Sypris Reports Third Quarter Results
Revenue and Operating Results Increase on Industrial Group Performance
HIGHLIGHTS
For the Third Quarter:
-
Consolidated revenue increased 18% to
$90 .2 million from the third quarter of 2013. -
Gross profit increased 13% to
$8.2 million from the third quarter of 2013. -
Earnings improved to a loss of
$0.06 per share, compared to a loss of $0.10 per share for the prior year period. -
Revenue, gross profit and gross margin for the
Industrial Group increased 24%, 25% and 20 basis points, respectively, from the third quarter of 2013. -
Subsequent to quarter end, the Company entered into a nonbinding
letter of intent for the purchase of a company to be merged with our
Industrial Group . Revenue for this business is expected to approximate$40 million in 2014. The closing is scheduled to occur during the first quarter of 2015, subject to the satisfactory completion of due diligence, among other conditions.
For the Nine Months:
-
Consolidated revenue increased 13% to
$267 .6 million from the first nine months of 2013. -
Gross profit increased 25% to
$29 .6 million from the first nine months of 2013. - Gross margin expanded 110 basis points from the prior year to 11.1%.
-
Earnings improved to
$0.04 per diluted share, compared to a loss of $0.52 per share for the prior year period. -
Revenue, gross profit and gross margin for the
Industrial Group increased 14%, 31% and 160 basis points, respectively, from the first nine months of 2013.
The Company reported revenue of
For the nine months ended September 28, 2014, the Company reported
revenue of
“Our
“Our Aerospace and Defense business 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 continues to make progress
on the development of a
Revenue for our
Revenue for our
Outlook
Mr. Gill added, “We will continue to concentrate on the daily execution
within both of our businesses. Within our
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) |
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Three Months Ended | ||||||||||||||||||||
September 28, |
September 29, |
|||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Revenue | $ | 90,204 | $ | 76,278 | ||||||||||||||||
Net loss | $ | (1,159 | ) | $ | (1,995 | ) | ||||||||||||||
Loss per common share: | ||||||||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.10 | ) | ||||||||||||||
Diluted | $ | (0.06 | ) | $ | (0.10 | ) | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 19,612 | 19,373 | ||||||||||||||||||
Diluted | 19,612 | 19,373 | ||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
September 28, 2014 |
September 29, 2013 |
|||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Revenue | $ | 267,561 | $ | 236,855 | ||||||||||||||||
Net income (loss) | $ | 863 | $ | (9,948 | ) | |||||||||||||||
Income (loss) per common share: | ||||||||||||||||||||
Basic | $ | 0.04 | $ | (0.52 | ) | |||||||||||||||
Diluted | $ | 0.04 | $ | (0.52 | ) | |||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 19,564 | 19,303 | ||||||||||||||||||
Diluted | 19,607 | 19,303 | ||||||||||||||||||
Sypris Solutions, Inc. Consolidated Statements of Operations (in thousands, except for per share data) |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 28, 2014 |
September 29, 2013 |
September 28, 2014 |
September 29, 2013 |
||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||
Net revenue: | |||||||||||||||||||
Industrial Group | $ | 82,555 | $ | 66,650 | $ | 242,104 | $ | 212,231 | |||||||||||
Electronics Group | 7,649 | 9,628 | 25,457 | 24,624 | |||||||||||||||
Total net revenue | 90,204 | 76,278 | 267,561 | 236,855 | |||||||||||||||
Cost of sales: | |||||||||||||||||||
Industrial Group | 73,256 | 59,233 | 210,268 | 187,846 | |||||||||||||||
Electronics Group | 8,739 | 9,784 | 27,693 | 25,336 | |||||||||||||||
Total cost of sales | 81,995 | 69,017 | 237,961 | 213,182 | |||||||||||||||
Gross profit (loss): | |||||||||||||||||||
Industrial Group | 9,299 | 7,417 | 31,836 | 24,385 | |||||||||||||||
Electronics Group | (1,090 | ) | (156 | ) | (2,236 | ) | (712 | ) | |||||||||||
Total gross profit | 8,209 | 7,261 | 29,600 | 23,673 | |||||||||||||||
Selling, general and administrative | 8,273 | 7,689 | 25,406 | 22,445 | |||||||||||||||
Research and development | 116 | 547 | 277 | 2,843 | |||||||||||||||
Amortization of intangible assets | - | - | - | 30 | |||||||||||||||
Impairment of goodwill | - | - | - | 6,900 | |||||||||||||||
Operating (loss) income | (180 | ) | (975 | ) | 3,917 | (8,545 | ) | ||||||||||||
Interest expense, net | 179 | 124 | 466 | 390 | |||||||||||||||
Other expense (income), net | (397 | ) | 38 | (850 | ) | (1,416 | ) | ||||||||||||
Income (loss) before taxes | 38 | (1,137 | ) | 4,301 | (7,519 | ) | |||||||||||||
