Sypris Reports Second Quarter Results

Estimated reading time: 4 minutes

Sypris Solutions, Inc. reported financial results for its second quarter ended June 29, 2025.

Highlights:

• The Company’s second quarter revenue decreased compared to the prior-year quarter primarily due to the near-term impact of tariffs, which reduced demand from certain transportation-related customers and necessitated the conversion of certain shipments from our facility in Mexico to a value-add only sub-maquiladora.
• The Company’s gross profit decreased compared to the prior-year period due to the volume decrease described above, an unfavorable mix for both segments, and production inefficiencies resulting from material availability issues for Sypris Electronics.
• Orders for Sypris Electronics increased 110% to $47 million, driving backlog up 26% from year-end 2024.
• Orders for our energy products increased slightly when compared to the prior-year quarter, while backlog rose 26% from year-end 2024.
• During the quarter, Sypris Electronics announced a follow-on award from a U.S. DoD prime contractor for a secure communications infrastructure program. Sypris will manufacture and test the embedded circuit card assemblies that will perform certain cryptographic functions for the Army Key Management System. Deliveries are expected to begin in 2026.
• Sypris Electronics also announced that it received releases for an additional four systems under a multi-year production contract that was first announced in 2022. The modules to be produced by Sypris will be integrated into an electronic warfare improvement program for the U.S. Navy. Deliveries are expected to begin in 2026.
• Sypris Technologies announced that it entered a long-term agreement to supply certain drivetrain components for a new electrified truck of a leading global commercial vehicle manufacturer. Deliveries are expected to begin in 2026.
• Subsequent to quarter end, Sypris Electronics announced that it had secured follow-on contract awards to manufacture and test electronic power supply modules for multiple high-reliability subsea communication networks, with production currently underway and expected to continue through 2026.

“The past few months have been insightful as we evaluate how tariffs might affect the economy and our customers, which may, in turn, affect our overall results,” commented Jeffrey T. Gill, President and Chief Executive Officer. “We are focused on operational excellence to drive the timely and efficient execution of the rapidly growing demand at Sypris Electronics. Customer funding has already been secured for a portion of the key programs, which enables us to procure inventory under multi-year purchase orders to mitigate future supply chain issues.

“A moderate decrease in production is anticipated this year from Sypris Technologies customers in the automotive, commercial vehicle, sport-utility and off-highway markets. However, we believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets will help offset some of the anticipated cyclical decline for the commercial vehicle market.

“Orders for our energy products remained steady during the period, with open quotes still outstanding on several large projects. Additional opportunities for growth may exist with new global projects in support of increasing LNG demand, including support for the projected steep increase in electricity demand from data centers to support AI. We are also actively pursuing applications for our products in adjacent markets including CO2 capture to further diversify our industry and customer portfolios.”

Second Quarter Results

The Company reported revenue of $31.4 million for the second quarter of 2025, compared to $35.5 million for the prior-year comparable period. Additionally, the Company reported a net loss of $2.1 million, or $0.09 per share, compared with breakeven net income for the prior-year period.

For the six months ended June 29, 2025, the Company reported revenue of $60.9 million compared to $71.1 million for the first half of 2024. The Company reported a net loss of $3.0 million compared with a net loss of $2.2 million for the prior-year period.

Sypris Technologies

Revenue for Sypris Technologies was $14.1 million in the second quarter of 2025 compared to $17.8 million for the prior-year period, reflecting the anticipated cyclical decline in the commercial vehicle market in addition to volume declines related to tariff uncertainty. Furthermore, during 2025, Sypris Technologies began operating under a sub-maquiladora services agreement with one of its customers in Mexico under which the material is consigned to us by the customer instead of being included in the price. This resulted in a revenue decrease of $1.6 million as compared to the prior-year comparable period. Gross profit for the second quarter of 2025 was $2.1 million, or 15.2% of revenue, compared to $2.7 million, or 15.2% of revenue, for the same period in 2024. Gross profit for the second quarter of 2025 was negatively impacted by the decrease in volumes, partially offset by a $0.4 million favorable impact from foreign currency exchange rates for our Mexican subsidiary.

Sypris Electronics

Revenue for Sypris Electronics was $17.3 million in the second quarter of 2025 compared to $17.7 million for the prior-year period as a result of changes in customer delivery schedules for the current year and delays resulting from material availability issues. Gross profit for the second quarter of 2025 was $0.4 million, or 2.5% of revenue, compared to $2.9 million, or 16.5% of revenue, for the same period in 2024. Some of the material availability issues have delayed certain customer deliveries, limited our ability to ramp up production in response to customer demand for certain products and have caused out-of-sequence manufacturing, which increases costs and decreases operational efficiency.

Outlook

Commenting on the future, Mr. Gill added, “With a strong backlog, new program wins and long-term contract extensions in place, we are confident that our future has the potential to be very positive despite the increased market uncertainty. We are closely monitoring customer demand and forward-looking signals and believe our long-standing track record of resilience will allow us to successfully navigate any headwinds. While we anticipate a modest decline in revenue due to the conversion of certain shipments from Mexico to the U.S. into a value-add only sub-maquiladora basis, and the cyclical decrease in production volumes in the commercial vehicle market, we expect the combined strength of our backlog for Sypris Electronics and robust orders for our energy products to serve as a partial offset.”