SOLITRON DEVICES INC
For the period ended Feb 28, 2025. Filed May 23, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed May 23, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-02-29; filed 2024-07-12.
0001654954-24-008904
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-02-28; filed 2025-05-23.
0001437749-25-018346
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 59 previous paragraphs and 63 current paragraphs.
36 unchanged; 22 reworded; 5 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Revenue Recognition - The Company records revenue in accordance with ASC 606,Revenues from Contracts with Customers (Topic 606) which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. Revenue is recognized at a point in time, generally upon shipment of products to customers.
Current report
Income Taxes - Income taxes are accounted for under the asset and liability method of ASC 740-10, “Income Taxes”. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Current report
Inventories - Inventories are stated at the lower of cost and net realizable value. Cost is determined using the “first-in, first-out” (FIFO) method. If excess material is not utilized after two fiscal years, it is fully reserved, except for wafers which function under a three- year policy. Any inventory item once designated as reserved is carried at zero value in all subsequent valuation activities. The Company does not classify a portion of inventories as non-current since we cannot reasonably estimate based on the length of our operating cycle which items will or will not be used within twelve months.
Current report
PROPOSED TARIFFS
Current report
The Company relies on various foreign suppliers for raw materials used in the manufacture and production of our products. If the proposed increased tariffs are implemented, this may have a significant impact on the cost of the materials the Company purchases and therefore our expenses and revenues.
Removed paragraphs (1)
Previous report
At February 29, 2024 and February 28, 2023, the Company had short-term investments of approximately $0 and $986,000, respectively.
Reworded paragraphs (22)
Previous wording
During the fiscal year ended February 29, 2024, the Company’s book-to-bill ratio was approximately 1.11 to 1 as compared to approximately 1.49 to 1 for the fiscal year ended February 28, 2023, reflecting an increase in the volume of orders booked. Historically, the Company has experienced seasonality in its bookings, with the fiscal fourth quarter experiencing the highest level of bookings. Going forward we expect more variability in bookings.
Current wording
During the fiscal year ended February 28, 2025, the Company’s book-to-bill ratio was approximately 1.48 to 1 as compared to approximately 1.01 to 1 for the fiscal year ended February 29, 2024, reflecting an increase in the volume of orders booked. Historically, the Company has experienced seasonality in its bookings, with the fiscal fourth quarter experiencing the highest level of bookings. Going forward we expect more variability in bookings.
Previous wording
*Revenue.*Net sales for the fiscal year ended February 29, 2024, increased by approximately 99% to $12,757,000 versus $6,406,000 for the fiscal year ended February 28, 2023. The increase was primarily attributable to the acquisition of MEI in fiscal 2024, and the return to more normal production levels after the relocation into our new West Palm Beach facility in fiscal 2023. The relocation resulted in minimal shipments in the fiscal 2023 third quarter.
Current wording
*Revenue.*Net sales for the fiscal year ended February 28, 2025, increased by approximately 10% to $14,049,000 versus $12,757,000 for the fiscal year ended February 29, 2024. The increase was primarily attributable to the acquisition of MEI in fiscal 2024.
Previous wording
Net bookings for the fiscal year ended February 29, 2024, were approximately 11% more than net sales. Backlog increased by approximately 47% to $11,207,000 as of February 29, 2024, from $7,633,000 as of February 28, 2023. The increase was due to increased order activity by our customers and the acquisition of MEI.
Current wording
Net bookings for the fiscal year ended February 28, 2025, were approximately 48% more than net sales. Backlog increased by approximately 62% to $18,108,000 as of February 28, 2025, from $11,207,000 as of February 29, 2024. The increase was due to increased order activity by our customers and the acquisition of MEI.
Previous wording
During the fiscal year ended February 29, 2024, the Company shipped 74,924 units as compared with 52,924 units shipped during the fiscal year ended February 28, 2023, primarily due to the acquisition of MEI and to increased shipments by the Company upon completion of relocating its facilities. It should be noted that since the Company manufactures a wide variety of products with an average sales price ranging from a few dollars to several hundred dollars, such periodic variations in the Company’s volume of units shipped might not be a reliable indicator of the Company’s performance.
