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Universal Security Instruments Inc. (UUU-5.61%) has submitted its 10-Q filing for the quarterly period ended December 31, 2024.
The filing includes financial statements for the quarter, showing an increase in net sales to $5,535,148 from $4,654,978 in the same quarter the previous year. The increase is attributed primarily to the timing of orders from a large retail customer.
Gross profit for the quarter was $1,022,011, down from $1,501,907 in the previous year. The decline in gross profit margin, which decreased to 18.5% from 32.3%, was due to the bulk sale of excess and obsolete inventory at reduced margins.
Selling, general, and administrative expenses rose to $1,762,446 from $1,310,872, primarily due to legal, proxy solicitation, and consulting expenses related to an asset purchase agreement.
The company reported a net loss of $936,639 for the quarter, compared to a net income of $102,176 in the previous year. The loss is attributed to lower gross profit margins and expenditures related to strategic alternatives.
For the nine-month period ended December 31, 2024, net sales increased to $17,336,933 from $15,071,204 in the prior period. The increase was due to improved product deliveries and easing supply chain disruptions.
The gross profit margin for the nine-month period decreased to 23.7% from 30.0% in the prior year, due to increased allowances for excess inventory and higher costs of electronic components.
The company recorded a net loss of $801,867 for the nine-month period, compared to a net income of $80,881 in the previous year, largely due to lower gross profit margins and costs associated with the asset purchase agreement.
Operating activities used $736,999 in cash during the nine-month period, primarily due to increased inventories and prepaid expenses.
The filing also discusses an asset purchase agreement with Feit Electric Company, Inc., which is subject to shareholder approval. A special meeting of shareholders is scheduled for March 6, 2025, to vote on the proposal.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Universal Security Instruments Inc. quarterly 10-Q report dated February 14, 2025. To report an error, please email earnings@qz.com.