LOUISVILLE, KY -- Sypris Solutions reported second-quarter revenue at its Electronics Group fell by nearly half on program delays and ending contracts.

Overall revenue from continuing operations was $63.1 million for the quarter, down from $69.4 million the prior year. The net loss from continuing operations was $4 million, up from a net loss of $6.6 million a year ago. The company took $1 million in restructuring charges during the current period. Gross margin increased to 7.8% of revenue, up from 6.4% last year, for the period ended July 4.

The contract electronics manufacturing unit's sales were $16.5 million, versus $32.4 million in the prior year period. The company cited delays in production of certain secured communication programs for the government and the completion of certain older low-margin programs. Gross profit decreased to $2.6 million from $6.1 million a year ago, while gross margins fell 16% from 18.7% for the prior year period.

CEO and president Jeffrey Gill said, “In the near term, the outlook for our Electronics Group is expected to benefit materially from the resumption of our secured communication product shipments to the government in the third quarter of 2010, while the long-term is expected to benefit from further gross margin expansion as a result of new program launches, process improvements, increased productivity and lower costs driven by Lean and Six Sigma quality programs.”

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