Universal Security Instruments(UUU) - 2023 Q4 - Annual Report

Financial Performance - For the fiscal year ended March 31, 2023, the company's net sales increased to $22,178,873, representing a 13.4% increase from $19,549,785 in the prior year[44]. - Gross profit percentage decreased to 28.6% in fiscal 2023 from 30.9% in fiscal 2022, attributed to product mix variations and tariff impacts[45]. - Selling, general and administrative expenses decreased to $4,974,453 in fiscal 2023, down from $5,524,343 in fiscal 2022, representing 22.4% of net sales compared to 28.3% in the prior year[46]. - The company reported net income of $720,411 for fiscal 2023, a significant increase of $798,561 (1,021.8%) compared to a net loss of $78,150 in fiscal 2022[50]. Cash Flow and Working Capital - Working capital increased by $724,528 from $4,451,947 on March 31, 2022, to $5,176,475 on March 31, 2023[51]. - Operating activities generated cash of $1,491,943 for the year ended March 31, 2023, primarily from a decrease in inventories of $2,165,429[52]. - Interest expense increased to $237,686 in fiscal 2023 from $147,840 in fiscal 2022, primarily due to rising interest rates on borrowings[48]. - The unused availability of the factoring facility totaled approximately $852,000 on March 31, 2023[58]. Customer and Supplier Concentration - The Company had one customer representing 18.2% of net sales for the fiscal year ended March 31, 2023, compared to no customers exceeding 10% in the previous fiscal year[70]. - Accounts receivable from Eyston Company, Ltd. amounted to $75,947 as of March 31, 2023, down from $358,958 in the previous year[70]. - Eyston Company, Ltd. accounted for approximately 88.5% of the Company's purchases in the fiscal year ended March 31, 2023, compared to 83.6% in 2022[70]. Market Outlook - The company anticipates that the shift towards ten-year sealed alarms will positively impact future sales of its sealed battery units and other electrical devices[43]. - The company’s financial condition remains dependent on the strength of the U.S. housing market, which directly affects sales through its USI Electric subsidiary[42].