Sypris Reports Second Quarter Results
Revenue up 23%; Backlog up 26%; EPS Rises
HIGHLIGHTS
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Revenue for the quarter increased 22.6% year-over-year, driven by a 40.2% increase for
Sypris Electronics and a 11.7% increase forSypris Technologies . -
Backlog increased 25.5%, reflecting a 25.0% year-over-year increase at
Sypris Electronics and 38.0% growth for the energy products ofSypris Technologies . -
EPS increased
$0.04 per share during the period, rising to$0.01 per diluted share from a loss of$0.03 per diluted share for the prior year quarter. -
During the quarter,
Sypris Electronics announced that it received additional releases under a multi-year production contract to manufacture and test power supply modules for a large, mission-criticalU.S. Navy electronic warfare program, with deliveries to begin in 2023. -
Sypris Technologies announced that it was awarded a new program to supply drivetrain components for use in the production of a new model of side-by-side utility-terrain vehicles, with production expected to begin in 2024. -
Subsequent to quarter-end,
Sypris Technologies announced that it had received an order to supply 72-inch insulated joints for use in the expansion of the Atoka Water Pipeline for theOklahoma City Water Utilities Trust . Shipments are expected to begin in 2023 and extend into 2024. -
Sypris Technologies also announced that it had received an award for specialty high-pressure closures for use in theVenture Global CP2 LNG Export Terminal and theVenture Global CP Express Natural Gas Pipeline Project . Shipments under this award are anticipated to be completed by year-end 2023. -
The Company updated its full-year outlook for 2023, maintaining the expected increase in revenue at 25-30% year-over-year while adjusting the guidance for gross margin expansion to 75 to 125 basis points due to the continuing unfavorable impact of the Mexican peso relative to the
U.S. dollar.
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“We were pleased with our second quarter performance, as both operating segments reported significant growth in revenue and backlog. Our teammates have done an excellent job navigating inflationary pressures, supply chain challenges, customer demand volatility and currency fluctuations to position the business for further growth and increased profitability during the remainder of 2023,” commented
“Backlog for
“Overall demand from customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained stable. We continue to invest in new equipment and drive continuous improvement initiatives to support more cost-efficient operations. The recent successful amendment of long-term contracts with two of our key customers to add additional part numbers provides important support for our revenue outlook.
“Backlog for our energy products increased 38.0% during the second quarter from the prior year. Additional opportunities for growth may exist with new projects in support of continued high levels of natural gas exports and water line expansions. We are also actively pursuing applications for our products in adjacent markets to further diversify our industry and customer portfolios.”
Second Quarter Results
The Company reported revenue of
For the six months ended
Revenue for
Revenue for
Outlook
Commenting on the future,
“With a strong backlog, new program wins and long-term contract extensions in place, we are confident that 2023 has the potential to be very positive for
Webcast and Conference Call Information
The live broadcast of Sypris’ quarterly conference call will also be available online at www.sypris.com on
About
Forward Looking Statements
This press release contains “forward-looking” statements within the meaning of the federal securities laws. Forward-looking statements include our plans and expectations of future financial and operational performance. 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
