Sypris Reports 2Q19 Results

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Sypris Solutions, Inc. has reported financial results for its second quarter ended June 30, 2019. Having completed a series of strategic initiatives over the past several years, Sypris Solutions is now better positioned to achieve long-term growth and a return to profitable operations for the full year 2019. These steps have included reducing and realigning its cost structure while diversifying its book of business in terms of both customers and markets.

Highlights:

• The Company’s second quarter 2019 consolidated revenue increased 6.4% to $24.4 million compared with the prior-year quarter and increased 24.9% sequentially.
• The Company’s gross margin increased 350 basis points to 16.3% for the second quarter of 2018 and up from 4.4% in the first quarter of 2019. Gross profit increased 36.0% to $4.0 million, up from $2.9 million from the prior-year.
• The Company’s EPS increased 75% to $0.07 per share, up from $0.04 per share for the prior-year period.
• Revenue for Sypris Technologies increased 10.1% to $16.9 million during the quarter compared to the prior-year period.
• Gross margin for Sypris Technologies increased 500 basis points to 17.6% from the second quarter of 2018 and increased 330 basis points from 14.3% in the first quarter of 2019.
• Revenue for Sypris Electronics was flat with the year-earlier quarter at $7.6 million, while gross margin improved 50 basis points to 13.6% when compared to the prior-year period.
• Orders for Sypris Electronics were up 200% on both a comparable period and sequential basis, with approximately 40% of the new bookings targeted for shipment in 2019 and the balance in 2020 and 2021.
• The Company updated its outlook for 2019. The Company now expects to achieve revenues of $95-$105 million for the year, representing 14% year-over-year growth at the midpoint, and gross margin of 14%-16%, with both business segments forecasted to register solid profitability over the second half of the year.

“We are pleased to report profitable results for the second quarter of 2019,” commented Jeffrey T. Gill, president and chief executive officer. “This represents a milestone we have been focused on over the past several years and while a great amount of work remains before us to achieve a consistent and higher level of profitability, we are delighted with what we have accomplished to this point.

“Shipment volumes at Sypris Technologies remained strong in the quarter to support demand coming from the automotive and commercial vehicle markets. Energy products also performed well during the period, with orders increasing 58% during the quarter reflecting strong demand from domestic as well as international customers.

“Shipments at Sypris Electronics were generally in line with expectations for the quarter, reflecting the resolution of some of the challenges we have faced with shortages of certain electronic components. We expect to see progressively higher levels of shipments through the remainder of the year, with a full recovery to normal deliveries during the second half of the year.”

Concluding, Gill said, “We continue to see strong demand in each of our primary markets to support our revenue outlook for the balance of the year. Our customer base and the markets we serve remain resilient and are considerably more diversified than at any point in our recent history. The combination of additional revenue growth and improved mix are expected to drive further margin expansion during the second half of 2019.”

Second Quarter Results

The Company reported revenue of $24.4 million for the second quarter, compared to $23.0 million for the prior-year period. Additionally, the Company reported net income of $1.5 million, or $0.07 per share, compared to net income of $0.8 million, or $0.04 per share, for the prior-year period. Results for the quarter ended June 30, 2019, include a gain of $1.5 million in connection with a contract settlement with one of its customers. The results for the quarter ended July 1, 2018, included an insurance recovery gain of $2.3 million, which was partially offset by a net loss of $0.5 million from the sale of excess equipment by Sypris Technologies.

For the six months ended June 30, 2019, the Company reported revenue of $44.0 million compared with $42.9 million for the first half of 2018. The Company reported a net loss for the six month period of $1.5 million, or $0.07 per share, compared with a net loss of $1.0 million, or $0.05 per share, for the prior-year period. Results for the six months ended June 30, 2019, include a gain of $1.5 million in connection with a contract settlement with one of its customers. Results for the six months ended July 1, 2018, included an insurance recovery gain of $2.3 million, which was partially offset by a net loss of $0.2 million on the sale of excess equipment. 

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