Universal Security Instruments Announces its Fourth-Quarter and Year-End Results

Rhea-AI Summary

Universal Security Instruments (NYSE: UUU) reported significant financial declines for the fourth quarter and fiscal year ending March 31, 2020. Q4 sales dropped by $910,144 (20.1%) to $3,613,786, resulting in a net loss of $3,492,290, or $1.51 per share. For the fiscal year, sales fell by $2,785,016 (15.8%) to $14,803,024, with a net loss of $5,813,891, or $2.51 per share. The company attributed these declines to the impact of the COVID-19 pandemic and a loss from the sale of its Hong Kong Joint Venture, totaling $2,472,620. Despite these challenges, sales are expected to improve in the upcoming quarter as operations resume.

Positive

• Expected sales increase in Q2 2020 as most customers return to operations.
• New retail customers added.

Negative

• Q4 sales declined by $910,144 (20.1%) to $3,613,786.
• Net loss of $3,492,290 in Q4 compared to a loss of $270,836 in the previous year.
• Fiscal year sales decreased by $2,785,016 (15.8%) to $14,803,024.
• Net loss of $5,813,891 for the fiscal year, significantly higher than last year's loss of $1,347,986.
• Loss of $2,472,620 from the sale of its Hong Kong Joint Venture.

OWINGS MILLS, Md., Aug. 10, 2020 /PRNewswire/ -- Universal Security Instruments, Inc. (NYSE Amex: UUU) today announced its financial results for the fourth quarter and its fiscal year ended March 31, 2020.

The Company reported the following for its fourth quarter and fiscal year ended March 31, 2020:

• For the fourth quarter ended March 31, 2020, sales decreased $910,144 (20.1%) to $3,613,786 from $4,523,930 from the comparable period last year. USI reported a net loss of $3,492,290, or $1.51 per basic and diluted share compared to a net loss of $270,836, or $0.12 per basic and diluted share for the comparable period of the previous year.
• For the 12 months ended March 31, 2020, sales decreased $2,785,016 (15.8%) to $14,803,024 versus $17,588,040 for the fiscal year ended March 31, 2019. The Company reported a net loss of $5,813,891, or $2.51 per basic and diluted share, versus a net loss of $1,347,986 or $0.58 per basic and diluted share, for the same period last year.

Harvey Grossblatt, President and Chief Executive Officer said, "Included in the fourth quarter results was the previously reported sale of the Company's 50% interest in its Hong Kong Joint Venture. The sale, which occurred on March 31, 2020, resulted in a loss of $2,472,620. In addition, the Hong Kong Joint Venture ceased production for approximately one month during the fourth quarter ended March 31, 2020 due to the COVID-19 pandemic. As a result we recorded a loss of approximately $218,000 from of the operations of the Hong Kong Joint Venture during the fourth quarter. The COVID-19 pandemic also contributed to our reduced sales in the quarter as many of our customers were temporarily closed."

"Our year end results included a charge of $2,472,620 from the previously reported sale of our 50% interest in the Hong Kong Joint Venture, as well as our share of the Hong Kong Joint Venture's net loss in the amount $1,369,655. The primary reasons for lower sales and gross margins during the fiscal year ended March 31, 2020 include generally lower sales and the impact of the COVID-19 pandemic.

The COVID-19 pandemic has continued to affect our sales in our first quarter ended June 30, 2020, but sales are expected to be higher in our current second quarter ending September 30, 2020, as most of our customers have returned to full operations and we have added new retail customers."

11407 CRONHILL DRIVE, SUITE A • OWINGS MILLS, MARYLAND 21117, USA
 (410) 363-3000  •  www.universalsecurity.com

UNIVERSAL SECURITY INSTRUMENTS, INC. is a U.S.-based manufacturer (through its Hong Kong Joint Venture) and distributor of safety and security devices. Founded in 1969, the Company has a 48 year heritage of developing innovative and easy-to-install products, including smoke, fire and carbon monoxide alarms. For more information on Universal Security Instruments, visit our website at www.universalsecurity.com.

