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Surge Components inc.. (SPRS)

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Surge Components, Inc.

Headquarters: 95 East Jefryn Boulevard
Deer Park, NY 11729
Web Address:
http://www.surgecomponents.com

Is a supplier of electronic products and components. These products include capacitors, which are electrical energy storage devices, and discrete components, such as semiconductor rectifiers, transistors and diodes, which are single-function, low-power semiconductor products that are packaged alone, as compared to integrated circuits (ICs) such as microprocessors. Surge's products are typically utilized in the electronic circuitry of diverse products, including, but not limited to, automobiles, cellular telephones, computers, consumer electronics, garage door openers, household appliances, power supplies and security equipment. Surge's products are sold to both original equipment manufacturers (OEMs) that incorporate them into their products and to distributors of Surge's product lines that resell these products within their customer baseResults of Operations

Comparison of six months ended May 31, 2010 and May 31, 2009

Consolidated net sales for the six months ended May 31, 2010 increased by $4,310,216 or 82%, to $9,553,204 as compared to net sales of $5,242,988 for the six months May 31, 2009. We attribute the increase to additional business with existing customers. The electronic components industry is currently experiencing a high demand in products and the Company is benefiting from that with an increase in volume.

Our gross profit for the six months ended May 31, 2010 increased by $1,358,611, or 91%, as compared the six months ended May 31, 2009. Gross margin as a percentage of net sales increased to 29.8% the six months ended May 31, 2010 compared to 28.4% for the six months ended May 31,2009. We attribute the increase to new more profitable business and cutting costs, including an increase in the amount of purchase rebates earned from certain vendors.

Selling and shipping expenses for the six months ended May 31, 2010 was $797,656, an increase of $321,707, or 68%, as compared to $475,949 for the six months ended May 31, 2009.The increase is directly related to the increase in sales for the Company. Specifically the increase is due to additional sales commissions, selling expenses, such as travel and freight out expense.

General and administrative expenses for the six months ended May 31, 2010 was $1,201,731, an increase of $186,625, or 18%, as compared to $1,015,106 for the six months ended May 31, 2009. The increase is due to increased professional fees associated with the Company becoming a reporting company with the SEC and additional compensation approved by the Board for the officers and directors of the Company.

Investment income for the six months ended May 31, 2010 was $2,446, compared to $4,685 for the six months ended May 31, 2009. We attribute the decrease of $2,239, or 48%, to lower interest rates in our money market accounts in 2010.

Interest expense for the six months ended May 31, 2010 was $60,150, compared to $60,454 for the six months ended May 31, 2009. Interest expense remained relatively unchanged between the two periods. Interest rates have been comparable for the last year.

Income taxes for the six months ended May 31, 2010 were $9,868, compared to $4,480 for the six months ended May 31, 2009. The difference is a result of state income taxes.

As a result of the foregoing, net income for the six months ended May 31, 2010 was $712,367, compared to net loss of $136,117 for the six months ended May 31, 2009.

Comparison Fiscal 2009 and Fiscal 2008

Consolidated net sales for Fiscal 2009 decreased by $1,915,624, or 13.5%, to $12,325,812 as compared to net sales of $14,241,436 for Fiscal 2002. The decrease in revenue is primarily due to the significant decrease in purchasing as a result of the global recession.

Our gross profit for Fiscal 2009 decreased by $418,930, or 10.2%, as compared to Fiscal 2008. Gross margin as a percentage of net sales increased to 29.9% in Fiscal 2009 compared to 28.8% for Fiscal 2008. We attribute the increase to new more profitable business and cutting costs, including an increase in the amount of purchase rebates earned from certain vendors.

Selling and shipping expenses for Fiscal 2009 was $1,090,196, a decrease of $399,236, or 26.8%, as compared to $1,489,392 for Fiscal 2008. We attribute the decrease to the lower sales volume resulting in fewer sales commissions and shipping costs.

General and administrative expenses for Fiscal 2009 was $2,012,639, a decrease of $226,827, or 10.1%, as compared to $2,239,466 for Fiscal 2008. We attribute the decrease to cutting costs, primarily payroll and payroll related costs

Investment income for fiscal 2009 was $7,405, compared to $24,245 for fiscal 2008. We attribute the decrease of $16,840, or 69.5%, lower interest rates in 2009.

