Sypris Reports First Quarter Results
Revenue and Earnings Continue to Post Solid Growth
HIGHLIGHTS
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- Revenue and gross profit increased 27% and 54%, respectively, from the first quarter of last year.
-
Earnings increased to
$0.27 per diluted share, up from$0.10 per share for the prior year period. - Gross margin increased to 13.0%, up 230 basis points from 10.7% in the first quarter of 2011 and up from 10.4% sequentially.
-
Profit conversion on incremental revenue growth for the
Industrial Group exceeded 20% on a year-over-year basis and 16% sequentially. - Orders for the Company’s Aerospace and Defense business increased 30% when compared to the prior year period.
- Subsequent to quarter end, the Company announced a new alliance with BlackRidge Technology to develop the next generation of network defense technology for government customers.
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The Company reported revenue of
Pretax income from continuing operations of
“Our
“Orders in our Aerospace and Defense business increased 30% during the
period when compared to the first quarter of 2011, following a 23% year
over year increase in the fourth quarter of last year. And while the
periods used for comparison reflect the lack of
Revenue for our
Revenue for our
Outlook
Mr. Gill added, “We will continue to concentrate on the daily execution
of our business. We expect to see strong comparable period growth in the
top line of our
“We believe that the Company is well-positioned and our team is focused on delivering improved operational and financial results during the year. We will do so through a relentless focus on execution at every level of our organization.”
Each “forward-looking statement” herein is subject to serious
risks and should not be relied upon, as detailed in our most recent Form
10-K and Form 10-Q and subsequent
Non-GAAP Measures
In addition to the results reported in accordance with accounting
principles generally accepted in
Profit conversion on incremental revenue is defined as the change in gross profit as a percentage of the change in net revenue. Management uses this non-GAAP measure in planning and forecasting for future periods.
This non-GAAP measure should not be considered a substitute for our reported results prepared in accordance with GAAP.
RECONCILIATION OF PROFIT CONVERSION ON INCREMENTAL REVENUE |
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(in thousands, except for percent data) |
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Three Months Ended |
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April 1, |
December 31, |
April 3, |
||||||||
2012 |
2011 |
2011 |
||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||
Net revenue: | ||||||||||
Industrial Group | $ | 82,522 | $ | 72,223 | $ | 59,550 | ||||
Electronics Group | 13,941 | 11,357 | 16,260 | |||||||
Total net revenue | $ | 96,463 | $ | 83,580 | $ | 75,810 | ||||
Gross profit: | ||||||||||
Industrial Group | $ | 9,922 | $ | 8,200 | $ | 5,132 | ||||
Electronics Group | 2,592 | 507 | 3,016 | |||||||
Total gross profit | $ | 12,514 | $ | 8,707 | $ | 8,148 | ||||
Net revenue Industrial Group Q1 2011 | $ | 59,550 | ||||||||
Net revenue Industrial Group Q1 2012 | 82,522 | |||||||||
Net increase in revenue | $ | 22,972 | ||||||||
Gross profit Industrial Group Q1 2011 | $ | 5,132 | ||||||||
Gross profit Industrial Group Q1 2012 | 9,922 | |||||||||
Net increase in gross profit | $ | 4,790 | ||||||||
Net increase in gross profit | $ | 4,790 | ||||||||
Net increase in revenue | 22,972 | |||||||||
Profit conversion | 20.9 | % | ||||||||
Net revenue Industrial Group Q4 2011 | $ | 72,223 | ||||||||
