Sypris Reports Fourth Quarter Results

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Sypris Solutions, Inc. reported financial results for its fourth quarter and full-year ended December 31, 2024.

Highlights:

• The Company’s gross profit for the quarter increased 23.1% from the prior-year period, while gross margin expanded 350 basis points.
• For the full year, the Company’s gross profit increased 15.3% from the prior year, while gross margin increased 150 basis points.
• Gross profit for Sypris Technologies surged 41.6% for the quarter and 39.3% for the full year, reflecting favorable exchange rates, improved mix and productivity improvements. Orders for energy products were up 8.6% year-to-date.
• EPS for the quarter increased $0.06 to $0.01 per diluted share, up from a loss of $0.05 per diluted share for the prior-year period.
• The Company announced its financial guidance for 2025, projecting revenue between $125-$135 million, gross margin expansion in the range of 150 to 175 basis points, and a forecast of 10-15% increase in gross profit. The revenue outlook partly reflects the conversion of certain shipments from our facility in Mexico to a value-add only sub-maquiladora basis.

“We are pleased with the year-over-year revenue growth at Sypris Technologies, driven by an increase in sales of our energy products during the period,” commented Jeffrey T. Gill, President and Chief Executive Officer. “Orders for our energy products increased during the year, and additional opportunities for growth may exist with new global projects in support of increasing LNG demand including support for the 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.

“Demand from Sypris Technologies customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained relatively stable, with new product line shipments helping to offset the anticipated cyclical decline for the commercial vehicle market. 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 this decline.

“The backlog at Sypris Electronics exceeds $90 million and is expected to support growth through 2025 and beyond. Customer funding has already been secured for a significant portion of these key programs, which enables us to procure inventory under multi-year purchase orders to mitigate future supply chain issues.”

Fourth Quarter and Full-Year Results

The Company reported revenue of $33.4 million for the fourth quarter ended December 31, 2024, compared to $34.7 million for the prior-year comparable period. The Company reported net income of $0.1 million, or $0.01 per diluted share, compared to a net loss of $1.1 million, or $0.05 per diluted share, for the prior-year period.

For the full-year 2024, the Company reported revenue of $140.2 million compared with $136.2 million for the prior year. The Company reported a net loss of $1.7 million, or $0.08 per share, for 2024 compared with a net loss of $1.6 million, or $0.07 per diluted share, for the prior year.

Sypris Technologies

Revenue for Sypris Technologies was $19.5 million in the fourth quarter of 2024 compared to $19.0 million for the prior-year period, reflecting strong energy shipments during the period, partially offset by the anticipated cyclical decline in the commercial vehicle market. Gross profit for the fourth quarter of 2024 was $4.4 million, or 22.5% of revenue, compared to $3.1 million, or 16.3% of revenue, for the same period in 2023. Gross profit for the fourth quarter of 2024 benefited from a favorable mix and favorable exchange rates.

Sypris Electronics

Revenue for Sypris Electronics was $13.9 million in the fourth quarter of 2024 compared to $15.7 million for the prior-year period. Material delays and supplier quality issues caused a temporary delay in shipments for the period. Gross profit for the fourth quarter of 2024 was $1.0 million, or 7.1% of revenue, compared to $1.3 million, or 8.1% of revenue, for the same period in 2023 primarily due to the lower revenue, an unfavorable mix and additional labor and overhead costs incurred on programs that recently ramped production.

Outlook

Commenting on the future, Mr. Gill added, “Demand from customers serving the markets for electronic warfare, aircraft and missile avionics, secure and subsea communications, and ground-based radar remain robust, while the outlook for the energy market continues to move in the right direction. Similarly, demand from customers serving the automotive, commercial vehicle and sport utility markets remains healthy despite the anticipated cyclical decline in the commercial vehicle market.

“With a strong backlog, new program wins, and continued long-standing contractual relationships in place, we are confident 2025 has the potential to be very positive for Sypris. While we anticipate a modest decline in revenue reported resulting from the conversion of certain shipments from Mexico to the U.S. into a sub-maquiladora, and the cyclical decrease in production volumes in the commercial vehicle market, we expect the combined strength of our backlog for Sypris Electronics and increasing orders for our energy products to largely serve as an offset. Additionally, we expect to achieve gross margin expansion in the range of 150 to 175 basis points, with gross profit expected to grow 10-15% in 2025.”