Income taxes for Fiscal 2009 were $5,364, compared to $7,426 for fiscal 2008.

As a result of the foregoing, net income for Fiscal 2009 was $316,555, compared to $132,156 for Fiscal 2008.

Liquidity and Capital Resources

As of May 31, 2010 we had cash of $1,486,406, and working capital of $3,402,977. We believe that our working capital levels and available financing are adequate to meet our operating requirements during the next twelve months.

During the six months ended May 31, 2010, we had net cash flow from operating activities of $140,504, as compared to net cash from operating activities of $244,193 for the six months ended May 31, 2009. During Fiscal 2009, we had net cash flow from operating activities of $364,294, as compared to net cash used in operating activities of $404,330 in Fiscal 2008. The increase in cash flow from operating activities resulted from increase in the 2010 profit, increase in accounts receivable and inventory offset by increase in accounts payable. The significant increase in accounts receivable in the current quarter was a direct result in the increase in revenues. As a result of these increased revenues, the Company made a significant investment in additional inventory. The Company adjusts its inventory levels based upon the industry outlook and near term expectations of demand for the Company’s products.

We had net cash used in investing activities of $(4,866) for the six months ended May 31, 2010, as compared to net cash used in investing activities of $146,949 for the six months ended May 31, 2009. We had net cash used in investing activities of $158,512 for Fiscal 2009, as compared to net cash used in investing activities of $44,067 in Fiscal 2008. This decrease was the result of the Company purchasing additional computer hardware in 2009.

We had net cash from financing activities of 210,430 for the six months ended May 31, 2010, as compared to net cash used in financing activities of $(76,872) for the six months ended May 31, 2009. We had net cash from financing activities of $29,393 for Fiscal 2009, as compared to net cash from financing activities of $496,966 for Fiscal 2008. The increase was the result of increased borrowings in 2010 from our lender.

As a result of the foregoing, the Company had a net increase in cash of $346,068 during the six months ended May 31, 2010 , as compared to a net increase in cash of $20,372 for the six months ended May 31, 2009 .

In July 2002, the Company obtained a financing commitment with an asset-based lender totaling $1,000,000 (the “Credit Line”). Borrowings under the Credit Line accrue interest at the greater of the prime rate plus two percent (2.0%) or 6.75%. The Company is required to make monthly interest only payments. The Company may repay all or a portion of the line of credit at any time. In addition, the Company is obligated to pay one-quarter of one percent (1/4 of 1%) annually as an unused line fee for the difference between $1,000,000 and the average daily balance of the Credit Line. The Credit Line is collateralized by substantially all the Company’s assets and contains various financial covenants pertaining to the maintenance of working capital and tangible net worth. At May 31, 2010, the Company was in compliance with the financial covenants.
  [chart]data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=SPRS&E1=0&LPR=2&C1=0&C2=0&C3=3&C4=2&D5=0&D2=0&D4=1&DD=1&width=612&height=258&CE=0&CF=0[/chart]

SURGE COMPONENTS, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS -UNAUDITED
 
   
Nine Months Ended
   
Three Months Ended
 
    August 31,    
August 31,
 
   
2010
   
2009
   
2010
   
2009
 
                         
                         
Net sales
  $ 15,620,352     $ 8,576,213     $ 6,067,148     $ 3,333,225  
                                 
Cost of goods sold
    10,958,792       6,152,063       4,252,684       2,397,560  
                                 
Gross profit
    4,661,560       2,424,150       1,814,464       935,665  
                                 
Operating expenses:
                               
Selling and shipping expenses
    1,248,187       752,618       450,531       276,669  
General and administrative expenses
    1,836,010       1,478,631       634,279       465,311  
Depreciation and amortization
    105,180       112,960       37,410       37,876  
                                 
Total operating expenses
    3,189,377       2,344,209       1,122,220       779,856  
                                 
                                 
Income before other income (expense)
                               
and income taxes
    1,472,183       79,941       692,244       155,809  
                                 
Other income (expense):
                               
