Attached files
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| 8-K - CURRENT REPORT - SOLITRON DEVICES INC | sodi_8k.htm |
Exhibit 99.1
SOLITRON
DEVICES, INC. FINANCIAL/CORPORATE UPDATE
WEST
PALM BEACH, FL – Solitron Devices, Inc. (OTCBB: SODI)
(“Solitron” or the “Company”) is providing
the following financial/corporate update.
FISCAL
2021 THIRD QUARTER HIGHLIGHTS
➢
Net sales of
approximately $2.3 million in the fiscal 2021 third quarter (three
month period ending November 30, 2020) versus $2.3 million in the
prior year period
➢
Net bookings of
$1.3 million in the fiscal 2021 third quarter versus $3.5 million
in prior year period
➢
Cash and securities
of approximately $3.7 million and debt of $0.8 million under our
PPP loan at the end of the fiscal 2021 third quarter versus cash
and securities of $2.9 million and debt of $0.8 million at the end
of the fiscal 2021 second quarter.
➢
Accounts Receivable
was $1.1 million at the end of the fiscal 2021 third quarter as
compared to $1.8 million at the end of the fiscal 2021 second
quarter and $1.4 million at the end of fiscal 2020.
In a
year of unusual challenges, our team has done a remarkable job. We
are on track to come close to, meet or exceed the updated fiscal
year 2021 expectations from our September press release of $10.5
million in net sales, $11.5 million of bookings, and a meaningful
improvement in net income.
For the
first nine months of fiscal 2021 net sales were $7.9 million versus
$7.2 million in the first nine months of fiscal 2020. Our current
estimate for fiscal 2021 fourth quarter net sales is $2.4 to $2.7
million. This would result in net sales for fiscal 2021 of between
$10.3 million and $10.6 million. If achieved, it would be the first
time the company has exceeded $10 million in fiscal year revenues
since the company went through a reorganization more than 25 years
ago. As a reminder, when current management took over in 2016
trailing twelve months sales were approximately $7.5
million.
Due to
COVID-19 we have experienced significant delays in bookings. In the
first nine months of fiscal 2021 bookings were just $4.4 million
versus $9.1 million for the first nine months of fiscal 2020. So
far in the month of December we have received bookings in excess of
$6.6 million and expect to receive approximately another $1.0 to
$1.5 million of additional bookings before the end of the fiscal
year in February 2021. As a reminder, timing
is always uncertain with regard to the receipt of
government/defense related contracts.
In
July, based on the then current economic uncertainty due to the
resurgence of the coronavirus in the country, and South Florida in
particular, and the impact of the COVID-19 on our bookings, the
Company applied for and was approved for a PPP loan in the amount
of $0.8 million. We will be eligible to apply for forgiveness in
January.
Below
are preliminary unaudited financials for the first two quarters of
fiscal 2021
SOLITRON DEVICES, INC.
BALANCE SHEETS
AS OF AUGUST 31, 2020, MAY 31, 2020 AND FEBRUARY 29,
2020
(In thousands except for share and per share amounts)
|
|
August 31,
2020
|
May 31,
2020
|
Feb. 29,
2020
|
|
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash
and cash equivalents
|
2,819
|
1,549
|
1,332
|
|
Securities
|
193
|
211
|
164
|
|
Accounts
receivable
|
1,782
|
1,300
|
1,379
|
|
Inventories,
net
|
3,168
|
3,290
|
2,870
|
|
Prepaid
expenses and other current assets
|
249
|
179
|
118
|
|
TOTAL
CURRENT ASSETS
|
8,211
|
6,529
|
5,863
|
|
|
|
|
|
|
Property,
Plant and Equipment, Net
|
327
|
369
|
405
|
|
Operating
Lease - Right-of-Use Asset
|
535
|
630
|
723
|
|
Other
Assets
|
44
|
45
|
45
|
|
TOTAL
ASSETS
|
9,117
|
7,573
|
7,036
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
325
|
314
|
269
|
|
Customer
deposits
|
29
|
24
|
53
|
|
Notes
Payable (PPP Loan)
|
807
|
-
|
-
|
|
Operating
Lease Liability
|
437
|
417
|
417
|
|
Accrued
expenses and other current liabilities
|
885
|
690
|
438
|
|
TOTAL
CURRENT LIABILITIES
|
2,483
|
1,445
|
1,177
|
|
|
|
|
|
|
Operating
Lease Liability
|
153
|
276
|
377
|
|
TOTAL
LIABILITIES
|
2,636
|
1,721
|
1,554
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY
|
|
|
|
|
Preferred
stock, $.01 par value, authorized 500,000 shares, none
issued
|
-
|
-
|
-
|
|
Common
stock, $.01 par value, authorized 10,000,000 shares,
|
|
|
|
|
2,060,456
shares outstanding, net of 510,807 treasury shares
|
|
|
|
|
at
August 31, 2020; 2,062,949 shares outstanding, net of
|
|
|
|
|
508,314
treasury shares at May 31, 2020 and February 29, 2020
|
21
|
21
|
21
|
|
Additional
paid-in capital
|
1,834
|
1,834
|
1,834
|
|
Retained
Earnings
|
6,113
|
5,478
|
5,109
|
|
Less
treasury stock
|
( 1,487)
|
( 1,481)
|
( 1,481)
|
|
TOTAL
STOCKHOLDERS’ EQUITY
|
6,481
|
5,852
|
5,483
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
9,117
|
7,573
|
7,037
|
SOLITRON DEVICES, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 31, 2020, MAY 31, 2020, AUGUST
31, 2019 AND MAY 31, 2019
