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| Statement |
|---|
| Gross margin improved 202 basis points to 15.9% |
| Revenue for the quarter increased 33% while gross profit increased 105% and gross margins expanded 420 basis points despite the negative drag of the Mexican peso on our year-over-year results |
| The strong backlog in place provides a solid foundation to support this growth through the remainder of 2023 and into 2024 |
| We look forward to the opportunity to continue the positive momentum of growth and continuous improvement in 2023 into a bigger and more profitable 2024 |
| Backlog for the period increased 8.4% on a consolidated basis which was an important accomplishment following the 33% increase in sales during the period |
| Based on our strong backlog, growing new business funnel and growing market potential, we offer our initial guidance for 2024 at 15% to 20% growth in revenue, 25% to 30% growth in gross profit and 150 [ph] to 200 basis point increase in gross margin |
| In other words, from an operating standpoint, it was another very positive quarter |
| That decline is expected to be offset by planned increases in new programs with existing commercial and other vehicle customers and currently strong demands for its energy products for use in the rapidly growing LNG export markets, among others |
| We are pleased to report that revenue for the quarter increased 33% year-over-year, reflecting continued strength across each of our business segments, with revenue rising 73.5% for Sypris Electronics and 13.8% for Sypris Technologies on a year-over-year basis |
| Key highlights for the quarter and year-to-date include the continued strong backlog position and a significant increase in gross profit both for the third quarter and the year-to-date periods despite the unfavorable impact of the Mexican peso relative to the U.S |
| We will also continue our efforts to diversify our markets served and our customer base and to deliver more value-added services to our customers which we believe can provide further upside to our current margin levels |
| Gross margin was at 18.1%, an increase of 710 basis points year-over-year on higher production and shipment volumes, favorable mix, material cost savings on certain programs and the impact of our continuous improvement initiatives |
| The defense market should benefit from increased spending in fiscal 2024, with discretionary and emergency funding combining to exceed $1 trillion for the year |
| We expect gross profit to rise 25% to 30% while gross margin is forecast to expand 150 to 200 basis points for the year |
| We are very pleased with the level of new business momentum and we are optimistic that this important trend will continue going forward |
| We are looking forward to another year of double-digit growth, expanding margins and increased profitability |
| Our engineering and product development teams have also initiatives underway to reduce steel consumption in both our forging and machining processes to improve our margins and deliver cost savings to our customers |
| We expect the momentum of new contract wins to continue into the coming year and we remain very optimistic about the potential for future program and revenue growth as we move forward |
| As we increase production and continue to make manufacturing process improvements, we anticipate an improvement in labor productivity and overhead absorption, resulting in an improvement in margins |
| Our initial outlook for 2024 is positive, reflecting our strong backlog and the continued momentum of new contract awards across many of our markets |
| Revenue is forecast to increase 15% to 20%, with gross profit rising 25% to 30% while gross margins are expected to expand 150 to 200 basis points |
| We expect these efforts to cost effectively further boost manufacturing output to meet the planned shipment increases |
| The continued growth in our energy products backlog year-over-year reflects the strong and growing demand to support these infrastructure programs |
| We continue to implement a comprehensive approach to continuous improvement in lean manufacturing at Sypris Electronics and to expand its workforce to reinforce the team's efforts to effectively serve its customers and the execution of significant sequential quarterly increases in shipments in 2023 and on into 2024 |
| We also expect significant growth in its communications and space markets |
| European countries boosted LNG imports by 60% in 2022 to offset declining pipeline shipments from Russia |
| Under the umbrella of our nation's electronic key management system, the AKMS provides tactical units at sustaining basis, with an organic key generation capability and an efficient secure electronic key distribution means |
| In addition to the factors previously noted for Q3, the comparison of year-to-date revenue and gross margin for Sypris Electronics to the prior year periods reflects a significant increase in revenue volume resulting from a very high level of bookings achieved in 2022 and continuing into 2023 and the significant progress our integrated manufacturing and continuous improvement team has made in delivering on the steeply increased backlog |
| Excluding the impact of the unfavorable exchange rates, gross margin would have improved 125 basis points to 13.4% |
| We will strive to continuously improve manufacturing output and productivity while maintaining excellent quality |
| Statement |
|---|
| The company's financial performance was particularly notable since we bore the negative weight of $800,000 in the form of foreign currency headwinds when compared to the prior year period |
| Gross margin decreased 180 basis points to 10.4% for the period |
| Gross profit decreased 3.6% to $6.1 million, mainly due to the $1.8 million year-to-date unfavorable peso-to-dollar exchange rate impact |
| On the cost side, we continue to experience some of the inflationary pressures that are being felt across the economy |
| SG&A as a percent of revenue decreased to 11.4% from 13.3% a year ago |
| No assurance can be given that these projections and statements will be achieved and actual results could differ materially from those projected as a result of several factors |
| According to ACT Research, the demand for the production of commercial vehicles is now expected to rise 7.3% to 625,000 vehicles during 2023 and for a softening of demand to occur in 2024, with production forecast to decline by 13.4% for the year before rising sequentially in each of the following 2 years |
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