Sypris Reports Second Quarter Results
- Sypris Solutions reports a strong Q2 2023 with a 22.6% increase in revenue, driven by a 40.2% increase for Sypris Electronics and an 11.7% increase for Sypris Technologies. Backlog also increased by 25.5%, reflecting growth in both segments. EPS rose to $0.01 per diluted share from a loss of $0.03 per diluted share in the prior year quarter. Sypris Electronics received additional releases under a multi-year production contract with the U.S. Navy, while Sypris Technologies was awarded a new program for drivetrain components. The company maintains its full-year outlook for a 25-30% year-over-year revenue increase.
- None.
Revenue up
HIGHLIGHTS
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-
Revenue for the quarter increased
22.6% year-over-year, driven by a40.2% increase for Sypris Electronics and a11.7% increase for Sypris Technologies. -
Backlog increased
25.5% , reflecting a25.0% year-over-year increase at Sypris Electronics and38.0% growth for the energy products of Sypris Technologies. -
EPS increased
per share during the period, rising to$0.04 per diluted share from a loss of$0.01 per diluted share for the prior year quarter.$0.03 -
During the quarter, Sypris Electronics announced that it received additional releases under a multi-year production contract to manufacture and test power supply modules for a large, mission-critical
U.S. Navy electronic warfare program, with deliveries to begin in 2023. - Sypris Technologies announced that it was awarded a new program to supply drivetrain components for use in the production of a new model of side-by-side utility-terrain vehicles, with production expected to begin in 2024.
- Subsequent to quarter-end, Sypris Technologies announced that it had received an order to supply 72-inch insulated joints for use in the expansion of the Atoka Water Pipeline for the Oklahoma City Water Utilities Trust. Shipments are expected to begin in 2023 and extend into 2024.
- Sypris Technologies also announced that it had received an award for specialty high-pressure closures for use in the Venture Global CP2 LNG Export Terminal and the Venture Global CP Express Natural Gas Pipeline Project. Shipments under this award are anticipated to be completed by year-end 2023.
-
The Company updated its full-year outlook for 2023, maintaining the expected increase in revenue at 25
-30% year-over-year while adjusting the guidance for gross margin expansion to 75 to 125 basis points due to the continuing unfavorable impact of the Mexican peso relative to theU.S. dollar.
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“We were pleased with our second quarter performance, as both operating segments reported significant growth in revenue and backlog. Our teammates have done an excellent job navigating inflationary pressures, supply chain challenges, customer demand volatility and currency fluctuations to position the business for further growth and increased profitability during the remainder of 2023,” commented Jeffrey T. Gill, President and Chief Executive Officer.
“Backlog for Sypris Electronics continued to increase, rising
“Overall demand from customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained stable. We continue to invest in new equipment and drive continuous improvement initiatives to support more cost-efficient operations. The recent successful amendment of long-term contracts with two of our key customers to add additional part numbers provides important support for our revenue outlook.
“Backlog for our energy products increased
Second Quarter Results
The Company reported revenue of
For the six months ended July 2, 2023, the Company reported revenue of
Sypris Technologies
Revenue for Sypris Technologies increased to
Sypris Electronics
Revenue for Sypris Electronics increased to
Outlook
Commenting on the future, Mr. Gill added, “Demand from customers in the defense and communications sector remains robust while demand also remains strong from customers serving the automotive and sport utility markets. Similarly, demand from energy market customers remains higher than the prior year and continues to move in the right direction.
“With a strong backlog, new program wins and long-term contract extensions in place, we are confident that 2023 has the potential to be very positive for Sypris. We are pleased to confirm our revenue outlook for 2023, which includes a 25
Webcast and Conference Call Information
Sypris Solutions will host a listen only conference call to discuss the Company's financial results today, August 15, 2023, at 9:00 a.m. (Eastern Time). To listen to the call, participants should dial (833) 316-0560 approximately 10 minutes prior to the start of the call (ask to be joined into the Sypris Solutions, Inc. call).
