Universal Security Instruments Reports First-Quarter Results

Rhea-AI Summary

Universal Security Instruments (NYSE Amex: UUU) reported its fiscal quarter results ended June 30, 2024. The company experienced a significant decline in sales, dropping from $6,698,771 in the previous year to $4,598,516 this quarter. UUU also reported a net loss of $442,206, or $(0.19) per basic and diluted share, compared to a net income of $165,130, or $0.07 per share, in the same period last year.

CEO Harvey Grossblatt attributed the lower sales to supply chain delays in obtaining components for security products. Additionally, gross margins were reduced due to higher ocean freight and component costs. Universal Security Instruments, founded in 1969, is a distributor of safety and security devices, specializing in smoke, fire, and carbon monoxide alarms.

Positive

• Over 55-year heritage in developing innovative safety and security devices
• Continued operation and reporting of financial results despite challenges

Negative

• Sales decreased by 31.4% from $6,698,771 to $4,598,516 year-over-year
• Net loss of $442,206 compared to net income of $165,130 in the previous year
• Earnings per share dropped from $0.07 to $(0.19)
• Supply chain delays affecting component availability for security products
• Reduced gross margins due to higher ocean freight and component costs

Insights

Financial Analyst

Universal Security Instruments' Q1 FY2025 results reveal significant challenges. Sales dropped 31.4% year-over-year to $4.6 million, primarily due to supply chain disruptions affecting component availability for security products. The company swung from a profit to a net loss of $442,206, or $0.19 per share, compared to a net income of $165,130 in the same quarter last year.

The deterioration in financial performance is concerning, with gross margins squeezed by elevated ocean freight and component costs. These factors suggest ongoing operational difficulties that may persist in the near term. Investors should closely monitor the company's ability to navigate supply chain issues and manage costs effectively in the coming quarters.

Supply Chain Expert

The company's performance highlights the ongoing global supply chain challenges. The inability to secure components for security products has directly impacted sales, demonstrating the critical nature of supply chain management in today's market. This situation underscores the need for:

• Diversification of suppliers to mitigate risks
• Improved inventory management strategies
• Potential redesign of products to use more readily available components

The increased ocean freight costs further compound the issue, suggesting that Universal Security Instruments may need to reassess its logistics strategies and potentially explore local sourcing options to reduce dependency on international shipping.

OWINGS MILLS, Md., Aug. 19, 2024 (GLOBE NEWSWIRE) -- Universal Security Instruments, Inc. (NYSE Amex: UUU) today announced results for its fiscal quarter ended June 30, 2024.

The Company reported sales of $4,598,516 for the quarter ended June 30, 2024, versus $6,698,771 for the comparable period of last year. The Company reported a net loss of $442,206 or $(0.19) per basic and diluted share, compared to net income of $165,130, or $0.07 per basic and diluted share, for the same period last year.

Harvey Grossblatt - President and CEO said: “Sales were lower due to supply chain delays in obtaining components for the Company’s security products, and gross margins were reduced in the June quarter by higher ocean freight and component costs.”     

UNIVERSAL SECURITY INSTRUMENTS, INC. is a distributor of safety and security devices. Founded in 1969, the Company has an over 55-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.

Contact: Harvey Grossblatt, CEO
Universal Security Instruments, Inc.
(410) 363-3000, Ext. 224
or
Zachary Mizener
Lambert & Co.
(315) 529-2348

"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, currency fluctuations, the impact of current and future laws and governmental regulations, 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 June 30,
		2024				2023
Sales	$	4,598,516			$	6,698,771
Net (Loss) Income:		(442,206	)			165,130
Net (Loss) Income per share – basic and diluted		(0.19	)			0.07
Weighted average number of common shares outstanding:
Basic and diluted		2,312,887				2,312,887

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

ASSETS
	June 30, 2024				June 30, 2023
Cash	$	321,539			$	240,817
Accounts receivable and amount due from factor		2,955,164				4,670,947
Inventory		5,106,588				2,878,373
Prepaid expense		132,241				280,594
TOTAL CURRENT ASSETS		8,515,532				8,070,731
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS–NET		149,925				313,550
TOTAL ASSETS	$	8,665,457			$	8,384,281
LIABILITIES AND SHAREHOLDERS’ EQUITY
Line of credit – factor	$	2,223,419			$	1,370,299
Short-term portion of operating lease liability		132,659				153,095
Accounts payable		1,526,605				831,915
Accrued liabilities		261,953				372,366
TOTAL CURRENT LIABILITIES		4,144,636				2,727,675
LONG-TERM OPERATING LEASE LIABILITY		-				132,659
TOTAL LONG-TERM LIABILITIES		-				132,659
SHAREHOLDERS’ EQUITY:
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 2,312,887 at June 30, 2024 and 2023		23,129				23,129
Additional paid-in capital		12,885,841				12,885,841
Accumulated Deficit		(8,388,149	)			(7,385,023	)
TOTAL SHAREHOLDERS’ EQUITY		4,520,821				5,523,947
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,665,457			$	8,384,281

FAQ

What were Universal Security Instruments' (UUU) sales for the quarter ended June 30, 2024?

Universal Security Instruments (UUU) reported sales of $4,598,516 for the quarter ended June 30, 2024.

How did Universal Security Instruments' (UUU) net income change in Q1 2024 compared to the previous year?

UUU reported a net loss of $442,206 in Q1 2024, compared to a net income of $165,130 in the same period last year.

What factors affected Universal Security Instruments' (UUU) performance in the first quarter of 2024?

UUU's performance was affected by supply chain delays in obtaining components for security products, higher ocean freight costs, and increased component costs, which reduced gross margins.

What is the main business of Universal Security Instruments (UUU)?

Universal Security Instruments (UUU) is a distributor of safety and security devices, specializing in smoke, fire, and carbon monoxide alarms.