Financial Highlights | ||||||||
(In thousands, except per share amounts) | ||||||||
Three Months Ended |
||||||||
|
|
|
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Revenue |
$ |
35,615 |
|
$ |
29,044 |
|
||
Net income (loss) |
$ |
213 |
|
$ |
(629 |
) |
||
Income (loss) per common share: | ||||||||
Basic |
$ |
0.01 |
$ |
(0.03 |
) |
|||
Diluted |
$ |
0.01 |
|
$ |
(0.03 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
21,852 |
|
|
21,723 |
|
||
Diluted |
|
22,446 |
|
|
21,723 |
|
||
Six Months Ended |
||||||||
|
|
|
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Revenue |
$ |
67,907 |
|
$ |
55,210 |
|
||
Net income (loss) |
$ |
38 |
|
$ |
(392 |
) |
||
Income (loss) per common share: | ||||||||
Basic |
$ |
0.00 |
|
$ |
(0.02 |
) |
||
Diluted |
$ |
0.00 |
|
$ |
(0.02 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic |
|
21,824 |
|
|
21,700 |
|
||
Diluted |
|
22,457 |
|
|
21,700 |
|
Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
|
|
|
|
|
||||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Net revenue: | ||||||||||||||||
$ |
20,058 |
|
$ |
17,951 |
|
$ |
39,558 |
|
$ |
35,106 |
|
|||||
|
15,557 |
|
|
11,093 |
|
|
28,349 |
|
|
20,104 |
|
|||||
Total net revenue |
|
35,615 |
|
|
29,044 |
|
|
67,907 |
|
|
55,210 |
|
||||
Cost of sales: | ||||||||||||||||
|
18,051 |
|
|
15,820 |
|
|
34,912 |
|
|
29,843 |
|
|||||
|
12,894 |
|
|
9,444 |
|
|
24,164 |
|
|
17,078 |
|
|||||
Total cost of sales |
|
30,945 |
|
|
25,264 |
|
|
59,076 |
|
|
46,921 |
|
||||
Gross profit: | ||||||||||||||||
|
2,007 |
|
|
2,131 |
|
|
4,646 |
|
|
5,263 |
|
|||||
|
2,663 |
|
|
1,649 |
|
|
4,185 |
|
|
3,026 |
|
|||||
Total gross profit |
|
4,670 |
|
|
3,780 |
|
|
8,831 |
|
|
8,289 |
|
||||
Selling, general and administrative |
|
3,704 |
|
|
3,737 |
|
|
7,449 |
|
|
7,126 |
|
||||
Operating income |
|
966 |
|
|
43 |
|
|
1,382 |
|
|
1,163 |
|
||||
Interest expense, net |
|
178 |
|
|
263 |
|
|
404 |
|
|
511 |
|
||||
Other expense, net |
|
513 |
|
|
104 |
|
|
584 |
|
|
273 |
|
||||
Income (loss) before taxes |
|
275 |
|
|
(324 |
) |
|
394 |
|
|
379 |
|
||||
Income tax expense, net |
|
62 |
|
305 |
|
|
356 |
|
771 |
|
||||||
Net income (loss) |
$ |
213 |
|
$ |
(629 |
) |
$ |
38 |
|
$ |
(392 |
) |
||||
Income (loss) per common share: | ||||||||||||||||
Basic |
$ |
0.01 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.02 |
) |
||||
Diluted |
$ |
0.01 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.02 |
) |
||||
Dividends declared per common share |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
21,852 |
|
|
21,723 |
|
|
21,824 |
|
|
21,700 |
|
||||
Diluted |
|
22,446 |
|
|
21,723 |
|
|
22,457 |
|
|
21,700 |
|
Consolidated Balance Sheets | ||||||||
(in thousands, except for share data) | ||||||||
|
|
|
||||||
2023 |
|
2022 |
||||||
(Unaudited) |
|
(Note) |
||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
20,580 |
|
$ |
21,648 |
|
||
Accounts receivable, net |
|
10,801 |
|
|
8,064 |
|
||
Inventory, net |
|
64,049 |
|
|
42,133 |
|
||
Other current assets |
|
10,489 |
|
|
8,133 |
|
||
Total current assets |
|
105,919 |
|
|
79,978 |
|
||
Property, plant and equipment, net |
|
17,516 |
|
|
15,532 |
|
||
Operating lease right-of-use assets |
|
3,865 |
|
|
4,251 |
|
||
Other assets |
|
4,649 |
|
|
4,383 |
|
||
Total assets |
$ |
131,949 |
|
$ |
104,144 |
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable |
$ |
22,436 |
|
$ |
17,638 |
|
||
Accrued liabilities |
|
54,428 |
|
|
33,316 |
|
||
Operating lease liabilities, current portion |
|
1,172 |
|
|
1,168 |
|
||
Finance lease obligations, current portion |
|
1,169 |
|
|
1,102 |
|
||
Equipment financing obligations, current portion |
|
557 |
|
|
398 |
|
||
Note payable - related party, current portion |
|
2,000 |
|