The live broadcast of Sypris’ quarterly conference call will also be available online at www.sypris.com on August 15, 2023, beginning at 9:00 a.m. (Eastern Time). The online replay will be available at approximately 11:00 a.m. (Eastern Time) and continue for 30 days. Related presentation materials will be posted to the “Investor Information” section of the Company’s website at www.sypris.com, located under the sub-heading “Upcoming Events,” prior to the call.
About Sypris Solutions
Sypris Solutions is a diversified manufacturing and engineering services company serving the defense, transportation, communications and energy industries. For more information about Sypris Solutions, visit its Web site at www.sypris.com.
Forward Looking Statements
This press release contains “forward-looking” statements within the meaning of the federal securities laws. Forward-looking statements include our plans and expectations of future financial and operational performance. Each forward-looking statement herein is subject to risks and uncertainties, as detailed in our most recent Form 10-K and Form 10-Q and other SEC filings. Briefly, we currently believe that such risks also include the following: our failure to achieve and maintain profitability on a timely basis by steadily increasing our revenues from profitable contracts with a diversified group of customers, which would cause us to continue to use existing cash resources or require us to sell assets to fund operating losses; risks of foreign operations, including foreign currency exchange rate risk exposure, which could impact our operating results; cost, quality and availability or lead times of raw materials such as steel, component parts (especially electronic components), natural gas or utilities including increased cost relating to inflation; dependence on, retention or recruitment of key employees and highly skilled personnel and distribution of our human capital; the cost and availability of full-time accounting personnel with technical accounting knowledge to execute, review and approve all aspects of the financial statement close and reporting process; the cost, quality, timeliness, efficiency and yield of our operations and capital investments, including the impact of inflation, tariffs, product recalls or related liabilities, employee training, working capital, production schedules, cycle times, scrap rates, injuries, wages, overtime costs, freight or expediting costs; volatility of our customers’ forecasts and our contractual obligations to meet current scheduling demands and production levels, which may negatively impact our operational capacity and our effectiveness to integrate new customers or suppliers, and in turn cause increases in our inventory and working capital levels; our failure to successfully complete final contract negotiations with regard to our announced contract “orders”, “wins” or “awards”; significant reductions in
SYPRIS SOLUTIONS, INC. | ||||||||
Financial Highlights | ||||||||
(In thousands, except per share amounts) | ||||||||
Three Months Ended |
||||||||
July 2, |
|
July 3, |
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Revenue | $ |
35,615 |
|
$ |
29,044 |
|
||
Net income (loss) | $ |
213 |
|
$ |
(629 |
) |
||
Income (loss) per common share: | ||||||||
Basic | $ |
0.01 |
$ |
(0.03 |
) |
|||
Diluted | $ |
0.01 |
|
$ |
(0.03 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
21,852 |
|
|
21,723 |
|
||
Diluted |
|
22,446 |
|
|
21,723 |
|
||
Six Months Ended |
||||||||
July 2, |
|
July 3, |
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Revenue | $ |
67,907 |
|
$ |
55,210 |
|
||
Net income (loss) | $ |
38 |
|
$ |
(392 |
) |
||
Income (loss) per common share: | ||||||||