Net revenue Industrial Group Q1 2012 | 82,522 | |||||||||
Net increase in revenue | $ | 10,299 | ||||||||
Gross profit Industrial Group Q4 2011 | $ | 8,200 | ||||||||
Gross profit Industrial Group Q1 2012 | 9,922 | |||||||||
Net increase in gross profit | $ | 1,722 | ||||||||
Net increase in gross profit | $ | 1,722 | ||||||||
Net increase in revenue | 10,299 | |||||||||
Profit conversion | 16.7 | % | ||||||||
SYPRIS SOLUTIONS, INC. | ||||||||
Financial Highlights | ||||||||
(In thousands, except per share amounts) | ||||||||
Three Months Ended | ||||||||
April 1, | April 3, | |||||||
2012 | 2011 | |||||||
(Unaudited) | ||||||||
Revenue | $ | 96,463 | $ | 75,810 | ||||
Net income | $ | 5,288 | $ | 2,052 | ||||
Basic income (loss) per common share: | ||||||||
Continuing operations | $ | 0.28 | $ | 0.13 | ||||
Discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Net income per share | $ | 0.27 | $ | 0.11 | ||||
Diluted income (loss) per common share: | ||||||||
Continuing operations | $ | 0.28 | $ | 0.12 | ||||
Discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Net income per share | $ | 0.27 | $ | 0.10 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 18,938 | 18,734 | ||||||
Diluted | 19,148 | 18,933 | ||||||
Sypris Solutions, Inc. | ||||||||
Consolidated Statements of Operations | ||||||||
(in thousands, except for per share data) | ||||||||
Three Months Ended | ||||||||
April 1, | April 3, | |||||||
2012 | 2011 | |||||||
(Unaudited) | ||||||||
Net revenue: | ||||||||
Industrial Group | $ | 82,522 | $ | 59,550 | ||||
Electronics Group | 13,941 | 16,260 | ||||||
Total net revenue | 96,463 | 75,810 | ||||||
Cost of sales: | ||||||||
Industrial Group | 72,600 | 54,418 | ||||||
Electronics Group | 11,349 | 13,244 | ||||||
Total cost of sales | 83,949 | 67,662 | ||||||
Gross profit: | ||||||||
Industrial Group | 9,922 | 5,132 | ||||||
Electronics Group | 2,592 | 3,016 | ||||||
Total gross profit | 12,514 | 8,148 | ||||||
Selling, general and administrative | 7,595 | 6,863 | ||||||
Research and development | 394 | 616 | ||||||
Amortization of intangible assets | 22 | 28 | ||||||
Nonrecurring (income) expense, net | - | (3,000 | ) | |||||
Restructuring (income) expense, net | - | (253 | ) | |||||
Operating income | 4,503 | 3,894 | ||||||
Interest expense, net | 117 | 729 | ||||||
Other (income) expense, net | (2,074 | ) | 231 | |||||
Income from continuing operations before taxes | 6,460 | 2,934 | ||||||
Income tax expense | 949 | 432 | ||||||
Income from continuing operations | 5,511 | 2,502 | ||||||
Loss from discontinued operations, net of tax | (223 | ) | (450 | ) | ||||
Net income | $ | 5,288 | $ | 2,052 | ||||
Basic income (loss) per share: | ||||||||
Income per share from continuing operations | $ | 0.28 | $ | 0.13 | ||||
Loss per share from discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Net income per share | $ | 0.27 | $ | 0.11 | ||||
Diluted income (loss) per share: | ||||||||
Income per share from continuing operations | $ | 0.28 | $ | 0.12 | ||||
Loss per share from discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Net income per share | $ | 0.27 | $ | 0.10 | ||||
Dividends declared per common share | $ | 0.02 | $ | - | ||||
Weighted average shares outstanding: | ||||||||
Basic | 18,938 | 18,734 | ||||||
Diluted | 19,148 | 18,933 | ||||||
Sypris Solutions, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except for share data) | ||||||||
April 1, | December 31, | |||||||
2012 | 2011 | |||||||
(Unaudited) | (Note) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,172 | $ | 18,173 | ||||
Accounts receivable, net | 60,547 | 42,984 | ||||||