Current wording
During the fiscal year ended February 28, 2025, the Company shipped 73,319 units as compared with 74,924 units shipped during the fiscal year ended February 29, 2024. It should be noted that since the Company manufactures a wide variety of products with an average sales price ranging from a few dollars to several hundred dollars, such periodic variations in the Company’s volume of units shipped might not be a reliable indicator of the Company’s performance.
Previous wording
*Cost of Sales.*Cost of sales for the fiscal year ended February 29, 2024, increased to $8,950,000 from $5,005,000 for the fiscal year ended February 28, 2023. Expressed as a percentage of sales, cost of sales decreased to 70% for the fiscal year ended February 29, 2024, as compared to 78% for the fiscal year ended February 28, 2023. Included in cost of sales in fiscal 2024 was $718,000 of non-cash cost due to the fair value adjustment of inventory as required in the MEI acquisition.
Current wording
Cost of Sales. Cost of sales for the fiscal year ended February 28, 2025, increased to $10,057,000 from $8,950,000 for the fiscal year ended February 29, 2024. Expressed as a percentage of sales, cost of sales increased to 72% for the fiscal year ended February 28, 2025, as compared to 70% for the fiscal year ended February 29, 2024. Included in cost of sales in fiscal 2024 was $718,000 of non-cash cost due to the fair value adjustment of inventory as required in the MEI acquisition. The increase is primarily due to the acquisition of MEI.
Previous wording
*Gross Profit.*Gross profit for the fiscal year ended February 29, 2024, increased to $3,807,000 from $1,401,000 for the fiscal year ended February 28, 2023, due primarily to increased net sales and the acquisition of MEI. Expressed as a percentage of sales, gross profit for the fiscal year ended February 29, 2024, increased to 30% as compared to 22% for the fiscal year ended February 28, 2023 due primarily to increased revenue.
Current wording
*Gross Profit.*Gross profit for the fiscal year ended February 28, 2025, increased to $3,992,000 from $3,807,000 for the fiscal year ended February 29, 2024, due primarily to increased net sales and the acquisition of MEI. Expressed as a percentage of sales, actual gross profit for the fiscal year ended February 28, 2025, decreased to 28% as compared to 30% for the fiscal year ended February 29, 2024.
Previous wording
Selling, General & Administrative Expenses. During the fiscal year ended February 29, 2024, selling, general and administrative expenses, as a percentage of sales, decreased to approximately 23% as compared to 32% for the year ended February 28, 2023. In terms of dollars, selling, general and administrative expenses increased 40% to $2,873,000 for the fiscal year ended February 29, 2024, from $2,052,000 for the fiscal year ended February 28, 2023. This increase is primarily due to professional and legal fees related to the acquisition of MEI and six months of SG&A at MEI.
Current wording
Selling, General & Administrative Expenses. During the fiscal year ended February 28, 2025, selling, general and administrative expenses, as a percentage of sales, decreased to approximately 21% as compared to 23% for the year ended February 29, 2024. In terms of dollars, selling, general and administrative expenses increased 4% to $2,994,000 for the fiscal year ended February 28, 2025, from $2,873,000 for the fiscal year ended February 29, 2024. This increase is primarily due to the acquisition of MEI.
Previous wording
Operating Income. Operating income for the fiscal year ended February 29, 2024, was $934,000 as compared to an operating loss of ($651,000) for the fiscal year ended February 28, 2023. The increase in operating income was mainly attributable to the increase in net sales.
Current wording
Operating Income. Operating income for the fiscal year ended February 28, 2025, was $998,000 as compared to an operating income of $934,000 for the fiscal year ended February 29, 2024. The increase in operating income was mainly attributable to the increase in net sales.
Previous wording
Total Other Income. Interest income and dividend income were $29,000 and $29,000, respectively for the fiscal year ended February 29, 2024, compared to $36,000 and $31,000, respectively for the fiscal year ended February 28, 2023. Interest expense was ($177,000) for the fiscal year ended February 29, 2024, compared to ($108,000) for the fiscal year ended February 28, 2023. The increased expense was primarily due to $53,000 of non-cash interest expense related to the contingent consideration associated with the acquisition of MEI. Realized gains (losses) on investments for the fiscal year ended February 29, 2024, were $332,000 compared to loss of ($18,000) for the fiscal year ended February 28, 2023. The change in unrealized gains (loss) on investments for the fiscal year ended February 29, 2024, was a loss of ($579,000) compared to a gain of $886,000 for the fiscal year ended February 28, 2023. Bargain purchase gain on the acquisition of MEI was $2,236,000 in the fiscal year ended February 29, 2024, versus $0 in the fiscal year ended February 28, 2023. Scrap income was $0 in the fiscal year ended February 29, 2024, as compared to $650,000 in the fiscal year ended February 28, 2023. Other income (expense) was ($27,000) in the fiscal year ended February 29, 2024, as compared to $0 in the fiscal year ended February 28, 2023.
