2012 Preliminary Results

21st June 2012

Solid State plc

("Solid State" or the "Group")

Preliminary Results for the year ended 31 March 2012

Solid State plc (AIM: SSP), the AIM listed supplier of industrial/ruggedised computers, specialist electronic components and battery power solutions to the electronics market, is pleased to announce its Preliminary Results for the year ended 31 March 2012.

Highlights in the period include:

Financial:

Operational:

·; Acquisition of trade and assets of Blazepoint Ltd in October 2011 for £200k

·; Strong performance from all operating divisions

·; Planned relocation of Solid State Supplies Ltd to achieve improved operational efficiencies

Commenting on the results, Gordon Comben, Chairman of Solid State said:

"These results demonstrate the value of building embedded partnerships with our clients in targeted niche sectors. This is the second successive year of record results.

"We continue to see opportunities for both organic and acquisitive growth in a market which demands increasing levels of product customisation. This plays very much to our strengths, the prospects for Solid State are extremely positive."

For further information please contact:

Notes to Editors:

Solid State plc (SSP) is a leading value added group of companies providing specialist distribution, design-in and manufacturing services to those acquiring industrial/rugged computing products, battery power solutions and electronic components for use in harsh environments.

Serving niche markets in oil & gas production, medical, construction, security, military and field maintenance, Solid State acts as both a distributor to OEMs and bespoke manufacturer of specialist units to clients with complex requirements.

Headquartered in Paddock Wood in Kent, Solid State employs over 100 staff across four sites. Solid State operates through two main divisions: Solid State Supplies and Steatite.

Solid State was established in 1971 and admitted to AIM in June 1996.

CHAIRMAN'S STATEMENT

I am very pleased to report that the Group has continued to build on the strong performance achieved last year, delivering a second consecutive year of record results.

Financial Review

Revenues increased by 22% to £25.87m (2011: £21.17m) with profit before tax rising by 29% to £1.60m (2011: £1.24m). Underlying growth in the core business, excluding costs of £223k associated with the recent acquisition of the trade and assets of Blazepoint Ltd saw revenue increase by 20% and profits increase by 34%.

The Group typically experiences margin variation due to order size and product mix however retains its ability to command good margins due to the value added nature of its offering. Pleasingly, despite lower margins in the first half of the year due to the product mix and continuing margin pressures resulting from broader economic conditions and competition, Group gross profit margins were maintained at 27.8% for the year as a whole.

The operating margins increased to 6.4% when including the gain on the acquisition of the trade and assets of Blazepoint Ltd (2011: 6.1%). Profit before tax has increased by 29% to £1.6m (2011: £1.24m) and earnings per share have increased by 24% to 19.5p (2011: 15.7p).

The balance sheet continues to strengthen. Total net assets have increased 30% to £5.1m (2011: £3.94m). Working capital requirements have increased in line with sales and at the year end the Company had a net gearing level of 47% (2011: 40%).

Dividends

The Directors recommend that a final dividend of 4.75p per share be paid. An interim dividend of 2.5p per share was paid in January 2012 giving a total dividend in respect of the year of 7.25p per share (2011: 6p per share). The final dividend will be paid on 31st August 2012 to shareholders on the register at the close of business on 10th August 2012. The shares will go ex-dividend on 8th August 2012.

Business Review

The Group is focussed on the supply and support of specialist electronics equipment which include high tolerance and tailor made battery packs, specialist electronic components and industrial/rugged computers.

The market for the Group's products and services is driven by the need for custom electronic solutions to address complex needs, typically in harsh environments where enhanced durability and resistance to extreme and volatile temperatures is vital. Drivers in our markets include efficiency improvement, cost saving, environmental monitoring and safety.

Divisional Review

The key performance indicators measured by management are billings, bookings and gross profit margins. Bookings are sales orders received and billings are sales delivered.

Solid State Supplies Ltd

Solid State Supplies is a distributor of specialist components to the UK OEM community; selling semiconductors, related components and modules for embedded processing, control and communications switches, power management units and LED lighting.

The financial year to 31st March 2012 saw a continuation of the growth achieved in the previous year with bookings growing 15% and billings 39% year on year.

Whilst gross margins on sales remain under pressure the total gross margin including commissions held up well at 27.6% (2011: 27.3%, 2010: 27.2%).

New product franchises acquired during the current and previous financial years have started to reflect in the growth numbers and are now contributing well to the overall billings of the company. This trend is expected to continue into FY2012/13 with new franchises accounting for a larger percentage of the overall sales. The company's dependence on sales to the military sector reduced during the year thus reducing the exposure to the Government's austerity measures. Pleasingly the company's design-in pipeline (designs in progress at customers) has strengthened throughout the year.

FY2012/13 will see the company relocating to larger and more suitable premises adjacent to its sister company, Steatite, in Redditch. The company will enter the value added market space within the electronics distribution sector, consequently strengthening the company's position both with key customers and key suppliers. The outlook for specialist electronic distribution and technical support remains buoyant and the company expects to see sustained but single digit growth throughout the 2012/13 year.