Inventory, net | 38,946 | 33,621 | ||||||
Other current assets | 3,612 | 3,468 | ||||||
Assets held for sale | — | 1,739 | ||||||
Total current assets | 122,277 | 99,985 | ||||||
Restricted cash | 3,000 | 3,000 | ||||||
Investment in marketable securities | 2,231 | 1,749 | ||||||
Property, plant and equipment, net | 56,624 | 56,891 | ||||||
Goodwill | 6,900 | 6,900 | ||||||
Other assets | 7,920 | 7,200 | ||||||
Total assets | $ | 198,952 | $ | 175,725 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 63,326 | $ | 51,303 | ||||
Accrued liabilities | 25,289 | 23,569 | ||||||
Total current liabilities | 88,615 | 74,872 | ||||||
Long-term debt | 9,000 | 10,000 | ||||||
Other liabilities | 33,187 | 30,385 | ||||||
Total liabilities | 130,802 | 115,257 | ||||||
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; 20,293,907 shares issued and 20,166,842 outstanding in 2012 and 20,108,635 shares issued and 19,995,401 outstanding in 2011 and |
203 | 201 | ||||||
Additional paid-in capital | 149,130 | 149,160 | ||||||
Retained deficit | (61,831 | ) | (66,722 | ) | ||||
Accumulated other comprehensive loss | (19,351 | ) | (22,170 | ) | ||||
Treasury stock, 127,065 and 113,234 shares in 2012 and 2011, respectively | (1 | ) | (1 | ) | ||||
Total stockholders’ equity | 68,150 | 60,468 | ||||||
Total liabilities and stockholders’ equity | $ | 198,952 | $ | 175,725 | ||||
Note: The balance sheet at December 31, 2011, 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 the United States for a complete set of financial statements. |
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Sypris Solutions, Inc. | ||||||||
Consolidated Cash Flow Statements | ||||||||
(in thousands) | ||||||||
Three Months Ended | ||||||||
April 1, | April 3, | |||||||
2012 | 2011 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 5,288 | $ | 2,052 | ||||
Loss from discontinued operations | (223 | ) | (450 | ) | ||||
Income from continuing operations | 5,511 | 2,502 | ||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
||||||||
Depreciation and amortization | 3,073 | 3,637 | ||||||
Stock-based compensation expense | 439 | 232 | ||||||
Deferred revenue recognized | (1,973 | ) | (1,721 | ) | ||||
Deferred loan costs recognized | 19 | 96 | ||||||
Gain on the sale of assets | (2,612 | ) | (460 | ) | ||||
Provision for excess and obsolete inventory | 409 | 413 | ||||||
Other noncash items | 901 | 625 | ||||||
Contributions to pension plans | (446 | ) | (32 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (17,719 | ) | (9,599 | ) | ||||
Inventory | (5,649 | ) | (5,516 | ) | ||||
Other current assets | (554 | ) | 489 | |||||
Accounts payable | 12,193 | 11,304 | ||||||
Accrued and other liabilities | 5,471 | (1,257 | ) | |||||
Net cash (used in) provided by operating activities | (937 | ) | 713 | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (1,444 | ) | (1,378 | ) | ||||
Proceeds from sale of assets | 4,481 | 463 | ||||||
Changes in nonoperating assets and liabilities | (90 | ) | 22 | |||||
Net cash provided by (used in) investing activities | 2,947 | (893 | ) | |||||
Cash flows from financing activities: | ||||||||
Net proceeds from Credit Facility | (1,000 | ) | 1,000 | |||||
Common stock repurchases | (11 | ) | — | |||||
Proceeds from issuance of common stock | — | 16 | ||||||
Net cash (used in) provided by financing activities | (1,011 | ) | 1,016 | |||||
Net increase in cash and cash equivalents | 999 | 836 | ||||||
Cash and cash equivalents at beginning of period | 18,173 | 16,592 | ||||||
Cash and cash equivalents at end of period | $ | 19,172 | $ | 17,428 | ||||
Source:
Sypris Solutions, Inc.
Brian A. Lutes, 502-329-2000
Chief
Financial Officer