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Sypris (SYPR) Q2 Earnings Break Even With Mixed Segment Results
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Sypris Solutions, Inc. (SYPR - Free Report) reported breakeven net income per share for second-quarter 2024, down from 1 cent in the prior-year quarter. The company generated $35.5 million in revenues during the quarter, largely unchanged from $35.6 million in the second quarter of 2023.
The company’s quarterly performance was marked by mixed results across its business segments. Sypris Electronics saw robust growth, driven by new contracts in strategic defense and communication sectors. However, Sypris Technologies faced challenges, with a notable decline in revenue due to timing delays in energy shipments and cyclical downturns in the commercial vehicle market.
The net income margin decreased as a result of higher selling, general, and administrative expenses, which rose 17.9% to $4.4 million compared to $3.7 million in the second quarter of 2023. Additionally, interest expenses more than tripled to $0.6 million from $0.2 million in the prior-year quarter, further impacting the bottom line.
Despite these challenges, Sypris Solutions managed to improve its gross profit by 20.8% year over year, driven by better performance in both of its segments, which helped offset some of the increased costs.
Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Revenue for Sypris Technologies declined 11% year over year to $17.8 million in the second quarter of 2024, from $20.1 million in the second quarter of 2023. This segment faced headwinds from timing delays in energy product shipments and the expected downturn in the commercial vehicle market.
Despite the revenue decline, gross profit surged 35.5% year over year to $2.7 million, up from $2 million in the prior-year quarter, benefiting from a favorable product mix and higher absorption rates. Gross margin also improved significantly, expanding 520 basis points to 15.2%, up from 10% in the second quarter of 2023.
Sypris Electronics
Sypris Electronics posted a 13.6% increase in revenues, reaching $17.7 million in the second quarter of 2024 compared to $15.6 million in the same period last year. This growth was attributed to increased shipments related to ongoing defense programs, including electronic warfare and missile avionics.
Gross profit for the segment increased by 9.7% year-over-year to $2.9 million, although the gross margin slightly declined to 16.5% from 17.1% in the second quarter of 2023. The margin contraction was due to higher labor and overhead costs associated with ramping up production on new programs, partially offset by favorable material costs.
Financial Update (As of Jun 30, 2024)
Sypris Solutions reported cash and cash equivalents of $13.8 million, a substantial increase from $7.9 million at the end of 2023.
The company's total assets were $124.2 million at the end of the second quarter of 2024, down from $129.3 million at the end of 2023.
Operating lease liabilities, net of the current portion, increased to $3.6 million as of Jun 30, 2024, from $2.6 million at the end of 2023.
Stockholders' equity decreased to $19 million from $22.5 million at the end of 2023.
SYPR maintained a working capital line of credit of $0.5 million as of Jun 30, 2024, unchanged from the end of 2023.
Operating Cash Flows
The company generated $4.5 million in cash from operating activities during the first half of 2024, an improvement from $3.7 million in the same period in 2023.
Management Guidance
Sypris Solutions reaffirmed its full-year 2024 outlook, maintaining expectations for revenue growth of 10-15% year over year. The company also expects gross profit to increase 20-25%, with gross margins anticipated to expand 100-125 basis points. Management highlighted the strong backlog, particularly in Sypris Electronics, which exceeds $100 million and is expected to support growth through the remainder of 2024 and beyond. They expressed confidence in the company’s ability to deliver positive results in the second half of 2024, driven by ongoing demand in the defense and energy markets, along with long-term contract extensions and new program wins.
Other Developments
During the second quarter of 2024, Sypris Electronics announced the receipt of releases for an additional four systems under a multi-year production contract for the U.S. Navy's electronic warfare improvement program. These modules are slated for delivery starting in 2024, providing a steady revenue stream for the segment.
Additionally, Sypris Technologies secured a long-term sole-source extension to its supply agreement with a leading commercial vehicle manufacturer. This extension ensures continued production of the company’s Ultra Axle Shafts for use in the customer's branded drive axles for medium and heavy-duty trucks. These developments underscore Sypris Solutions' strategic efforts to strengthen its market position and secure long-term revenue streams amid challenging market conditions.
