Sequestration Stifles Sypris' EMS Sales PDF Print E-mail
Written by Mike Buetow   
Tuesday, 14 May 2013 09:16

LOUISVILLE, KY -- Sypris Solutions today reported first quarter revenue at its Electronics Group was $7.3 million, down from $13.9 million a year ago, on sequestration and other defense-related spending delays.

For the period ended March 31, the EMS unit had a breakeven gross profit, compared to a profit of $2.6 million in 2012, reflecting lower sales volume and change in product mix.

Overall company revenue increased 16% sequentially to $78.4 million on a 28% bump in sales at the firm's Industrial Group. The net loss was $6.5 million, versus a net loss of $900,000 in the fourth quarter and net income of $5.3 million a year ago.

In conjunction with the decline in quarterly revenue, the Electronics Group recorded a non-cash charge of $6.9 million to recognize an impairment of goodwill.

President and chief executive Jeffrey T. Gill said, “We now expect the commercial vehicle market to continue to recover during the course of 2013, as OEMs focus on the introduction of the new model year vehicles and engine technologies that offer far greater fuel efficiency than previous models. In addition, with an estimated 70% of the vehicles on the road today being in excess of eight years of age, the replacement cycle is expected to support current levels of demand for an extended period of time.

“Our Aerospace and Defense business continues to be affected by budgetary and funding uncertainties within the US Department of Defense that are not expected to be eliminated in the near term. For the longer term, we are continuing to pursue strategic investments in new products and programs to further improve the growth and profitability of our business portfolio, with a specific emphasis on trusted solutions for identity management, cryptographic key distribution and cyber analytics.”

 

 

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