Orlando, FL 5/15/12 (StreetBeat) -- Sypris Solutions, Inc. (Nasdaq: SYPR) today reported financial results for its first quarter ended April 1, 2012.HIGHLIGHTS
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• Revenue and gross profit increased 27% and 54%, respectively, from the first quarter of last year.
• Earnings increased to $0.27 per diluted share, up from $0.10 per share for the prior year period.
• Gross margin increased to 13.0%, up 230 basis points from 10.7% in the first quarter of 2011 and up from 10.4% sequentially.
• Profit conversion on incremental revenue growth for the Industrial Group exceeded 20% on a year-over-year basis and 16% sequentially.
• Orders for the Company’s Aerospace and Defense business increased 30% when compared to the prior year period.
• Subsequent to quarter end, the Company announced a new alliance with BlackRidge Technology to develop the next generation of network defense technology for government customers.
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The Company reported revenue of $96.5 million for the first quarter compared to $75.8 million for the prior year period. The Company reported net income of $5.3 million, or $0.27 per diluted share, for the first quarter compared to $2.1 million, or $0.10 per share, for the prior year period.
Pretax income from continuing operations of $6.5 million for the quarter ended April 1, 2012, included a gain of $2.6 million in connection with the sale of idle assets and a foreign currency translation loss of $0.6 million. Pretax income from continuing operations of $2.9 million for the quarter ended April 3, 2011, included a gain of $3.0 million in connection with the settlement regarding volumes with one of its customers.
“Our Industrial Group continued to show progress during the quarter, with revenue, margins and income increasing on a year-over-year and sequential basis,” said Jeffrey T. Gill, president and chief executive officer. “We expect the improved cost profile and strong operational performance of this business to make a material contribution to the growth and profitability of the Company throughout the coming year.
“Orders in our Aerospace and Defense business increased 30% during the period when compared to the first quarter of 2011, following a 23% year over year increase in the fourth quarter of last year. And while the periods used for comparison reflect the lack of Department of Defense funding that impacted our order stream historically, we believe that the current trend in new bookings over the past six months provides important support for this business.”
The Industrial Group
Revenue for our Industrial Group increased 39% to $82.5 million in the first quarter compared to $59.6 million for the prior year period, primarily as a result of increased demand from customers in the commercial vehicle and trailer markets. Gross profit for the quarter increased 93% to $9.9 million, or 12.0% of revenue, compared to $5.1 million, or 8.6% of revenue for the same period in 2011, reflecting the positive conversion associated with the increase in revenue and supply chain productivity.
The Electronics Group
Revenue for our Electronics Group was $13.9 million in the first quarter compared to $16.3 million in the prior year period, but up 23% sequentially from the fourth quarter of 2011. Gross profit for the quarter was $2.6 million, or 18.6% of revenue, compared to $3.0 million, or 18.5% of revenue for the same period in 2011, and up sequentially from $0.5 million, or 4.5% of revenue, from the fourth quarter of 2011.
Outlook
Mr. Gill added, “We will continue to concentrate on the daily execution of our business. We expect to see strong comparable period growth in the top line of our Industrial Group going forward, as recently announced contracts add additional volume. For our Electronics Group, we are planning for a progressive recovery in shipments and margins for this business segment as we move throughout the coming year.
“We believe that the Company is well-positioned and our team is focused on delivering improved operational and financial results during the year. We will do so through a relentless focus on execution at every level of our organization.”
Sypris Solutions is a diversified provider of outsourced services and specialty products. The Company performs a wide range of manufacturing, engineering, design and other technical services, typically under multi-year, sole-source contracts with corporations and government agencies in the markets for truck components and assemblies and aerospace and defense electronics. For more information about Sypris Solutions, visit its Web site at www.sypris.com.
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