Sypris Reports Third Quarter Results
Gross Profit Up
HIGHLIGHTS
-
Revenue for the quarter increased
6.2% year-over-year, driven by a13.6% increase for Sypris Electronics and a0.7% increase for Sypris Technologies. Orders were up6.5% for the quarter and13.4% year-to-date, reflecting positive growth for both businesses. -
Gross profit for the Company increased
48.0% from the prior-year period and increased6.0% sequentially, while gross margin expanded 480 basis points and 90 basis points, respectively. -
EPS increased to
per diluted share, up from a loss of$0.02 per diluted share for the prior-year quarter, and up from$0.03 per diluted share sequentially.$0.00 -
Revenue for Sypris Electronics increased
13.6% , reflecting the positive impact of recently announced contracts with customers serving the markets for electronic warfare, subsea communications, and aircraft and missile avionics. Orders are up14.2% year-to-date. -
Gross profit for Sypris Technologies surged
150.9% year-over-year and34.6% sequentially, while gross margin expanded 1,130 basis points and 360 basis points, respectively. Orders for energy products are up11.8% year-to-date. - During the quarter, Sypris Technologies announced that it entered into a long-term sole-source extension to its current supply agreement with one of the world’s largest commercial vehicle manufacturers. The agreement provides for a continuation of Sypris’ Ultra® Axle Shafts for use in the assemblies of the customer’s branded drive axles for medium and heavy-duty trucks.
-
The Company updated its full-year outlook for 2024, with revenue now expected to increase
10% year-over-year, at the lower end of our prior guidance due to temporary production delays on three of our Sypris Electronics programs during the year. We continue to expect a 100-125 basis point increase in gross margin.
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“We were pleased with the year-over-year revenue growth at Sypris Electronics,” commented Jeffrey T. Gill, President and Chief Executive Officer. “The backlog at Sypris Electronics exceeds
“Demand from Sypris Technologies customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained relatively stable, with new product line shipments offsetting the anticipated cyclical decline for the commercial vehicle market. We believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets will help offset some of this decline.
“Orders for our energy products increased during the period, and additional opportunities for growth may exist with new global projects in support of increasing LNG demand. We are also actively pursuing applications for our products in adjacent markets including CO2 capture to further diversify our industry and customer portfolios.”
Third Quarter Results
The Company reported revenue of
For the nine months ended September 29, 2024, the Company reported revenue of
Sypris Technologies
Revenue for Sypris Technologies was
Sypris Electronics
Revenue for Sypris Electronics was
Outlook
Commenting on the future, Mr. Gill added, “Demand from customers serving the markets for electronic warfare, aircraft and missile avionics, secure and subsea communications, and ground-based radar remain robust, while the outlook for the energy market continues to move in the right direction. Similarly, demand from customers serving the automotive, commercial vehicle and sport utility markets remains healthy despite the anticipated cyclical decline in the commercial vehicle market.
“With a strong backlog, new program wins, and long-term contract extensions in place, we are confident that the remainder of 2024 has the potential to be very positive for Sypris. We have updated our outlook for 2024 to include a
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: the fees, costs and supply of, or access to, debt, equity capital, or other sources of liquidity; 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; 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; the termination or non-renewal of existing contracts by customers; dependence on, retention or recruitment of key employees and highly skilled personnel and distribution of our human capital; 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; 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; unanticipated or uninsured product liability claims, disasters, public health crises, losses or business risks; our failure to successfully complete final contract negotiations with regard to our announced contract “orders”, “wins” or “awards”; our reliance on a few key customers, third party vendors and sub-suppliers; significant delays or reductions due to a prolonged continuing resolution or
