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8-K - CURRENT REPORT - SOLITRON DEVICES INC | sodi_8k.htm |
Exhibit 99.1
Solitron Devices, Inc. Announces Preliminary Unaudited Fourth
Quarter Sales and Bookings
WEST PALM BEACH, Fla., April 12, 2018 (GLOBE NEWSWIRE) -- Solitron
Devices, Inc. (OTCBB:SODI) (“Solitron” or the
“Company”) today announced an update on recent
financial results.
For the quarter ended February 28, 2018 (unaudited) (fourth quarter
of fiscal 2018):
●
Sales
in the fourth quarter of fiscal 2018 increased by 25% to
approximately $1.9 million versus approximately $1.6 million in the
fourth quarter of fiscal 2017.
●
Bookings
in the fourth quarter of fiscal 2018 decreased by 39% to
approximately $4.0 million versus approximately $5.3 million in the
fourth quarter of fiscal 2017.
●
Backlog
at the end of the fourth quarter of fiscal 2018 decreased by 13% to
approximately $7.3 million versus approximately $8.3 million at the
end of the fourth quarter of fiscal 2017.
●
Total
cash and securities was approximately $2.6 million at the end of
the fourth quarter of fiscal 2018 versus approximately $3.1 million
at the end of the fourth quarter of fiscal 2017.
●
Accounts
receivable at the end of the fourth quarter of fiscal 2018 was
approximately $1.4 million versus approximately $0.7 million at the
end of the fourth quarter of fiscal 2017.
●
Total
liabilities at the end of the fourth quarter of fiscal 2018 was
approximately $1.4 million versus approximately $0.9 million at the
end of fourth quarter of fiscal 2017.
For the fiscal year ended February 28, 2018
(unaudited):
●
Sales
in fiscal 2018 increased by 25% to approximately $9.3 million
versus approximately $7.4 million in fiscal
2017.
●
Bookings
in fiscal 2018 decreased by 17% to approximately $8.3 million
versus $9.9 million in fiscal 2017.
While sales increased by 25% in the fourth quarter of fiscal 2018
versus the prior year fiscal quarter they still fell short of
management’s expectations. The shortfall related to the
continuation into the fourth quarter of the issues noted in our
previous press release announcing preliminary unaudited third
quarter results: 1) difficulties encountered in manufacturing some
products along with extensive qualification testing for a
distribution agreement entered into in the fourth quarter of fiscal
2017, and 2) delivery problems by a supplier of raw materials used
in two of our larger contracts. We have begun shipping
the affected items in Q1 of fiscal 2019.
The Company is seeking to grow revenues and expects growing pains
to be a natural part of that process. We currently do not
expect to materially increase our investment in property and
equipment; however, we have materially added to our engineering
staff in order to address the growing pains and expand our
capabilities. The increased cost in fiscal 2018 was
approximately $0.5 million, which consisted of hiring additional
personnel and replacing some personnel with personnel possessing
greater skills and experience that we needed to compensate at a
higher level. While the additional cost results in a
reduction in earnings in the short term, we believe that it will
broaden and strengthen our capabilities which will in the long term
lead to higher sales and higher future
profitability.
As noted above, bookings in the fourth quarter of fiscal 2018 were
approximately $4.0 million versus approximately $5.3 million in the
fourth quarter of fiscal 2017. Approximately $0.8 million of
the reduction was due to a reduction in the size of a large order
versus the prior year. This was expected, as we had been
informed by the customer that there would be two orders instead of
the typical one. The second order is expected to be awarded
toward the end of the second quarter of fiscal 2019. In
aggregate, the two orders are expected to be approximately $1.5
million larger than in prior years.
The investigation pertaining to certain matters relating to the
Company’s historical inventory reserves is ongoing.
Depending on the results of the investigation, the Audit Committee
will determine whether a restatement of previously issued financial
statements is necessary. The results of the investigation may
also impact management’s review of the Company’s
inventory policies and assessment to date regarding the extent to
which inventory will be written down for the fiscal year ended
February 28, 2017 and result in changes to management’s prior
review and assessments. The Company intends to take the appropriate
measures to correct any gaps or deficiencies in internal controls
that may be discovered in the investigation to ensure that the
financial statements are complete and accurate in all material
respects.
These preliminary, unaudited results for the fourth quarter and
fiscal years ended 2017 and 2018 are based on management's review
of operations for those periods and the information available to
the Company as of the date of this press release and remain subject
to the completion of the Company's review procedures and the audit
of the Company’s annual financial statements by an
independent registered public accounting firm to be retained by the
Company. Final adjustments and other material developments may
arise between the date of this press release and the date the
Company files with the Securities and Exchange Commission
(“SEC”) its Annual Report on Form 10-K for the year
ended February 28, 2018. Our current independent registered
public accounting firm has not reviewed or performed any procedures
with respect to the preliminary financial information presented for
the fiscal year ended February 28, 2018, nor has it completed the
audit for the fiscal year ended February 28, 2017.
The information presented in this press release should not be
considered a substitute for the financial information to be filed
with the SEC in the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 2018 once it becomes available. The
Company has no intention or obligation to update the preliminary
estimated unaudited financial results in this release prior to
filing its Annual Report on Form 10-K for the year ended February
28, 2018.
About Solitron Devices, Inc.
Solitron Devices, Inc., a Delaware corporation, 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
(“Power MOSFETS”), 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
(“JAN”) transistors, diodes and Standard Military
Drawings voltage regulators, are sold as standard or catalog items.
The Company was incorporated under the laws of the State of New
York in March 1959 and reincorporated under the laws of the State
of Delaware in August 1987.
Forward-Looking Statements
This press release contains forward-looking statements regarding
future events and the future performance of Solitron Devices, Inc.
that involve risks and uncertainties that could materially affect
actual results, including statements regarding the Company’s
preliminary year-end results and fourth quarter results.
Factors that could cause actual results to vary from current
expectations and forward-looking statements contained in this press
release include, but are not limited to: (1) the Audit
Committee’s ability to complete the investigation; (2) the
results of the investigation and the impact of the results on the
Company’s previously issued financial statements and the
Company’s inventory policies and assessments; (3) our ability
to properly account for inventory in the future, (4) our ability to
protect the Company’s net operating losses and tax benefits,
(5) changes in our stock price, corporate or other market
conditions; (6) the loss of, or reduction of business from,
substantial clients; (7) our dependence on government contracts,
which are subject to termination, price renegotiations and
regulatory compliance; (8) changes in government policy or economic
conditions; (9) increased competition; (10) the uncertainty of
current economic conditions, domestically and globally; and (11)
other factors contained in the Company’s Securities and
Exchange Commission filings, including its Form 10-K, 10-Q and 8-K
reports.
Tim Eriksen
Chief Executive Officer
(561) 848-4311
Corporate@solitrondevices.com