Sypris Reports 2015 Results
HIGHLIGHTS
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For the Fourth Quarter:
- Consolidated revenue and gross profit for the fourth quarter declined sequentially, primarily reflecting a reduction in the demand for commercial vehicles and the rebalancing of inventory by certain customers.
-
Revenue for
Sypris Electronics increased 26% from the prior fourth quarter to$8 .9 million, while gross profit increased$1 .2 million to $0.3 million. -
Sypris Electronics delivered aSypris Cyber Range to theNEC Corporation inSingapore . The Range is to serve as a platform for cybersecurity training, modeling and simulation. - Sypris Technologies received new purchase orders from a variety of customers for the forging and machining of axle shafts; the forging of input shafts and brake flanges; the machining of knuckles; and the provision of shot blast, heat treat and tooling services.
For the Full Year:
-
Consolidated revenue declined to
$145 .3 million, reflecting the previously-reported loss of a major customer for Sypris Technologies. -
Revenue and gross profit for
Sypris Electronics increased$4 .7 million and$4.3 million, respectively, from 2014. -
The Company raised
$15.7 million through transactions involving the sale of its underutilized manufacturing facility inMorganton, North Carolina , and related assets, toMeritor . -
The Company secured a new asset-based revolving credit facility for up
to
$15.0 million and a$12.0 million , three-year term loan to replace its$10.0 million revolving credit facility. -
The Company raised
$5.5 million in the form of subordinated debt. -
The Company implemented system-wide cost reduction initiatives that
are estimated to exceed
$9.0 million per year of savings on an annualized basis. -
Sypris Electronics announced the commissioning of its firstSypris Cyber Range in theSecurity Operations Center for theMinistry of Home Affairs inSingapore . -
Sypris Technologies entered into new long-term contracts with
Volvo and Detroit Axle for the supply of drive-train components.
Subsequent to Year-End:
-
Sypris Electronics was awarded a$5.0 million engineering services contract for a defense program. -
Sypris Electronics was notified by an agency of theDepartment of Defense of its intent to deploy aSypris Cyber Range to test, evaluate and train personnel for the next generation of cyber threats. -
Sypris Electronics received a purchase order for theSypris Cyber Range for delivery toKyushu University inFukuoka, Japan . -
Sypris Electronics received a$13.8 million contract for the manufacture of circuit card assemblies for use in a program of the US Armed Services. Deliveries are expected to run from 4Q16 through 2018. -
As a result of the positive momentum generated by these and other
orders, the Company now expects orders for
Sypris Electronics to reach$24.0 million for the first quarter of 2016 compared to$4.6 million for the comparable period in 2015. -
The Company completed a sale-leaseback transaction for its
underutilized manufacturing facility located in
Toluca, Mexico , generating gross proceeds of approximately$12 .1 million. - The Company amended its revolving credit facility to provide additional availability for use in the Company’s operations.
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“Significant progress has been made during this past year,” commented
The Company reported revenue of
For the full year ended December 31, 2015, the Company reported revenue
of
“Sypris Technologies also continues to adjust manpower and overhead expenses to reflect the recent softness in the commercial vehicle market that started during the fourth quarter,” added Mr. Gill. “We have worked diligently to control our costs while taking actions to rebuild and diversify our customer base.”
“Sypris Electronics continued its efforts to diversify its portfolio of
products and services in response to the challenges posed by the U.S.
defense industry. Our team is beginning to gain traction on several new
technologies, including interest in our Cyber Security platform, where
the
Sypris Technologies
Revenue for Sypris Technologies decreased 74.8% to
Revenue for
Outlook
Mr. Gill added, “We will continue to concentrate on daily execution
within both of our businesses. The Company is working to adjust manpower
and overhead expenses to align with projected levels of customer demand
and market requirements, while optimizing our ability to bring in
potential new business.
