Sypris' EMS Sales Hurt by DoD Delays
LOUISVILLE, KY -- Sypris Solutions swung to a first-quarter net profit of $2.1 million, reversing a loss of $2.4 million in the year-ago period.
Excluding discontinued operations, the electronics manufacturing company’s income was $2.5 million. The results include a gain of $3 million in connection with the settlement of a dispute regarding prior year volumes with one of its customers.
For the period ended April 3, revenue rose 20.5% year-over-year to $75.8 million on a 35% jump in sales for the Industrial Group. Gross profit increased 41.3% from last year.
The company's contract assembly group had sales of $16.3 million, down 13.3% from last year, primarily because of delays to the 2011 Defense Appropriations Bill. Gross profit was $3 million, down $300,000.
President and chief executive Jeff Gill said, “The continued strength of our gross margins helped to mitigate the short-term impact of reduced government funding resulting from the delayed approval by Congress and restrictions imposed by the Department of Defense during the intervening period of time. With the recent approval and signing of the bill, we expect to see the eventual recovery of this market as funds are allocated through the various departments and agencies for program use.”
Gill said the EMS company expects an "eventual recovery" in the defense market, but it couldn't specify the timing because "funds to the various departments and agencies for program use remains somewhat uncertain at this early juncture."
