Sypris Reports Fourth Quarter and Full Year Results
Gross Margins Expand; New Contracts Awarded For 2020
Results for 2019 fundamentally reflected these expectations, especially with respect to
HIGHLIGHTS
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- The Company’s fourth quarter 2019 consolidated gross margin increased 660 basis points compared to the prior year period and 200 basis points sequentially to 12.5%, while gross profit increased 92.7% compared to the prior year period and 16.4% sequentially.
- For the full-year, consolidated gross margin increased 260 basis points from 2018 to 11.2%, while gross profit increased 30.5% from 2018.
-
Gross margin for
Sypris Technologies for the fourth quarter of 2019 increased 110 basis points to 15.4% compared to the prior year quarter despite lower revenue as a result of softening commercial vehicle demand and year-end inventory rebalancing by certain customers. -
During the fourth quarter of 2019,
Sypris Technologies announced the award of two long-term contracts: one to produce components for a new, dual-clutch sportscar transmission and another for the transmission of a leading all-terrain vehicle. Both contracts are expected to contribute meaningfully to the diversification and financial results of the business beginning in the first half of 2020. -
Gross margin for
Sypris Electronics increased materially to 8.2% for the fourth quarter of 2019, up from a gross margin loss of 8.5% for the fourth quarter of 2018 and up from a gross margin loss of 2.8% sequentially. -
During the fourth quarter of 2019,
Sypris Electronics announced that it received a contract award fromCollins Aerospace to manufacture and test electronic assemblies for the power management, environmental control and life support systems of the Deep-Space Orion spacecraft program. -
Subsequent to year-end,
Sypris Electronics announced that it received a contract award from BAE Systems to manufacture and test electronic power supply modules for a large, mission-critical military program, with production to begin in 2020.
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“Gross margin for
“Revenue for
Concluding,
Fourth Quarter and Full-Year Results
The Company reported revenue of
For the full-year 2019, the Company reported revenue of
Revenue for
Revenue for
Outlook
Commenting on the future,
“Our performance in early 2020 has improved sequentially from the fourth quarter of 2019 and is consistent with the outlook discussed on our previous earnings call in November. At this point our business has not been materially impacted by COVID-19, but the environment appears to be changing rapidly with regard to customers, suppliers and public policy, and we are paying close attention to developments on a daily basis. First and foremost, we are focused on the health and safety of our employees, their families and our customers. We are closely monitoring local, state and federal government agencies and will follow all recommendations. The extent and duration of the impacts that COVID-19 may have on our business are not known at this time, but we are monitoring developments in order to be in a position to take appropriate action.”
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. Such statements may relate to projections of the company’s revenue, earnings, and other financial and operational measures, our liquidity, our ability to mitigate or manage disruptions posed by COVID-19, and the impact of COVID-19 and economic conditions on our future operations, among other matters. 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 | |||||||||||||
