Sypris Reports Second Quarter Results
HIGHLIGHTS
For the Second Quarter:
-
Revenue for the Company was
$40 .8 million, an increase of$3 .7 million, or 10.1% sequentially from the first quarter of 2015. -
The Company was breakeven at the gross profit line for the second
quarter of 2015, for a sequential improvement of
$3 .1 million from the first quarter of 2015. -
Revenue for the
Industrial Group increased 14.0% sequentially to$32 .0 million, while gross profit increased$4 .7 million to $0.6 million, as compared to a loss of$4 .1 million in the first quarter of 2015. EBITDA increased$7.2 million to breakeven for the quarter. -
Subsequent to quarter end, the Company:
-
Sold its manufacturing facility in
Morganton, North Carolina and amended the Meritor Note generating$15 .7 million in cash proceeds, reducing senior debt outstanding to$2 .9 million1. In addition, the Company retained over 50 pieces of axle shaft machining equipment, and certain operations, that will be transferred to other Sypris locations. The plant as a whole had reported a loss of$1 .8 million during the quarter and$4 .4 million during the first six months of 2015; -
Announced the extension of its agreement to purchase
Reynolds Machine Co., Inc. , subject to the satisfactory completion of due diligence, among other conditions; and -
Implemented plans to reduce its overhead across all operations,
with an estimated annual savings in excess of
$4.7 million per year.
-
Sold its manufacturing facility in
The Company reported revenue of
For the six months ended July 5, 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
“We are targeting further margin improvement in the third quarter of
this year to the extent that both business units benefit from the lower
cost structures, new program shipments and in the case of
Sypris Technologies
Revenue for Sypris Technologies decreased 61.8% 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 during the second half.
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
Non-GAAP Measures
To supplement our consolidated financial statements presented on a
GAAP basis,
RECONCILIATION OF EBITDA (in thousands) |
|||||||
|
Three Months Ended |
||||||
July 5, |
April 5, |
||||||
2015 |
2015 |
||||||
|
(Unaudited) |
||||||
Net loss | $ | (8,416) | $ | (13,033) | |||
Income tax (benefit) expense | 0 | (15) | |||||
Interest expense, net | 1,154 | 334 | |||||
Depreciation and amortization | 2,491 | 2,459 | |||||
EBITDA | $ | (4,771) | $ | (10,255) | |||
Net loss: | |||||||
Industrial Group | $ | (1,770) | $ | (9,188) | |||
Electronics Group | (3,111) | (1,590) | |||||
General, corporate and other | (3,535) | (2,255) | |||||
$ | (8,416) | $ | (13,033) | ||||
Income tax expense (benefit): | |||||||
Industrial Group | $ | (23) | $ | — | |||
Electronics Group | — | — | |||||
General, corporate and other | 23 | (15) | |||||
$ | — | $ | (15) | ||||
Interest expense, net: | |||||||
Industrial Group | $ | (3) | $ | (1) | |||
Electronics Group | — | — | |||||
General, corporate and other | 1,157 | 335 | |||||
$ | 1,154 | $ | 334 | ||||
Depreciation and amortization: | |||||||
Industrial Group | $ | 1,752 | $ | 1,927 | |||
Electronics Group | 704 | 497 | |||||
General, corporate and other | 35 | 35 | |||||
$ | 2,491 | $ | 2,459 | ||||
EBITDA: | |||||||
Industrial Group | $ | (44) | $ | (7,262) | |||
Electronics Group | (2,407) | (1,093) | |||||
General, corporate and other | (2,320) | (1,900) | |||||
$ | (4,771) | $ | (10,255) | ||||
SYPRIS SOLUTIONS, INC. | |||||||
Financial Highlights | |||||||