SYPRIS SOLUTIONS, INC. |
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Financial Highlights |
||||||||
(In thousands, except per share amounts) |
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
September 29, |
|
October 1, |
||||
|
|
2024 |
|
2023 |
||||
(Unaudited) | ||||||||
Revenue | $ |
35,657 |
|
$ |
33,581 |
|
||
Net income (loss) | $ |
390 |
|
$ |
(555 |
) |
||
Income (loss) per common share: | ||||||||
Basic | $ |
0.02 |
|
$ |
(0.03 |
) |
||
Diluted | $ |
0.02 |
|
$ |
(0.03 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
22,088 |
|
|
21,880 |
|
||
Diluted |
|
22,415 |
|
|
21,880 |
|
||
Nine Months Ended |
||||||||
September 29, |
|
October 1, |
||||||
2024 |
|
2023 |
||||||
(Unaudited) | ||||||||
Revenue | $ |
106,731 |
|
$ |
101,488 |
|
||
Net loss | $ |
(1,815 |
) |
$ |
(517 |
) |
||
Loss per common share: | ||||||||
Basic | $ |
(0.08 |
) |
$ |
(0.02 |
) |
||
Diluted | $ |
(0.08 |
) |
$ |
(0.02 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
22,011 |
|
|
21,848 |
|
||
Diluted |
|
22,011 |
|
|
21,848 |
|
||
Sypris Solutions, Inc. |
|||||||||||||||
Consolidated Statements of Operations |
|||||||||||||||
(in thousands, except for per share data) |
|||||||||||||||
|
|
||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||
|
|
September 29, |
|
October 1, |
|
September 29, |
|
October 1, |
|||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
(Unaudited) |
(Unaudited) |
||||||||||||||
Net revenue: | |||||||||||||||
Sypris Technologies | $ |
19,469 |
$ |
19,337 |
|
$ |
55,660 |
|
$ |
58,895 |
|
||||
Sypris Electronics |
|
16,188 |
|
14,244 |
|
|
51,071 |
|
|
42,593 |
|
||||
Total net revenue |
|
35,657 |
|
33,581 |
|
|
106,731 |
|
|
101,488 |
|
||||
Cost of sales: | |||||||||||||||
Sypris Technologies |
|
15,808 |
|
17,878 |
|
|
47,229 |
|
|
52,790 |
|
||||
Sypris Electronics |
|
13,870 |
|
11,663 |
|
|
44,998 |
|
|
35,827 |
|
||||
Total cost of sales |
|
29,678 |
|
29,541 |
|
|
92,227 |
|
|
88,617 |
|
||||
Gross profit: | |||||||||||||||
Sypris Technologies |
|
3,661 |
|
1,459 |
|
|
8,431 |
|
|
6,105 |
|
||||
Sypris Electronics |
|
2,318 |
|
2,581 |
|
|
6,073 |
|
|
6,766 |
|
||||
Total gross profit |
|
5,979 |
|
4,040 |
|
|
14,504 |
|
|
12,871 |
|
||||
Selling, general and administrative |
|
4,250 |
|
4,170 |
|
|
12,876 |
|
|
11,619 |
|
||||
Operating income (loss) |
|
1,729 |
|
(130 |
) |
|
1,628 |
|
|
1,252 |
|
||||
Interest expense, net |
|
546 |
|
127 |
|
|
1,468 |
|
|
531 |
|
||||
Other expense, net |
|
246 |
|
199 |
|
|
781 |
|
|
783 |
|
||||
Income (loss) before taxes |
|
937 |
|
(456 |
) |
|
(621 |
) |
|
(62 |
) |
||||
Income tax expense, net |
|
547 |
|
99 |
|
|
1,194 |
|
|
455 |
|
||||
Net income (loss) | $ |
390 |
$ |
(555 |
) |
$ |
(1,815 |
) |
$ |
(517 |
) |
||||
Income (loss) per common share: | |||||||||||||||
Basic | $ |
0.02 |
$ |
(0.03 |
) |
$ |
(0.08 |
) |
$ |
(0.02 |
) |
||||
Diluted | $ |
0.02 |
$ |
(0.03 |
) |
$ |
(0.08 |
) |
$ |
(0.02 |
) |
||||
Dividends declared per common share | $ |
- |
$ |
- |
|
$ |
- |
|
$ |
- |
|
||||
Weighted average shares outstanding: | |||||||||||||||
Basic |
|
22,088 |
|
21,880 |
|
|
22,011 |
|
|
21,848 |
|
||||
Diluted |
|
22,415 |
|
21,880 |
|
|
22,011 |
|
|
21,848 |
|
||||
|
|
|
|
||||
|
|
|
|
||||
Sypris Solutions, Inc. |
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Consolidated Balance Sheets |
|||||||
(in thousands, except for share data) |
|||||||
|
|
|
|
||||
|
September 29, |
|
December 31, |
||||
|
2024 |
|
2023 |
||||
|
(Unaudited) |
|
(Note) |
||||
ASSETS |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
8,215 |
|
|
$ |
7,881 |
|
Accounts receivable, net |
|
12,373 |
|
|
|
8,929 |
|
Inventory, net |
|
67,333 |
|
|
|
77,314 |
|
Other current assets |
|
11,457 |
|
|
|
9,743 |
|
Total current assets |
|
99,378 |
|
|
|
103,867 |
|
Property, plant and equipment, net |
|
13,914 |
|
|
|
17,133 |
|
Operating lease right-of-use assets |
|
4,012 |
|
|
|
3,309 |
|
Other assets |
|
4,309 |
|
|
|
5,033 |
|
Total assets |
