Wed, 19 Feb 2020

WEST PALM BEACH, FL / ACCESSWIRE / January 22, 2020 / Solitron Devices, Inc. (OTC PINK:SODI) ('Solitron' or the 'Company') today announced unaudited results for the fiscal 2020 third quarter ended November 30, 2019.

FISCAL THIRD QUARTER HIGHLIGHTS

Slight increase in net sales in fiscal third quarter versus prior year

154% increase in net bookings in fiscal third quarter versus prior year

Net Income of $38,000 versus a loss of ($358,000) in the prior year

Wafer Fab improvement plan on track for completion by fiscal year end.

FISCAL 2020 NINE MONTH HIGHLIGHTS

11% increase in net sales in first nine months of fiscal 2020 versus prior year

117% increase in net bookings in first nine months of fiscal 2020 versus prior year

Cash and Securities increased by more than $0.7 million in first nine months of fiscal 2020

Net loss decreased by $1.3 million in first nine months of fiscal 2020 versus prior year

For the fiscal 2020 third quarter, net sales increased 0.4% to $2,263,000 versus $2,255,000 in the fiscal 2019 third quarter. Sales in the fiscal 2020 third quarter were negatively impacted by both supplier issues and internal production challenges. The supplier issues related to supplier delivery delays and some supplier deliveries we received failing our quality control inspection. We expect the issues to be resolved in the first quarter of fiscal 2021. Gross profit as a percentage of sales was 20.4% in the fiscal 2020 third quarter versus 12.8% in the fiscal 2019 third quarter. Net income was $38,000, or $0.02 per share in the fiscal 2020 third quarter as compared to a net loss of ($358,000), or ($0.19) per share in the fiscal 2019 third quarter. The reduction in cost of sales in the fiscal 2020 third quarter was primarily due to a decrease in inventory reserves for excess and obsolescence.

Our wafer fab continued to make progress in its improvement plan. As noted in our July 26, 2019 press release, the improvement plan includes a temporary reduction in our fab production levels, which resulted in approximately $175,000 of normal cost being immediately expensed in the quarter, instead of allocated to inventory. The improvement plan is on schedule to be completed towards the end of the fiscal fourth quarter, at which time production levels will be increased. This will allow the company to provide for its future requirements and to supply customers with specialized bipolar wafer lot needs.

Selling, General & Administrative expenses were $422,000 in the fiscal 2020 third quarter, as compared to $604,000 in the fiscal 2019 third quarter. There were no audit costs in the fiscal 2020 third quarter, whereas the company incurred $163,000 in audit related costs in the fiscal 2019 third quarter. There was a $4,000 increase in accounts receivable reserve in the fiscal 2020 third quarter.

Net bookings were $3.5 million in the fiscal 2020 third quarter, and $9.1 million in the first nine months of fiscal 2020, as compared to $1.4 million in the fiscal 2019 third quarter, and $4.2 million in the first nine months of fiscal 2019. We are maintaining our estimate for fiscal 2020 bookings of a range of $10.0 million to $11.0 million. The potential end of life order we were expecting is no longer expected to occur. As a reminder, timing is always uncertain with regard to the receipt of government/defense related contracts.

As announced previously, on October 2, 2019, the Company engaged MaloneBailey, LLP to audit the Company's fiscal 2019 and 2020 financial results at the completion of the fiscal 2020 year.

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