Sypris Reports Third Quarter Results
HIGHLIGHTS
For the Third Quarter:
- The Company’s gross margin increased to 6.4% of revenue, up sequentially from losses of 0.1% and 8.5% for the second and first quarters of 2015, respectively.
-
The Company generated
$15 .7 million in cash proceeds through transactions involving the sale of its manufacturing assets located inMorganton, North Carolina . -
The Company reported a loss of
$0.01 per share, up sequentially from a loss of$0.43 per share for the second quarter, reflecting improved operating performance, lower costs and the gain on the sale of theMorganton assets. -
The Company announced the commissioning its
Cyber Range in theSecurity Operations Center of theMinistry of Home Affairs for Singapore , recognizing$2.0 million of revenue during the quarter. -
Subsequent to quarter end, the Company:
-
Secured a new lending facility of
$27 .0 million, replacing the Company’s previous$8.5 million senior revolving credit facility; -
Received a purchase order from
NEC Corporation for the acquisition of aSypris Cyber Range for use in cyber threat competency evaluation and response training; and -
Entered into a long-term contract with
Detroit Diesel Corporation , a subsidiary ofDaimler Trucks North America , to supply the Sypris Ultra™ series lightweight axle shaft for use in Detroit™ Axles. -
Announced that it had entered into a long-term contract with
Volvo Group North America LLC andMack Trucks, Inc. for the supply of axle shafts for use on Volvo’s Mack branded axle through 2018.
-
Secured a new lending facility of
The Company reported revenue of
For the nine months ended October 4, 2015, the Company reported revenue
of
“Sypris Technologies continued to adjust manpower and overhead expenses
to reflect the cessation of shipments to Dana, while optimizing our
ability to bring in potential new business,” said
“We previously announced the sale on
“As we look to the future, we will continue to review alternatives for further improving our margins, business mix and return on assets,” Mr. Gill continued.
Sypris Technologies
Revenue for Sypris Technologies decreased 66.3% to
Revenue for
Outlook
Mr. Gill added, “We will continue to concentrate on daily execution
within both of our businesses. Within Sypris Technologies, our legal
dispute with Dana remains unresolved, and since the beginning of 2015,
shipments to Dana have been minimal. New program launches and cost
reductions are anticipated to have a positive impact on income and cash
flow in future periods.
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 | ||||||||||||||
October 4, | September 28, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Revenue | $ | 38,437 | $ | 90,204 | ||||||||||
Net loss | $ | (274 | ) | $ | (1,159 | ) | ||||||||
Loss per common share: | ||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.06 | ) | ||||||||
Diluted | $ | (0.01 | ) | $ | (0.06 | ) | ||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | 19,654 | 19,612 | ||||||||||||
Diluted | 19,654 | 19,612 | ||||||||||||
Nine Months Ended | ||||||||||||||
October 4, | September 28, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Revenue | $ | 116,202 | $ | 267,561 | ||||||||||
Net (loss) income | $ | (21,723 | ) | $ | 863 | |||||||||
(Loss) income per common share: | ||||||||||||||
Basic | $ | (1.10 | ) | $ | 0.04 | |||||||||
Diluted | (1.10 | ) | 0.04 | |||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | 19,684 | 19,564 | ||||||||||||
Diluted | 19,684 | 19,607 | ||||||||||||
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Sypris Solutions, Inc. | |||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||
(in thousands, except for per share data) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
October 4, | September 28, | October 4, | September 28, | ||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
Net revenue: | |||||||||||||||||||||
Industrial Group | $ | 27,824 | $ | 82,555 | $ | 87,904 | $ | 242,104 | |||||||||||||
Electronics Group | 10,613 | 7,649 | 28,298 | 25,457 | |||||||||||||||||
Total net revenue | 38,437 | 90,204 | 116,202 | 267,561 | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||
Industrial Group | 25,851 | 73,256 | 89,454 | 210,268 | |||||||||||||||||
Electronics Group | 10,118 | 8,739 | 27,471 | 27,693 | |||||||||||||||||
Total cost of sales | 35,969 | 81,995 | 116,925 | 237,961 | |||||||||||||||||
Gross profit (loss): | |||||||||||||||||||||
Industrial Group | 1,973 | 9,299 | (1,550 | ) | 31,836 | ||||||||||||||||
Electronics Group | 495 | (1,090 | ) | 827 | (2,236 | ) | |||||||||||||||
Total gross profit (loss) | 2,468 | 8,209 | (723 | ) | 29,600 | ||||||||||||||||
Selling, general and administrative | 5,969 | 8,273 | 22,414 | 25,406 | |||||||||||||||||
Research and development | 119 | 116 | 647 | 277 | |||||||||||||||||
Severance | 457 | - | 1,023 | - | |||||||||||||||||
Operating (loss) income | (4,077 | ) | (180 | ) | (24,807 | ) | 3,917 | ||||||||||||||
Interest expense, net | 1,783 | 179 | 3,271 | 466 | |||||||||||||||||
Other income, net | (7,841 | ) | (397 | ) | (8,595 | ) | (850 | ) | |||||||||||||
Income loss before taxes | 1,981 | 38 | (19,483 | ) | 4,301 | ||||||||||||||||