Basic | $ |
0.00 |
|
$ |
(0.02 |
) |
||
Diluted | $ |
0.00 |
|
$ |
(0.02 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
21,824 |
|
|
21,700 |
|
||
Diluted |
|
22,457 |
|
|
21,700 |
|
Sypris Solutions, Inc. | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||
July 2, |
|
July 3, |
|
July 2, |
|
July 3, |
||||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Net revenue: | ||||||||||||||||
Sypris Technologies | $ |
20,058 |
|
$ |
17,951 |
|
$ |
39,558 |
|
$ |
35,106 |
|
||||
Sypris Electronics |
|
15,557 |
|
|
11,093 |
|
|
28,349 |
|
|
20,104 |
|
||||
Total net revenue |
|
35,615 |
|
|
29,044 |
|
|
67,907 |
|
|
55,210 |
|
||||
Cost of sales: | ||||||||||||||||
Sypris Technologies |
|
18,051 |
|
|
15,820 |
|
|
34,912 |
|
|
29,843 |
|
||||
Sypris Electronics |
|
12,894 |
|
|
9,444 |
|
|
24,164 |
|
|
17,078 |
|
||||
Total cost of sales |
|
30,945 |
|
|
25,264 |
|
|
59,076 |
|
|
46,921 |
|
||||
Gross profit: | ||||||||||||||||
Sypris Technologies |
|
2,007 |
|
|
2,131 |
|
|
4,646 |
|
|
5,263 |
|
||||
Sypris Electronics |
|
2,663 |
|
|
1,649 |
|
|
4,185 |
|
|
3,026 |
|
||||
Total gross profit |
|
4,670 |
|
|
3,780 |
|
|
8,831 |
|
|
8,289 |
|
||||
Selling, general and administrative |
|
3,704 |
|
|
3,737 |
|
|
7,449 |
|
|
7,126 |
|
||||
Operating income |
|
966 |
|
|
43 |
|
|
1,382 |
|
|
1,163 |
|
||||
Interest expense, net |
|
178 |
|
|
263 |
|
|
404 |
|
|
511 |
|
||||
Other expense, net |
|
513 |
|
|
104 |
|
|
584 |
|
|
273 |
|
||||
Income (loss) before taxes |
|
275 |
|
|
(324 |
) |
|
394 |
|
|
379 |
|
||||
Income tax expense, net |
|
62 |
|
305 |
|
|
356 |
|
771 |
|
||||||
Net income (loss) | $ |
213 |
|
$ |
(629 |
) |
$ |
38 |
|
$ |
(392 |
) |
||||
Income (loss) per common share: | ||||||||||||||||
Basic | $ |
0.01 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.02 |
) |
||||
Diluted | $ |
0.01 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.02 |
) |
||||
Dividends declared per common share | $ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
21,852 |
|
|
21,723 |
|
|
21,824 |
|
|
21,700 |
|
||||
Diluted |
|
22,446 |
|
|
21,723 |
|
|
22,457 |
|
|
21,700 |
|
Sypris Solutions, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except for share data) | ||||||||
July 2, |
|
December 31, |
||||||
2023 |
|
2022 |
||||||
(Unaudited) |
|
(Note) |
||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ |
20,580 |
|
$ |
21,648 |
|
||
Accounts receivable, net |
|
10,801 |
|
|
8,064 |
|
||
Inventory, net |
|
64,049 |
|
|
42,133 |
|
||
Other current assets |
|
10,489 |
|
|
8,133 |
|
||
Total current assets |
|
105,919 |
|
|
79,978 |
|
||
Property, plant and equipment, net |
|
17,516 |
|
|
15,532 |
|
||
Operating lease right-of-use assets |
|
3,865 |
|
|
4,251 |
|
||
Other assets |
|
4,649 |
|
|
4,383 |
|
||
Total assets | $ |
131,949 |
|
$ |
104,144 |
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ |
22,436 |
|
$ |
17,638 |
|
||
Accrued liabilities |
|
54,428 |
|
|
33,316 |
|
||
Operating lease liabilities, current portion |
|
1,172 |
|
|
1,168 |
|
||
Finance lease obligations, current portion |
|
1,169 |
|
|
1,102 |
|
||
Equipment financing obligations, current portion |
|
557 |
|
|
398 |
|
||
Note payable - related party, current portion |
|
2,000 |
|
|
2,500 |
|
||
Total current liabilities |
|
81,762 |
|
|
56,122 |
|
||
Operating lease liabilities, net of current portion |
|
3,134 |
|
|
3,710 |
|
||
Finance lease obligations, net of current portion |
|
2,128 |
|
|
2,536 |
|
||
Equipment financing obligations, net of current portion |
|
1,222 |
|
|
738 |
|
||
Note payable - related party, net of current portion |
|
1,992 |
|
|
3,989 |
|
||
Other liabilities |
|
19,348 |
|
|
17,474 |
|
||
Total liabilities |
|
