Sign in

You're signed outSign in or to get full access.

SS

SYPRIS SOLUTIONS INC (SYPR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $33.45M, down 3.7% y/y and down 6.2% q/q; diluted EPS improved to $0.01 from $(0.05) y/y, but fell sequentially from $0.02, with gross margin up 350 bps y/y to ~16.1% driven by favorable mix and FX .
  • Segment mix: Sypris Technologies (ST) revenue rose 2.8% y/y with gross margin at 22.5%; Sypris Electronics (SE) revenue fell 11.5% y/y due to material delays and supplier quality issues, compressing gross margin to 7.1% .
  • 2025 guidance introduced: revenue $125–$135M, gross margin expansion +150–175 bps, gross profit +10–15%; noted a modest reported revenue headwind from converting certain Mexico shipments to a sub‑maquiladora value‑add model .
  • Backlog remains robust: SE backlog “exceeds $90M,” expected to support growth through 2025 and beyond; management highlighted LNG, subsea communications, EW, and AI‑driven electricity demand as tailwinds for ST’s energy products .
  • No Wall Street consensus from S&P Global was available for Q4 EPS or revenue; estimate comparison is not possible at this time (S&P Global consensus unavailable)*.

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded 350 bps y/y in Q4; company gross profit up 23.1% y/y; ST gross profit surged 41.6% (mix and FX), a key driver of consolidated margin improvement .
  • SE and ST demand signals: management cited robust demand in EW, avionics, secure/subsea communications, radar, and improving outlook in energy; backlog and program funding support multi‑year inventory procurement to mitigate supply chain issues .
  • Strategic positioning: management highlighted opportunities tied to LNG projects and AI‑driven power needs; exploring adjacent CO2 capture markets to diversify customers and end‑markets .

What Went Wrong

  • SE execution issues: revenue declined y/y due to material delays and supplier quality problems; gross margin compressed to 7.1% given lower revenue, unfavorable mix, and ramp‑related labor/overhead .
  • Macro/market headwinds: anticipated cyclical decline in commercial vehicle market pressured ST, partially offset by new product line shipments and diversification into automotive, sport‑utility, and off‑highway programs .
  • Reported revenue headwind expected in 2025 from Mexico shipments conversion (sub‑maquiladora value‑add basis), reducing recognized top line despite operational activity .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$34.735 $35.521 $35.657 $33.449
Diluted EPS ($USD)$(0.05) $0.00 $0.02 $0.01
Total Gross Margin %12.6%*15.9%*16.8%*16.1%*
EBIT Margin %(1.5%)*3.2%*4.3%*3.3%*
Net Income Margin %(3.1%)*0.05%*1.09%*0.40%*

Values marked with * retrieved from S&P Global.

Segment Breakdown

Segment MetricQ4 2023Q2 2024Q3 2024Q4 2024
ST Revenue ($USD Millions)$19.025 $17.841 $19.469 $19.547
ST Gross Profit ($USD Millions)$3.103 $2.719 $3.661 $4.393
ST Gross Margin %16.3% 15.2% 18.8% 22.5%
SE Revenue ($USD Millions)$15.710 $17.680 $16.188 $13.902
SE Gross Profit ($USD Millions)$1.274 $2.922 $2.318 $0.993
SE Gross Margin %8.1% 16.5% 14.3% 7.1%

KPIs

KPIQ2 2024Q3 2024Q4 2024
SE Backlog ($USD Millions)>$100 >$100 >$90
Company Orders Growth YTD (%)+15.8% +13.4% n/a
SE Orders Growth YTD (%)+16.6% +14.2% n/a
ST Energy Orders Growth YTD (%)+13.6% +11.8% +8.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025n/a$125–$135M New
Gross Margin ExpansionFY 2025n/a+150–175 bps New
Gross Profit GrowthFY 2025n/a+10–15% New
Reported Revenue MethodologyFY 2025n/aMexico shipments conversion to sub‑maquiladora value‑add, modest headwind New
RevenueFY 2024+10–15% y/y (reaffirmed) ~+10% y/y (lower end, on temporary SE delays) Lowered to low end
Gross Margin ExpansionFY 2024+100–125 bps +100–125 bps (maintained) Maintained

Notes: No 2025 guidance provided for OpEx, OI&E, tax rate, or dividends in the Q4 materials .

