UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   May 15, 2012

______________

Sypris Solutions, Inc.
(Exact name of registrant as specified in its charter)

Delaware

0-24020

61-1321992

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

101 Bullitt Lane, Suite 450

Louisville, Kentucky

 

40222

(Address of Principal

Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (502) 329-2000










Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.
 
On May 15, 2012, Sypris Solutions, Inc. (the “Company”) announced its financial results for the first quarter ended April 1, 2012. The full text of the press release is set forth in Exhibit 99 hereto. The Company has also released certain supplemental financial information that can be accessed through the Company’s website at http://www.sypris.com.
 
The information in this Form 8-K and the attached Exhibit is being furnished pursuant to Item 2.02 “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.
 
On May 15, 2012, Sypris Solutions, Inc. (the “Company”) announced its financial results for the first quarter ended April 1, 2012. The full text of the press release is set forth in Exhibit 99 hereto. The Company has also released certain supplemental financial information that can be accessed through the Company’s website at http://www.sypris.com.
 
The information in this Form 8-K and the attached Exhibit as well as the supplemental information referenced above is being furnished pursuant to Item 7.01 “Regulation FD Disclosure” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


Section 9 – Financial Statements and Exhibits

Item 9.01

Financial Statements and Exhibits.

 
(d) Exhibits.
 

Exhibit Number

Description of Exhibit

99 Press release issued May 15, 2012.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated:

May 15, 2012

Sypris Solutions, Inc.

 

 

 

By:

/s/ Brian A. Lutes

Brian A. Lutes

Vice President & Chief Financial Officer


INDEX TO EXHIBITS

Exhibit

Number

Description

 

99

Registrant’s press release dated May 15, 2012.

Exhibit 99

Sypris Reports First Quarter Results

Revenue and Earnings Continue to Post Solid Growth

LOUISVILLE, Ky.--(BUSINESS WIRE)--May 15, 2012--Sypris Solutions, Inc. (Nasdaq/NM: SYPR) today reported financial results for its first quarter ended April 1, 2012.

HIGHLIGHTS

─────────────────────

─────────────────────

The Company reported revenue of $96.5 million for the first quarter compared to $75.8 million for the prior year period. The Company reported net income of $5.3 million, or $0.27 per diluted share, for the first quarter compared to $2.1 million, or $0.10 per share, for the prior year period.

Pretax income from continuing operations of $6.5 million for the quarter ended April 1, 2012, included a gain of $2.6 million in connection with the sale of idle assets and a foreign currency translation loss of $0.6 million. Pretax income from continuing operations of $2.9 million for the quarter ended April 3, 2011, included a gain of $3.0 million in connection with the settlement regarding volumes with one of its customers.


“Our Industrial Group continued to show progress during the quarter, with revenue, margins and income increasing on a year-over-year and sequential basis,” said Jeffrey T. Gill, president and chief executive officer. “We expect the improved cost profile and strong operational performance of this business to make a material contribution to the growth and profitability of the Company throughout the coming year.

“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 Department of Defense funding that impacted our order stream historically, we believe that the current trend in new bookings over the past six months provides important support for this business.”

The Industrial Group

Revenue for our Industrial Group increased 39% to $82.5 million in the first quarter compared to $59.6 million for the prior year period, primarily as a result of increased demand from customers in the commercial vehicle and trailer markets. Gross profit for the quarter increased 93% to $9.9 million, or 12.0% of revenue, compared to $5.1 million, or 8.6% of revenue for the same period in 2011, reflecting the positive conversion associated with the increase in revenue and supply chain productivity.

The Electronics Group

Revenue for our Electronics Group was $13.9 million in the first quarter compared to $16.3 million in the prior year period, but up 23% sequentially from the fourth quarter of 2011. Gross profit for the quarter was $2.6 million, or 18.6% of revenue, compared to $3.0 million, or 18.5% of revenue for the same period in 2011, and up sequentially from $0.5 million, or 4.5% of revenue, from the fourth quarter of 2011.

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 Industrial Group going forward, as recently announced contracts add additional volume. For our Electronics Group, we are planning for a progressive recovery in shipments and margins for this business segment as we move throughout the coming year.

“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.”

Sypris Solutions is a diversified provider of outsourced services and specialty products. The Company performs a wide range of manufacturing, engineering, design and other technical services, typically under multi-year, sole-source contracts with corporations and government agencies in the markets for truck components and assemblies and aerospace and defense electronics. For more information about Sypris Solutions, visit its Web site at www.sypris.com.


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 SEC filings. Briefly, we currently believe that such risks also include: declining revenues in our aerospace and defense business lines as we transition from legacy products and services into new market segments and technologies; dependence on, recruitment or retention of key employees; reliance on major customers or suppliers, especially in the automotive or aerospace and defense electronics sectors; U.S. government spending on products and services that our Electronics Group provides, including the timing of budgetary decisions; our ability to develop new products and programs within the Electronics Group; cyber security threats and disruptions; potential impairments, non-recoverability or write-offs of goodwill, assets or deferred costs, including capitalized pre-contract costs related to the development of a replacement for certain aerospace and defense products; potential liabilities associated with discontinued operations, including post-closing indemnifications or claims related to business or asset dispositions; our inability to successfully launch or sustain new or next generation programs or product features, especially in accordance with budgets or committed delivery schedules; the costs of compliance with our auditing, regulatory or contractual obligations; regulatory actions or sanctions (in each case including FCPA, OSHA and Federal Acquisition Regulations, among others); inventory valuation risks including obsolescence, shrinkage, theft, overstocking or underbilling; pension valuation, health care or other benefit costs; labor relations; strikes; union negotiations; changes in licenses, security clearances, or other legal rights to operate, manage our work force or import and export as needed; breakdowns, relocations or major repairs of machinery and equipment; changes or delays in government or other customer budgets, funding or programs; potential weaknesses in internal controls over financial reporting and enterprise risk management; the cost, efficiency and yield of our operations and capital investments, including working capital, production schedules, cycle times, scrap rates, injuries, wages, overtime costs, freight or expediting costs; disputes or litigation, involving customer, supplier, lessor, landlord, creditor, stockholder, product liability or environmental claims; the costs and supply of debt, equity capital, or insurance; fees, costs or other dilutive effects of refinancing, compliance with covenants; cost and availability of raw materials such as steel, component parts, natural gas or utilities; volatility of our customers’ forecasts, financial conditions, market shares, product requirements or scheduling demands; adverse impacts of new technologies or other competitive pressures which increase our costs or erode our margins; failure to adequately insure or to identify environmental or other insurable risks; revised contract prices or estimates of major contract costs; risks of foreign operations; currency exchange rates; war, terrorism, or political uncertainty; unanticipated or uninsured disasters, losses or business risks; inaccurate data about markets, customers or business conditions; or unknown risks and uncertainties.


Non-GAAP Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included in this press release, the company has provided information regarding profit conversion on incremental revenue, which is a non-GAAP financial measure.

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

(in thousands, except for percent data)

 
 

Three Months Ended

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.

 

   
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  
 

CONTACT:
Sypris Solutions, Inc.
Brian A. Lutes, 502-329-2000
Chief Financial Officer