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Sypris (SYPR) Q2 Earnings Break Even With Mixed Segment Results
Sypris Solutions, Inc. (SYPR - Free Report) reported breakeven net income per share for second-quarter 2024, down from 1 cent in the prior-year quarter. The company generated $35.5 million in revenues during the quarter, largely unchanged from $35.6 million in the second quarter of 2023.
The company’s quarterly performance was marked by mixed results across its business segments. Sypris Electronics saw robust growth, driven by new contracts in strategic defense and communication sectors. However, Sypris Technologies faced challenges, with a notable decline in revenue due to timing delays in energy shipments and cyclical downturns in the commercial vehicle market.
The net income margin decreased as a result of higher selling, general, and administrative expenses, which rose 17.9% to $4.4 million compared to $3.7 million in the second quarter of 2023. Additionally, interest expenses more than tripled to $0.6 million from $0.2 million in the prior-year quarter, further impacting the bottom line.
Despite these challenges, Sypris Solutions managed to improve its gross profit by 20.8% year over year, driven by better performance in both of its segments, which helped offset some of the increased costs.
Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Sypris Solutions, Inc. price-consensus-eps-surprise-chart | Sypris Solutions, Inc. Quote
Business Segment Performance
Sypris Technologies
Revenue for Sypris Technologies declined 11% year over year to $17.8 million in the second quarter of 2024, from $20.1 million in the second quarter of 2023. This segment faced headwinds from timing delays in energy product shipments and the expected downturn in the commercial vehicle market.
Despite the revenue decline, gross profit surged 35.5% year over year to $2.7 million, up from $2 million in the prior-year quarter, benefiting from a favorable product mix and higher absorption rates. Gross margin also improved significantly, expanding 520 basis points to 15.2%, up from 10% in the second quarter of 2023.
Sypris Electronics
Sypris Electronics posted a 13.6% increase in revenues, reaching $17.7 million in the second quarter of 2024 compared to $15.6 million in the same period last year. This growth was attributed to increased shipments related to ongoing defense programs, including electronic warfare and missile avionics.
Gross profit for the segment increased by 9.7% year-over-year to $2.9 million, although the gross margin slightly declined to 16.5% from 17.1% in the second quarter of 2023. The margin contraction was due to higher labor and overhead costs associated with ramping up production on new programs, partially offset by favorable material costs.
Financial Update (As of Jun 30, 2024)
Sypris Solutions reported cash and cash equivalents of $13.8 million, a substantial increase from $7.9 million at the end of 2023.
The company's total assets were $124.2 million at the end of the second quarter of 2024, down from $129.3 million at the end of 2023.
Operating lease liabilities, net of the current portion, increased to $3.6 million as of Jun 30, 2024, from $2.6 million at the end of 2023.
Stockholders' equity decreased to $19 million from $22.5 million at the end of 2023.
SYPR maintained a working capital line of credit of $0.5 million as of Jun 30, 2024, unchanged from the end of 2023.
Operating Cash Flows
The company generated $4.5 million in cash from operating activities during the first half of 2024, an improvement from $3.7 million in the same period in 2023.
Management Guidance
Sypris Solutions reaffirmed its full-year 2024 outlook, maintaining expectations for revenue growth of 10-15% year over year. The company also expects gross profit to increase 20-25%, with gross margins anticipated to expand 100-125 basis points. Management highlighted the strong backlog, particularly in Sypris Electronics, which exceeds $100 million and is expected to support growth through the remainder of 2024 and beyond. They expressed confidence in the company’s ability to deliver positive results in the second half of 2024, driven by ongoing demand in the defense and energy markets, along with long-term contract extensions and new program wins.
Other Developments
During the second quarter of 2024, Sypris Electronics announced the receipt of releases for an additional four systems under a multi-year production contract for the U.S. Navy's electronic warfare improvement program. These modules are slated for delivery starting in 2024, providing a steady revenue stream for the segment.
Additionally, Sypris Technologies secured a long-term sole-source extension to its supply agreement with a leading commercial vehicle manufacturer. This extension ensures continued production of the company’s Ultra Axle Shafts for use in the customer's branded drive axles for medium and heavy-duty trucks. These developments underscore Sypris Solutions' strategic efforts to strengthen its market position and secure long-term revenue streams amid challenging market conditions.