SYPRIS SOLUTIONS INC (SYPR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue fell to $29.5M, down 17.0% year over year and 11.8% sequentially, driven by a cyclical decline in commercial vehicles, conversion of Mexico shipments to value-add only sub‑maquiladora, and customer delivery delays in Electronics; EPS improved to a loss of $0.04 from a loss of $0.10 YoY .
• Company gross profit rose 16.7% YoY with 330 bps gross margin expansion, led by stronger mix and lower costs on large Electronics programs; operating loss narrowed to $(0.1)M vs $(1.4)M in Q1 2024 .
• Management withdrew full‑year 2025 guidance (previously $125–$135M revenue, +150–175 bps margin expansion) citing macro uncertainty tied to potential tariffs; guidance suspended until outlook stabilizes .
• Backlog and orders remain supportive: Electronics backlog “over $80M” (>1 year of sales), while energy product orders elevated with backlog up 32.8% from year‑end; these dynamics help offset revenue headwinds .
• Near‑term stock reaction catalyst: the explicit withdrawal of guidance and tariff commentary could weigh on sentiment, while improving YoY margins and backlog strength provide medium‑term support .

What Went Well and What Went Wrong

What Went Well

• Gross profit up 16.7% YoY; company gross margin expanded 330 bps on improved mix and cost performance. “Gross profit for the Company increased 16.7%… gross margin expanded 330 bps.” .
• Electronics improved profitability: “Gross profit for Sypris Electronics improved 51.1%… gross margin… grew 310 bps,” aided by a $0.6M equitable adjustment approval recognized in Q1 2025 .
• FX tailwinds and mix: Technologies margins +430 bps YoY, with favorable foreign exchange adding ~$0.4M to GP; energy orders remained elevated with backlog +32.8% from year‑end .

What Went Wrong

• Revenue contracted YoY and sequentially: $29.5M vs $35.6M YoY and vs $33.4M in Q4, impacted by commercial vehicle cycle, sub‑maquiladora conversion (−$1.6M YoY), and Electronics delivery timing .
• Cash burn increased: operating cash flow was $(5.5)M vs $(1.7)M in Q1 2024, reflecting working capital outflows (accrued liabilities −$8.6M, A/R −$1.3M) .
• Guidance withdrawn due to tariff uncertainty; Electronics backlog sequentially lower vs Q3/Q4 (> $100M → > $90M → > $80M), suggesting orders are being converted to shipments while new wins may be lagging .

Financial Results

Summary (Company-level)

Segment Breakdown

KPIs and Balance Sheet/Cash Flow

Guidance Changes

Earnings Call Themes & Trends

Note: No earnings call transcript for Q1 2025 was available in our document catalog. Themes below reflect management commentary from earnings releases.

Management Commentary

• “We are focused on operational excellence to drive the timely and efficient execution of our over $80 million backlog at Sypris Electronics, which represents more than a full year of sales for this segment.” – CEO Jeffrey T. Gill .
• “The current outlook… is for a moderate decrease in production… [but] market diversification… will help offset some of the anticipated cyclical decline for the commercial vehicle market.” .
• “Additional opportunities for growth may exist with new global projects in support of increasing LNG demand including support for the steep increase in electricity demand from data centers to support AI.” .
• “Due to macroeconomic uncertainty related to the potential impact of new tariffs, the Company is withdrawing the 2025 financial guidance… and plans to suspend any future guidance until… outlook… stabilizes.” .

Q&A Highlights

No Q1 2025 earnings call transcript was available; therefore, Q&A highlights and any live guidance clarifications cannot be provided from primary sources [Functions returned 0 transcripts].

Estimates Context

• S&P Global consensus estimates for Q1 2025 were unavailable for EPS and revenue (no data points returned for count/means). As a result, we cannot assess beats/misses vs Street for the quarter. Values retrieved from S&P Global*.
• Implication: In absence of consensus, investors should anchor on company‑reported dynamics (margin improvements, backlog strength, guidance withdrawal) rather than an estimates‑based surprise framework .

Key Takeaways for Investors

• Revenue headwinds are cyclical and structural (sub‑maquiladora conversion), but YoY margin expansion and Electronics profitability improvement indicate operational progress; watch for continued mix/FX tailwinds in Technologies .
• The withdrawal of FY25 guidance is a notable negative surprise; monitor tariff developments and potential reinstatement of outlook as a stock catalyst .
• Electronics backlog remains sizable (> $80M), offering execution runway; sequential declines from >$100M to >$80M signal conversion to revenue—track booking trends and new awards to sustain visibility .
• Energy products demand remains robust; backlog up 32.8% from year‑end—this segment can offset commercial vehicle softness if order momentum persists .
• Working capital usage drove a larger operating cash outflow; monitor receivables, accrued liabilities, and inventory trends for cash discipline improvements in subsequent quarters .
• Near‑term trading: guidance withdrawal and tariff exposure may cap multiple; any evidence of tariff clarity or reissued guidance could be a positive catalyst. Medium‑term: execution on Electronics backlog and energy projects tied to LNG/AI‑related power demand support margin resilience and eventual EPS normalization .
• Continue to assess segment margin trajectory: Technologies margins benefitted from FX and mix; Electronics should sustain GP improvements as large programs mature and as the Q1 equitable adjustment is non‑recurring .