(In thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
July 5, | June 29, | ||||||
2015 | 2014 | ||||||
(Unaudited) | |||||||
Revenue | $ | 40,756 | $ | 93,113 | |||
Net (loss) income | $ | (8,416 | ) | $ | 370 | ||
(Loss) income per common share: | |||||||
Basic | $ | (0.43 | ) | $ | 0.02 | ||
Diluted | $ | (0.43 | ) | $ | 0.02 | ||
Weighted average shares outstanding: | |||||||
Basic | 19,701 | 19,622 | |||||
Diluted | 19,701 | 19,682 | |||||
Six Months Ended | |||||||
July 5, | June 29, | ||||||
2015 | 2014 | ||||||
(Unaudited) | |||||||
Revenue | $ | 77,765 | $ | 177,357 | |||
Net (loss) income | $ | (21,449 | ) | $ | 2,022 | ||
(Loss) income per common share: | |||||||
Basic | $ | (1.09 | ) | $ | 0.10 | ||
Diluted | (1.09 | ) | 0.10 | ||||
Weighted average shares outstanding: | |||||||
Basic | 19,675 | 19,525 | |||||
Diluted | 19,675 | 19,566 | |||||
Sypris Solutions, Inc. | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
July 5, | June 29, | July 5, | June 29, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Net revenue: | ||||||||||||||||
Industrial Group | $ | 32,010 | $ | 83,710 | $ | 60,080 | $ | 159,549 | ||||||||
Electronics Group | 8,746 | 9,403 | 17,685 | 17,808 | ||||||||||||
Total net revenue | 40,756 | 93,113 | 77,765 | 177,357 | ||||||||||||
Cost of sales: | ||||||||||||||||
Industrial Group | 31,429 | 72,327 | 63,603 | 137,012 | ||||||||||||
Electronics Group | 9,361 | 9,959 | 17,353 | 18,954 | ||||||||||||
Total cost of sales | 40,790 | 82,286 | 80,956 | 155,966 | ||||||||||||
Gross (loss) profit: | ||||||||||||||||
Industrial Group | 581 | 11,383 | (3,523 | ) | 22,537 | |||||||||||
Electronics Group | (615 | ) | (556 | ) | 332 | (1,146 | ) | |||||||||
Total gross (loss) profit | (34 | ) | 10,827 | (3,191 | ) | 21,391 | ||||||||||
Selling, general and administrative | 7,327 | 9,141 | 16,445 | 17,133 | ||||||||||||
Research and development | 195 | 10 | 528 | 161 | ||||||||||||
Severance | 281 | - | 566 | - | ||||||||||||
Operating (loss) income | (7,837 | ) | 1,676 | (20,730 | ) | 4,097 | ||||||||||
Interest expense, net | 1,154 | 155 | 1,488 | 287 | ||||||||||||
Other income, net | (575 | ) | 75 | (754 | ) | (453 | ) | |||||||||
(Loss) income before taxes | (8,416 | ) | 1,446 | (21,464 | ) | 4,263 | ||||||||||
Income tax (benefit) expense, net | - | 1,076 | (15 | ) | 2,241 | |||||||||||
Net (loss) income | $ | (8,416 | ) | $ | 370 | $ | (21,449 | ) | $ | 2,022 | ||||||
(Loss) income per common share: | ||||||||||||||||
Basic | $ | (0.43 | ) | $ | 0.02 | $ | (1.09 | ) | $ | 0.10 | ||||||
Diluted | $ | (0.43 | ) | $ | 0.02 | $ | (1.09 | ) | $ | 0.10 | ||||||
Dividends declared per common share | $ | - | $ | 0.02 | $ | - | $ | 0.04 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 19,701 | 19,622 | 19,675 | 19,525 | ||||||||||||
Diluted | 19,701 | 19,682 | 19,675 | 19,566 | ||||||||||||
Sypris Solutions, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except for share data) | ||||||||
July 5, | December 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | (Note) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,579 | $ | 7,003 | ||||
Accounts receivable, net | 13,197 | 47,666 | ||||||
Inventory, net | 24,464 | 29,031 | ||||||
Other current assets | 7,454 | 5,666 | ||||||
Assets held for sale | 9,410 | - | ||||||
Total current assets | 56,104 | 89,366 | ||||||
Property, plant and equipment, net | 27,798 | 37,654 | ||||||
Other assets | 4,006 | 2,661 | ||||||
Total assets | $ | 87,908 | $ | 129,681 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 15,021 | $ | 39,027 | ||||
