LOUISVILLE, KY -- Sypris Solutions said revenue at its electronics unit was flat at $5.4 million in the first quarter compared to the prior year-period.

Revenue was affected by shortages of certain electronic components and extensive lead-time issues in the electronics manufacturing industry. Gross loss was $100,000, compared to a profit of $100,000 for the prior-year period, primarily reflecting changes in revenue mix.

Orders for Sypris Electronics increased 84.1% during the quarter compared to the same period in 2017. During the quarter, the company announced new contract awards for for the production of electronic assemblies for use in munition dispensing systems and global undersea communications projects.

Overall first quarter revenue increased 9.7% compared to the prior-year quarter to $19.9 million, while gross margin improved to 10.2%, up from a -3% last year. The net loss was $1.8 million, versus $3.3 million.

Revenue for Sypris Technologies increased 13.7% during the quarter on new contract awards and positive market conditions. Gross margin rose to 14.5% for the quarter, up from -5%, and increased 320 basis points sequentially on significantly lower operating costs and improved mix.

The company reaffirmed its financial guidance for the year, with revenue forecast to be in the range of $90 to $96 million for 2018, representing topline growth of 13% at the midpoint on a year-over-year basis, with gross profit forecast to be in the range of 15% to 17% of revenue. As a result, the company expects to be profitable for the year.

“The financial results of Sypris Electronics continued to be affected during the first quarter by materials availability, which resulted in lower shipment levels than were otherwise planned," said Jeffrey T. Gill, president and chief executive. "Importantly, we expect to see progressively higher levels of shipments sequentially through 2018, with a full recovery to normal deliveries during the second half of the year.

“As noted in our fourth quarter update, electronic component shortages and extensive lead-time issues are currently prevalent in the electronics manufacturing industry. We are continuing to work with our customers to qualify alternative components and/or suppliers to mitigate the impact on our business and expedite shipments to our customers. The majority of our aerospace and defense programs require specific components or components that are sole-sourced to specific suppliers; therefore, the resolution of supplier constraints requires coordination with our customers or the end-users of the products."

He said Sypris Electronics forecasts revenue of $7 to $8 million and gross margins of 10% to 12% in the second quarter.

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