$ |
121,613 |
|
|
$ |
129,342 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
22,630 |
|
|
$ |
26,737 |
|
Accrued liabilities |
|
50,813 |
|
|
|
56,232 |
|
Operating lease liabilities, current portion |
|
882 |
|
|
|
1,068 |
|
Finance lease obligations, current portion |
|
1,467 |
|
|
|
1,327 |
|
Equipment financing obligations, current portion |
|
522 |
|
|
|
618 |
|
Working capital line of credit |
|
500 |
|
|
|
500 |
|
Note payable - related party, current portion |
|
2,000 |
|
|
|
- |
|
Total current liabilities |
|
78,814 |
|
|
|
86,482 |
|
|
|
|
|
||||
Operating lease liabilities, net of current portion |
|
3,552 |
|
|
|
2,642 |
|
Finance lease obligations, net of current portion |
|
1,133 |
|
|
|
1,852 |
|
Equipment financing obligations, net of current portion |
|
959 |
|
|
|
1,333 |
|
Note payable - related party, net of current portion |
|
6,984 |
|
|
|
6,484 |
|
Other liabilities |
|
11,999 |
|
|
|
8,082 |
|
Total liabilities |
|
103,441 |
|
|
|
106,875 |
|
Stockholders’ equity: |
|
|
|
||||
Preferred stock, par value |
|
- |
|
|
|
- |
|
Series A preferred stock, par value |
|
- |
|
|
|
- |
|
Common stock, non-voting, par value |
|
- |
|
|
|
- |
|
Common stock, par value |
|
230 |
|
|
|
224 |
|
Additional paid-in capital |
|
156,772 |
|
|
|
156,242 |
|
Accumulated deficit |
|
(118,747 |
) |
|
|
(116,932 |
) |
Accumulated other comprehensive loss |
|
(20,083 |
) |
|
|
(17,067 |
) |
Treasury stock, 19,513 in 2024 and 5,835 in 2023 |
|
- |
|
|
|
- |
|
Total stockholders’ equity |
|
18,172 |
|
|
|
22,467 |
|
Total liabilities and stockholders’ equity |
$ |
121,613 |
|
|
$ |
129,342 |
|
|
|
|
|
||||
Note: The balance sheet at December 31, 2023, 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 |
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|
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Sypris Solutions, Inc. |
|||||||
Consolidated Cash Flow Statements |
|||||||
(in thousands) |
|||||||
|
|
||||||
|
Nine Months Ended |
||||||
|
September 29, |
|
October 1, |
||||
|
2024 |
|
2023 |
||||
|
(Unaudited) |
||||||
Cash flows from operating activities: | |||||||
Net loss | $ |
(1,815 |
) |
$ |
(517 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization |
|
2,449 |
|
|
2,392 |
|
|
Deferred income taxes |
|
39 |
|
|
(56 |
) |
|
Stock-based compensation expense |
|
660 |
|
|
615 |
|
|
Deferred loan costs amortized |
|
6 |
|
|
3 |
|
|
Provision for excess and obsolete inventory |
|
591 |
|
|
(22 |
) |
|
Non-cash lease expense |
|
898 |
|
|
667 |
|
|
Other noncash items |
|
413 |
|
|
178 |
|
|
Contributions to pension plans |
|
(580 |
) |
|
(10 |
) |
|
Changes in operating assets and liabilities: | |||||||
Accounts receivable |
|
(3,606 |
) |
|
(2,845 |
) |
|
Inventory |
|
8,642 |
|
|
(34,146 |
) |
|
Prepaid expenses and other assets |
|
(2,116 |
) |
|
(464 |
) |
|
Accounts payable |
|
(3,986 |
) |
|
7,841 |
|
|
Accrued and other liabilities |
|
(1,903 |
) |
|
18,195 |
|
|
Net cash used in operating activities |
|
(308 |
) |
|
(8,169 |
) |
|
Cash flows from investing activities: | |||||||
Capital expenditures |
|
(666 |
) |
|
(1,890 |
) |
|
Net cash used in investing activities |
|
(666 |
) |
|
(1,890 |
) |
|
Cash flows from financing activities: | |||||||
Proceeds from equipment financing obligations |
|
430 |
|
|
210 |
|
|
Proceeds from working capital line of credit |
|
- |
|
|
500 |
|
|
Proceeds from Note Payable - related party |
|
2,500 |
|
|
- |
|
|
Principal payments on finance lease obligations |
|
(1,006 |
) |
|
(845 |
) |
|
Principal payments on equipment financing obligations |
|
(471 |
) |
|
(387 |
) |
|
Principal payments on Note Payable - related party |
|
- |
|
|
(2,500 |
) |
|
Indirect repurchase of shares for minimum statutory tax withholdings |
|
(127 |
) |
|
(104 |
) |
|
Net cash provided by (used in) financing activities |
|
1,326 |
|
|
(3,126 |
) |
|
Effect of exchange rate changes on cash balances |
|
(18 |
) |
|
(54 |
) |
|
Net increase (decrease) in cash and cash equivalents |
|
334 |
|
|
(13,239 |
) |
|
Cash and cash equivalents at beginning of period |
|
7,881 |
|
|
21,648 |
|
|
Cash and cash equivalents at end of period | $ |
8,215 |
|
$ |
8,409 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241112960905/en/
Rebecca R. Eckert
Chief Accounting Officer
(502) 329-2000
Source: Sypris Solutions, Inc.