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Solitron Devices, Inc. Announces Inventory Charge
Solitron Devices, Inc. Announces Inventory Charge.
About this update from Solitron Devices, Inc.
[{"type":"text","content":"WEST PALM BEACH, FL / ACCESSWIRE / May 31, 2017 / Solitron Devices, Inc. (OTCQB: SODI) (\"Solitron\" or the \"Company\") today announced that, after a thorough review of its accounting for inventory, it expects to take a charge due to excess and obsolescence (\"E&O\"), and wafer yield loss. Management has determined that fiscal 2017 year-end inventory, net of reserves, should be approximately $2.7 million. The E&O charge cannot be taken in the fourth quarter of fiscal 2017 due to (1) management's belief that there was no specific event in the quarter that caused the change in estimates; (2) an inability of management to affirm proper inventory calculations for the past two fiscal years, including an apparent failure to perform an E&O assessment or incorporate a wafer yield loss adjustment. Management is working on allocating the E&O charge to the specific reporting periods. Due to the E&O assessment the Company is conducting, it may be discovered that previous balance sheets did not properly reflect an accurate level of inventory under General Accepted Accounting Principles (\"GAAP\"), or that income statements did not properly include accurate period related inventory charges in cost of goods sold. No adjustments are expected to sales, or cash and securities.Management can provide the following information regarding Q4 and fiscal 2017: Sales of approximately $7.4 million in fiscal 2017 versus approximately $8.4 million in fiscal 2016. Sales in the fourth quarter of fiscal 2017 were approximately $1.6 million versus approximately $1.9 million in the prior year period. The decline was due to an expected delay in some shipments at fiscal year-end 2017 due to extended qualification testing. Backlog at the end of fiscal 2017 increased by 43% to approximately $8.4 million from approximately $5.8 million at the end of fiscal 2016.CEO, Tim Eriksen, stated, \"We thoroughly evaluated our inventory on a line by line basis and determined that an increase to reserves was necessary primarily due to our wafer fab having produced more of certain wafers than we currently expect to use over the next three years. The increase in inventory reserves adjusts inventory levels in line with management's current projections regarding usage of those specific wafers. Our analysis concluded that the excess production has been an ongoing...