Forward Looking Statements
This press release contains “forward-looking” statements within
the meaning of the federal securities laws. 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
SYPRIS SOLUTIONS, INC. | |||||||||||
Financial Highlights | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2015 | 2014 | ||||||||||
(Unaudited) | |||||||||||
Revenue | $ | 29,121 | $ | 87,215 | |||||||
Net loss | $ | (5,493 | ) | $ | (2,047 | ) | |||||
Loss per common share: | |||||||||||
Basic | $ | (0.28 | ) | $ | (0.11 | ) | |||||
Diluted | $ | (0.28 | ) | $ | (0.11 | ) | |||||
Weighted average shares outstanding: | |||||||||||
Basic | 19,702 | 19,601 | |||||||||
Diluted | 19,702 | 19,601 | |||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2015 | 2014 | ||||||||||
(Unaudited) | |||||||||||
Revenue | $ | 145,323 | $ | 354,776 | |||||||
Net loss | $ | (27,216 | ) | $ | (1,184 | ) | |||||
Loss per common share: | |||||||||||
Basic | $ | (1.38 | ) | $ | (0.06 | ) | |||||
Diluted | (1.38 | ) | (0.06 | ) | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | 19,688 | 19,586 | |||||||||
Diluted | 19,688 | 19,586 | |||||||||
Sypris Solutions, Inc. | |||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||
(in thousands, except for per share data) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
Net revenue: | |||||||||||||||||||||
Sypris Technologies | $ | 20,230 | $ | 80,158 | $ | 108,134 | $ | 322,262 | |||||||||||||
Sypris Electronics | 8,891 | 7,057 | 37,189 | 32,514 | |||||||||||||||||
Total net revenue | 29,121 | 87,215 | 145,323 | 354,776 | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||
Sypris Technologies | 19,470 | 69,973 | 108,924 | 280,241 | |||||||||||||||||
Sypris Electronics | 8,610 | 8,012 | 36,081 | 35,705 | |||||||||||||||||
Total cost of sales | 28,080 | 77,985 | 145,005 | 315,946 | |||||||||||||||||
Gross profit (loss): | |||||||||||||||||||||
Sypris Technologies | 760 | 10,185 | (790 | ) | 42,021 | ||||||||||||||||
Sypris Electronics | 281 | (955 | ) | 1,108 | (3,191 | ) | |||||||||||||||
Total gross profit | 1,041 | 9,230 | 318 | 38,830 | |||||||||||||||||
Selling, general and administrative | 5,431 | 10,125 | 27,845 | 35,531 | |||||||||||||||||
Research and development | 132 | 302 | 779 | 579 | |||||||||||||||||
Severance and equipment relocation costs | 315 | - | 1,338 | - | |||||||||||||||||
Operating (loss) income | (4,837 | ) | (1,197 | ) | (29,644 | ) | 2,720 | ||||||||||||||
Interest expense, net | 952 | 151 | 4,223 | 617 | |||||||||||||||||
Other income, net | (48 | ) | (432 | ) | (8,643 | ) | (1,282 | ) | |||||||||||||
(Loss) income before taxes | (5,741 | ) | (916 | ) | (25,224 | ) | 3,385 | ||||||||||||||
Income tax expense, net | (248 | ) | 1,131 | 1,992 | 4,569 | ||||||||||||||||
Net loss | $ | (5,493 | ) | $ | (2,047 | ) | $ | (27,216 | ) | $ | (1,184 | ) | |||||||||
Loss per common share: | |||||||||||||||||||||
Basic | $ | (0.28 | ) | $ | (0.11 | ) | $ | (1.38 | ) | $ | (0.06 | ) | |||||||||
Diluted | $ | (0.28 | ) | $ | (0.11 | ) | $ | (1.38 | ) | $ | (0.06 | ) | |||||||||
Dividends declared per common share | $ | - | $ | 0.02 | $ | - | $ | 0.08 | |||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 19,702 | 19,601 | 19,688 | 19,586 | |||||||||||||||||
Diluted | 19,702 | 19,601 | 19,688 | 19,586 | |||||||||||||||||
Sypris Solutions, Inc. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(in thousands, except for share data) | |||||||||||
December 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,349 | $ | 7,003 | |||||||
Accounts receivable, net | 12,394 | 47,666 | |||||||||
Inventory, net | 20,192 | 29,031 | |||||||||
Other current assets | 4,459 | 5,666 | |||||||||
Assets held for sale | 3,230 | - | |||||||||
Total current assets | 41,624 | 89,366 | |||||||||
Property, plant and equipment, net | 22,178 | 37,654 | |||||||||
Other assets | 4,310 | 2,661 | |||||||||
Total assets | $ | 68,112 | $ | 129,681 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 11,311 | $ | 39,027 | |||||||
Accrued liabilities | 11,661 | 18,775 | |||||||||
