UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): October 17, 2006
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Sypris Solutions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-24020 61-1321992
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
101 Bullitt Lane, Suite 450
Louisville, Kentucky 40222
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (502) 329-2000
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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 October 17, 2006, Sypris Solutions, Inc. (the "Company")
reported that it is lowering its financial outlook for the third
quarter. The Company now expects to report a loss for the third
quarter in the range of $0.04 to $0.05 per diluted share
compared to prior guidance for earnings of $0.03 to $0.06 per
diluted share. Revenue for the third quarter is expected to be
in the range of $125 to $127 million, below prior guidance of
$138 to $143 million. Free cash flow is expected to be $9 to $11
million, exceeding prior guidance of $0 to $5 million. The full
text of the press release is set forth in Exhibit 99 hereto.
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 October 17, 2006, Sypris Solutions, Inc. (the "Company")
reported that it is lowering its financial outlook for the third
quarter. The Company now expects to report a loss for the third
quarter in the range of $0.04 to $0.05 per diluted share
compared to prior guidance for earnings of $0.03 to $0.06 per
diluted share. Revenue for the third quarter is expected to be
in the range of $125 to $127 million, below prior guidance of
$138 to $143 million. Free cash flow is expected to be $9 to $11
million, exceeding prior guidance of $0 to $5 million. The full
text of the press release is set forth in Exhibit 99 hereto.
The information in this Form 8-K and the attached Exhibit 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
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99 Press release issued October 17, 2006.
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: October 17, 2006 Sypris Solutions, Inc.
By: /s/ T. Scott Hatton
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T. Scott Hatton
Vice President and Chief
Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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99 Registrant's press release dated October 17, 2006.
Exhibit 99
Sypris Lowers Earnings Outlook
Cash Flow Remains Strong
LOUISVILLE, Ky.--(BUSINESS WIRE)--Oct. 17, 2006--Sypris Solutions,
Inc. (Nasdaq/NM:SYPR) today reported that it is lowering its financial
outlook for the third quarter. The Company now expects to report a
loss for the third quarter in the range of $0.04 to $0.05 per diluted
share compared to prior guidance for earnings of $0.03 to $0.06 per
diluted share. Revenue for the third quarter is expected to be in the
range of $125 to $127 million, below prior guidance of $138 to $143
million. Free cash flow is expected to be $9 to $11 million, exceeding
prior guidance of $0 to $5 million.
"Our Industrial Group experienced a 39% reduction in orders for
component shipments to the Ford Motor Company during the third
quarter, the result of which had a material impact on the Company's
revenue and income for the period," said Jeffrey T. Gill, President
and Chief Executive Officer. "Unfortunately, the rightsizing of our
workforces in each of the plants impacted by the change required much
of the quarter to complete, further compressing the group's short-term
margins. The outlook for the balance of the year appears to be stable
for the moment."
Gill continued, "The lower than expected revenue and margins for
the quarter were also driven by our Electronics Group, which generated
lower sales primarily due to a reduction in the initial rate of
production for the launch of a new classified program. The short-term
change in schedules was necessitated to incorporate several new
important design modifications earlier in the product's life cycle. We
now expect to reach full rates of production early in 2007."
"Despite these headwinds, the Company continued to generate
significant free cash flow of approximately $10 million, resulting in
$35 million of free cash flow on a year to date basis. As a result,
the Company's balance sheet remains a source of strength, with net
debt representing less than 14% of total capital. As we go forward, we
will continue to evaluate opportunities to use this strength to
improve margins and increase the Company's market share."
A conference call is scheduled for Thursday, October 26, 2006 at
9:00 a.m. Eastern Standard Time to discuss the content of this
release. The call can be accessed live via the Internet. Visit
www.sypris.com or www.earnings.com for the link to the call or to
listen to a replay of the call, which will be available for 30 days.
Sypris Solutions is a diversified provider of technology-based
outsourced services and specialty products. The Company performs a
wide range of manufacturing and technical services, typically under
multi-year, sole-source contracts with major corporations and
government agencies in the markets for aerospace and defense
electronics, truck components and assemblies, and for users of test
and measurement equipment. 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: cost and availability
of raw materials such as steel, components, freight, natural gas or
utilities; cost and inefficiencies associated with increasing our
manufacturing capacity and launching new programs; stability and
predictability of our costs and margins or our customers' forecasts,
financial conditions, late payments, low-margin product mix, market
shares, changing product requirements or scheduling demands; costs
associated with breakdowns or repairs of machinery and equipment;
growth beyond our productive capacity, cyclical or other downturns,
adverse impacts of new technologies or other competitive pressures
which erode our margins; cost, efficiency and yield of our operations
including capital investments, working capital, scrap rates, cycle
times, injuries, self-insured risks, wages, freight, production
schedules, overtime costs, expediting costs or scrap rates; failure to
make strategic acquisitions or to integrate and improve results of
acquired businesses or to identify and adequately insure environmental
or other risks in due diligence; inventory valuation risks due to
obsolescence, shrinkage, theft, price, overstocking or underbilling;
changes in government funded or other customer programs; reliance on
major customers or suppliers, especially in the automotive sector
where bankruptcies (such as Dana Corporation's recent filing) could
result in the rejection or modification of our contracts; revised
contract prices or estimates of major contract costs; dependence on,
recruitment or retention of management or other key employees; union
negotiations; pension valuation, health care or other benefit costs;
labor relations; strikes; risks of foreign operations; currency
exchange rates; costs and supply of debt, equity capital, or insurance
due to poor operating or financial results, new business risks, credit
ratings, debt covenant violations, contract claims, insurance
conditions or regulatory developments; impairments or write-offs of
goodwill or fixed assets; changes in licenses, security clearances, or
other legal rights to operate, manage our work force or import and
export as needed; weaknesses in internal controls; costs of compliance
with auditing, regulatory or contractual obligations; regulatory
actions or sanctions; disputes or litigation, involving customer,
supplier, creditor, stockholder, product liability or environmental
claims; 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.
CONTACT: Sypris Solutions, Inc.
Chief Financial Officer
T. Scott Hatton, 502-329-2000