Accrued liabilities | 13,333 | 18,775 | ||||||
Note payable - Meritor | 3,047 | - | ||||||
Note payable - related party | 5,500 | - | ||||||
Current portion of long-term debt | 16,749 | 17,000 | ||||||
Liabilities held for sale | 1,833 | - | ||||||
Total current liabilities |
55,483 | 74,802 | ||||||
Other liabilities | 7,615 | 7,991 | ||||||
Total liabilities | 63,098 | 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 20,791,544 outstanding in 2015 and 20,567,735 shares issued and 20,485,043 outstanding in 2014 |
208 | 206 | ||||||
Additional paid-in capital | 151,736 | 151,314 | ||||||
Retained deficit | (101,045 | ) | (79,596 | ) | ||||
Accumulated other comprehensive loss | (26,088 | ) | (25,035 | ) | ||||
Treasury stock, 34,692 and 82,692 shares in 2015 and 2014, respectively | (1 | ) | (1 | ) | ||||
Total stockholders’ equity | 24,810 | 46,888 | ||||||
Total liabilities and stockholders’ equity | $ | 87,908 | $ | 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. |
Sypris Solutions, Inc. | |||||||||
Consolidated Cash Flow Statements | |||||||||
(in thousands) | |||||||||
Six Months Ended | |||||||||
July 5, | June 29, | ||||||||
2015 | 2014 | ||||||||
(Unaudited) | |||||||||
Cash flows from operating activities: | |||||||||
Net (loss) income | $ | (21,449 | ) | $ | 2,022 | ||||
Adjustments to reconcile net (loss) income to net cash | |||||||||
(used in) provided by operating activities: | |||||||||
Depreciation and amortization | 4,950 | 5,396 | |||||||
Stock-based compensation expense | 501 | 914 | |||||||
Deferred revenue recognized | (4,200 | ) | (4,329 | ) | |||||
Deferred loan costs recognized | 630 | 39 | |||||||
Gain on the sale of assets | - | (4 | ) | ||||||
Provision for excess and obsolete inventory | 1,125 | 445 | |||||||
Other noncash items | (1,587 | ) | 81 | ||||||
Contributions to pension plans | (281 | ) | (441 | ) | |||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | 25,317 | (26,343 | ) | ||||||
Inventory | 1,400 | (1,032 | ) | ||||||
Prepaid expenses and other assets | (3,006 | ) | 755 | ||||||
Accounts payable | (14,026 | ) | 23,581 | ||||||
Accrued and other liabilities | (355 | ) | 3,593 | ||||||
Net cash (used in) provided by operating activities | (10,981 | ) | 4,677 | ||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | (883 | ) | (2,474 | ) | |||||
Proceeds from sale of assets | - | 8 | |||||||
Net cash used in investing activities | (883 | ) | (2,466 | ) | |||||
Cash flows from financing activities: | |||||||||
Net change in debt under Credit Facility | (251 | ) | (1,000 | ) | |||||
Proceeds from note payable - Meritor | 3,047 | - | |||||||
Proceeds from related party note payable | 5,500 | - | |||||||
Debt modification costs | (1,369 | ) | - | ||||||
Common stock repurchases | - | (236 | ) | ||||||
Indirect repurchase of shares for minimum statutory tax withholdings | (77 | ) | (419 | ) | |||||
Cash dividends paid | (410 | ) | (814 | ) | |||||
Proceeds from issuance of common stock | - | 4 | |||||||
Net cash provided by (used in) financing activities | 6,440 | (2,465 | ) | ||||||
Net decrease in cash and cash equivalents | (5,424 | ) | (254 | ) | |||||
Cash and cash equivalents at beginning of period | 7,003 | 18,674 | |||||||
Cash and cash equivalents at end of period | $ | 1,579 | $ | 18,420 | |||||
1 As of
View source version on businesswire.com: http://www.businesswire.com/news/home/20150818005549/en/
Source:
Sypris Solutions, Inc.
Anthony C. Allen, 502-329-2000
Chief
Financial Officer