Solitron Devices posts 42% revenue jump on defence backlog surge
Solitron Devices, the West Palm Beach-based maker of military-grade semiconductor components, has reported a sharp improvement in its fiscal 2027 second quarter, with net sales rising 42% year on year to $5.66 million against $3.99 million in the same period of fiscal 2026. The company swung from a net loss of $234,000 to a net profit of $1.30 million, or $0.60 per share, on the back of growing demand from US defence programmes.
Net bookings rose 48% to $6.42 million in the quarter, and the company's order backlog climbed to a record $24.11 million by the end of August 2026, up from $18.64 million twelve months earlier and $23.34 million at the close of the previous quarter. Chief executive Tim Eriksen described the trajectory as encouraging, with the company signalling it expects sales to remain at or above current levels for the rest of the fiscal year.
Missile programmes driving demand
Solitron's release cited specific visibility into two major US weapons procurement pipelines. The company said it is monitoring the prospect of multi-year orders for components supplied to the AMRAAM and Standard Missiles 2, 3 and 6 programmes. RTX and the Pentagon announced multi-year agreements covering both programmes in October 2026, though both are subject to Congressional funding approval. Solitron said it expects its next AMRAAM-related order to arrive in the fiscal fourth quarter.
Gross profit for the quarter reached $2.75 million, a dramatic improvement on the $835,000 recorded a year ago, as cost of sales fell despite higher revenues. For the six months ended 31 August 2026, cumulative net sales totalled $11.09 million against $6.69 million in the prior-year period, and the company posted a half-year net income of $2.29 million versus a loss of $570,000.
One notable drag on the quarter was $200,000 in professional fees charged to selling, general and administrative costs, related to the retention of an investment banker engaged to help the company explore strategic alternatives. This process was first disclosed in Solitron's fiscal 2027 first quarter release. No further detail on the nature of those alternatives was provided in the current filing.
Market context and strategic positioning
Solitron operates in a narrow but stable niche: custom and catalogue solid-state components for US military and aerospace customers, including bipolar and metal oxide semiconductor power transistors, power hybrids and power MOSFETs. Most of its output is produced to bespoke contract specifications, with end products destined for US government platforms. This concentration creates both visibility, through long-dated backlogs, and risk, given dependence on Congressional appropriations cycles and the possibility of programme cancellations or renegotiations.
The company's September 2023 acquisition of Micro Engineering Inc., a Florida-based specialist in low-to-mid volume precision manufacturing, has broadened its production capabilities. Integration costs appear to have been absorbed into the current cost structure, though Solitron has not separately broken out MEI's revenue contribution.
The broader defence electronics sector has seen sustained demand as Western governments expand procurement budgets in response to geopolitical pressures. Smaller, specialist suppliers such as Solitron can benefit disproportionately when prime contractors accelerate sub-component sourcing, particularly for programmes already in multi-year production cycles. The engagement of an investment banker to explore strategic alternatives suggests the board may be assessing whether to pursue a sale, merger or other transaction while trading conditions are favourable and the backlog is at record levels. Investors will be watching for any formal announcement on that process alongside Q3 results.