Solitron Devices Reports $815,000 Net Income, Revenue Increases to $14.05 Million

Solitron Devices, Inc. reported a net income of $815,000 for the fiscal year ending February 28, 2025, a significant decrease from the previous year's net income of $5.8 million. The company's revenue increased by approximately 10% to $14.05 million, up from $12.76 million in the prior year, primarily driven by the acquisition of Micro Engineering Inc. (MEI) in September 2023. However, the increase in revenue was offset by a rise in costs, with cost of sales climbing to $10.06 million, resulting in a gross profit margin that fell to 28% from 30% in the previous year.

The acquisition of MEI has been a pivotal strategic development for Solitron, allowing the company to expand its capabilities in manufacturing electronic components for the medical industry. The acquisition has contributed to a backlog of orders that increased by 62% to $18.11 million as of February 28, 2025, compared to $11.21 million a year earlier. This growth in backlog reflects heightened order activity and the integration of MEI's operations into Solitron's business model.

Operationally, Solitron shipped 73,319 units during the fiscal year, a slight decrease from 74,924 units in the previous year. The company continues to focus on its core markets, with approximately 52% of sales attributed to contracts with customers whose products are sold to the U.S. government. The customer concentration remains high, with two customers accounting for 69% of total revenue in the latest fiscal year, compared to four customers making up 75% in the prior year.

Looking ahead, Solitron's management has expressed optimism about future growth, particularly through the continued integration of MEI and the exploration of new product lines. The company plans to invest in building up inventories and capital equipment to support new product manufacturing. However, management also acknowledges potential challenges, including the impact of inflation and supply chain disruptions, which could affect margins and operational efficiency. The company expects to maintain sufficient liquidity to support its operations, with cash and cash equivalents totaling approximately $4.1 million as of February 28, 2025.