(Unaudited, in thousands except for share and per share
amounts)
|
|
Fiscal second
quarter ended
|
Fiscal first
quarter ended
|
Fiscal second
quarter ended
|
Fiscal first
quarter ended
|
|
|
8/31/2020
|
5/31/2020
|
8/31/2019
|
5/31/2019
|
|
|
|
|
|
|
|
Net
Sales
|
3,103
|
2,498
|
2,420
|
2,557
|
|
Cost
of Sales
|
1,978
|
1,642
|
1,958
|
2,366
|
|
|
|
|
|
|
|
Gross
Profit
|
1,125
|
856
|
462
|
191
|
|
|
|
|
|
|
|
Selling,
General and Administrative Expenses
|
526
|
486
|
672
|
444
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
599
|
370
|
( 210)
|
( 253)
|
|
|
|
|
|
|
|
Other
income (loss)
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
1
|
-
|
|
Dividend
Income
|
1
|
6
|
( 7)
|
1
|
|
Realized
gain (loss) on investments
|
11
|
15
|
3
|
( 16)
|
|
Unrealized
gain (loss) on investments
|
24
|
( 22)
|
-
|
19
|
|
Total
other income (loss)
|
36
|
( 1)
|
( 3)
|
4
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
635
|
369
|
( 213)
|
( 249)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss) Per Share-Basic and diluted
|
$0.31
|
$0.18
|
$(0.11)
|
$(0.13)
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
2,060,457
|
2,062,949
|
2,013,959
|
1,901,959
|
SOLITRON DEVICES, INC.
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED AUGUST 31, 2020 AND AUGUST 31, 2019
(Unaudited, in thousands)
|
|
2020
|
2019
|
|
|
|
|
|
Net income
(loss)
|
$1,004
|
$(462)
|
|
Adjustments to
reconcile net income (loss)
|
|
|
|
to net cash used in
operating activities:
|
|
|
|
Depreciation
and amortization
|
119
|
108
|
|
Amortization
of ROU Asset
|
187
|
185
|
|
Net
realized and unrealized losses (gains) on investments
|
( 28)
|
1
|
|
Stock
based compensation
|
-
|
282
|
|
Changes
in Operating Assets and Liabilities:
|
|
|
|
Accounts
receivable
|
( 403)
|
152
|
|
Inventories
|
( 298)
|
909
|
|
Payments
on Operating Lease Liabilities
|
( 204)
|
( 185)
|
|
Prepaid
expenses and other current assets
|
( 131)
|
( 35)
|
|
Other
assets
|
-
|
-
|
|
Accounts
payable
|
56
|
( 411)
|
|
Customer
deposits
|
( 24)
|
33
|
|
Accrued expenses,
other current and non current liabilities
|
447
|
( 103)
|
|
Net
cash provided by (used in) operating activities
|
725
|
474
|
|
|
|
|
|
Investing
activities
|
|
|
|
Proceeds
from sale of securities
|
272
|
45
|
|
Purchases
of Securities
|
( 272)
|
( 32)
|
|
Purchases
of property and equipment
|
( 40)
|
( 68)
|
|
Net
cash provided by (used in) investing activities
|
( 40)
|
( 55)
|
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds
from SBA Paycheck Protection Program loan
|
807
|
-
|
|
Purchase
of treasury stock
|
( 6)
|
-
|
|
Net
cash provided by financing activities
|
802
|
-
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
1,487
|
419
|
|
Cash and cash
equivalents - beginning of the year
|
1,332
|
394
|
|
Cash and cash
equivalents - end of period
|
$2,819
|
$813
|
The
preliminary, unaudited financial information disclosed in this
press release for the fiscal 2020 and 2021 first, second and third
quarters 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. An independent registered public accounting
firm has not reviewed or performed any procedures with respect to
the preliminary, unaudited financial information presented for the
fiscal quarters and fiscal years ended November 30, 2020, August
31, 2020, May 31, 2020, February 29, 2020, November 30, 2019,
August 31,2019, May 31, 2019, February 28, 2019, or February 28,
2018, nor completed the audit for the fiscal year ended February
28, 2017.
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
unaudited fiscal 2020 and 2021 first, second and third quarter
results and the Company’s expectations regarding bookings,
net sales, and net income in fiscal 2021. 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 successful completion of the
two-year audit the Company is currently undergoing; (2) actual
bookings, net sales and net income for fiscal year 2021; (3)
the global impact of the
pandemic outbreak of coronavirus (COVID-19) and its impact on our
operations and the operations of our suppliers and clients,
staffing levels and labor costs, the timing and size of orders from
our clients, our delivery schedules and our liquidity and cash
position (4) our ability to properly account for inventory
in the future; (5) our ability to protect the Company’s net
operating losses and tax benefits; (6) volatility and changes in
our stock price, corporate or other market conditions; (7) the loss
of, or reduction of business from, substantial clients; (8) our
dependence on government contracts, which are subject to
termination, price renegotiations and regulatory compliance; (9)
changes in government policy or economic conditions; (10) increased
competition; (11) the uncertainty of current economic conditions,
domestically and globally; and (12) other factors contained in the
Company’s Securities and Exchange Commission filings,
including its most recent Form 10-K, 10-Q and 8-K
reports.
Tim Eriksen
Chief Executive Officer
(561) 848-4311
Corporate@solitrondevices.com