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Sypris Solutions Inc. has reported revenues of $40.8 million for the second quarter compared to $93.1 million for the prior year period, reflecting the cessation of shipments to Dana Holding Corporation as of December 31, 2014. Additionally, the company reported a net loss of $8.4 million, or $0.43 per share, as compared to income of $0.4 million, or $0.02 per diluted share, for the prior year comparable period.
For the six months ended July 5, 2015, the company reported revenue of $77.8 million compared to $177.4 million for the first half of 2014, and a net loss of $21.4 million, or $1.09 per diluted share, as compared to net income of $2 million, or $0.10 per diluted share, for the comparable period in the prior year.
"Sypris Technologies continued to adjust manpower and overhead expenses to reflect the cessation of shipments to Dana, while optimizing our ability to bring in potential new business," said Jeffrey T. Gill, president and chief executive officer. "We believe that these adjustments and reduced SG&A spending will make a positive contribution to the company's overall financial performance during the second half of 2015."
"We previously announced the sale on July 9, 2015 of certain assets used in our manufacturing facility in Morganton, North Carolina, to Meritor Heavy Vehicles Systems LLC. The Morganton facility was impacted by the loss of the Dana business, leaving the majority of the facility dedicated to Meritor which generated a strategic opportunity for both parties culminating in the sale. The proceeds from the sale were used to reduce the Company’s indebtedness, thereby improving the overall strength of its balance sheet going forward."
"We are targeting further margin improvement in the third quarter of this year to the extent that both business units benefit from the lower cost structures, new program shipments and in the case of Sypris Electronics, the commissioning of the Cyber Security Lab in Singapore," Gill continued. "As we look to the future, we will continue to review alternatives for further improving our margins, business mix and return on assets."
Revenue for Sypris Technologies decreased 61.8% to $32 million in the second quarter compared to $83.7 million for the prior year period, primarily as a result of the cessation of the Dana business, which represented approximately 59% of our business in the prior year. Gross profit for the quarter was $0.6 million, compared to $11.4 million for the same period in 2014. On a sequential basis, revenue increased 14% from $28.1 million in the first quarter, while gross profit increased $4.7 million from a loss of $4.1 million earlier this year.
Revenue for Sypris Electronics was $8.7 million in the second quarter of 2015 compared to $9.4 million in the prior year period, reflecting the decline in engineering services due to the completion of a program during 2015 partially offset by the ramp up and completion of a new electronic manufacturing service program. Gross profit for the quarter was flat at a loss of $0.6 million in comparison with the prior year period.
"We will continue to concentrate on daily execution within both of our businesses. Within Sypris Technologies, our legal dispute with Dana remains unresolved, and since the beginning of 2015, shipments to Dana have been minimal. New program launches and cost reductions are anticipated to have a positive impact on income and cash flow during the second half," said Gill. "Sypris Electronics will continue to face near-term revenue challenges until such time as new programs, products and cyber related services achieve sufficient traction to offset the ongoing defense spending uncertainty."
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.