10-K - SURGE COMPONENTS INC (0000747540) (Filer)

Fri, Feb 28, 9:01 PM (16 days ago)

Surge Components, Inc. (SPRS) reported a 14% decline in net sales for FY 2024, totaling $31,211,139, down from $36,276,542 in FY 2023. The decrease was attributed to reduced orders from customers holding excess inventory from previous over-ordering. Gross profit also fell to $8,903,694, with a slight increase in gross margin to 28.5%. Operating expenses decreased to $7,999,747, reflecting lower selling and administrative costs. Net income dropped to $825,677 from $972,110, while earnings per share declined to $0.15 from $0.17. Surge's financial health remains stable with cash reserves of $5,627,693 and marketable securities of approximately $7.1 million. The company faces risks from supplier dependency, particularly on Lelon Electronics, which accounted for 28% of purchases. Additionally, ongoing inflation, tariffs, and supply chain challenges could impact future operations. The strategic focus includes expanding product lines and maintaining customer relationships to navigate market fluctuations. Overall, Surge is cautiously optimistic about future growth despite current economic pressures.