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TheStreet Open House

Sypris Reports Third Quarter Results

Free cash flow is defined as cash provided by operating activities less capital expenditures. Free cash flow is useful in analyzing the company’s ability to service and repay its debt. Management uses this non-GAAP measure in planning and forecasting for future periods.

This non-GAAP measure should not be considered a substitute for our reported results prepared in accordance with GAAP.

 

Reconciliation of Three and Nine Months Ended Free Cash Flow

(in thousands)

 
   

Three Months Ended

 

Nine Months Ended

September 30,2012

 

October 2,2011

September 30,2012

 

October 2,2011

(Unaudited)

(Unaudited)

 

Consolidated Cash Flow Statement:

 
Cash flows from operating activities:
Net cash provided by operating activities $ 5,918 $ 7,749 $ 1,087 $ 9,644
 
Cash flows from investing activities:
Capital expenditures (1,676 ) (929 ) (4,106 ) (3,827 )
Proceeds from sale of marketable securities 1,271 1,271
Proceeds from sale of assets 4,062 4,542 4,637
Other       10         44  

Net cash provided by (used in) investing activities

(405 ) 3,143 1,707 854
 
Cash flows from financing activities:
Net cash used in financing activities   (6,981 )   (9,525 )   (3,886 )   (11,563 )
 

Net (decrease) increase in cash and cash equivalents

(1,468 ) 1,367 (1,092 ) (1,065 )
 
Cash and cash equivalents at beginning of period   18,549     14,160     18,173     16,592  
 
Cash and cash equivalents at end of period $ 17,081   $ 15,527   $ 17,081   $ 15,527  
 

Free Cash Flow:

 
Net cash provided by operating activities $ 5,918 $ 7,749 $ 1,087 $ 9,644
Capital expenditures   (1,676 )   (929 )   (4,106 )   (3,827 )
 
Free cash flow $ 4,242   $ 6,820   $ (3,019 ) $ 5,817  
 
Diluted shares outstanding 19,567 19,024 19,423 18,999
 
Free cash flow per share $ 0.22 $ 0.36 $ (0.16 ) $ 0.31
 

 

SYPRIS SOLUTIONS, INC.

Financial Highlights
(In thousands, except per share amounts)
 
    Three Months Ended

September 30,

 

October 2,

2012 2011
(Unaudited)
Revenue $ 78,763 $ 91,177
Net (loss) income $ (5,739 ) $ 6,082
Basic income (loss) per common share:
Continuing operations $ 0.03 $ 0.30
Discontinued operations   (0.33 )   -  
Net (loss) income per share $ (0.30 ) $ 0.30  
Diluted income (loss) per common share:
Continuing operations $ 0.03 $ 0.30
Discontinued operations   (0.32 )   -  
Net (loss) income per share $ (0.29 ) $ 0.30  
Weighted average shares outstanding:
Basic 19,074 18,844
Diluted 19,567 19,024
 
 
 
 
Nine Months Ended

September 30,

October 2,

2012 2011
(Unaudited)
Revenue $ 274,138 $ 252,045
Net income $ 3,987 $ 6,584
Basic income (loss) per common share:
Continuing operations $ 0.56 $ 0.35
Discontinued operations   (0.37 )   (0.02 )
Net income per share $ 0.19   $ 0.33  
Diluted income (loss) per common share:
Continuing operations $ 0.55 $ 0.35
Discontinued operations   (0.37 )   (0.02 )
Net income per share $ 0.18   $ 0.33  
Weighted average shares outstanding:
Basic 19,038 18,813
Diluted 19,423 18,999
 

 
Sypris Solutions, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data)
 
    Three Months Ended   Nine Months Ended
September 30,   October 2, September 30,   October 2,
2012 2011 2012 2011
(Unaudited) (Unaudited)
Net revenue:
Industrial Group $ 65,176 $ 72,647 $ 230,548 $ 201,082
Electronics Group   13,587     18,530     43,590     50,963  
Total net revenue 78,763 91,177 274,138 252,045
Cost of sales:
Industrial Group 58,602 65,716 205,146 181,939
Electronics Group   10,787     15,198     33,881     43,584  
Total cost of sales 69,389 80,914 239,027 225,523
Gross profit:
Industrial Group 6,574 6,931 25,402 19,143
Electronics Group   2,800     3,332     9,709     7,379  
Total gross profit 9,374 10,263 35,111 26,522
Selling, general and administrative 7,633 7,232 22,926 20,905
Research and development 1,084 1,097 2,513 2,637
Amortization of intangible assets 22 24 66 80
Nonrecurring (income) expense, net - - - (3,000 )
Restructuring expense, net   -     356     -     233  
Operating income 635 1,554 9,606 5,667
Interest expense, net 98 153 320 1,608
(Gain) on sale of marketable securities (1,313 ) - (1,850 ) -
Other (income) expense, net   561     (6,489 )   (1,970 )   (5,983 )
Income from continuing operations before taxes 1,289 7,890 13,106 10,042
Income tax expense   697     1,808     1,989     3,008  
Income from continuing operations 592 6,082 11,117 7,034
Loss from discontinued operations, net of tax   (6,331 )   -     (7,130 )   (450 )
Net (loss) income $ (5,739 ) $ 6,082   $ 3,987   $ 6,584  
Basic income (loss) per share:
Income per share from continuing operations $ 0.03 $ 0.30 $ 0.56 $ 0.35
Loss per share from discontinued operations   (0.33 )   -     (0.37 )   (0.02 )
Net (loss) income per share $ (0.30 ) $ 0.30   $ 0.19   $ 0.33  
Diluted income (loss) per share:
Income per share from continuing operations $ 0.03 $ 0.30 $ 0.55 $ 0.35
Loss per share from discontinued operations   (0.32 )   -     (0.37 )   (0.02 )
Net (loss) income per share $ (0.29 ) $ 0.30   $ 0.18   $ 0.33  
Dividends declared per common share $ 0.02 $ - $ 0.06 $ -
Weighted average shares outstanding:
Basic 19,074 18,844 19,038 18,813
Diluted 19,567 19,024 19,423 18,999
 