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"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the federal securities laws that inherently include certain risks and uncertainties. Actual results could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, among other items, our Hong Kong Joint Venture's respective ability to maintain operating profitability, currency fluctuations, the impact of current and future laws and governmental regulations affecting us and our Hong Kong Joint Venture and other factors which may be identified from time to time in our Securities and Exchange Commission filings and other public announcements. We do not undertake and specifically disclaim any obligation to update any forward-looking statements to reflect occurrence of anticipated or unanticipated events or circumstances after the date of such statements. We will revise our outlook from time to time and frequently will not disclose such revisions publicly.

                                 

UNIVERSAL SECURITY INSTRUMENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(UNAUDITED)
	Three Months Ended March 31,
	2020	2019
Net sales	$3,613,786	$4,523,930
Net loss	(3,492,290)	(270,836)
Net loss per share – basic and diluted	(1.51)	(0.12)
Weighted average number of common shares outstanding          Basic and diluted	2,312,887	2,312,887
	(AUDITED)
	Fiscal Year Ended March 31,
	2020	2019
Net sales	$14,803,024	$17,588,040
Net loss	(5,813,891)	(1,347,986)
Net loss per share – basic and diluted	(2.51)	(0.58)
Weighted average number of common shares outstanding          Basic and diluted	2,312,887	2,312,887

 

CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	March 31,
	2020	2019
Cash	$      93,794	$      374,472
Accounts receivable and amount due from factor	2,446,533	3,015,412
Inventory	5,123,959	6,852,305
Prepaid expenses	113,145	145,190
TOTAL CURRENT ASSETS	7,777,431	10,387,379
INVESTMENT IN HONG KONG JOINT VENTURE	-	8,441,889
PROPERTY AND EQUIPMENT – NET	346,477	19,998
OTHER ASSETS	53,189	57,660
TOTAL ASSETS	$  8,177,097	$ 18,906,926
LIABILITIES AND SHAREHOLDERS' EQUITY
Line of credit - factor	$ 1,561,665	$   1,851,591
Short-term portion of operating lease liability	158,578	-
Accounts payable– Trade	505,904	616,444
Accounts payable – Eyston Company Ltd.	266,409	4,962,023
Accrued liabilities	225,377	603,008
TOTAL CURRENT LIABILITIES	2,717,933	8,033,066
ACCOUNTS PAYABLE – Eyston Company Ltd. - noncurrent	839,831	-
LONG-TERM PORTION OF OPERATING LEASE LIABILITY	171,120	-
TOTAL LONG-TERM LIABILITIES	1,010,951	-
COMMITMENTS AND CONTINGENCIES	-	-
SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; 20,000,000 authorized, 2,312,887 shares outstanding at March 31, 2020 and 2019	23,129	23,129
Additional paid-in capital	12,885,841	12,885,841
(Accumulated Deficit)	(8,460,757)	(2,646,866)
Accumulated other comprehensive income	_________-	611,756
TOTAL SHAREHOLDERS' EQUITY	4,448,213	10,873,860
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 8,177,097	$18,906,926

 

Contact:  Harvey Grossblatt, President 
Universal Security Instruments, Inc.
410-363-3000, Ext. 224
Or
Don Hunt, Jeff Lambert
Lambert, Edwards & Associates, Inc.
616-233-0500

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SOURCE Universal Security Instruments, Inc.

FAQ

What were the Q4 financial results for Universal Security Instruments (UUU)?

For Q4 ending March 31, 2020, UUU reported a sales decline of $910,144 (20.1%) to $3,613,786 and a net loss of $3,492,290.

How did COVID-19 impact Universal Security Instruments (UUU) financial performance?

COVID-19 contributed to reduced sales in Q4 and in the fiscal year, causing a significant loss in revenues.

What is the financial outlook for Universal Security Instruments (UUU) in Q2 2020?

Sales are expected to improve in Q2 2020 as most customers have returned to full operations.

What was the net loss reported by UUU for the fiscal year ending March 31, 2020?

UUU reported a net loss of $5,813,891 for the fiscal year, compared to a loss of $1,347,986 the prior year.