Espey(ESP) - 2021 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended March 31, 2021, were $4,205,068, compared to $6,191,300 for the same period in 2020, indicating a decrease of about 32%[9] - Gross loss for the three months ended March 31, 2021, was $(187,154), compared to a gross profit of $910,933 for the same period in 2020[9] - Operating loss for the nine months ended March 31, 2021, was $(1,196,734), compared to an operating income of $136,441 for the same period in 2020[9] - Net loss for the three months ended March 31, 2021, was $(1,070,114), compared to a net loss of $(103,765) for the same period in 2020[9] - Total revenue for the nine months ended March 31, 2021, was $15,479,212, a decrease of 2.1% compared to $15,806,805 for the same period in fiscal year 2020[31] - The net loss for the nine months ended March 31, 2021, was $1,061,297, compared to a net income of $206,975 for the same period in 2020[15] Assets and Liabilities - Total assets as of March 31, 2021, were $36,740,177, a decrease from $38,208,766 on June 30, 2020, representing a decline of approximately 3.9%[7] - Total current liabilities increased to $7,489,473 as of March 31, 2021, from $6,748,965 on June 30, 2020, reflecting an increase of approximately 11%[7] - Total stockholders' equity as of March 31, 2021, was $29,071,392, a decrease from $31,226,848 on June 30, 2020, indicating a decline of approximately 6.9%[7] - Cash and cash equivalents increased to $8,488,936 as of March 31, 2021, from $5,402,122 on June 30, 2020, representing an increase of about 57%[7] Shareholder Information - Basic net loss per share for the three months ended March 31, 2021, was $(0.44), compared to $(0.04) for the same period in 2020[9] - Dividends per share were $0.00 for the three months ended March 31, 2021, compared to $0.25 for the same period in 2020[9] - The company paid dividends of $0.50 per share, totaling $1,201,316 during the nine months ended March 31, 2021[11] - The company suspended its regular quarterly dividend payment effective March 9, 2021, after paying $0.50 per share for the nine months ended March 31, 2021, compared to $0.75 per share for the same period in 2020[24] Compensation and Expenses - Stock-based compensation for the three months ended March 31, 2021, amounted to $25,412, while for the nine months it was $106,286[11] - Total stock-based compensation expense for the nine-month period ending March 31, 2021, was $106,286, down from $141,450 in the same period of 2020[21] - Selling, general and administrative expenses decreased to $990,311 for the three months ended March 31, 2021, a reduction of $66,723 compared to the same period in 2020[75] Operational Challenges - Management expects revenues in fiscal year 2021 to be lower than in fiscal year 2020, driven by backlog orders and workforce constraints due to the pandemic[57] - Significant customer concentration risk exists, with net sales to five significant customers representing 66.1% of total sales for the three-month period ended March 31, 2021[62] - An unplanned facility closure in March 2021 due to COVID-19 exposure impacted manufacturing and shipping capabilities for approximately 10 days[55] - The company continues to face supply chain disruptions affecting product shipments, with ongoing efforts to resolve these issues[72] Backlog and Future Orders - The company's backlog as of March 31, 2021, totaled $67.3 million, with expected revenue recognition of 19.1% in 2021, 50.6% in 2022, 19.1% in 2023, and 11.2% thereafter[34] - New orders received in the first nine months of fiscal year 2021 were $30.8 million, down from $33.6 million in the same period of fiscal 2020[59] - The company anticipates that a minimum of $12.8 million of orders from the March 31, 2021 backlog will be filled during the fiscal year ending June 30, 2021[59] Tax and Other Financial Metrics - The effective tax rates for the three and nine months ended March 31, 2021, were approximately 8.6% and 8.2%, respectively, down from 15.4% and 15.9% in the same periods in 2020[77] - Other income for the three months ended March 31, 2021, was $7,075, down from $23,518 in 2020, primarily due to decreased interest income from reduced investment securities[76]