 
Sypris Solutions, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)
 
    September 30,   December 31,
2012 2011
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 17,081 $ 18,173
Restricted cash - current 3,000
Accounts receivable, net 44,243 42,984
Inventory, net 35,876 33,621
Other current assets 3,335 3,468
Assets held for sale       1,739  
Total current assets 103,535 99,985
Restricted cash 3,000
Investment in marketable securities 1,749
Property, plant and equipment, net 53,344 56,891
Goodwill 6,900 6,900
Other assets   8,106     7,200  
Total assets $ 171,885   $ 175,725  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 45,807 $ 51,303
Accrued liabilities   30,434     23,569  
Total current liabilities 76,241 74,872
Long-term debt 8,000 10,000
Other liabilities   23,281     30,385  
Total liabilities 107,522 115,257
Stockholders’ equity:

Preferred stock, par value $0.01 per share, 975,150 shares authorized; no shares issued

Series A preferred stock, par value $0.01 per share, 24,850 shares authorized; no shares issued

Common stock, non-voting, par value $0.01 per share, 10,000,000 shares authorized; no shares issued

Common stock, par value $0.01 per share, 30,000,000 shares authorized; 20,204,247 shares issued and 20,113,800 outstanding in 2012 and 20,108,635 shares issued and 19,995,401 outstanding in 2011

202 201
Additional paid-in capital 149,404 149,160
Retained deficit (63,938 ) (66,722 )
Accumulated other comprehensive loss (21,304 ) (22,170 )
Treasury stock, 90,447 and 113,234 shares in 2012 and 2011, respectively   (1 )   (1 )
Total stockholders’ equity   64,363     60,468  
Total liabilities and stockholders’ equity $ 171,885   $ 175,725  
 

 
Sypris Solutions, Inc.
Consolidated Cash Flow Statements
(in thousands)
 
    Nine Months Ended
 
September 30, October 2,
2012 2011
(Unaudited)
Cash flows from operating activities:
Net income $ 3,987 $ 6,584
Loss from discontinued operations   (7,130 )   (450 )
Income from continuing operations 11,117 7,034

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 9,141 10,791
Gain on the sale of marketable securities (1,850 )
Stock-based compensation expense 1,331 754
Deferred revenue recognized (5,919 ) (5,163 )
Deferred loan costs recognized 58 153
Write-off of debt issuance costs 277
Gain on the sale of assets (2,625 ) (4,189 )
Provision for excess and obsolete inventory 629 564
Other noncash items 1,514 (2,186 )
Contributions to pension plans (1,312 ) (753 )
Changes in operating assets and liabilities:
Accounts receivable (887 ) (12,632 )
Inventory (3,035 ) (6,346 )
Prepaid expenses and other assets (638 ) 1,138
Accounts payable (5,507 ) 17,793
Accrued and other liabilities   (930 )   2,409  
Net cash provided by operating activities 1,087 9,644
Cash flows from investing activities:
Capital expenditures (4,106 ) (3,827 )
Proceeds from sale of marketable securities 1,271
Proceeds from sale of assets 4,542 4,637
Other       44  
Net cash provided by investing activities 1,707 854
Cash flows from financing activities:
Repayment of former Revolving Credit Agreement (10,000 )
Repayment of former Senior Notes (13,305 )
Net proceeds from Credit Facility (2,000 ) 12,500
Payments for deferred loan costs (387 )
Common stock repurchases (575 )

Indirect repurchase of shares for minimum statutory tax withholdings

(511 ) (435 )
Cash dividends paid (801 )
Proceeds from issuance of common stock   1     64  
Net cash used in financing activities   (3,886 )   (11,563 )
Net decrease in cash and cash equivalents (1,092 ) (1,065 )
Cash and cash equivalents at beginning of period   18,173     16,592  
Cash and cash equivalents at end of period $ 17,081   $ 15,527  
 




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