Sypris Reports $27M Net Loss for 2015

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Sypris Solutions Inc. has reported revenue of $29.1 million for the fourth quarter of 2015 compared to $87.2 million for the prior year period, primarily reflecting the cessation of our shipments to Dana Holding Corp. as of December 31, 2014. Additionally, the company reported a net loss of $5.5 million, or $0.28 per share, as compared to a loss of $2 million, or $0.11 per share, for the prior year comparable period.

For the full year ended December 31, 2015, Sypris reported revenue of $145.3 million compared to $354.8 million for the prior year and a net loss of $27.2 million, or $1.38 per share, compared to a net loss of $1.2 million, or $0.06 per share, for the prior year. The results for the year ended December 31, 2015 include a gain of $7.7 million from the sale of assets partially offset by a non-cash charge of $2.2 million for a valuation allowance on our net deferred tax asset in Mexico.

“Significant progress has been made during this past year,” commented Jeffrey T. Gill, president and chief executive officer. “The company’s fixed overhead has been reduced, underperforming and underutilized assets have been divested, significant liquidity has been raised and important new business has been secured. We have more work yet to do, but we have a great team and the Company is clearly positioned for a much better year in 2016.

“Sypris Technologies also continues to adjust manpower and overhead expenses to reflect the recent softness in the commercial vehicle market that started during the fourth quarter. We have worked diligently to control our costs while taking actions to rebuild and diversify our customer base.”

“Sypris Electronics continued its efforts to diversify its portfolio of products and services in response to the challenges posed by the U.S. defense industry. Our team is beginning to gain traction on several new technologies, including interest in our Cyber Security platform, where the Sypris Cyber Range continues to gain important momentum, and our patented identity authentication solution, SiOMetrics, is being evaluated for use in a variety of commercial applications. Progress within these platforms represents an important step towards the achievement of our margin expansion and diversification objectives,” Mr. Gill continued.

Sypris Technologies

Revenue for Sypris Technologies decreased 74.8% to $20.2 million in the fourth quarter compared to $80.2 million for the prior year period, primarily as a result of the cessation of the Dana business. Gross profit for the quarter was $0.8 million, or 3.8% of revenue, compared to $10.2 million, or 12.7% of revenue for the same period in 2014.

Sypris Electronics

Revenue for Sypris Electronics increased 26% to $8.9 million in the fourth quarter of 2015 from $7.1 million in the prior year period, reflecting higher product sales of one of our key encryption products. Gross profit for the quarter was $0.3 million, or 3.2% of revenue, compared to a loss of $1.0 million for the prior year period, primarily reflecting the change in product mix combined with overhead reductions.

Outlook

“We will continue to concentrate on daily execution within both of our businesses. The Company is working to adjust manpower and overhead expenses to align with projected levels of customer demand and market requirements, while optimizing our ability to bring in potential new business. Sypris Electronics has continued to invest in a number of product development projects and is encouraged by the award of a significant engineering services contract in the defense sector subsequent to year-end,” Gill added.