Sypris Reports Fourth Quarter Results
Backlog Up 117%; 2023 Outlook Raised
HIGHLIGHTS
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- Consolidated revenue for the quarter increased 15.2% year-over-year and 17.9% sequentially driven by continued expansion across the business.
- Gross profit rose 4.3% from the prior-year period and 133.0% sequentially.
-
Earnings for the period of
$0.01 per diluted share represented an$0.11 per share increase sequentially from the third quarter of 2022. - Orders increased 102.7% year-over-year and 71.3% sequentially, while backlog jumped 117.3% and 16.9%, respectively.
-
Quarterly revenue for
Sypris Electronics increased 13.2% year-over-year and 52.9% sequentially. Gross profit rose 14.4% and 164.1%, respectively, while backlog increased 119.5%, or$64.5 million , to$118.5 million from the prior year end. -
Quarterly revenue for
Sypris Technologies increased 16.6% year-over-year and 1.0% sequentially. Orders for energy products rose 71.4% when compared to the prior-year period, while backlog increased 75.6% from the prior year end. -
During the quarter,
Sypris Electronics announced an amendment to an existing multi-year supply agreement to increase deliveries for a large, mission-criticalNavy program. The amended contract, including options, now provides for the purchase of up to$77.0 million of assemblies, representing a 39.5% increase in potential volume compared to the original base contract.Sypris also received releases for the first year of production with shipments scheduled to begin in 2023. -
Sypris Electronics also announced a follow-on award from aU.S. DOD prime contractor for a secure communications infrastructure program.Sypris will produce and test the embedded circuit card assemblies that will perform certain cryptographic functions for the Army Key Management System. Production is expected to begin in 2023. -
Subsequent to quarter end,
Sypris Electronics announced that it had received an award to produce and test electronic interface modules for aU.S. Department of Defense missile weapons system as part of an ongoing modernization program. Production is expected to begin in 2023. -
On
March 7 ,Sypris Technologies announced that it had entered into an amendment to its existing supply agreement withDetroit Diesel Corporation , a subsidiary ofDaimler Truck North America , to produce a new series of part numbers for driveline components for use in Detroit® Diesel-branded drive axles. The components to be produced bySypris will be essential to the performance of the drive axles of Freightliner’s heavy-duty trucks. Production is expected to begin in 2023. - The Company raised its outlook for 2023, with revenue now expected to increase 25-30% year-over-year, reflecting the continued momentum of new contract awards and strong backlog across many of the Company’s markets. We expect margins to expand 175-225 basis points year-over-year and cash flow from operations to be solid, reflecting the positive impact of earnings growth.
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“We were pleased with our fourth quarter performance, as we continued to expand across all segments of our business. Material shortages and supply chain disruptions are abating, and our focus is clearly on meeting the growing demand of our customers. We have reached the inflection point, with future shipments now expected to reflect the impact of our growing backlog,” commented
“Backlog for
“Overall demand from customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained somewhat stable, with new product line shipments offsetting headwinds for automotive and commercial vehicle components as our customers adjust inventory levels to align with OEM build schedules. While we continue to experience volatility within this market, current forecasts are predicting that 2023-2027 will be the strongest five years ever experienced by the North American Class 8 truck market.
“We continue to invest in new equipment, maintain or upgrade existing assets, and drive continuous improvement initiatives to add capacity and support more cost-efficient operations in the future. The successful extension of long-term contracts with two of our key Sypris Technologies’ customers during the year supports our revenue base and provides opportunities to expand these relationships in the coming years.
“Orders for our energy products during the fourth quarter increased 71% year-over-year, with open quotes outstanding on several large projects. Additional opportunities for growth may exist with new projects in support of increasing rig counts over pre-pandemic levels. We are also actively pursuing applications for our products in adjacent markets to further diversify our industry and customer portfolios.”