Current wording
Total Other Income. Interest income and dividend income were $6,000 and $70,000, respectively for the fiscal year ended February 28, 2025, compared to $29,000 and $29,000, respectively for the fiscal year ended February 29, 2024. Interest expense was ($272,000) for the fiscal year ended February 28, 2025, compared to ($177,000) for the fiscal year ended February 29, 2024. The increase in interest expense was primarily due to the purchase of MEI's property and building, which occurred in May 2024. Realized gains (losses) on investments for the fiscal year ended February 28, 2025, was $127,000 compared to $332,000 for the fiscal year ended February 29, 2024. The change in unrealized gains (loss) on investments for the fiscal year ended February 28, 2025, was $64,000 compared to a loss of ($579,000) for the fiscal year ended February 29, 2024. Bargain purchase gain on the acquisition of MEI was $0 in the fiscal year ended February 28, 2025, versus $2,236,000 in the fiscal year ended February 29, 2024. Other income (expense) was $0 in the fiscal year ended February 28, 2025, as compared to ($27,000) in the fiscal year ended February 29, 2024.
Previous wording
Income Taxes. Income taxes for the fiscal year ended February 29, 2024, was a benefit of $3,024,000 as compared to $0 for the fiscal year ended February 28, 2023. The tax benefit was due to the release of the Company’s deferred tax valuation.
Current wording
Income Taxes. Income taxes for the fiscal year ended February 28, 2025, were ($178,000) as compared to a benefit of $3,024,000 for the fiscal year ended February 29, 2024. The tax benefit for fiscal year 2024 was due to the release of the Company’s deferred tax valuation.
Previous wording
Net Income. Net income for the fiscal year ended February 29, 2024, was $5,801,000 as compared to net income of $826,000 for the fiscal year ended February 28, 2023. The increase in net income was mainly attributable to the bargain purchase gain and increased operating income.
Current wording
Net Income. Net income for the fiscal year ended February 28, 2025, was $815,000 as compared to net income of $5,801,000 for the fiscal year ended February 29, 2024. The decrease in net income was mainly attributable to the bargain purchase gain and release of the Company's deferred tax valuation recorded in fiscal year 2024 as part of the MEI acquisition as noted above.
Previous wording
Net cash provided by operating activities was $962,000 for the year ended February 28, 2023, primarily reflecting net income of $826,000, a decrease in accounts receivable of $807,000, and depreciation of $363,000 partially offset by net realized and unrealized gains of $868,000 and an increase in inventories of $155,000.
Current wording
Net cash provided by operating activities was $2,398,000 for the year ended February 28, 2025, primarily reflecting net income of $815,000, a decrease in inventory of $692,000, a decrease in accounts receivable of $697,000 and depreciation of $559,000 offset by a decrease in customer deposits of $421,000.
Previous wording
Net cash provided by (used in) investing activities was ($3,491,000) for the year ended February 28, 2023, primarily reflecting ($2,494,000) in purchases of short-term investment, ($2,188,000) in purchases of property and equipment, and ($1,313,000) in purchases of marketable securities, partially offset by $1,533,000 in maturities of short-term investments and $971,000 from proceeds from the sale of marketable securities.
Current wording
Net cash used in investing activities was ($1,750,000) for the year ended February 28, 2025, primarily reflecting ($1,838,000) in purchases of property and equipment, and ($651,000) in purchases of marketable securities, partially offset by $827,000 from proceeds from the sale of marketable securities.
Previous wording
Net cash provided by (used in) financing activities was ($112,000) for the year ended February 28, 2023, primarily reflecting ($103,000) in principal payments on the mortgage loan.
