Taitron Components Incorporated reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with net sales of $4.14 million, down 32.2% from $6.11 million in 2023. The decrease was primarily attributed to reduced demand for its original designed and manufactured (ODM) products, which are tailored for original equipment manufacturers (OEMs) and contract electronic manufacturers (CEMs). Gross profit also fell to $2.12 million, representing 51.1% of net sales, compared to 56.5% in the previous year. The company recorded a net income of $902,000, down from $1.85 million in 2023, reflecting a net income margin of 21.8%.
In terms of operational changes, Taitron has shifted its strategic focus from a "superstore" model, which emphasized maintaining a vast inventory of electronic components for immediate delivery, to prioritizing higher-margin ODM projects. This strategic pivot aims to enhance profitability by concentrating on custom-designed products for specific applications. The company continues to serve approximately 200 customers, with its two largest clients accounting for 73% of net sales in 2024, compared to 66% in 2023.
The company’s inventory as of December 31, 2024, was valued at $2.95 million, an increase from $2.60 million in 2023, with reserves for obsolescence totaling $5.15 million. Taitron's employee count remained stable at 15 full-time employees, and the company continues to maintain its operational facilities in California, Taiwan, and China. The company’s cash and cash equivalents decreased to $4.21 million from $6.21 million in the previous year, reflecting cash used in operating activities of $258,000 in 2024, a stark contrast to the $3.15 million generated in 2023.
Looking ahead, Taitron anticipates that its focus on ODM products will yield growth opportunities, particularly as OEMs increasingly outsource manufacturing to reduce costs and improve efficiency. However, the company remains cautious about market conditions, including the impact of tariffs on imported products and the potential for fluctuations in demand. Management believes that existing cash balances and cash generated from operations will be sufficient to meet working capital and capital expenditure needs for the foreseeable future, although they may seek additional financing if necessary.
About TAITRON COMPONENTS INC
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