Income tax expense, net | 1,197 | 858 | 3,438 | 2,429 | |||||||||||||||
Net (loss) income | $ | (1,159 | ) | $ | (1,995 | ) | $ | 863 | $ | (9,948 | ) | ||||||||
(Loss) income per common share | |||||||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.10 | ) | $ | 0.04 | $ | (0.52 | ) | ||||||||
Diluted | $ | (0.06 | ) | $ | (0.10 | ) | $ | 0.04 | $ | (0.52 | ) | ||||||||
Dividends declared per common share | $ | 0.02 | $ | 0.02 | $ | 0.06 | $ | 0.06 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 19,612 | 19,373 | 19,564 | 19,303 | |||||||||||||||
Diluted | 19,612 | 19,373 | 19,607 | 19,303 | |||||||||||||||
Sypris Solutions, Inc. Consolidated Balance Sheets (in thousands, except for share data) |
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September 28, 2014 |
December 31, 2013 |
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(Unaudited) | (Note) | ||||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 19,261 | $ | 18,674 | |||||||||||
Accounts receivable, net | 61,597 | 38,533 | |||||||||||||
Inventory, net | 35,490 | 34,422 | |||||||||||||
Other current assets | 6,515 | 5,403 | |||||||||||||
Total current assets | 122,863 | 97,032 | |||||||||||||
Property, plant and equipment, net | 40,708 | 44,683 | |||||||||||||
Other assets | 4,266 | 4,568 | |||||||||||||
Total assets | $ | 167,837 | $ | 146,283 | |||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 59,686 | $ | 36,684 | |||||||||||
Accrued liabilities | 23,007 | 23,806 | |||||||||||||
Total current liabilities | 82,693 | 60,490 | |||||||||||||
Long-term debt | 25,000 | 24,000 | |||||||||||||
Other liabilities | 4,342 | 5,541 | |||||||||||||
Total liabilities | 112,035 | 90,031 | |||||||||||||
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; 20,591,541 shares issued and 20,521,849 outstanding in 2014 and 20,448,007 shares issued and 20,399,649 outstanding in 2013 |
206 | 204 | |||||||||||||
Additional paid-in capital | 151,029 | 150,569 | |||||||||||||
Retained deficit | (77,140 | ) | (76,786 | ) | |||||||||||
Accumulated other comprehensive loss | (18,292 | ) | (17,734 | ) | |||||||||||
Treasury stock, 69,692 and 48,358 shares in 2014 and 2013, respectively | (1 | ) | (1 | ) | |||||||||||
Total stockholders’ equity | 55,802 | 56,252 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 167,837 | $ | 146,283 | |||||||||||
Note: The balance sheet at December 31, 2013 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. | |||||||||||||||
Sypris Solutions, Inc. |
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Nine Months Ended | ||||||||||||||||
September 28, 2014 |
September 29, 2013 |
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(Unaudited) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ | 863 | $ | (9,948 | ) | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Depreciation and amortization | 7,987 | 9,355 | ||||||||||||||
Deferred income taxes | ||||||||||||||||
Stock-based compensation expense | 1,235 | 1,452 | ||||||||||||||
Deferred revenue recognized | (6,493 | ) | (6,000 | ) | ||||||||||||
Deferred loan costs recognized | 58 | 58 | ||||||||||||||
Gain on the sale of assets | (4 | ) | (1,645 | ) | ||||||||||||
Provision for excess and obsolete inventory | 897 | 1,021 | ||||||||||||||
Goodwill impairment | - | 6,900 | ||||||||||||||
Other noncash items | (135 | ) | 549 | |||||||||||||
Contributions to pension plans | (907 | ) | (477 | ) | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (23,041 | ) | (7,931 | ) | ||||||||||||
Inventory | (1,955 | ) | (4,656 | ) | ||||||||||||
Prepaid expenses and other assets | (835 | ) | 535 | |||||||||||||
Accounts payable | 22,993 | 9,888 | ||||||||||||||
Accrued and other liabilities | 5,376 | 31 | ||||||||||||||
Net cash provided by (used in) operating activities | 6,039 | (868 | ) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (4,462 | ) | (3,092 | ) | ||||||||||||
Proceeds from sale of assets | 8 | 2,265 | ||||||||||||||
Net cash used in investing activities | (4,454 | ) | (827 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net (payment) proceeds on Credit Facility | 1,000 | (5,974 | ) | |||||||||||||
Common stock repurchases | (357 | ) | (9 | ) | ||||||||||||
Indirect repurchase of shares for minimum statutory tax withholdings | (420 | ) | (565 | ) | ||||||||||||
Cash dividends paid | (1,225 | ) | (808 | ) | ||||||||||||
Proceeds from issuance of common stock | 4 | - | ||||||||||||||
Net cash used in financing activities | (998 | ) | (7,356 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 587 | (9,051 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 18,674 | 18,664 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 19,261 | $ | 9,613 |
Source:
Sypris Solutions, Inc.
Anthony C. Allen, 502-329-2000
Vice
President & Treasurer