Taitron Components Inc. (TAIT, Financial) filed Quarterly Report for the period ended 2012-06-30.
Taitron Components Inc. has a market cap of $4.5 million; its shares were traded at around $0.9512 with and P/S ratio of 0.7.
Inventory – Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) or estimated market value. We had inventory balances in the amount of $12,149,000 and $12,801,000 at June 30, 2012 and December 31, 2011, respectively, which is presented net of valuation allowances of $4,673,000 and $4,233,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the cost of inventories. Based on our assumptions about future demand and market conditions, inventories are carried at the lower of cost or estimated market value. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories may be required. In any case, actual amounts could be different from those estimated.
Gross profit for the second quarter of 2012 was $272,000 versus $713,000 in the comparable period for 2011, and gross margin percentage of net sales was 19.2% in the second quarter of 2012 versus 36.4% in the comparable period for 2011. The overall decrease in gross margin percentage came from higher inventory reserves compared to the same period last year.
Net sales in the six months ended June 30, 2012 was $3,100,000 versus $3,517,000 in the comparable period for 2011, a decrease of $417,000 or 11.9% over the same period last year.
Gross profit for the six months ended June 30, 2012 was $626,000 versus $1,181,000 in the comparable period for 2011, and gross margin percentage of net sales was approximately 20.2% for the six months ended June 30, 2012 and 33.6% for 2011, respectively. The overall decrease in gross margin percentage came from higher inventory reserves compared to the same period last year.
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Taitron Components Inc. has a market cap of $4.5 million; its shares were traded at around $0.9512 with and P/S ratio of 0.7.
Highlight of Business Operations:
Revenue Recognition – Revenue is recognized upon shipment of the merchandise, which is when legal transfer of title occurs. Reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns. Sales returns for the three months ended June 30, 2012 and 2011 were $6,000 and $7,000, respectively and for the six months ended June 30, 2012 and 2011 were $21,000 and $14,000, respectively. The allowance for sales returns and doubtful accounts at June 30, 2012 and December 31, 2011 aggregated $86,000 and $92,000, respectively.Inventory – Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) or estimated market value. We had inventory balances in the amount of $12,149,000 and $12,801,000 at June 30, 2012 and December 31, 2011, respectively, which is presented net of valuation allowances of $4,673,000 and $4,233,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the cost of inventories. Based on our assumptions about future demand and market conditions, inventories are carried at the lower of cost or estimated market value. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories may be required. In any case, actual amounts could be different from those estimated.
Gross profit for the second quarter of 2012 was $272,000 versus $713,000 in the comparable period for 2011, and gross margin percentage of net sales was 19.2% in the second quarter of 2012 versus 36.4% in the comparable period for 2011. The overall decrease in gross margin percentage came from higher inventory reserves compared to the same period last year.
Net sales in the six months ended June 30, 2012 was $3,100,000 versus $3,517,000 in the comparable period for 2011, a decrease of $417,000 or 11.9% over the same period last year.
Gross profit for the six months ended June 30, 2012 was $626,000 versus $1,181,000 in the comparable period for 2011, and gross margin percentage of net sales was approximately 20.2% for the six months ended June 30, 2012 and 33.6% for 2011, respectively. The overall decrease in gross margin percentage came from higher inventory reserves compared to the same period last year.
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