Universal Security Instruments Reports Third-Quarter Results
- None.
- Sales decreased by 19.2% to $4,654,978 for the three months ended December 31, 2023.
- Net income was $102,176 for the quarter, down from $341,312 for the same period last year.
- Sales for the nine months ended December 31, 2023, decreased by 7.3% to $15,071,204 compared to the same period in 2022.
- Net income for the nine months was $80,881, a decrease from $435,776 in 2022.
- The company cited supply chain difficulties as the primary reason for the sales decline.
Insights
The reported decline in sales for Universal Security Instruments reflects a broader trend in the security and safety device industry, where supply chain disruptions have had a significant impact on companies' abilities to meet demand. This particular sales decrease of 19.2% for the quarter and 7.3% for the nine-month period is noteworthy as it indicates a substantial contraction in revenue generation. Analyzing the company's sales figures against industry benchmarks would reveal whether these figures are an outlier or in line with sector performance during the same period.
Furthermore, the net income figures highlight a sharp decline year-over-year, which could be a red flag for investors. A deeper dive into the company's cost management and operational efficiency is necessary to understand whether this decline is solely due to the supply chain issues or if there are underlying problems in the company's business model or market positioning.
From a financial perspective, the substantial decrease in net income to $102,176 from $341,312 in the prior year's quarter is a point of concern. This represents a significant erosion of profitability that could affect investor sentiment and the company's stock valuation. The earnings per share (EPS) has also decreased from $0.15 to $0.04, a metric closely watched by investors as it directly affects the perceived value of the company's shares.
Investors would benefit from an analysis of the company's financial health, including liquidity ratios and debt levels, to assess its ability to weather prolonged supply chain disruptions. Additionally, the company's strategic response to these supply chain challenges, such as diversifying suppliers or investing in inventory management technology, would be critical factors in evaluating its long-term prospects.
Supply chain difficulties cited by the CEO as the primary reason for the sales decrease underscore the vulnerability of the company to external logistics challenges. It's imperative to scrutinize the company's supply chain strategy and resilience. Understanding the specific nature of these difficulties, whether related to raw material shortages, transportation bottlenecks, or geopolitical factors, could shed light on the potential for future disruptions.
Assessing the company's mitigation plans, such as establishing alternative supply routes, increasing inventory levels, or localizing certain aspects of the supply chain, is crucial. This analysis would help determine if the company is taking adequate steps to prevent similar impacts in future quarters and safeguard its operational continuity.
OWINGS MILLS, Md., Feb. 20, 2024 (GLOBE NEWSWIRE) -- Universal Security Instruments, Inc. (NYSE AMEX: UUU) today announced results for its fiscal third quarter and nine months ended December 31, 2023.
For the three months ended December 31, 2023, sales decreased
For the nine months ended December 31, 2023, sales decreased
“The primary reason for the sales decreases during the three and nine-month periods ended December 31, 2023, was supply chain difficulties in getting sufficient product to cover orders during our third fiscal quarter.” said Harvey Grossblatt - President and CEO.
UNIVERSAL SECURITY INSTRUMENTS, INC. is a U.S.-based manufacturer and 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.
"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 affecting us 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 December 31, | |||||||
| 2023 | 2022 | ||||||
| Sales | $ | 4,654,978 | $ | 5,758,661 | |||
| Net income | 102,176 | 341,312 | |||||
| Earnings per share: | |||||||
| Basic and diluted | $ | 0.04 | $ | 0.15 | |||
| Weighted average number of common shares outstanding: | |||||||
| Basic and diluted | 2,312,887 | 2,312,887 | |||||
| Nine Months Ended December 31, | |||||||
| 2023 | 2021 | ||||||
| Sales | $ | 15,071,204 | $ | 16,251,106 | |||
| Net income | 80,881 | 435,776 | |||||
| Earnings per share: | |||||||
| Basic and diluted | $ | 0.03 | $ | 0.19 | |||
| Weighted average number of common shares outstanding: | |||||||
| Basic and diluted | 2,312,887 | 2,312,887 | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
| ASSETS | |||||||
| Dec. 31, 2023 | Dec. 31, 2022 | ||||||
| Cash | $ | 39,178 | $ | 200,155 | |||
| Accounts receivable and amount due from factor | 3,353,127 | 3,991,415 | |||||
| Inventory | 4,880,508 | 4,437,580 | |||||
| Prepaid expense | 399,318 | 313,277 | |||||
| TOTAL CURRENT ASSETS | 8,672,131 | 8,942,427 | |||||
| PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS–NET | 231,823 | 395,278 | |||||
| OTHER ASSETS | - | 4,000 | |||||
| TOTAL ASSETS | $ | 8,903,954 | $ | 9,341,705 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Line of credit – factor | $ | 1,121,064 | $ | 2,471,236 | |||
| Note payable – Eyston Company Ltd. | - | 181,440 | |||||
| Short-term portion of operating lease liability | 156,851 | 149,408 | |||||
| Accounts payable | 1,878,990 | 1,061,517 | |||||
| Accrued liabilities | 254,062 | 193,783 | |||||
| TOTAL CURRENT LIABILITIES | 3,410,967 | 4,057,384 | |||||
| LONG TERM PORTION OF OPERATING LEASE LIABILITY | 53,289 | 210,139 | |||||
| TOTAL LONG-TERM LIABILITIES | 53,289 | 210,139 | |||||
| COMMITMENTS AND CONTINGENCIES | - | - | |||||
| SHAREHOLDERS’ EQUITY: | |||||||
| Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 2,312,887 at December 31, 2023 and 2022 | 23,129 | 23,129 | |||||
| Additional paid-in capital | 12,885,841 | 12,885,841 | |||||
| Accumulated Deficit | (7,469,272 | ) | (7,834,788 | ) | |||
| TOTAL SHAREHOLDERS’ EQUITY | 5,439,698 | 5,074,182 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 8,903,954 | $ | 9,341,705 | |||
Contact: Harvey Grossblatt, CEO
Universal Security Instruments, Inc.
(410) 363-3000, Ext. 224
or
Zachary Mizener
Lambert & Co.
(315) 529-2348
FAQ
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