Solitron Devices, Inc.

What they do

Solitron designs, develops, manufactures and markets bipolar and MOS power transistors, power and control hybrids, junction and Power MOSFETs, and field effect transistors. Roughly 95% of fiscal 2026 sales were custom or semi-custom products built to customer requirements, with the remainder standard catalog items such as JAN transistors, diodes and SMD voltage regulators. About 54% of semiconductor components are produced under approved Source Control Drawings from the U.S. government and/or its prime contractors. The company acquired Micro Engineering Inc. (MEI) on September 1, 2023, adding low-to-mid volume engineering and manufacturing work.

Revenue drivers

• Power Transistors — Largest product line at 39% of fiscal 2026 sales, down from 43% in fiscal 2025.
• Hybrids — 27% of fiscal 2026 sales, down from 33% the prior year.
• Power MOSFETS — 24% of fiscal 2026 sales, up from 15% in fiscal 2025.
• Field Effect Transistors and Wafers/Dice — FETs were 9% of fiscal 2026 sales (8% in fiscal 2025); wafers/dice were 1% in both years.

Recent performance

Fiscal 2027 first quarter net sales rose 101% to approximately $5.44 million from $2.70 million a year earlier, with gross profit of $2.465 million versus $0.390 million. Operating income was $1.535 million against an operating loss of $0.378 million in the prior-year quarter. Net income was $0.99 million, or $0.46 per share, versus a net loss of $0.34 million, or $0.16 per share; the quarter included a $0.33 million increase to MEI contingent consideration. Net bookings fell 48% to $1.45 million, while backlog at quarter end was $23.34 million, up 28% year over year. Full-year fiscal 2026 revenue was $17.0 million with net income of $807,000.

Strategy

Management attributes recent revenue growth to a strong backlog and expects sales to remain at or above the fiscal 2027 first quarter level for the rest of the fiscal year. The company is pursuing multi-year orders for components on AMRAAM and Standard Missiles 2 and 6, and expects the next AMRAAM order in the fiscal third quarter. After the quarter, Solitron retained an investment banker to explore strategic alternatives, including a possible merger, sale, acquisition, tender offer or special dividend. No assurance was given that the review will result in any transaction, and the company said it will not comment further unless the Board approves a specific course of action.

Risks

• Customer concentration — Two customers accounted for approximately 60% of fiscal 2026 revenue (69% in fiscal 2025), so losing either would materially reduce revenue and cash flow.
• Defense procurement timing — Revenue depends on Congressional appropriations and defense contract awards, and management notes defense procurement tends to move slowly.
• Manufacturing yields — The company states its complex manufacturing processes can suffer lower yields from minute impurities or process transitions, reducing revenue.
• Strategic review uncertainty — The newly announced exploration of strategic alternatives may not result in a merger, sale, acquisition, tender offer or special dividend.

Outlook

Management said it expected higher revenue in the fiscal 2027 first quarter and anticipates sales at that level or greater for the remainder of fiscal 2027, supported by backlog. Backlog was $23.34 million at quarter end and rose to $26.97 million as of July 2026 including a $5.04 million MEI order received after quarter end. Management flagged a reported U.S. Air Force request to raise AMRAAM production from 1,200 to 2,400 annually by 2028, but noted any increase requires Congressional approval.