|
2019 |
|
|
2018 |
|
||||||||
(Unaudited) |
|||||||||||||
Revenue |
$ |
21,624 |
|
$ |
23,955 |
|
|||||||
Net loss |
$ |
(859 |
) |
$ |
(188 |
) |
|||||||
Loss per common share: | |||||||||||||
Basic |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
|||||||
Diluted |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
|||||||
Weighted average shares outstanding: | |||||||||||||
Basic |
20,974 |
|
20,555 |
|
|||||||||
Diluted |
20,974 |
|
20,555 |
|
|||||||||
|
Year Ended | ||||||||||||
|
2019 |
|
|
2018 |
|
||||||||
(Unaudited) | |||||||||||||
Revenue |
$ |
87,891 |
|
$ |
87,969 |
|
|||||||
Net loss |
$ |
(3,949 |
) |
$ |
(3,505 |
) |
|||||||
Loss per common share: | |||||||||||||
Basic |
$ |
(0.19 |
) |
$ |
(0.17 |
) |
|||||||
Diluted |
|
(0.19 |
) |
|
(0.17 |
) |
|||||||
Weighted average shares outstanding: | |||||||||||||
Basic |
20,865 |
|
20,512 |
|
|||||||||
Diluted |
|
20,865 |
|
|
20,512 |
|
Consolidated Statements of Operations | ||||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
Net revenue: | ||||||||||||||||||
$ |
13,010 |
|
$ |
15,130 |
|
$ |
61,683 |
|
$ |
59,816 |
|
|||||||
|
8,614 |
|
|
8,825 |
|
|
26,208 |
|
|
28,153 |
|
|||||||
Total net revenue |
|
21,624 |
|
|
23,955 |
|
|
87,891 |
|
|
87,969 |
|
||||||
Cost of sales: | ||||||||||||||||||
|
11,006 |
|
|
12,973 |
|
|
51,898 |
|
|
52,293 |
|
|||||||
|
7,910 |
|
|
9,577 |
|
|
26,110 |
|
|
28,104 |
|
|||||||
Total cost of sales |
|
18,916 |
|
|
22,550 |
|
|
78,008 |
|
|
80,397 |
|
||||||
Gross profit (loss): | ||||||||||||||||||
|
2,004 |
|
|
2,157 |
|
|
9,785 |
|
|
7,523 |
|
|||||||
|
704 |
|
|
(752 |
) |
|
98 |
|
|
49 |
|
|||||||
Total gross profit |
|
2,708 |
|
|
1,405 |
|
|
9,883 |
|
|
7,572 |
|
||||||
Selling, general and administrative |
|
3,474 |
|
|
1,213 |
|
|
13,680 |
|
|
10,474 |
|
||||||
Severance, relocation and other costs |
|
118 |
|
|
306 |
|
|
509 |
|
|
1,394 |
|
||||||
Operating loss |
|
(884 |
) |
|
(114 |
) |
|
(4,306 |
) |
|
(4,296 |
) |
||||||
Interest expense, net |
|
227 |
|
|
185 |
|
|
903 |
|
|
850 |
|
||||||
Other (income) expense, net |
|
(100 |
) |
|
215 |
|
|
(1,256 |
) |
|
(1,436 |
) |
||||||
Loss before taxes |
|
(1,011 |
) |
|
(514 |
) |
|
(3,953 |
) |
|
(3,710 |
) |
||||||
Income tax expense, net |
|
(152 |
) |
|
(326 |
) |
|
(4 |
) |
|
(205 |
) |
||||||
Net Loss |
$ |
(859 |
) |
$ |
(188 |
) |
$ |
(3,949 |
) |
$ |
(3,505 |
) |
||||||
Loss per common share: | ||||||||||||||||||
Basic |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
$ |
(0.19 |
) |
$ |
(0.17 |
) |
||||||
Diluted |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
$ |
(0.19 |
) |
$ |
(0.17 |
) |
||||||
Dividends declared per common share |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic |
|
20,974 |
|
|
20,555 |
|
|
20,865 |
|
|
20,512 |
|
||||||
Diluted |
|
20,974 |
|
|
20,555 |
|
|
20,865 |
|
|
20,512 |
|
Consolidated Balance Sheets | |||||||
(in thousands, except for share data) | |||||||
|
|
||||||
|
2019 |
|
|
2018 |
|
||
(Unaudited) | (Note) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents |
$ |
5,095 |
|
$ |
10,704 |
|
|
Accounts receivable, net |
|
7,444 |
|
|
9,881 |
|
|
Inventory, net |
|
20,784 |
|
|
18,584 |
|
|
Other current assets |
|
4,282 |
|
|
4,755 |
|
|
Assets held for sale |
|
2,233 |
|
|
1,474 |
|
|
Total current assets |
|
39,838 |
|
|
45,398 |
|
|
Property, plant and equipment, net |
|
11,675 |
|
|
14,655 |
|
|
Operating lease right-of-use assets |
|
7,014 |
|
|
- |
|
|
Other assets |
|
1,529 |
|
|
