Taitron ponents rporated(TAIT) - 2021 Q4 - Annual Report

Financial Performance - Net sales increased to $8,643,000 in 2021, up $1,947,000 or 29.1% from $6,696,000 in 2020, primarily driven by higher demand in ODM Projects[86] - Gross profit for 2021 was $4,121,000, representing 48% of net sales, compared to $3,281,000 or 49% in 2020, impacted by tariff costs on imports from China[87] - Operating income rose to $2,092,000 in 2021, representing 24.2% of net sales, compared to $1,054,000 or 15.7% in 2020[88] - Net income for 2021 was $2,010,000, or 23.3% of net sales, compared to $1,359,000 or 20.3% in 2020[90] - Total revenue for the year 2021 was $8,643,000, up 29.0% from $6,696,000 in 2020, with ODM projects contributing $5,462,000, a 38.8% increase from $3,936,000[140] - Net income for the twelve months ended December 31, 2021, was $2,010,000, an increase of 48.0% compared to $1,359,000 in 2020[122] - Revenues from the United States for the year ended December 31, 2021, were $7,731,000, a 30% increase from $5,955,000 in 2020[186] Expenses and Costs - Selling, general and administrative expenses decreased to $2,029,000 in 2021, representing 23.5% of net sales, down from $2,227,000 or 33.3% in 2020[88] - Cash provided by operating activities decreased to $1,802,000 in 2021 from $2,052,000 in 2020, primarily due to changes in inventory and accounts receivable[91] - Cash used for investing activities increased to $1,584,000 in 2021 from $17,000 in 2020, attributed to the purchase of short-term investments[92] - Cash used in financing activities was $889,000 in 2021, compared to $592,000 in 2020, with dividend payments of $965,000 in 2021 versus $840,000 in 2020[93] Assets and Liabilities - Total assets increased to $17,122,000 as of December 31, 2021, up from $14,261,000 in 2020, representing a growth of 13%[115] - Total current liabilities rose to $2,737,000 in 2021, up from $856,000 in 2020, reflecting a significant increase[115] - Inventory balances were $5,261,000 and $3,518,000 at December 31, 2021 and 2020, respectively, with valuation allowances of $4,892,000 and $4,759,000[80] - The company has fully reserved $1,915,000 and $2,121,000 against net deferred tax assets at December 31, 2021 and 2020, respectively[81] - The company reported total deferred tax assets of $2,044,000 as of December 31, 2021, down from $2,267,000 in 2020[179] Shareholder Returns - The company declared cash dividends of $0.165 per common share in 2021, compared to $0.145 in 2020, an increase of 14%[117] - The company paid dividends totaling $965,000 in 2021, an increase from $840,000 in 2020, reflecting a commitment to returning value to shareholders[122] - The company declared and paid quarterly dividends of $0.045 per share for the quarter ended December 31, 2021, up from $0.04 per share in the previous quarter[178] Inventory and Supply Chain - The company recognized a provision for inventory reserves of $150,000 in 2021, compared to $0 in 2020, indicating a proactive approach to inventory management[145] - The company’s inventory valuation allowances were $4,892,000 and $4,759,000 at December 31, 2021, and 2020, respectively, indicating a slight increase in inventory risk management[144] - As of December 31, 2021, the company had outstanding commitments to purchase inventory from suppliers totaling $3,723,000, compared to $1,972,000 as of December 31, 2020[185] - The company’s operations are significantly influenced by foreign suppliers, with over 90% of products purchased produced in Asia, highlighting potential supply chain risks[127] Cash and Investments - Cash and cash equivalents decreased to $5,974,000 in 2021 from $6,652,000 in 2020, a decline of 10%[115] - Cash and cash equivalents at the end of the period decreased to $5,974,000 from $6,652,000, reflecting a net decrease of $678,000[122] - The company recorded net gains of $66,000 from short-term investments in the year ended December 31, 2021[164] - As of December 31, 2021, total short-term investments amounted to $2,810,000, with $1,566,000 classified as Level 1 and $1,244,000 as Level 2[157] Employee Compensation - The employer matching contributions to the defined contribution profit-sharing plan were approximately $36,000 for the year ended December 31, 2021, compared to $34,000 in 2020[182] - Stock-based compensation for the year ended December 31, 2021 had a weighted-average grant date fair value per share ranging from $0.59 to $0.76[174] - As of December 31, 2021, the outstanding stock options totaled 294,067 shares with an average exercise price of $2.45[174] Other Considerations - The impact of COVID-19 on operations remains uncertain, with potential implications for future cash flows and market conditions[130] - The company does not anticipate any material changes to its financial position from its income tax filing positions and has not recorded reserves for uncertain income tax positions[155] - The company received loan proceeds of $163,200 under the Paycheck Protection Program, which was fully forgiven on June 4, 2021[170][171] - Property and equipment net value decreased from $3,217,000 in 2020 to $3,055,000 in 2021, with depreciation expense recorded at $180,000 for 2021[167] - The investment in Zowie Technology Corporation was valued at $186,000 as of December 31, 2021, representing approximately 6% of their total outstanding shares[169] - The company’s major customers accounted for significant sales, with two customers representing approximately 41% and 18% of net sales in 2021[129]