LOUISVILLE -- Sypris Solutions today reported its Electronics Group saw fourth-quarter sales fall 41.5% to $11.4 million on continuing delays in funding for defense orders.

Gross profit for the quarter ended Dec. 31 was $500,000, down from $5.4 million in 2010. Revenue shortfalls reflected delay in funding for orders as a result of the late enactment of 2011 US Federal budget, and a shipping delay related to a delayed certification.

The company reported overall revenue of $83.6 million for the fourth quarter, compared to $67.2 million for the prior year period. The Company reported net income of $1.3 million, up from a net loss of $1.6 million.

For the year ended Dec. 31, revenue increased 26% to revenue of $335.6 million and net income swung to a profit of $7.9 million, compared to a net loss of $10.2 million. Free cash flow increased to $10.1 million, and the company entered new multi-year supply agreements with Dana, Eaton, Meritor, Sisamex and others during the year that will contribute to top line growth in 2012.

The company said its Electronics Group faces "unknowns imposed by the uncertainty in our defense market until the 2012 budget authorization is enacted and funding successfully allocated." Sypris expects a "progressive recovery" in shipments and margins throughout 2012.