Surge Components, Inc. Announces Fiscal Full Year 2025 Results

• Fiscal 2025 results highlight strong year-over-year growth with $36.3 Million in net sales and $1.1 million in net income
• Expansion accelerates with growth through distribution sales channels and European growth advancing global reach
• Initiated efforts to explore sales opportunities targeting the AI ecosystem with potential customers whose applications require products that Surge Components supplies

DEER PARK, N.Y.–(BUSINESS WIRE)–Surge Components, Inc. (“Surge” or the “Company”) (OTC Pink: SPRS), a leading supplier of capacitors, discrete semi-conductors, switches, and audible/sounding devices, today announced financial results for the fiscal year ended November 30, 2025.

Operational Highlights

• Continues to strengthen its distribution sales channel, with distribution partners remaining a key growth driver in addition to sales through subcontractor relationships
• Continues to advance its sales operation in Europe, positioning for a strong 2026
• Developed new products that will be introduced through the distribution sales channel

Financial Highlights for the Fiscal Year Ended November 30, 2025

• Net income available to common shareholders of $1,131,713; EPS of $0.20 compared to net income available to common shareholders of $820,677; EPS of $0.15 in the prior-year-period
• Net sales of $36.3 million, compared to $31.2 million in the prior-year period
• Gross profit of $10.5 million, compared to $8.9 million in the prior-year period
• Gross profit margin of 28.8%, compared to 28.5% in the prior-year period

“We are very pleased with our strong performance in fiscal 2025, highlighted by meaningful growth in sales, expanding margins, and a significant increase in profitability year over year,” said Ira Levy, President and Chief Executive Officer of Surge.

“Our strong results reflect the continued execution of our strategy and the strength of the market segments that drive our business. Importantly, absent a one-time, non-cash charge related to stock-based compensation for employees, the Company would have more than doubled its profitability compared to fiscal 2024.

During fiscal 2025, in addition to our sales directly with customers, we continued to strengthen our distribution sales channel and sales through subcontractors who manufacture on behalf of our customers. By deepening these channels, we effectively open the door to a broad base of end customers. Challenge Electronics has developed numerous new products that will be introduced through its newly formed distribution sales channel, reinforcing our commitment to innovation and long-term growth.

We are also actively expanding our global reach. The Surge division’s European sales operation is performing quite well, and we are optimistic about continued growth in that market in fiscal 2026. At the same time, our Challenge Electronics sales division is establishing a sales presence in Europe.

We are also positioning the Company to participate in sales to high-growth markets. During the year, we initiated efforts to explore opportunities within the AI ecosystem, targeting potential customers whose applications require the types of electronic components we supply.

Lastly, in response to geopolitical considerations, many customers across the industry have requested production capabilities outside of China. As a result, several of our manufacturing partners have established secondary facilities outside of China.

We believe our strategic initiatives, combined with our strong financial performance, position us well for continued growth and value creation in the year ahead.”

Results of Operations for the fiscal year Ended November 30, 2025

Consolidated net sales for the fiscal year ended November 30, 2025 increased by $5,108,966 or 16.4%, to $36,320,105 as compared to net sales of $31,211,139 for the fiscal year ended November 30, 2024. We attribute the increase to an increase in business with new customers as well as an increase in business with existing customers. We can also attribute the increase to an increase in business from the Company’s distribution channels. Net sales for the fiscal years ended November 30, 2025 and November 30, 2024 reflect $941,564 and $549,564, respectively of tariff costs that the Company was able to pass on to its customers.

Our gross profit for the fiscal year ended November 30, 2025 increased by $1,551,477 to $10,455,171 or 17.4%, as compared to $8,903,694 for the fiscal year ended November 30, 2024. Gross margin as a percentage of net sales increased slightly to 28.8% for the fiscal year ended November 30, 2025 compared to 28.5% for the fiscal year ended November 30, 2024. The increase can be attributed to the increase in sales to certain customers whose sales are at a higher gross profit margin. We work with electronic manufacturing service subcontractor customers who manufacture products for other customers who do not have their own manufacturing operations. The Company has agreements with these subcontractor customers to provide periodic cost reductions through rebates in the amount of 5%. These reductions only affect future shipments of our products, and do not affect existing orders. These reductions can have a negative impact on our profit margins since they reduce the amount of commissions we can earn. Even though this rebate can impact the Company’s gross profit margin, these subcontractor customers represent very significant potential growth for the Company, because they can help the Company become an approved supplier at the customers they manufacture for, and they purchase our components for these customers. We believe it would be very difficult for the Company to achieve business at these customers without the help of these subcontractor customers. During Fiscal 2025, the Company was impacted by tariff costs on certain products imported from China. The Company has been able to pass along a portion of these costs to its customers and will do so under potential tariffs imposed upon us. The Company has also moved some customer deliveries directly to Hong Kong in order to mitigate some of these costs.

Selling and shipping expenses for the fiscal year ended November 30, 2025 was $2,906,782, an increase of $166,788, or 6.1%, as compared to $2,739,994 for the fiscal year ended November 30, 2024. We attribute the increase to increases in sales and the resulting selling expenses such as commission expenses, the hiring of new salespeople which increased sales payroll, travel and entertainment and auto expenses, offset by decreases in freight out and printing expenses.

General and administrative expenses for the fiscal year ended November 30, 2025 was $6,223,384, an increase of $1,034,015, or 19.9%, as compared to $5,189,369 for the fiscal year ended November 30, 2025. The increase is due primarily to non cash stock based compensation of $538,361 during the fiscal year ended November 30, 2025. As well as increases in officer salaries, other salaries and related payroll taxes, general insurance expenses as well as health insurance expenses, utilities and office expenses and professional fees, computer expenses and consulting expenses and pension expenses as well as increases in bank charges and bad debt expenses, offset by decreases in rent, directors fees and public company expenses.

This press release should be read in conjunction with the Company’s consolidated financial statements included in the Company’s most recent Annual Report on Form 10-K, which can be found at www.surgecomponents.com and at www.sec.gov.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical facts contained herein, including statements regarding global economic conditions, our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expected,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions and are based largely on our current expectations and projections about future events and financial trends that may affect our business, financial condition and results of operations. We discuss many of the risks in greater detail under the heading “Risk Factors” in our Annual Report on Form 10-K. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update any forward-looking statements for events or circumstances occurring after the date of this press release, except as required by law.

Contacts

Investor Contacts:
Sloane & Company
Jared Pollack, [email protected]