109,586 |
|
|
84,569 |
|
||
Stockholders’ equity: | ||||||||
Preferred stock, par value |
||||||||
no shares issued |
|
- |
|
|
|
- |
|
|
Series A preferred stock, par value |
|
|
|
|||||
authorized; no shares issued |
|
- |
|
|
|
- |
|
|
Common stock, non-voting, par value |
|
|
|
|||||
authorized; no shares issued |
|
- |
|
|
|
- |
|
|
Common stock, par value |
||||||||
22,425,445 shares issued and 22,414,610 outstanding in 2023 and | ||||||||
22,175,664 shares issued and 22,175,645 outstanding in 2022 |
|
224 |
|
|
221 |
|
||
Additional paid-in capital |
|
155,860 |
|
|
155,535 |
|
||
Accumulated deficit |
|
(115,298 |
) |
|
(115,336 |
) |
||
Accumulated other comprehensive loss |
|
(18,423 |
) |
|
(20,845 |
) |
||
Treasury stock, 10,835 in 2023 and 19 in 2022 |
|
- |
|
|
- |
|
||
Total stockholders’ equity |
|
22,363 |
|
|
19,575 |
|
||
Total liabilities and stockholders’ equity | $ |
131,949 |
|
$ |
104,144 |
|
||
Note: The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by accounting principles generally accepted in |
Sypris Solutions, Inc. | ||||||||
Consolidated Cash Flow Statements | ||||||||
(in thousands) | ||||||||
Six Months Ended |
||||||||
July 2, |
|
July 3, |
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Cash flos from operating activities | ||||||||
Income (loss) per common share: | $ |
38 |
|
$ |
(392 |
) |
||
Adjustments to reconcile net income (loss) to net cash | ||||||||
provided by (used in) operating activities: | ||||||||
Depreciation and amortization |
|
1,553 |
|
|
1,531 |
|
||
Deferred income taxes |
|
(121 |
) |
|
225 |
|
||
Stock-based compensation expense |
|
409 |
|
|
349 |
|
||
Deferred loan costs recognized |
|
3 |
|
|
3 |
|
||
Net loss on the sale of assets |
|
- |
|
|
10 |
|
||
Provision for excess and obsolete inventory |
|
(29 |
) |
|
129 |
|
||
Non-cash lease expense |
|
386 |
|
|
442 |
|
||
Other noncash items |
|
(68 |
) |
|
91 |
|
||
Contributions to pension plans |
|
(10 |
) |
|
(47 |
) |
||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable |
|
(2,747 |
) |
|
(1,155 |
) |
||
Inventory |
|
(21,267 |
) |
|
711 |
|
||
Prepaid expenses and other assets |
|
(1,443 |
) |
|
(819 |
) |
||
Accounts payable |
|
4,688 |
|
|
805 |
|
||
Accrued and other liabilities |
|
22,296 |
|
|
(3,892 |
) |
||
Net cash provided by (used in) operating activities |
|
3,688 |
|
|
(2,009 |
) |
||
Cash flows from investing activities: | ||||||||
Capital expenditures |
|
(1,526 |
) |
|
(1,840 |
) |
||
Proceeds from sale of assets |
|
- |
|
|
- |
|
||
Net cash used in investing activities |
|
(1,526 |
) |
|
(1,840 |
) |
||
Cash flows from financing activities: | ||||||||
Proceeds from equipment financing obligations |
|
210 |
|
|
- |
|
||
Principal payments on finance lease obligations |
|
(556 |
) |
|
(479 |
) |
||
Principal payments on equipment financing obligations |
|
(234 |
) |
|
(165 |
) |
||
Principal payments on Note Payable - related party |
|
(2,500 |
) |
|
- |
|
||
Indirect repurchase of shares for minimum statutory tax withholdings |
|
(83 |
) |
|
(36 |
) |
||
Net cash used in financing activities |
|
(3,163 |
) |
|
(680 |
) |
||
Effect of exchange rate changes on cash balances |
|
(67 |
) |
|
395 |
|
||
Net (decrease) in cash and cash equivalents |
|
(1,068 |
) |
|
(4,134 |
) |
||
Cash and cash equivalents at beginning of period |
|
21,648 |
|
|
11,620 |
|
||
Cash and cash equivalents at end of period | $ |
20,580 |
|
$ |
7,486 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230815433239/en/
Richard L Davis
Chief Financial Officer
(502) 329-2000
Source: Sypris Solutions, Inc.
FAQ
What were Sypris Solutions' Q2 2023 financial results?
What contracts did Sypris Electronics and Sypris Technologies receive?