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was located after searching for “earnings call transcript Q4 2024” across SYPR documents (none returned) [Search attempted; no matching documents found]. Themes are derived from press releases and the 8‑K.

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Electronics backlog and fundingBacklog >$100M; funding supports multi‑year inventory buys to mitigate supply chain Backlog >$90M; funded programs to support growth into 2025 Slightly lower backlog but still strong
Supply chain/materials qualitySE ramp added labor/overhead; some unfavorable mix Temporary shipment delays from material delays and supplier quality issues Persistent constraint in SE
Energy/LNG demandOpen quotes on large LNG projects; energy orders +13.6% YTD Energy shipments strong; energy orders +8.6% YTD; AI‑driven power demand as tailwind Supportive demand; orders growth moderating
Automotive/commercial vehicle cycleAnticipated cyclical decline; diversification into auto/SUV/off‑highway Cyclical decline continues; diversification offsets some decline Ongoing headwind; mitigated by diversification
Mexico operations modeln/aConversion of certain Mexico shipments to sub‑maquiladora (value‑add only) impacting reported revenue Accounting/reporting shift; top‑line headwind
Adjacent marketsPursuing adjacent markets; diversification Pursuing CO2 capture markets to diversify Expanding TAM focus

Management Commentary

  • “We are pleased with the year‑over‑year revenue growth at Sypris Technologies, driven by an increase in sales of our energy products during the period.” — Jeffrey T. Gill, CEO .
  • “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.” .
  • “The backlog at Sypris Electronics exceeds $90 million and is expected to support growth through 2025 and beyond. Customer funding has already been secured... to mitigate future supply chain issues.” .
  • “We anticipate a modest decline in revenue reported resulting from the conversion of certain shipments from Mexico to the U.S. into a sub‑maquiladora... we expect [electronics backlog strength and energy orders] to largely serve as an offset.” .

Q&A Highlights

  • No Q4 2024 earnings call transcript was available; Q&A themes and any guidance clarifications from the call cannot be assessed at this time (transcript unavailable) [Search attempted; no matching documents found].

Estimates Context

  • S&P Global consensus estimates were unavailable for Q4 2024 EPS and revenue; “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and corresponding “# of Estimates” returned no data (S&P Global consensus unavailable)*.
Metric (S&P Global)Q4 2024
Revenue Consensus MeanN/A*
Primary EPS Consensus MeanN/A*
Revenue – # of EstimatesN/A*
Primary EPS – # of EstimatesN/A*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion drove y/y profitability improvement despite a q/q revenue dip; ST’s mix and FX tailwinds delivered a 22.5% gross margin, offsetting SE’s supply chain drag .
  • 2025 setup is constructive: backlog, funded programs, and energy demand (including LNG and AI‑related power needs) underpin gross margin expansion and double‑digit gross profit growth guidance; reported revenue will be modestly lower due to Mexico sub‑maquiladora conversion .
  • SE execution is the swing factor: resolving material and supplier quality issues should restore revenue/margins; monitor ramp efficiency and mix evolution in early 2025 .
  • ST energy tailwinds remain: watch order intake vs. Q4’s +8.6% YTD and any large project conversions tied to LNG, subsea, and CO2 capture initiatives .
  • Near‑term trading lens: absent consensus estimates, price reaction may hinge on confidence in 2025 guidance durability and pace of SE remediation; any update on backlog conversion cadence is a catalyst .
  • Medium‑term thesis: diversified end‑markets, multi‑year funded programs, and structural energy demand support margin trajectory; Mexico reporting change warrants careful top‑line interpretation while focusing on margin/GP compounding .
  • Risk watchlist: supply chain quality, commercial vehicle cycle, program ramp costs, and funding continuity; maintain vigilance on execution vs. guidance .

Sources: Q4 2024 press release and 8‑K 2.02 earnings materials ; prior Q3 and Q2 2024 press releases for trend analysis .