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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): April 26, 2007
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Sypris Solutions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-24020 61-1321992
(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
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 April 26, 2007, Sypris Solutions, Inc. (the "Company")
announced its financial results for the first quarterly period
ended April 1, 2007. 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 April 26, 2007, Sypris Solutions, Inc. (the "Company")
announced its financial results for the first quarterly period
ended April 1, 2007. 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 April 26, 2007.
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: April 26, 2007 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 April 26, 2007.
Exhibit 99
Sypris Reports First Quarter Results
Electronics Group Posts Strong Orders
LOUISVILLE, Ky.--(BUSINESS WIRE)--April 26, 2007--Sypris
Solutions, Inc. (Nasdaq/NM: SYPR) today reported revenue of $111.4
million for the first quarter compared to $130.0 million for the prior
year period. The Company reported a net loss of $0.2 million, or $0.01
per diluted share for the first quarter compared to net income of $0.9
million or $0.05 per diluted share for the prior year period.
"The Company's financial results exceeded our expectations for the
first quarter of 2007," said Jeffrey T. Gill, president and chief
executive officer. "The cyclical downturn in demand for commercial
vehicles impacted the Company's top line, but the implementation of
cost containment measures, combined with better pricing, and higher
than forecasted sales from our Industrial and Test & Measurement
businesses, improved our gross margin rate despite the lower volumes."
Gill continued, "We expect revenue to decline further during the
second quarter of this year in line with the cycle for commercial
vehicle production, while the 34% increase in orders for our
Electronics Group during the period provides the Company with
important momentum moving into the second half of the year. In
addition, Sypris Electronics announced the award of a multi-year, $400
million IDIQ contract from the Department of Defense during the
quarter. This contract, which will serve as the platform for the
purchase of digital cryptographic security equipment from Sypris and
one other vendor, is expected to contribute to the Company's financial
results as early as the third quarter of 2007."
The Industrial Group
Revenue for our Industrial Group was $79.1 million in the first
quarter compared to $92.5 million for the prior year period. Gross
profit for the quarter was $5.3 million compared to $6.0 million for
the prior year period and increased 155% sequentially from the fourth
quarter of last year. Volumes in the Heavy and Light vehicle markets
exceeded our expectation while our energy-related products continued
to experience strong demand. Improved pricing also contributed to a
stronger performance.
The Electronics Group
Revenue for our Electronics Group was $32.3 million in the first
quarter compared to $37.5 million in the prior year period, but
increased $3.4 million sequentially from the fourth quarter of last
year. Gross profit for the quarter was $6.7 million, which was
consistent with the prior year period. Net orders increased 34% to
$41.2 million for the quarter when compared to prior year period.
Strong bookings were realized from the EMS, data recorder and
calibration businesses. As a result, backlog for the Electronics Group
rose by $9.0 million or 9% sequentially from fourth quarter of last
year.
Revenue for the Aerospace & Defense segment was $19.7 million
compared to $26.0 million for the prior year period. Revenue for the
Test & Measurement segment was $12.6 million compared to $11.5 million
for the prior year period. Gross profit for the Aerospace & Defense
segment was $3.2 million compared to $4.0 million for the prior year
period. Gross profit for the Test & Measurement segment increased 30%
to $3.5 million from $2.7 million in the prior year period.
Outlook
Gill added, "As a result of the Company's performance during the
first quarter, we have revised our guidance upward for the full year.
This latest outlook largely recognizes the upside from the first
quarter, but does not assume a change in our outlook for the balance
of the year at this time. Consequently, revenue for 2007 is now
forecast to be in the range of $420 to $430 million, up from the
previous guidance of $410 to $420 million, while the outlook for
earnings for the full year has improved to a loss of $0.30 to $0.35
per diluted share compared to previous guidance of $0.40 to $0.45 loss
per diluted share. We continue to expect free cash flow to be
positive, although we have adjusted our expectations to be in the
range of $10.0 to $15.0 million, as a result of necessary working
capital investments related to the previously announced restructuring
program in our Industrial Group.
"Looking forward to the second quarter of 2007, we expect revenue
to be in the range of $100 to $105 million compared to $132 million
for the prior year period. Losses for the second quarter are forecast
to be in the range of $0.11 to $0.13 per diluted share compared to
$0.02 per diluted share for the prior year period."
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 test and measurement
services. 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 subsequent SEC filings. Briefly, 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 (including bankruptcies
or other restructurings), 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, price, overstocking or
underbilling; changes in government funded or other customer programs
(including the failure to appropriate funds for IDIQ contracts);
reliance on major customers or suppliers; 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 covenants (including those regarding our creditors'
secured interests), 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; completion of the internal control assessment process; costs
of compliance with auditing, regulatory or contractual obligations;
regulatory actions or sanctions; contract terminations or other
disputes or litigation, involving customer, supplier, creditor,
stockholder, product liability, environmental or asbestos-related
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.
SYPRIS SOLUTIONS, INC.
Financial Highlights
(In thousands, except per share amounts)
Three Months Ended
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April 1, March 31,
2007 2006
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(Unaudited)
Revenue $111,439 $129,997
Net (loss) income $(245) $857
(Loss) income per common share:
Basic $(0.01) $0.05
Diluted $(0.01) $0.05
Weighted average shares outstanding:
Basic 18,107 18,042
Diluted 18,107 18,289
Sypris Solutions, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data)
Three Months Ended
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April 1, March 31,
2007 2006
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(Unaudited)
Net revenue:
Industrial Group $79,119 $92,499
Aerospace & Defense 19,671 26,011
Test & Measurement 12,649 11,487
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Electronics Group 32,320 37,498
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Total net revenue 111,439 129,997
Cost of sales:
Industrial Group 73,799 86,550
Aerospace & Defense 16,516 22,056
Test & Measurement 9,117 8,772
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Electronics Group 25,633 30,828
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Total cost of sales 99,432 117,378
Gross profit:
Industrial Group 5,320 5,949
Aerospace & Defense 3,155 3,955
Test & Measurement 3,532 2,716
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Electronics Group 6,687 6,670
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Total gross profit 12,007 12,619
Selling, general and administrative 10,902 9,919
Research and development 679 334
Amortization of intangible assets 164 159
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Operating income 262 2,207
Interest expense, net 719 1,159
Other income, net (20) (250)
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(Loss) income before income taxes (437) 1,298
Income tax (benefit) expense (192) 441
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Net (loss) income $(245) $857
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(Loss) earnings per common share:
Basic $(0.01) $0.05
Diluted $(0.01) $0.05
Dividends declared per common share $0.03 $0.03
Weighted average shares outstanding:
Basic 18,107 18,042
Diluted 18,107 18,289
Sypris Solutions, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)
April 1, December 31,
2007 2006
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(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents $24,751 $32,400
Restricted cash 1,002 1,002
Accounts receivable, net 60,374 59,876
Inventory, net 82,174 74,146
Other current assets 33,149 34,014
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Total current assets 201,450 201,438
Property, plant and equipment, net 149,096 155,341
Goodwill 14,277 14,277
Other assets 7,877 7,977
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Total assets $372,700 $379,033
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $71,824 $76,291
Accrued liabilities 23,957 19,430
Current portion of long-term debt -- 5,000
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Total current liabilities 95,781 100,721
Long-term debt 55,000 55,000
Other liabilities 13,130 13,426
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Total liabilities 163,911 169,147
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;
18,901,875 shares issued and 18,898,116
outstanding in 2007 and
18,342,243 shares issued and 18,338,484
outstanding in 2006 and 189 183
Additional paid-in capital 143,956 143,537
Retained earnings 69,003 69,816
Accumulated other comprehensive loss (4,343) (3,634)
Treasury stock, 3,759 shares (16) (16)
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Total stockholders' equity 208,789 209,886
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Total liabilities and stockholders'
equity $372,700 $379,033
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Note: The balance sheet at December 31, 2006 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)
Three Months Ended
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April 1, March 31,
2007 2006
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(Unaudited)
Cash flows from operating activities:
Net (loss) income $(245) $857
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating
activities:
Depreciation and amortization 7,134 6,819
Other noncash items (149) (38)
Changes in operating assets and
liabilities:
Accounts receivable (534) (3,167)
Inventory (3,900) 938
Other current assets (3,384) (236)
Accounts payable (4,432) (4,145)
Accrued liabilities 4,685 6,131
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Net cash (used in) provided by
operating activities (825) 7,159
Cash flows from investing activities:
Capital expenditures (697) (3,862)
Proceeds from sale of assets 22 10
Changes in nonoperating assets and
liabilities (598) (650)
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Net cash used in investing
activities (1,273) (4,502)
Cash flows from financing activities:
Net change in debt under revolving credit
agreements (5,000) --
Cash dividends paid (551) (545)
Proceeds from issuance of common stock -- 140
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Net cash used in financing
activities (5,551) (405)
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Net (decrease) increase in cash and cash
equivalents (7,649) 2,252
Cash and cash equivalents at beginning of
period 32,400 12,060
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Cash and cash equivalents at end of period $24,751 $14,312
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CONTACT: Sypris Solutions, Inc.
T. Scott Hatton, 502-329-2000
Chief Financial Officer