Current portion of long-term debt | 3,846 | 17,000 | |||||||||
Total current liabilities | 26,818 | 74,802 | |||||||||
Note payable - related party | 5,500 | - | |||||||||
Long-term debt | 10,000 | - | |||||||||
Other liabilities | 6,082 | 7,991 | |||||||||
Total liabilities | 48,400 | 82,793 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, par value $0.01 per share, 975,150 shares authorized; no shares issued |
- | - | |||||||||
Series A preferred stock, par value $0.01 per share, 24,850 shares authorized; no shares issued |
- | - | |||||||||
Common stock, non-voting, par value $0.01 per share, 10,000,000 shares authorized; no shares issued |
- | - | |||||||||
Common stock, par value $0.01 per share, 30,000,000 shares authorized; 20,826,236 shares issued and 20,776,544 outstanding in 2015 and 20,567,735 shares issued and 20,485,043 outstanding in 2014 |
208 | 206 | |||||||||
Additional paid-in capital | 152,077 | 151,314 | |||||||||
Accumulated deficit | (106,812 | ) | (79,596 | ) | |||||||
Accumulated other comprehensive loss | (25,760 | ) | (25,035 | ) | |||||||
Treasury stock, 49,692 and 82,692 shares in 2015 and 2014, respectively | (1 | ) | (1 | ) | |||||||
Total stockholders’ equity | 19,712 | 46,888 | |||||||||
Total liabilities and stockholders’ equity | $ | 68,112 | $ | 129,681 | |||||||
Sypris Solutions, Inc. | |||||||||||
Consolidated Cash Flow Statements | |||||||||||
(in thousands) | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2015 | 2014 | ||||||||||
(Unaudited) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (27,216 | ) | $ | (1,184 | ) | |||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|||||||||||
Depreciation and amortization | 9,035 | 10,409 | |||||||||
Deferred income taxes | 2,230 | 1,050 | |||||||||
Stock-based compensation expense | 842 | 1,597 | |||||||||
Deferred revenue recognized | (4,200 | ) | (8,657 | ) | |||||||
Deferred loan costs recognized | 2,333 | 78 | |||||||||
Gain on the sale of assets | (7,480 | ) | (19 | ) | |||||||
Provision for excess and obsolete inventory | 1,069 | 1,150 | |||||||||
Other noncash items | (1,289 | ) | (993 | ) | |||||||
Contributions to pension plans | (315 | ) | (1,090 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 24,700 | (9,091 | ) | ||||||||
Inventory | 5,432 | 4,276 | |||||||||
Prepaid expenses and other assets | (4,470 | ) | (143 | ) | |||||||
Accounts payable | (13,388 | ) | 2,425 | ||||||||
Accrued and other liabilities | (730 | ) | 3,237 | ||||||||
Net cash (used in) provided by operating activities | (13,447 | ) | 3,045 | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (1,825 | ) | (5,259 | ) | |||||||
Proceeds from sale of assets | 15,741 | 30 | |||||||||
Net cash provided by (used in) investing activities | 13,916 | (5,229 | ) | ||||||||
Cash flows from financing activities: | |||||||||||
Repayment of former Revolving Credit Agreement | (17,000 | ) | - | ||||||||
Repayment of note payable - Meritor | (3,779 | ) | - | ||||||||
Proceeds from issuance of Term Loan | 12,000 | - | |||||||||
Principal payments on Term Loan | (286 | ) | - | ||||||||
Proceeds from related party note payable | 5,500 | - | |||||||||
Proceeds from New Revolving Credit Agreement | 2,132 | - | |||||||||
Net change in debt under Credit Facility | - | (7,000 | ) | ||||||||
Debt issuance and modification costs | (4,203 | ) | - | ||||||||
Common stock repurchases | - | (426 | ) | ||||||||
Indirect repurchase of shares for minimum statutory tax withholdings | (77 | ) | (429 | ) | |||||||
Cash dividends paid | (410 | ) | (1,635 | ) | |||||||
Proceeds from issuance of common stock | - | 3 | |||||||||
Net cash used in financing activities | (6,123 | ) | (9,487 | ) | |||||||
Net decrease in cash and cash equivalents | (5,654 | ) | (11,671 | ) | |||||||
Cash and cash equivalents at beginning of year | 7,003 | 18,674 | |||||||||
Cash and cash equivalents at end of year | $ | 1,349 | $ | 7,003 | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160330005383/en/
Source:
Sypris Solutions, Inc.
Anthony C. Allen, 502-329-2000
Chief
Financial Officer