Income tax expense, net | 2,255 | 1,197 | 2,240 | 3,438 | |||||||||||||||||
Net (loss) income | $ | (274 | ) | $ | (1,159 | ) | $ | (21,723 | ) | $ | 863 | ||||||||||
(Loss) income per common share: | |||||||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.06 | ) | $ | (1.10 | ) | $ | 0.04 | ||||||||||
Diluted | $ | (0.01 | ) | $ | (0.06 | ) | $ | (1.10 | ) | $ | 0.04 | ||||||||||
Dividends declared per common share | $ | - | $ | 0.02 | $ | - | $ | 0.06 | |||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 19,654 | 19,612 | 19,684 | 19,564 | |||||||||||||||||
Diluted | 19,654 | 19,612 | 19,684 | 19,607 | |||||||||||||||||
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Sypris Solutions, Inc. |
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Consolidated Balance Sheets |
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(in thousands, except for share data) |
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October 4, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
(Unaudited) | (Note) | ||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,773 | $ | 7,003 | |||||||||
Accounts receivable, net | 13,647 | 47,666 | |||||||||||
Inventory, net | 23,348 | 29,031 | |||||||||||
Other current assets | 4,829 | 5,666 | |||||||||||
Total current assets | 43,597 | 89,366 | |||||||||||
Property, plant and equipment, net | 26,464 | 37,654 | |||||||||||
Other assets | 2,613 | 2,661 | |||||||||||
Total assets | $ | 72,674 | $ | 129,681 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 12,821 | $ | 39,027 | |||||||||
Accrued liabilities | 13,022 | 18,775 | |||||||||||
Current portion of long-term debt | 2,893 | 17,000 | |||||||||||
Total current liabilities | 28,736 | 74,802 | |||||||||||
Note payable - Meritor | 3,780 | - | |||||||||||
Note payable - related party | 5,500 | - | |||||||||||
Long-term debt | 3,369 | - | |||||||||||
Other liabilities | 7,532 |
|
7,991 | ||||||||||
Total liabilities | 48,917 | 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 20,788,544 outstanding in 2015 and 20,567,735 shares issued and 20,485,043 outstanding in 2014 |
208 | 206 | |||||||||||
Additional paid-in capital | 151,952 | 151,314 | |||||||||||
Retained deficit | (101,319 | ) | (79,596 | ) | |||||||||
Accumulated other comprehensive loss | (27,083 | ) | (25,035 | ) | |||||||||
Treasury stock, 37,692 and 82,692 shares in 2015 and 2014, respectively | (1 | ) | (1 | ) | |||||||||
Total stockholders’ equity | 23,757 | 46,888 | |||||||||||
Total liabilities and stockholders’ equity | $ | 72,674 | $ | 129,681 | |||||||||
Note: The balance sheet at December 31, 2014 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) | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
October 4, | September 28, | |||||||||||||||
2015 | 2014 | |||||||||||||||
(Unaudited) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (21,723 | ) | $ | 863 | |||||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
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Depreciation and amortization | 7,022 | 7,987 | ||||||||||||||
Deferred income taxes | 2,436 | - | ||||||||||||||
Stock-based compensation expense | 717 | 1,235 | ||||||||||||||
Deferred revenue recognized | (4,200 | ) | (6,493 | ) | ||||||||||||
Deferred loan costs recognized | 1,929 | 58 | ||||||||||||||
Gain on the sale of assets | (7,423 | ) | (4 | ) | ||||||||||||
Provision for excess and obsolete inventory | 1,305 | 897 | ||||||||||||||
Other noncash items | (1,478 | ) | (135 | ) | ||||||||||||
Contributions to pension plans | (315 | ) | (907 | ) | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 23,384 | (23,041 | ) | |||||||||||||
Inventory | 2,154 | (1,955 | ) | |||||||||||||
Prepaid expenses and other assets | (4,332 | ) | (835 | ) | ||||||||||||
Accounts payable | (12,051 | ) | 22,993 | |||||||||||||
Accrued and other liabilities | 860 | 5,376 | ||||||||||||||
Net cash (used in) provided by operating activities | (11,715 | ) | 6,039 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (1,155 | ) | (4,462 | ) | ||||||||||||
Proceeds from sale of assets | 15,700 | 8 | ||||||||||||||
Net cash provided by (used in) investing activities | 14,545 | (4,454 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net change in debt under Credit Facility | (10,738 | ) | 1,000 | |||||||||||||
Proceeds from related party note payable | 5,500 | - | ||||||||||||||
Debt modification costs | (2,335 | ) | - | |||||||||||||
Common stock repurchases | - | (357 | ) | |||||||||||||
Indirect repurchase of shares for minimum statutory tax withholdings | (77 | ) | (420 | ) | ||||||||||||
Cash dividends paid | (410 | ) | (1,225 | ) | ||||||||||||
Proceeds from issuance of common stock | - | 4 | ||||||||||||||
Net cash used in financing activities | (8,060 | ) | (998 | ) | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (5,230 | ) | 587 | |||||||||||||
Cash and cash equivalents at beginning of period | 7,003 | 18,674 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 1,773 | $ | 19,261 | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151117005586/en/
Source:
Sypris Solutions, Inc.
Anthony C. Allen, 502-329-2000
Chief
Financial Officer