1,515 |
|
|
Total assets |
$ |
60,056 |
|
$ |
61,568 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable |
$ |
9,346 |
|
$ |
13,427 |
|
|
Accrued liabilities |
|
12,495 |
|
|
14,965 |
|
|
Operating lease liabilities, current portion |
|
841 |
|
|
- |
|
|
Finance lease obligations, current portion |
|
684 |
|
|
593 |
|
|
Total current liabilities |
|
23,366 |
|
|
28,985 |
|
|
Note payable - related party |
|
6,463 |
|
|
6,449 |
|
|
Operating lease liabilities, net of current portion |
|
6,906 |
|
|
- |
|
|
Finance lease obligations, net of current portion |
|
2,351 |
|
|
2,804 |
|
|
Other liabilities |
|
7,539 |
|
|
8,496 |
|
|
Total liabilities |
|
46,625 |
|
|
46,734 |
|
|
Stockholders’ equity: | |||||||
Preferred stock, par value |
|
- |
|
|
- |
|
|
Series A preferred stock, par value |
|
- |
|
|
- |
|
|
Common stock, non-voting, par value |
|
- |
|
|
- |
|
|
Common stock, par value |
|
213 |
|
|
214 |
|
|
Additional paid-in capital |
|
154,702 |
|
|
154,388 |
|
|
Accumulated deficit |
|
(117,433 |
) |
|
(114,926 |
) |
|
Accumulated other comprehensive loss |
|
(24,051 |
) |
|
(24,842 |
) |
|
|
- |
|
|
- |
|
||
Total stockholders’ equity |
|
13,431 |
|
|
14,834 |
|
|
Total liabilities and stockholders’ equity |
$ |
60,056 |
|
$ |
61,568 |
|
|
Note: The balance sheet at |
Consolidated Cash Flow Statements | ||||||||
(in thousands) | ||||||||
Year Ended | ||||||||
|
2019 |
|
|
2018 |
|
|||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss |
$ |
(3,949 |
) |
$ |
(3,505 |
) |
||
Adjustments to reconcile net loss to net cash | ||||||||
(used in) provided by operating activities: | ||||||||
Depreciation and amortization |
|
2,671 |
|
|
2,648 |
|
||
Deferred income taxes |
|
(260 |
) |
|
(509 |
) |
||
Non-cash compensation expense |
|
469 |
|
|
637 |
|
||
Deferred loan costs recognized |
|
11 |
|
|
14 |
|
||
Net (gain) loss on the sale of assets |
|
(654 |
) |
|
249 |
|
||
Insurance recovery gain |
|
- |
|
|
(2,275 |
) |
||
Settlement gain |
|
- |
|
|
(1,890 |
) |
||
Provision for excess and obsolete inventory |
|
616 |
|
|
520 |
|
||
Non-cash lease expense |
|
650 |
|
|
- |
|
||
Other noncash items |
|
(69 |
) |
|
278 |
|
||
Contributions to pension plans |
|
(382 |
) |
|
(77 |
) |
||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable |
|
2,425 |
|
|
(612 |
) |
||
Inventory |
|
(2,823 |
) |
|
(2,857 |
) |
||
Prepaid expenses and other assets |
|
560 |
|
|
(1,163 |
) |
||
Accounts payable |
|
(4,066 |
) |
|
2,948 |
|
||
Accrued and other liabilities |
|
(1,019 |
) |
|
7,486 |
|
||
Net cash (used in) provided by operating activities |
|
(5,820 |
) |
|
1,892 |
|
||
Cash flows from investing activities: | ||||||||
Capital expenditures |
|
(859 |
) |
|
(2,051 |
) |
||
Proceeds from sale of assets |
|
1,858 |
|
|
1,380 |
|
||
Insurance proceeds for recovery of property damage, net |
|
- |
|
|
2,275 |
|
||
Net cash provided by investing activities |
|
999 |
|
|
1,604 |
|
||
Cash flows from financing activities: | ||||||||
Finance lease payments |
|
(632 |
) |
|
(829 |
) |
||
Indirect repurchase of shares for minimum statutory tax withholdings |
|
(156 |
) |
|
(107 |
) |
||
Net cash used in financing activities |
|
(788 |
) |
|
(936 |
) |
||
Net (decrease) increase in cash and cash equivalents |
|
(5,609 |
) |
|
2,560 |
|
||
Cash and cash equivalents at beginning of period |
|
10,704 |
|
|
8,144 |
|
||
Cash and cash equivalents at end of period |
$ |
5,095 |
|
$ |
10,704 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200319005181/en/
Chief Financial Officer
(502) 329-2000
Source: