competition in the defense and aerospace market, the Company
believes that it will have sufficient cash on hand to satisfy its operating
needs during the current fiscal year. However, due to the level of
current backlog and new order intake (due to the status of the general economy
and the shift to Commercial Off –The-Shelf (COTS) by the defense industry), the
Company might operate at a break even or a small profit during the balance of
the current fiscal year. In the event the Company experiences a
significant slowdown in the intake of new orders, the Company may be required to
implement cost-cutting or other downsizing measures to continue its business
operations. Such cost-cutting measures could inhibit future growth
prospects. In appropriate situations, the Company may seek strategic alliances,
joint ventures with others or acquisitions in order to maximize marketing
potential and utilization of existing resources and provide further
opportunities for growth.
The
Company reported net income of $908,000 and operating income of $904,000 for the
nine months ended November 30, 2010.
At
November 30, 2010, February 28, 2010 and November 30, 2009, the Company had cash
of approximately $510,000, $400,000 and $468,000, respectively. Net
income contributed $908,000 to the last nine months’ cash flow generated by
ongoing operations.
At
November 30, 2010, February 28, 2010 and November 30, 2009, the Company had
investments in treasury bills of approximately $6,097,000, $5,601,000 and
$5,462,000, respectively.
At
November 30, 2010, the Company had working capital of $8,515,000 as compared
with working capital of $7,567,000 at November 30, 2009. At February
28, 2010, the Company had a working capital of $7,752,000. The
$948,000 increase for the nine months ended November 30, 2010 was due mainly to
a $940,000 combined increase in cash, receivables, inventories and investments
in treasury bills.
Off-Balance Sheet
Arrangements:
The
Company has not engaged in any off-balance sheet arrangements.
16
ITEM
3. QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
Not
applicable
FORWARD-LOOKING
STATEMENTS
Some of
the statements in this Quarterly Report on Form 10-Q are "forward-looking
statements," as that term is defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include statements regarding our
business, financial condition, results of operations, strategies or
prospects. You can identify forward-looking statements by the fact that these
statements do not relate strictly to historical or current matters. Rather,
forward-looking statements relate to anticipated or expected events, activities,
trends or results. Because forward-looking statements relate to matters that
have not yet occurred, these statements are inherently subject to risks and
uncertainties. Many factors could cause our actual activities or results to
differ materially from the activities and results anticipated in forward-looking
statements. These factors include those described under the caption "Risk
Factors" in our Annual Report on Form 10-K for the year ended February 28, 2010,
including those identified below. We do not undertake any obligation to update
forward-looking statements.
Some of
the factors that may impact our business, financial condition, results of
operations, strategies or prospects include:
|
·
|
Our
complex manufacturing processes may lower yields and reduce our
revenues.
|
|
·
|
Our
business could be materially and adversely affected if we are unable to
obtain qualified supplies of raw materials, parts and finished components
on a timely basis and at a cost-effective
price.
|
|
·
|
We
are dependent on government contracts, which are subject to termination,
price renegotiations and regulatory compliance, which can increase the
cost of doing business and negatively impact our
revenues.
|
|
·
|
Changes
in government policy or economic conditions could negatively impact our
results.
|
|
·
|
Our
inventories may become obsolete and other assets may be subject to
risks.
|
|
·
|
Environmental
regulations could require us to incur significant
costs.
|
|
·
|
Our
business is highly competitive, and increased competition could reduce
gross profit margins and the value of an investment in our
Company.
|
|
·
|
Downturns
in the business cycle could reduce the revenues and profitability of our
business.
|
|
·
|
Our
operating results may decrease due to the decline of profitability in the
semiconductor industry.
|
|
·
|
Uncertainty
of current economic conditions, domestically and globally, could continue
to affect demand for our products and negatively impact our
business.
|
|
·
|
Cost
reduction efforts may be unsuccessful or insufficient to improve our
profitability and may adversely impact
productivity.
|
|
·
|
We
may not achieve the intended effects of our new business strategy, which
could adversely impact our business, financial condition and results of
operations.
|
|
·
|
Our
inability to introduce new products could result in decreased revenues and
loss of market share to competitors; new technologies could also reduce
the demand for our products.
|
|
·
|
Loss
of, or reduction of business from, substantial clients could hurt our
business by reducing our revenues, profitability and cash
flow.
|
|
·
|
A
shortage of three-inch silicon wafers could result in lost revenues due to
an inability to build our products.
|
|
·
|
The
nature of our products exposes us to potentially significant product
liability risk.
|
|
·
|
We
depend on the recruitment and retention of qualified personnel, and our
failure to attract and retain such personnel could seriously harm our
business.
|
|
·
|
Provisions
in our charter documents and rights agreement could make it more difficult
to acquire our Company and may reduce the market price of our
stock.
|
|
·
|
Natural
disasters, like hurricanes, or occurrences of other natural disasters
whether in the United States or internationally may affect the markets in
which our common stock trades, the markets in which we operate and our
profitability.
|
|
·
|
Failure
to protect our proprietary technologies or maintain the right to use
certain technologies may negatively affect our ability to
compete.
|
|
·
|
The
price of our common stock has fluctuated widely in the past and may
fluctuate widely in the future.
|
17
ITEM
4. CONTROLS AND
PROCEDURES
Our
Evaluation of Disclosure Controls and Procedures
The
Company carried out an evaluation, under the supervision and with the
participation of its management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e), and 15d-15(e)) as of the
end of the period covered by this Quarterly Report. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of the end of the
period covered by this Quarterly Report.
Changes
in Internal Control over Financial Reporting
Based on
an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
there has been no change in our internal control over financial reporting during
our last fiscal quarter identified in connection with that evaluation, that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
PART II– OTHER
INFORMATION
ITEM
6. EXHIBITS
Exhibits
31
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002.
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of
2002.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
SOLITRON
DEVICES, INC.
|
|
Date:
January 7, 2011,
|
|
/s/ Shevach Saraf
|
|
Shevach
Saraf
|
|
Chairman,
President,
|
|
Chief
Executive Officer,
|
|
Treasurer
and
|
|
Chief
Financial Officer
|
|
(Principal
executive officer and
|
|
principal
financial officer)
|
18
EXHIBIT
INDEX
EXHIBIT NUMBER
|
DESCRIPTION
|
|
31
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
19