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Sypris Solutions, Inc. SYPR reported breakeven net income per share for second-quarter 2024, down from 1 cent in the prior-year quarter. The company generated $35.5 million in revenues during the quarter, largely unchanged from $35.6 million in the second quarter of 2023.
The company’s quarterly performance was marked by mixed results across its business segments. Sypris Electronics saw robust growth, driven by new contracts in strategic defense and communication sectors. However, Sypris Technologies faced challenges, with a notable decline in revenue due to timing delays in energy shipments and cyclical downturns in the commercial vehicle market.
The net income margin decreased as a result of higher selling, general, and administrative expenses, which rose 17.9% to $4.4 million compared to $3.7 million in the second quarter of 2023. Additionally, interest expenses more than tripled to $0.6 million from $0.2 million in the prior-year quarter, further impacting the bottom line.
Despite these challenges, Sypris Solutions managed to improve its gross profit by 20.8% year over year, driven by better performance in both of its segments, which helped offset some of the increased costs.
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Business Segment Performance
Sypris Technologies
Revenue for Sypris Technologies declined 11% year over year to $17.8 million in the second quarter of 2024, from $20.1 million in the second quarter of 2023. This segment faced headwinds from timing delays in energy product shipments and the expected downturn in the commercial vehicle market.
Despite the revenue decline, gross profit surged 35.5% year over year to $2.7 million, up from $2 million in the prior-year quarter, benefiting from a favorable product mix and higher absorption rates. Gross margin also improved significantly, expanding 520 basis points to 15.2%, up from 10% in the second quarter of 2023.
Sypris Electronics
Sypris Electronics posted a 13.6% increase in revenues, reaching $17.7 million in the second quarter of 2024 compared to $15.6 million in the same period last year. This growth was attributed to increased shipments related to ongoing defense programs, including electronic warfare and missile avionics.
Gross profit for the segment increased by 9.7% year-over-year to $2.9 million, although the gross margin slightly declined to 16.5% from 17.1% in the second quarter of 2023. The margin contraction was due to higher labor and overhead costs associated with ramping up production on new programs, partially offset by favorable material costs.