Interest expense
    (90,270 )     (89,799 )     (30,120 )     (29,345 )
Investment income
    3,522       6,106       1,076       1,421  
                                 
Other income (expense)
    (86,748 )     (83,693 )     (29,044 )     (27,924 )
                                 
Income (Loss) before income taxes
    1,385,435       (3,752 )     663,200       127,885  
                                 
Income taxes (benefit)
    9,137       5,006       (731 )     526  
                                 
Net Income (Loss)
    1,376,298       (8,758 )     663,931       127,359  
Dividends on preferred stock
    16,350       16,350       8,175       8,175  
                                 
                                 
Net income (loss) available to
                               
   common shareholders
  $ 1,359,948     $ (25,108 )   $ 655,756     $ 119,184  
                                 
                                 
                                 
Net income (loss) per share available
                               
 to common shareholders:
                               
                                 
 Basic
  $ .15     $ (.00   .07     .01  
 Diluted
  $ .15     $ (.00 )   $ .07     $ .01  
                                 
Weighted Shares Outstanding:
                               
                                 
Basic
    8,895,008       8,874,512       8,922,512       8,874,512  
                                 
Diluted
    9,222,008       8,874,512       9,249,512       8,874,512  
 
See notes to financial statements.


 

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SPRS News: Statement of Changes in Beneficial Ownership (4) 05/17/2019 04:33:49 PM
SPRS News: Statement of Changes in Beneficial Ownership (4) 05/17/2019 04:32:35 PM
SPRS News: Current Report Filing (8-k) 04/15/2019 09:16:25 AM
SPRS News: Quarterly Report (10-q) 04/15/2019 09:12:13 AM
SPRS News: Annual Report (10-k) 02/28/2019 04:05:53 PM
PlusOneCoin Top Posts
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PostSubject
#24   SPRS buy 2.84 stocktrademan 05/09/19 12:29:04 PM
#23   checked mirza3 04/11/19 03:41:29 PM
#22   Numbers out. Not as good as last year tsoprano-1 02/28/14 03:32:40 PM
#21   so dumb scottrade has my funds restricted until blindman28 02/27/14 05:23:26 PM
#20   Hoping for a good report. Noticed a couple tsoprano-1 02/26/14 07:52:14 PM
#19   my bad i mean the 28th blindman28 02/26/14 05:12:06 PM
#18   probably going to see another positive Q tomorrow blindman28 02/26/14 04:42:03 PM
#17   Exactly what gives us an opportunity to make tsoprano-1 02/24/14 06:18:10 PM
#16   their is still no respect for this company blindman28 02/24/14 01:00:39 PM
#15   Fantastic and history shows the 4th q will otcbargains 10/25/13 04:37:11 PM
#14   outstanding quarter here blindman28 10/16/13 10:40:54 AM
#13   helllllooooo anybody out there? Who else has First Crown Research 05/30/12 03:50:45 PM
#12   SPRS.. $1.14 10 bagger 02/09/11 12:06:48 AM
#11   SPRS.. $1.01 Knowledge is King 02/04/11 02:52:49 PM
#10   SPRS.. $0.81 10 bagger 12/20/10 11:01:21 AM
#9   SPRS.. $0.65 10 bagger 10/26/10 11:53:06 AM
#8   What do you make of the Form 4 CPTMatt 10/26/10 11:41:45 AM
#7   SPRS.. $0.69 10 bagger 10/25/10 12:12:02 PM
#6   SPRS.. $0.66 10 bagger 10/22/10 02:19:39 PM
#5   .15 EPS for past 9 months. Impressive. CPTMatt 10/22/10 01:09:19 PM
#4   SPRS.. $0.63.. The supply of stock is running dry.. 10 bagger 10/21/10 09:16:28 AM
#3   SPRS.. $0.63 I wish I could of bought 10 bagger 10/20/10 11:19:53 PM
#2   SPRG.. Surge Components, Inc. $0.55 10 bagger 10/20/10 02:12:43 PM
#1   SPRG.. Surge Components, Inc. $0.55 10 bagger 10/20/10 01:47:24 PM
PostSubject