Current wording
Net cash provided by financing activities was $1,234,000 for the year ended February 28, 2025, primarily reflecting $1,400,000 in proceeds from the MEI mortgage loan, partially offset by ($131,000) in principal payments on mortgage loans.
Previous wording
We expect our sole source of liquidity over the next twelve months to be cash from operations and cash and cash equivalents, if necessary. We anticipate that our capital expenditures required during the next twelve months to sustain operations will be approximately $0.3 million and will be funded from operations and cash and cash equivalents, if necessary.
Current wording
We expect our sole source of liquidity over the next twelve months to be cash from operations and cash and cash equivalents, if necessary. We anticipate that our capital expenditures required during the next twelve months to sustain operations will be approximately$0.3 million and will be funded from operations and cash and cash equivalents, if necessary.
Previous wording
At February 29, 2024 and February 28, 2023, the Company had cash and cash equivalents of approximately $2,217,000 and $1,447,000, respectively. The cash increase for the year ended February 29, 2024, was primarily due to cash from operating activities.
Current wording
At February 28, 2025 and February 29, 2024, the Company had cash and cash equivalents of approximately $4,099,000 and $2,217,000, respectively. The cash increase for the year ended February 28, 2025, was primarily due to cash from operating activities.
Previous wording
At February 29, 2024 and February 28, 2023, the Company had investments in securities of approximately $904,000 and $1,895,000, respectively.
Current wording
At February 28, 2025 and February 29, 2024, the Company had investments in securities of approximately $919,000 and $904,000, respectively.
Previous wording
At February 29, 2024, the Company had working capital of $6,227,000 as compared with working capital at February 28, 2023 of $6,541,000. The decrease for the year ended February 29, 2024, was due primarily to the acquisition of MEI.
Current wording
At February 28, 2025, the Company had working capital of $8,594,000 as compared with working capital at February 29, 2024 of $6,227,000. The increase for the year ended February 28, 2025, was due primarily to the acquisition of MEI.
Previous wording
The Company had approximately $2,300,000 in cash and equivalents on hand as of June 30, 2024. Management estimates this amount will be sufficient to fund the Company’s operations and working capital requirements for the next twelve months.
Current wording
The Company had approximately $3,000,000 in cash and equivalents on hand as of April 30, 2025. Management estimates this amount will be sufficient to fund the Company’s operations and working capital requirements for the next twelve months.
Previous wording
The Company’s previously authorized stock repurchase program permits the Company to acquire up to $1,000,000 of its outstanding common stock from time to time. Purchases under the amended stock repurchase program may be made through the open market or privately negotiated transactions as determined by the Company’s management, and in accordance with the requirements of the Securities and Exchange Commission. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other conditions.
Current wording
The Company’s previously authorized stock repurchase program permits the Company to acquire up to $2,000,000 of its outstanding common stock from time to time. Purchases under the amended stock repurchase program may be made through the open market or privately negotiated transactions as determined by the Company’s management, and in accordance with the requirements of the Securities and Exchange Commission. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other conditions.
Previous wording
See Note 2 in the financial statements for the Company’s significant accounting policies. Of the Company’s accounting policies, the following are considered to be critical – Revenue Recognition, Income Taxes, and Inventories.
Current wording
See Note 2 in the financial statements for a complete overview of the Company’s significant accounting policies, which are summarized below. Of the Company’s accounting policies, the following are considered to be critical – Revenue Recognition, Income Taxes, and Inventories.
Previous wording
During the fiscal year ended February 29, 2024, the Company’s net bookings were $14,117,000 in new orders as compared with $9,572,000 for the year ended February 28, 2023, reflecting an increase in bookings of approximately 47%. The* Company’s *backlog increased to $11,207,000 at February 29, 2024 as compared with $7,633,000 as of February 28, 2023, reflecting an increase of approximately 47% in backlog.
Current wording
During the fiscal year ended February 28, 2025, the Company’s net bookings were $20,759,000 in new orders as compared with $12,836,000 for the year ended February 29, 2024, reflecting an increase in bookings of approximately 62%. The* Company’s *backlog increased to $18,108,000 at February 28, 2025 as compared with $11,207,000 as of February 29, 2024, reflecting an increase of approximately 62% in backlog.