Steatite Ltd (including Blazepoint Ltd)

Steatite designs, manufactures and supplies a range of products and solutions that include bespoke Lithium battery packs, rugged mobile computing/radio solutions and industrial computer hardware and software. Key to its strategy is the ability to design, manufacture and test to customer requirements for usage in some of the most difficult and harsh environments against the most stringent of standards and qualifications.

Steatite went into the second period of last year with a large order book resulting in a very strong result for the year. Sales increased during the year by 14% whilst profit increased by 22.5%. In October 2011 the company acquired the trade and assets of Blazepoint Ltd and traded the business as Steatite Blazepoint Ltd for the balance of the fiscal year. Excluding the results of Steatite Blazepoint Ltd in the period would have resulted in an increase in sales of 11.7% and profits of 24.9% in the underlying business on a like for like basis.

For the year ahead Steatite Blazepoint Ltd will trade as a division of Steatite Ltd with most of the restructuring having taken place. This will enable it to contribute within Steatite to a greater level enhancing its product range and prospects for the year ahead. One-off costs for the year totalled £110k of which all relates to the cost of acquisition and restructuring of Blazepoint Ltd.

The prospects for Steatite Ltd for the year ahead remain positive. It continues to add to a strong order book and is competing and winning some major contracts in all its chosen fields of expertise. The economy continues to present challenges with order visibility difficult to predict. Nevertheless, we are confident that remaining focussed on our strategy of supplying leading edge solutions will continue to build long term growth and value.

Divisional Summary

The companies in the Solid State group have distinct characteristics in their market places. A depth of technical understanding and a collaborative approach to client relationships have always promoted an integrated process of product design and supply. The degree of co-operation has always been appreciated by our clients and we believe it is of significant commercial value both to us and our customers. Solid State will continue to pursue this approach and to extend it into new relationships where appropriate.

Our stated strategy is to supplement organic growth with selective acquisitions within the electronics industry which will complement our existing Group companies and enable us to achieve improved operating margins through the employment of operational efficiencies, scale and distribution.

Outlook

The Group will continue its stated strategy of both organic and acquisitive growth. The successful acquisition and integration of both Rugged Systems in 2010 and Blazepoint in October 2011 demonstrates that we can enhance shareholder value through our policy of selective acquisitions in our chosen fields of computing, components and batteries. We will continue to seek further acquisitions that complement our growth strategy and benefit shareholders.

We are mindful of the current economic environment but remain confident of the Group's prospects for the year ahead and beyond. We entered the new financial year with a strong order book which at 31st March 2012 stood at £10.5m (31st March 2011: £8.4m). This has been underpinned with the recent announcement of a £3.5m order to be delivered during H1 2012. This confidence is reflected in the Board's decision to declare a final dividend of 4.75p giving a total dividend for the year 7.25p, a 21% increase on the 2011 dividend of 6.0p. The prospects for Solid State are extremely positive.

Finally, I would like to thank my fellow Directors and all the staff for their continued support in what has been an outstanding year for the Group.

Gordon Comben

Chairman

20th June 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31st March 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31st March 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31st March 2012

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31st March 2012

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31st March 2012 (continued)

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31st March 2012

1) The financial information in the preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 March 2012 or 31 March 2011. The financial information for the year ended 31 March 2011 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under the Companies Act 2006, s 498 (2) or (3). The financial information for the year ended 31 March 2012 is unaudited. Statutory accounts for that will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of Companies following the Company's annual general meeting.

2) ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS

The financial information in this preliminary announcement has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The principal accounting policies used in preparing the preliminary announcement are those the Group will apply in its financial statement for the year ended 31 March 2012 and are unchanged from those disclosed in the Group's Report and Financial Statements for the year ended 31 March 2011.

3) EARNINGS PER SHARE

The earnings per share is based on the following:

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the year. The weighted average number of equity shares in issue was 6,770,613 (2011: 6,156,511).

The Diluted earnings per share is based on 6,870,252 (2011: 6,444,348) ordinary shares which allow for the exercise of all dilutive potential ordinary shares.

In the prior year, certain employee options were not included in the calculation of diluted EPS because their exercise was contingent on the satisfaction of certain criteria that had not been met at the end of the year. In addition, certain employee options were also excluded from the calculation of diluted EPS as their exercise price was greater than the weighted average share price during the year (i.e. they are out-of-the-money) and therefore it would not be advantageous for the holders to exercise the options.

The number of share options which have not been included in the calculation of the weighted average number of shares was nil (2011: 60,000).

4) DIVIDENDS

The proposed final dividend has not been accrued for as the dividend was declared after the statement of financial position date.

5) SEGMENT INFORMATION

The Group's primary reporting format for segment information is business segments which reflect the management reporting structure in the Group. The distribution division includes Solid State Supplies Limited and the manufacturing division includes Steatite Blazepoint Limited and Steatite Limited which incorporates RZ Pressure and Wordsworth Technology Limited.

Year ended 31st March 2012

SEGMENT INFORMATION (continued)

Year ended 31st March 2011

All the above relate to continuing operations.

6) TAX EXPENSE

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

7) The Annual Report will be sent to shareholders shortly and made available to the public at the registered office of the Company at Unit 2, Eastlands lane, Paddock Wood, Kent, TN12 6BU and will also be available to download on the Company's website www.solidstateplc.com.