Fourth Quarter and Full-Year Results
The Company reported revenue of
For the full-year 2022, the Company reported revenue of
Revenue for
Revenue for
Outlook
Commenting on the future,
“Our record backlog, new program wins and long-term contract extensions are expected to support continued revenue and earnings growth during 2023. We now expect revenue to increase 25-30% year-over-year as a result of the combined strength of our backlog 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 |
||||||
|
|
||||||
|
|
2022 |
|
|
|
2021 |
|
|
(Unaudited) |
||||||
Revenue |
$ |
29,712 |
|
$ |
25,800 |
||
Net income |
$ |
140 |
|
$ |
436 |
||
Income per common share: | |||||||
Basic |
$ |
0.01 |
|
$ |
0.02 |
||
Diluted |
$ |
0.01 |
|
$ |
0.02 |
||
Weighted average shares outstanding: | |||||||
Basic |
|
21,759 |
|
|
21,694 |
||
Diluted |
|
21,759 |
|
|
22,941 |
||
Year Ended | |||||||
|
2022 |
|
|
2021 |
|||
(Unaudited) | |||||||
Revenue |
$ |
110,121 |
|
$ |
97,434 |
||
Net (loss) income |
$ |
(2,494 |
) |
$ |
2,923 |
||
(Loss) income per common share: | |||||||
Basic |
$ |
(0.11 |
) |
$ |
0.14 |
||
Diluted |
$ |
(0.11 |
) |
$ |
0.13 |
||
Weighted average shares outstanding: | |||||||
Basic |
|
21,729 |
|
|
21,585 |
||
Diluted |
|
21,729 |
|
|
23,001 |
||
Consolidated Statements of Operations | ||||||||||||||
(in thousands, except for per share data) | ||||||||||||||
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
||
(Unaudited) |
|
(Unaudited) |
||||||||||||
Net revenue: | ||||||||||||||
$ |
17,163 |
$ |
14,715 |
$ |
69,259 |
|
$ |
61,737 |
|
|||||
|
12,549 |
|
11,085 |
|
40,862 |
|
|
35,697 |
|
|||||
Total net revenue |
|
29,712 |
|
25,800 |
|
110,121 |
|
|
97,434 |
|
||||
Cost of sales: | ||||||||||||||
|
14,947 |
|
12,389 |
|
60,709 |
|
|
53,622 |
|
|||||
|
10,172 |
|
9,008 |
|
34,559 |
|
|
29,306 |
|
|||||
Total cost of sales |
|
25,119 |
|
21,397 |
|
95,268 |
|
|
82,928 |
|
||||
Gross profit: | ||||||||||||||
|
2,216 |
|
2,326 |
|
8,550 |
|
|
8,115 |
|
|||||
|
2,377 |
|
2,077 |
|
6,303 |
|
|
6,391 |
|
|||||
Total gross profit |
|
4,593 |
|
4,403 |
|
14,853 |
|
|
14,506 |
|
||||
Selling, general and administrative |
|
3,789 |
|
3,291 |
|
14,489 |
|
|
12,596 |
|
||||
Operating income |
|
804 |
|
1,112 |
|
364 |
|
|
1,910 |
|
||||
Interest expense, net |
|
326 |
|
224 |
|
1,110 |
|
|
868 |
|
||||
Other expense, net |
|
145 |
|
147 |
|
800 |
|
|
645 |
|
||||
Forgiveness of PPP Loan and related interest |
|
- |
|
- |
|
- |
|
|
(3,599 |
) |
||||
Income (loss) before taxes |
|
333 |
|
741 |
|
(1,546 |
) |
|
3,996 |
|
||||
Income tax expense, net |
|
193 |
|
305 |
|
948 |
|
|
1,073 |
|
||||
Net income (loss) |
$ |
140 |
$ |
436 |
$ |
(2,494 |
) |
$ |
2,923 |
|
||||
Income (loss) per common share: | ||||||||||||||
Basic |
$ |
0.01 |
$ |
0.02 |
$ |
(0.11 |
) |
$ |
0.14 |
|
||||
Diluted |
$ |
0.01 |
$ |
0.02 |
$ |
(0.11 |
) |
$ |
0.13 |
|
||||
Dividends declared per common share |
$ |
- |
$ |
- |
$ |
- |
|
$ |
- |
|
||||
Weighted average shares outstanding: | ||||||||||||||
Basic |
|
21,759 |
|
21,694 |
|
21,729 |
|
|
21,585 |
|
||||
Diluted |
|
21,759 |
|
22,941 |
|
21,729 |
|
|
23,001 |
|
||||
Consolidated Balance Sheets | ||||||||
(in thousands, except for share data) | ||||||||
|
||||||||
|
2022 |
|
|
|
2021 |
|
||
(Unaudited) |
||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
21,648 |
|
$ |
11,620 |
|
||
Accounts receivable, net |
|
8,064 |
|
|
8,467 |
|
||
Inventory, net |
|
42,133 |
|
|
30,100 |
|
||
Other current assets |
|
8,133 |
|
|
5,868 |
|
||
Total current assets |
|
79,978 |
|
|
56,055 |
|
||
Property, plant and equipment, net |
|
15,532 |
|
|
14,140 |
|
||
Operating lease right-of-use assets |
|
4,251 |
|
|
5,140 |
|
||
Other assets |
|
4,383 |
|
|
4,170 |
|
||
Total assets |
$ |
104,144 |
|
$ |
79,505 |
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable |
$ |
17,638 |
|
$ |
11,962 |
|
||
Accrued liabilities |
|
33,316 |
|
|
19,646 |
|
||
Operating lease liabilities, current portion |
|
1,168 |
|
|
1,063 |
|
||
Finance lease obligations, current portion |
|
1,102 |
|
|
983 |
|
||
Equipment financing obligations, current portion |
|
398 |
|
|
336 |
|
||
Note payable - related party, current portion |
|
2,500 |
|
|
- |
|
||
Total current liabilities |
|
56,122 |
|
|
33,990 |
|
||
Operating lease liabilities, net of current portion |
|
3,710 |
|
|
4,878 |
|
||
Finance lease obligations, net of current portion |
|
2,536 |
|
|
3,469 |
|
||
Equipment financing obligations, net of current portion |
|
738 |
|
|
868 |
|
||
Note payable - related party |
|
3,989 |
|
|
6,484 |
|
||
Other liabilities |
|
17,474 |
|
|
10,530 |
|
||
Total liabilities |
|
84,569 |
|
|
60,219 |
|
||
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 |
||||||||
22,175,664 shares issued and 22,175,645 outstanding in 2022 and | ||||||||
21,864,743 shares issued and 21,864,724 outstanding in 2021 and |
|
221 |
|
|
218 |
|
||
Additional paid-in capital |
|
155,535 |
|
|
154,904 |
|
||
Accumulated deficit |
|
(115,336 |
) |
|
(112,842 |
) |
||
Accumulated other comprehensive loss |
|
(20,845 |
) |
|
(22,994 |
) |
||
|
- |
|
|
- |
|
|||
Total stockholders’ equity |
|
19,575 |
|
|
19,286 |
|
||
Total liabilities and stockholders’ equity |
$ |
104,144 |
|
$ |
79,505 |
|
||
Consolidated Cash Flow Statements | ||||||||
(in thousands) | ||||||||
Year Ended |
||||||||
|
||||||||
|
2022 |
|
|
|
2021 |
|
||
(Unaudited) |
||||||||
Cash flows from operating activities: | ||||||||
Net (loss) income |
$ |
(2,494 |
) |
$ |
2,923 |
|
||
Adjustments to reconcile net (loss) income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization |
|
3,088 |
|
|
2,646 |
|
||
Forgiveness of PPP Loan and related interest |
|
(3,599 |
) |
|||||
Deferred income taxes |
|
329 |
|
|
1,015 |
|
||
Stock-based compensation expense |
|
683 |
|
|
491 |
|
||
Deferred loan costs recognized |
|
6 |
|
|
7 |
|
||
Net loss on the sale of assets |
|
- |
|
|
11 |
|
||
Provision for excess and obsolete inventory |
|
65 |
|
|
162 |
|
||
Non-cash lease expense |
|
890 |
|
|
963 |
|
||
Other noncash items |
|
(148 |
) |
|
150 |
|
||
Contributions to pension plans |
|
(60 |
) |
|
(297 |
) |
||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable |
|
345 |
|
|
(1,265 |
) |
||
Inventory |
|
(11,804 |
) |
|
(13,978 |
) |
||
Prepaid expenses and other assets |
|
(3,072 |
) |
|
(1,314 |
) |
||
Accounts payable |
|
5,556 |
|
|
5,268 |
|
||
Accrued and other liabilities |
|
20,409 |
|
|
11,055 |
|
||
Net cash provided by operating activities |
|
13,793 |
|
|
4,238 |
|
||
Cash flows from investing activities: | ||||||||
Capital expenditures |
|
(3,041 |
) |
|
(2,824 |
) |
||
Proceeds from sale of assets |
|
10 |
|
|
10 |
|
||
Net cash used in investing activities |
|
(3,031 |
) |
|
(2,814 |
) |
||
Cash flows from financing activities: | ||||||||
Principal payments on finance lease obligations |
|
(982 |
) |
|
(499 |
) |
||
Principal payments on equipment financing obligations |
|
(352 |
) |
|
(176 |
) |
||
Proceeds from Paycheck Protection Program loan |
|
- |
|
|
- |
|
||
Indirect repurchase of shares for minimum statutory tax withholdings |
|
(49 |
) |
|
(607 |
) |
||
Net cash used in financing activities |
|
(1,383 |
) |
|
(1,282 |
) |
||
Effect of exchange rate changes on cash balances |
|
649 |
|
|
(128 |
) |
||
Net increase in cash and cash equivalents |
|
10,028 |
|
|
14 |
|
||
Cash and cash equivalents at beginning of period |
|
11,620 |
|
|
11,606 |
|
||
Cash and cash equivalents at end of period |
$ |
21,648 |
|
$ |
11,620 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230316005029/en/
Vice President & Chief Financial Officer
(502) 329-2000
Source: