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Sypris Reports 2Q19 Results
August 19, 2019 | Business WireEstimated reading time: 5 minutes
Revenue for Sypris Technologies was $16.9 million in the second quarter compared to $15.3 million for the prior-year period, primarily reflecting an increase in demand from customers in the oil and gas, automotive and commercial vehicle industries. Gross profit for the quarter was $3.0 million, or 17.6% of revenue, compared to $1.9 million, or 12.6% of revenue, for the same period in 2018. Gross profit also increased 28.6% sequentially as a result of the increase in volume, improved mix and productivity growth.
Sypris Electronics
Revenue for Sypris Electronics was flat with the prior-year period at $7.6 million. Revenue for the quarter was affected by shortages of certain electronic components and extensive lead-time issues in the electronics manufacturing industry. Gross profit for the quarter was also equal to that of the prior-year period at $1.0 million, though much improved from the first quarter of 2019 when shipments were severely impacted by the shortage of certain electronic components and other delays.
Outlook
Commenting on the future, Mr. Gill added, “Our markets are poised to provide Sypris with the opportunity for healthy, double-digit revenue growth during 2019. We anticipate new contract awards and market expansion in each of our targeted markets for energy, automotive, commercial vehicle, and aerospace and defense products as well as new electronics programs.
“Demand from the commercial vehicle market is expected to continue to drive production at historically high levels during the second half of 2019. The energy market also continues to benefit from strong demand and higher oil prices. Both the House and Senate versions of the Fiscal Year 2020 National Defense Authorizations Act would provide over $700 billion of funding for the Department of Defense. Maintaining defense spending at this level is expected to support program growth and market expansion for aerospace and defense participants during the coming year.
“As a result, we are pleased to update our guidance for 2019, with full-year revenue expected to be in the range of $95-$105 million, which primarily reflects strong market conditions for the commercial vehicle and energy markets, and our expectation that headwinds from component availability will improve in the aerospace and defense market allowing shipments to increase sequentially through the year.
“We expect to see further expansion of our gross margin during the second half of 2019, resulting in gross margin of 14%-16% for the full year. The positive results are expected to be supported by the continuation of top line growth and an improved mix of sales during the second half of 2019.”
About Sypris Solutions
Sypris Solutions is a diversified provider of truck components, oil and gas pipeline components and aerospace and defense electronics. The Company performs a wide range of manufacturing services, often under multi-year, sole-source contracts. For more information about Sypris Solutions, visit its Web site at www.sypris.com.
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