LOUISVILLE, KY – Sypris Electronics reported second quarter revenue was $8.8 million, down 9.3% year-over-year and up 30% sequentially.

Gross profit was $1.8 million, or 20.4% of revenue, compared to $1.9 million, or 19.5% of revenue, for the same period in 2020. Gross profit increased 179.1% sequentially.

Shipments during the period ended July 4 were lower than the prior-year period, as production tapered down on a limited rate production contract for a key program that is expected to ramp up beginning late in the third quarter as full rate production is launched.

Backlog increased 29.3% year-over-year and 51.9% year-to-date on the strength of orders in the first half of 2021.

During the second quarter, Sypris Electronics announced a contract to manufacture and test electronic assemblies for power management and other systems for a deep space program from a US DoD prime contractor, with production to begin during 2021; an agreement to manufacture and test electronic power supply modules for multiple high-reliability Subsea communication networks, with production to begin during 2021 and continue into 2022; a full-rate production award from a US DoD prime contractor to manufacture and test multiple electronic power supply modules for a large mission-critical electronic warfare program for the US Navy, with production to begin during 2021; a contract award to manufacture and test embedded circuit card assemblies that will perform certain cryptographic functions for the Army Key Management System, with production to begin during 2021.

For the first half of 2021, Sypris Electronics reported revenue of $15.6 million, down 15.2% year-over-year. Gross profit was $2.4 million, a decrease of 21.7%.

“Backlog for Sypris Electronics is up 29.3% from the second quarter of 2020 and up 51.9% since the beginning of the year, while the OEM backlog of Class 8 commercial vehicles is estimated to be up 187% year-over-year,” said Jeffrey T. Gill, president and CEO. “Backlog for Sypris Electronics in 2021 has reached its highest level in 11 years, with deliveries now scheduled well into 2022. Shipments increased during the second quarter, up 30% sequentially from the first quarter. We expect shipments from our recent contract wins to begin to contribute to revenue in the third quarter and provide meaningful sequential growth in the top line going forward.

“Our customer base and the markets we serve are considerably more diversified than at any point in our recent history. As an essential business, we have a responsibility to ensure our defense, communications, energy, and transportation sectors remain vibrant. We will continue to monitor developments, act promptly to mitigate risks and take the necessary steps required to ensure deliveries continue to be made to our customers in a timely manner.”

“The second quarter marks the turning point for the company. We expect the significant growth in orders and strength of our markets to have a substantial impact on our financial results through the second half of the year, with a strong rise in revenue, margins and income forecast for the period and continuing going forward.

“As a result, we have updated our outlook to include a 30-35% growth in the company’s top line in 2021, which is up from our previous guidance of 25-30% in May and 20% in March. Gross margin is forecast to expand 300 to 400 basis points year-over-year during the second half of 2021, which is expected to contribute to strong double-digit percentage growth in cash flow generated from operations for the full year.”

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