|
2,500 |
|
||
Total current liabilities |
|
81,762 |
|
|
56,122 |
|
||
Operating lease liabilities, net of current portion |
|
3,134 |
|
|
3,710 |
|
||
Finance lease obligations, net of current portion |
|
2,128 |
|
|
2,536 |
|
||
Equipment financing obligations, net of current portion |
|
1,222 |
|
|
738 |
|
||
Note payable - related party, net of current portion |
|
1,992 |
|
|
3,989 |
|
||
Other liabilities |
|
19,348 |
|
|
17,474 |
|
||
Total liabilities |
|
109,586 |
|
|
84,569 |
|
||
Stockholders’ equity: | ||||||||
Preferred stock, par value |
||||||||
no shares issued |
|
- |
|
|
|
- |
|
|
Series A preferred stock, par value |
|
|
|
|||||
authorized; no shares issued |
|
- |
|
|
|
- |
|
|
Common stock, non-voting, par value |
|
|
|
|||||
authorized; no shares issued |
|
- |
|
|
|
- |
|
|
Common stock, par value |
||||||||
22,425,445 shares issued and 22,414,610 outstanding in 2023 and | ||||||||
22,175,664 shares issued and 22,175,645 outstanding in 2022 |
|
224 |
|
|
221 |
|
||
Additional paid-in capital |
|
155,860 |
|
|
155,535 |
|
||
Accumulated deficit |
|
(115,298 |
) |
|
(115,336 |
) |
||
Accumulated other comprehensive loss |
|
(18,423 |
) |
|
(20,845 |
) |
||
|
- |
|
|
- |
|
|||
Total stockholders’ equity |
|
22,363 |
|
|
19,575 |
|
||
Total liabilities and stockholders’ equity |
$ |
131,949 |
|
$ |
104,144 |
|
||
Note: The balance sheet at |
Consolidated Cash Flow Statements | ||||||||
(in thousands) | ||||||||
Six Months Ended |
||||||||
|
|
|
||||||
2023 |
|
2022 |
||||||
(Unaudited) | ||||||||
Cash flos from operating activities | ||||||||
Income (loss) per common share: |
$ |
38 |
|
$ |
(392 |
) |
||
Adjustments to reconcile net income (loss) to net cash | ||||||||
provided by (used in) operating activities: | ||||||||
Depreciation and amortization |
|
1,553 |
|
|
1,531 |
|
||
Deferred income taxes |
|
(121 |
) |
|
225 |
|
||
Stock-based compensation expense |
|
409 |
|
|
349 |
|
||
Deferred loan costs recognized |
|
3 |
|
|
3 |
|
||
Net loss on the sale of assets |
|
- |
|
|
10 |
|
||
Provision for excess and obsolete inventory |
|
(29 |
) |
|
129 |
|
||
Non-cash lease expense |
|
386 |
|
|
442 |
|
||
Other noncash items |
|
(68 |
) |
|
91 |
|
||
Contributions to pension plans |
|
(10 |
) |
|
(47 |
) |
||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable |
|
(2,747 |
) |
|
(1,155 |
) |
||
Inventory |
|
(21,267 |
) |
|
711 |
|
||
Prepaid expenses and other assets |
|
(1,443 |
) |
|
(819 |
) |
||
Accounts payable |
|
4,688 |
|
|
805 |
|
||
Accrued and other liabilities |
|
22,296 |
|
|
(3,892 |
) |
||
Net cash provided by (used in) operating activities |
|
3,688 |
|
|
(2,009 |
) |
||
Cash flows from investing activities: | ||||||||
Capital expenditures |
|
(1,526 |
) |
|
(1,840 |
) |
||
Proceeds from sale of assets |
|
- |
|
|
- |
|
||
Net cash used in investing activities |
|
(1,526 |
) |
|
(1,840 |
) |
||
Cash flows from financing activities: | ||||||||
Proceeds from equipment financing obligations |
|
210 |
|
|
- |
|
||
Principal payments on finance lease obligations |
|
(556 |
) |
|
(479 |
) |
||
Principal payments on equipment financing obligations |
|
(234 |
) |
|
(165 |
) |
||
Principal payments on Note Payable - related party |
|
(2,500 |
) |
|
- |
|
||
Indirect repurchase of shares for minimum statutory tax withholdings |
|
(83 |
) |
|
(36 |
) |
||
Net cash used in financing activities |
|
(3,163 |
) |
|
(680 |
) |
||
Effect of exchange rate changes on cash balances |
|
(67 |
) |
|
395 |
|
||
Net (decrease) in cash and cash equivalents |
|
(1,068 |
) |
|
(4,134 |
) |
||
Cash and cash equivalents at beginning of period |
|
21,648 |
|
|
11,620 |
|
||
Cash and cash equivalents at end of period |
$ |
20,580 |
|
$ |
7,486 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230815433239/en/
Richard L Davis
Chief Financial Officer
(502) 329-2000
Source: