Delaware
|
61-1321992
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Identification
No.)
|
101
Bullitt Lane, Suite 450
|
|
Louisville,
Kentucky 40222
|
(502)
329-2000
|
(Address
of principal executive
|
(Registrant’s
telephone number,
|
offices)
(Zip code)
|
including
area code)
|
¨ Large accelerated filer
|
¨ Accelerated filer
|
¨ Non-accelerated filer
|
x Smaller reporting company
|
Part
I.
|
Financial
Information
|
|||||
Item
1.
|
Financial
Statements
|
|
||||
Consolidated
Statements of Operations for the Three and Six Months Ended July 5, 2009
and June 29, 2008
|
2 | |||||
Consolidated
Balance Sheets at July 5, 2009 and December 31, 2008
|
3 | |||||
Consolidated
Cash Flow Statements for the Six Months Ended July 5, 2009 and
June 29, 2008
|
4 | |||||
Notes
to Consolidated Financial Statements
|
5 | |||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16 | ||||
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
22 | ||||
Item
4.
|
Controls
and Procedures
|
22 | ||||
Part
II.
|
Other
Information
|
|||||
Item
1.
|
Legal
Proceedings
|
22 | ||||
Item
1A.
|
Risk
Factors
|
22 | ||||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23 | ||||
Item
3.
|
Defaults
Upon Senior Securities
|
23 | ||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
23 | ||||
Item
5.
|
Other
Information
|
23 | ||||
Item
6.
|
Exhibits
|
23 | ||||
Signatures
|
24 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
July
5,
|
June
29,
|
July
5,
|
June
29,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net
revenue:
|
||||||||||||||||
Outsourced
services
|
$ | 64,392 | $ | 89,564 | $ | 127,871 | $ | 178,236 | ||||||||
Products
|
17,704 | 20,786 | 35,916 | 38,376 | ||||||||||||
Total
net revenue
|
82,096 | 110,350 | 163,787 | 216,612 | ||||||||||||
Cost
of sales:
|
||||||||||||||||
Outsourced
services
|
62,301 | 80,456 | 126,171 | 160,431 | ||||||||||||
Products
|
12,180 | 18,440 | 25,646 | 31,661 | ||||||||||||
Total
cost of sales
|
74,481 | 98,896 | 151,817 | 192,092 | ||||||||||||
Gross
profit
|
7,615 | 11,454 | 11,970 | 24,520 | ||||||||||||
Selling,
general and administrative
|
9,362 | 11,279 | 19,834 | 21,771 | ||||||||||||
Research
and development
|
1,032 | 1,089 | 2,200 | 2,084 | ||||||||||||
Amortization
of intangible assets
|
28 | 58 | 56 | 129 | ||||||||||||
Nonrecurring
expense
|
1,732 | — | 3,713 | — | ||||||||||||
Operating
(loss) income
|
(4,539 | ) | (972 | ) | (13,833 | ) | 536 | |||||||||
Interest
expense, net
|
2,303 | 1,023 | 3,572 | 1,975 | ||||||||||||
Other
income, net
|
(384 | ) | (924 | ) | (77 | ) | (916 | ) | ||||||||
Loss
before income taxes
|
(6,458 | ) | (1,071 | ) | (17,328 | ) | (523 | ) | ||||||||
Income
tax expense (benefit)
|
320 | (136 | ) | 795 | 27 | |||||||||||
Net
loss
|
$ | (6,778 | ) | $ | (935 | ) | $ | (18,123 | ) | $ | (550 | ) | ||||
Loss
per common share:
|
||||||||||||||||
Basic
|
$ | (0.37 | ) | $ | (0.05 | ) | $ | (0.98 | ) | $ | (0.03 | ) | ||||
Diluted
|
(0.37 | ) | (0.05 | ) | (0.98 | ) | (0.03 | ) | ||||||||
Dividends
declared per common share
|
$ | — | $ | 0.03 | $ | — | $ | 0.06 | ||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
18,478 | 18,351 | 18,456 | 18,347 | ||||||||||||
Diluted
|
18,478 | 18,351 | 18,456 | 18,347 |
July
5,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Note)
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 10,125 | $ | 13,717 | ||||
Restricted
cash
|
263 | 464 | ||||||
Accounts
receivable, net
|
45,394 | 44,695 | ||||||
Inventory,
net
|
35,838 | 48,394 | ||||||
Other
current assets
|
10,151 | 12,009 | ||||||
Total
current assets
|
101,771 | 119,279 | ||||||
Investment
in marketable securities
|
5,239 | 2,769 | ||||||
Property,
plant and equipment, net
|
98,051 | 105,219 | ||||||
Goodwill
|
13,837 | 13,837 | ||||||
Other
assets
|
11,312 | 12,101 | ||||||
Total
assets
|
$ | 230,210 | $ | 253,205 | ||||
Liabilities
and Stockholders’ Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 39,955 | $ | 44,645 | ||||
Accrued
liabilities
|
24,169 | 28,433 | ||||||
Notes
payable
|
75,500 | — | ||||||
Total
current liabilities
|
139,624 | 73,078 | ||||||
Long-term
debt
|
— | 73,000 | ||||||
Other
liabilities
|
45,110 | 47,142 | ||||||
Total
liabilities
|
184,734 | 193,220 | ||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, par value $0.01 per share, 975,150 shares authorized; no shares
issued
|
— | — | ||||||
Series
A preferred stock, par value $0.01 per share, 24,850 shares authorized; no
shares issued
|
— | — | ||||||
Common
stock, non-voting, par value $0.01 per share, 10,000,000 shares
authorized; no shares issued
|
— | — | ||||||
Common
stock, par value $0.01 per share, 30,000,000 shares authorized; 20,019,347
shares issued and 19,501,708 shares outstanding in 2009 and 19,496,620
shares issued and 19,296,003 shares outstanding in 2008
|
200 | 195 | ||||||
Additional
paid-in capital
|
147,042 | 146,741 | ||||||
Retained
deficit
|
(85,251 | ) | (67,205 | ) | ||||
Accumulated
other comprehensive loss
|
(16,510 | ) | (19,744 | ) | ||||
Treasury
stock, 517,639 and 200,617 shares in 2009 and 2008,
respectively
|
(5 | ) | (2 | ) | ||||
Total
stockholders’ equity
|
45,476 | 59,985 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 230,210 | $ | 253,205 |
Six Months Ended
|
||||||||
July
5,
|
June
29,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (18,123 | ) | $ | (550 | ) | ||
Adjustments
to reconcile net loss to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
9,700 | 13,511 | ||||||
Noncash
compensation expense
|
398 | 736 | ||||||
Other
noncash items
|
510 | (4,969 | ) | |||||
Change
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(684 | ) | (2,502 | ) | ||||
Inventory
|
11,209 | 1,275 | ||||||
Other
current assets
|
1,819 | 4,623 | ||||||
Accounts
payable
|
(4,597 | ) | 8,641 | |||||
Accrued
liabilities
|
(2,146 | ) | (11,523 | ) | ||||
Net
cash (used in) provided by operating activities
|
(1,914 | ) | 9,242 | |||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures, net
|
(3,418 | ) | (7,040 | ) | ||||
Proceeds
from sale of assets
|
82 | 181 | ||||||
Changes
in nonoperating assets and liabilities
|
196 | (162 | ) | |||||
Net
cash used in investing activities
|
(3,140 | ) | (7,021 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Net
change in debt under revolving credit agreements
|
2,500 | (2,000 | ) | |||||
Debt
modification costs
|
(652 | ) | — | |||||
Cash
dividends paid
|
(386 | ) | (1,153 | ) | ||||
Net
cash provided by (used in) financing activities
|
1,462 | (3,153 | ) | |||||
Net
decrease in cash and cash equivalents
|
(3,592 | ) | (932 | ) | ||||
Cash
and cash equivalents at beginning of period
|
13,717 | 14,622 | ||||||
Cash
and cash equivalents at end of period
|
$ | 10,125 | $ | 13,690 |
(1)
|
Nature
of Business
|
(2)
|
Basis
of Presentation
|
(3)
|
Recent
Accounting Pronouncements
|
(4)
|
Dana
Claim
|
|
1.
|
Pricing
concessions on future shipments of certain parts under a new supply
agreement;
|
|
2.
|
The
transfer of future production for certain parts from Sypris to
Dana;
|
|
3.
|
Dana’s
obligation under prior supply agreements to transfer the production of
certain parts from Dana to Sypris;
|
|
4.
|
Dana’s
obligation under prior supply agreements to transfer contractual
production volumes for certain parts from Dana to Sypris;
and
|
|
5.
|
A
commitment by Sypris to relocate certain assets among Sypris’ existing
facilities related to the production of certain parts under a new supply
agreement.
|
(5)
|
Restructuring,
Impairments and Other Nonrecurring
Charges
|
Recognized
|
Remaining
|
|||||||||||
Total
|
as
of
|
Costs
to be
|
||||||||||
Program
|
July 5, 2009
|
Recognized
|
||||||||||
Severance
and benefit-related costs
|
$ | 3,818 | $ | 3,595 | $ | 223 | ||||||
Asset
impairments
|
13,053 | 13,053 | — | |||||||||
Deferred
contract costs write-offs
|
16,102 | 16,102 | — | |||||||||
Inventory
related charges
|
7,895 | 7,895 | — | |||||||||
Equipment
relocation costs
|
1,918 | 1,328 | 590 | |||||||||
Asset
retirement obligations
|
1,500 | 1,500 | — | |||||||||
Contract
termination costs
|
3,209 | 3,209 | — | |||||||||
Other
|
3,312 | 2,117 | 1,195 | |||||||||
$ | 50,807 | $ | 48,799 | $ | 2,008 |
Accrued
|
Cash
|
Accrued
|
||||||||||||||
Balance
at
|
Payments
|
Balance
at
|
||||||||||||||
December
31,
|
2009
|
or
Asset
|
July
5,
|
|||||||||||||
2008
|
Charge
|
Write-Offs
|
2009
|
|||||||||||||
Severance
and benefit related costs
|
$ | 2,045 | $ | 872 | $ | (1,984 | ) | $ | 933 | |||||||
Asset
impairments
|
— | 872 | (872 | ) | — | |||||||||||
Asset
retirement obligations
|
1,500 | — | (13 | ) | 1,487 | |||||||||||
Contract
termination costs
|
3,141 | — | (2,210 | ) | 931 | |||||||||||
Other
|
— | 1,969 | (1,969 | ) | — | |||||||||||
$ | 6,686 | $ | 3,713 | $ | (7,048 | ) | $ | 3,351 |
Industrial
|
Aerospace
&
|
|||||||||||
Group
|
Defense
|
Total
|
||||||||||
Severance
and benefit-related costs
|
$ | 2,617 | $ | 978 | $ | 3,595 | ||||||
Asset
impairments
|
13,053 | — | 13,053 | |||||||||
Deferred
contract costs write-offs
|
— | 16,102 | 16,102 | |||||||||
Inventory
related charges
|
— | 7,895 | 7,895 | |||||||||
Equipment
relocation costs
|
1,328 | — | 1,328 | |||||||||
Asset
retirement obligations
|
1,500 | — | 1,500 | |||||||||
Contract
termination costs
|
1,868 | 1,341 | 3,209 | |||||||||
Other
|
264 | 1,853 | 2,117 | |||||||||
$ | 20,630 | $ | 28,169 | $ | 48,799 |
(6)
|
Loss
Per Common Share
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
July
5,
|
June
29,
|
July
5,
|
June
29,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Shares
used to compute basic loss per common share
|
18,478 | 18,351 | 18,456 | 18,347 | ||||||||||||
Dilutive
effect of equity awards
|
— | — | — | — | ||||||||||||
Shares
used to compute diluted loss per common share
|
18,478 | 18,351 | 18,456 | 18,347 |
(7)
|
Investment in Marketable
Securities
|
Fair
Value
|
||||||||||||||||
At
Quoted
|
||||||||||||||||
Prices
|
||||||||||||||||
Gross
|
Gross
|
in
Active
|
||||||||||||||
Unrealized
|
Realized
|
Markets
|
||||||||||||||
Basis
|
Gain/(Loss)
|
Gain/(Loss)
|
(Level 1)
|
|||||||||||||
Marketable
securities, July 5, 2009
|
$ | 2,769 | $ | 2,470 | $ | — | $ | 5,239 | ||||||||
Marketable
securities, December 31, 2008
|
$ | 2,769 | $ | — | $ | — | $ | 2,769 |
(8)
|
Inventory
|
July
5,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Raw
materials, including perishable tooling of $334 and $737 in 2009 and 2008,
respectively
|
$ | 14,332 | $ | 16,423 | ||||
Work
in process
|
8,085 | 9,804 | ||||||
Finished
goods
|
4,063 | 8,337 | ||||||
Costs
relating to long-term contracts and programs, net of amounts attributed to
revenue recognized to date
|
19,027 | 24,230 | ||||||
Progress
payments related to long-term contracts and programs
|
— | (781 | ) | |||||
Reserve
for excess and obsolete inventory
|
(9,669 | ) | (9,619 | ) | ||||
$ | 35,838 | $ | 48,394 |
(9)
|
Debt
|
July
5,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Revolving
credit facility
|
$ | 45,500 | $ | 43,000 | ||||
Senior
notes
|
30,000 | 30,000 | ||||||
$ | 75,500 | $ | 73,000 | |||||
Classified
as notes payable
|
$ | 75,500 | $ | — | ||||
Classified
as long-term debt
|
$ | — | $ | 73,000 |
(10)
|
Segment
Data
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
July
5,
|
June
29,
|
July
5,
|
June
29,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net
revenue from unaffiliated customers:
|
||||||||||||||||
Industrial
Group
|
$ | 36,941 | $ | 69,100 | $ | 74,439 | $ | 138,915 | ||||||||
Aerospace
& Defense
|
32,437 | 27,011 | 62,648 | 50,435 | ||||||||||||
Test
& Measurement
|
12,718 | 14,239 | 26,700 | 27,262 | ||||||||||||
Electronics
Group
|
45,155 | 41,250 | 89,348 | 77,697 | ||||||||||||
$ | 82,096 | $ | 110,350 | $ | 163,787 | $ | 216,612 | |||||||||
Gross
profit (loss):
|
||||||||||||||||
Industrial
Group
|
$ | (1,630 | ) | $ | 5,333 | $ | (4,332 | ) | $ | 12,162 | ||||||
Aerospace
& Defense
|
6,073 | 2,354 | 9,329 | 5,253 | ||||||||||||
Test
& Measurement
|
3,172 | 3,767 | 6,973 | 7,105 | ||||||||||||
Electronics
Group
|
9,245 | 6,121 | 16,302 | 12,358 | ||||||||||||
$ | 7,615 | $ | 11,454 | $ | 11,970 | $ | 24,520 | |||||||||
Operating
(loss) income:
|
||||||||||||||||
Industrial
Group
|
$ | (5,377 | ) | $ | 2,458 | $ | (12,061 | ) | $ | 6,612 | ||||||
Aerospace
& Defense
|
1,964 | (1,993 | ) | 739 | (2,746 | ) | ||||||||||
Test
& Measurement
|
616 | 838 | 1,482 | 1,349 | ||||||||||||
Electronics
Group
|
2,580 | (1,155 | ) | 2,221 | (1,397 | ) | ||||||||||
General,
corporate and other
|
(1,742 | ) | (2,275 | ) | (3,993 | ) | (4,679 | ) | ||||||||
$ | (4,539 | ) | $ | (972 | ) | $ | (13,833 | ) | $ | 536 |
July
5,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Total
assets:
|
||||||||
Industrial
Group
|
$ | 135,160 | $ | 146,964 | ||||
Aerospace
& Defense
|
58,560 | 65,077 | ||||||
Test
& Measurement
|
27,826 | 29,892 | ||||||
Electronics
Group
|
86,386 | 94,969 | ||||||
General,
corporate and other
|
8,664 | 11,272 | ||||||
$ | 230,210 | $ | 253,205 |
(11)
|
Commitments
and Contingencies
|
(12)
|
Income
Taxes
|
(13)
|
Employee
Benefit Plans
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
July
5,
|
June
29,
|
July
5,
|
June
29,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Service
cost
|
$ | 18 | $ | 25 | $ | 36 | $ | 50 | ||||||||
Interest
cost on projected benefit obligation
|
595 | 580 | 1,190 | 1,160 | ||||||||||||
Net
amortizations, deferrals and other costs
|
252 | 27 | 504 | 54 | ||||||||||||
Expected
return on plan assets
|
(587 | ) | (813 | ) | (1,174 | ) | (1,626 | ) | ||||||||
$ | 278 | $ | (181 | ) | $ | 556 | $ | (362 | ) |
(14)
|
Other
Comprehensive Loss
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
July
5,
|
June
29,
|
July
5,
|
June
29,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net
loss
|
$ | (6,778 | ) | $ | (935 | ) | $ | (18,123 | ) | $ | (550 | ) | ||||
Other
comprehensive income (loss):
|
||||||||||||||||
Unrealized
gain (loss) on available-for-sale securities, net of tax of $61 and $3,902
for the three and six months ended June 29, 2008
|
2,769 | (15,643 | ) | 2,470 | (36,874 | ) | ||||||||||
Foreign
currency translation adjustments
|
1,266 | 1,836 | 764 | 2,370 | ||||||||||||
Total
comprehensive loss
|
$ | (2,743 | ) | $ | (14,742 | ) | $ | (14,889 | ) | $ | (35,054 | ) |
July
5,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Foreign
currency translation adjustments
|
$ | (5,173 | ) | $ | (5,937 | ) | ||
Unrealized
gain on available-for-sale securities, net of tax
|
2,470 | — | ||||||
Employee
benefit related adjustments, net of tax
|
(13,807 | ) | (13,807 | ) | ||||
Accumulated
other comprehensive loss
|
$ | (16,510 | ) | $ | (19,744 | ) |
(15)
|
Fair
Value of Financial Instruments
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
·
|
The
first two data columns in the table show the absolute results for each
period presented.
|
·
|
The
columns entitled “Year Over Year Change” and “Year Over Year Percentage
Change” show the change in results, both in dollars and percentages. These
two columns show favorable changes as positive and unfavorable changes as
negative. For example, when our net revenue increases from one
period to the next, that change is shown as a positive number in both
columns. Conversely, when expenses increase from one period to
the next, that change is shown as a negative number in both
columns.
|
·
|
The
last two columns in the table show the results for each period as a
percentage of net revenue. In these two columns, the cost of sales and
gross profit for each are given as a percentage of that segment’s net
revenue. These amounts are shown in
italics.
|
Year
Over
|
||||||||||||||||||||||||
Year
Over
|
Year
|
Results
as Percentage of
|
||||||||||||||||||||||
Year
|
Percentage
|
Net
Revenue for the Three
|
||||||||||||||||||||||
Three Months
Ended
|
Change
|
Change
|
Months
Ended
|
|||||||||||||||||||||
July
5,
|
June
29,
|
Favorable
|
Favorable
|
July
5,
|
June
29,
|
|||||||||||||||||||
2009
|
2008
|
(Unfavorable)
|
(Unfavorable)
|
2009
|
2008
|
|||||||||||||||||||
(in
thousands, except percentage data)
|
||||||||||||||||||||||||
Net
revenue:
|
||||||||||||||||||||||||
Industrial
Group
|
$ | 36,941 | $ | 69,100 | $ | (32,159 | ) | (46.5 | )% | 45.0 | % | 62.6 | % | |||||||||||
Aerospace
& Defense
|
32,437 | 27,011 | 5,426 | 20.1 | 39.5 | 24.5 | ||||||||||||||||||
Test
& Measurement
|
12,718 | 14,239 | (1,521 | ) | (10.7 | ) | 15.5 | 12.9 | ||||||||||||||||
Electronics
Group
|
45,155 | 41,250 | 3,905 | 9.5 | 55.0 | 37.4 | ||||||||||||||||||
Total
|
82,096 | 110,350 | (28,254 | ) | (25.6 | ) | 100.0 | 100.0 | ||||||||||||||||
Cost
of sales:
|
||||||||||||||||||||||||
Industrial
Group
|
38,571 | 63,767 | 25,196 | 39.5 | 104.4 | 92.3 | ||||||||||||||||||
Aerospace
& Defense
|
26,364 | 24,657 | (1,707 | ) | (6.9 | ) | 81.3 | 91.3 | ||||||||||||||||
Test
& Measurement
|
9,546 | 10,472 | 926 | 8.8 | 75.1 | 73.5 | ||||||||||||||||||
Electronics
Group
|
35,910 | 35,129 | (781 | ) | (2.2 | ) | 79.5 | 85.2 | ||||||||||||||||
Total
|
74,481 | 98,896 | 24,415 | 24.7 | 90.7 | 89.6 | ||||||||||||||||||
Gross
profit:
|
||||||||||||||||||||||||
Industrial
Group
|
(1,630 | ) | 5,333 | (6,963 | ) | (130.6 | ) | (4.4 | ) | 7.7 | ||||||||||||||
Aerospace
& Defense
|
6,073 | 2,354 | 3,719 | 158.0 | 18.7 | 8.7 | ||||||||||||||||||
Test
& Measurement
|
3,172 | 3,767 | (595 | ) | (15.8 | ) | 24.9 | 26.5 | ||||||||||||||||
Electronics
Group
|
9,245 | 6,121 | 3,124 | 51.0 | 20.5 | 14.8 | ||||||||||||||||||
Total
|
7,615 | 11,454 | (3,839 | ) | (33.5 | ) | 9.3 | 10.4 | ||||||||||||||||
Selling,
general and administrative
|
9,362 | 11,279 | 1,917 | 17.0 | 11.4 | 10.2 | ||||||||||||||||||
Research
and development
|
1,032 | 1,089 | 57 | 5.2 | 1.3 | 1.0 | ||||||||||||||||||
Amortization
of intangible assets
|
28 | 58 | 30 | 51.7 | — | — | ||||||||||||||||||
Nonrecurring
expense
|
1,732 | — | (1,732 | ) |
NM
|
2.1 | — | |||||||||||||||||
Operating
loss
|
(4,539 | ) | (972 | ) | (3,567 | ) | (367.0 | ) | (5.5 | ) | (0.8 | ) | ||||||||||||
Interest
expense, net
|
2,303 | 1,023 | (1,280 | ) | (125.1 | ) | 2.8 | 0.9 | ||||||||||||||||
Other
income, net
|
(384 | ) | (924 | ) | (540 | ) | (58.4 | ) | (0.5 | ) | (0.8 | ) | ||||||||||||
Loss
before income taxes
|
(6,458 | ) | (1,071 | ) | (5,387 | ) | (503.0 | ) | (7.9 | ) | (0.9 | ) | ||||||||||||
Income
tax expense (benefit)
|
320 | (136 | ) | (456 | ) |
NM
|
0.4 | (0.1 | ) | |||||||||||||||
Net
loss
|
$ | (6,778 | ) | $ | (935 | ) | $ | (5,843 | ) | (624.9 | )% | (8.3 | )% | (0.8 | )% |
Year
Over
|
||||||||||||||||||||||||
Year
Over
|
Year
|
Results
as Percentage of
|
||||||||||||||||||||||
Year
|
Percentage
|
Net
Revenue for the Six
|
||||||||||||||||||||||
Six
Months Ended
|
Change
|
Change
|
Months
Ended
|
|||||||||||||||||||||
July
5,
|
June
29,
|
Favorable
|
Favorable
|
July
5,
|
June
29,
|
|||||||||||||||||||
2009
|
2008
|
(Unfavorable)
|
(Unfavorable)
|
2009
|
2008
|
|||||||||||||||||||
(in
thousands, except percentage data)
|
||||||||||||||||||||||||
Net
revenue:
|
||||||||||||||||||||||||
Industrial
Group
|
$ | 74,439 | $ | 138,915 | $ | (64,476 | ) | (46.4 | )% | 45.4 | % | 64.1 | % | |||||||||||
Aerospace
& Defense
|
62,648 | 50,435 | 12,213 | 24.2 | 38.2 | 23.3 | ||||||||||||||||||
Test
& Measurement
|
26,700 | 27,262 | (562 | ) | (2.1 | ) | 16.3 | 12.6 | ||||||||||||||||
Electronics
Group
|
89,348 | 77,697 | 11,651 | 15.0 | 54.6 | 35.9 | ||||||||||||||||||
Total
|
163,787 | 216,612 | (52,825 | ) | (24.4 | ) | 100.0 | 100.0 | ||||||||||||||||
Cost
of sales:
|
||||||||||||||||||||||||
Industrial
Group
|
78,771 | 126,753 | 47,982 | 37.9 | 105.8 | 91.2 | ||||||||||||||||||
Aerospace
& Defense
|
53,319 | 45,182 | (8,137 | ) | (18.0 | ) | 85.1 | 89.6 | ||||||||||||||||
Test
& Measurement
|
19,727 | 20,157 | 430 | 2.1 | 73.9 | 73.9 | ||||||||||||||||||
Electronics
Group
|
73,046 | 65,339 | (7,707 | ) | (11.8 | ) | 81.8 | 84.1 | ||||||||||||||||
Total
|
151,817 | 192,092 | 40,275 | 21.0 | 92.7 | 88.7 | ||||||||||||||||||
Gross
profit:
|
||||||||||||||||||||||||
Industrial
Group
|
(4,332 | ) | 12,162 | (16,494 | ) | (135.6 | ) | (5.8 | ) | 8.8 | ||||||||||||||
Aerospace
& Defense
|
9,329 | 5,253 | 4,076 | 77.6 | 14.9 | 10.4 | ||||||||||||||||||
Test
& Measurement
|
6,973 | 7,105 | (132 | ) | (1.9 | ) | 26.1 | 26.1 | ||||||||||||||||
Electronics
Group
|
16,302 | 12,358 | 3,944 | 31.9 | 18.2 | 15.9 | ||||||||||||||||||
Total
|
11,970 | 24,520 | (12,550 | ) | (51.2 | ) | 7.3 | 11.3 | ||||||||||||||||
Selling,
general and administrative
|
19,834 | 21,771 | 1,937 | 8.9 | 12.1 | 10.0 | ||||||||||||||||||
Research
and development
|
2,200 | 2,084 | (116 | ) | (5.6 | ) | 1.3 | 1.0 | ||||||||||||||||
Amortization
of intangible assets
|
56 | 129 | 73 | 56.6 | — | — | ||||||||||||||||||
Nonrecurring
expense
|
3,713 | — | (3,713 | ) |
NM
|
2.3 | — | |||||||||||||||||
Operating
(loss) income
|
(13,833 | ) | 536 | (14,369 | ) |
NM
|
(8.4 | ) | 0.3 | |||||||||||||||
Interest
expense, net
|
3,572 | 1,975 | (1,597 | ) | (80.9 | ) | 2.2 | 0.9 | ||||||||||||||||
Other
income, net
|
(77 | ) | (916 | ) | (839 | ) | (91.6 | ) | — | (0.4 | ) | |||||||||||||
Loss
before income taxes
|
(17,328 | ) | (523 | ) | (16,805 | ) |
NM
|
(10.6 | ) | (0.2 | ) | |||||||||||||
Income
tax expense
|
795 | 27 | (768 | ) |
NM
|
0.5 | — | |||||||||||||||||
Net
loss
|
$ | (18,123 | ) | $ | (550 | ) | $ | (17,573 | ) |
NM
|
(11.1 | )% | (0.2 | )% |
Item
3.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
Item
4.
|
Controls
and Procedures
|
Part
II.
|
Other
Information
|
Item
1.
|
Legal
Proceedings
|
Item
1A.
|
Risk
Factors
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Item
3.
|
Defaults
Upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
Votes
in
|
Votes
|
|||
Class I Director
|
Favor
|
Withheld
|
||
John
F. Brinkley
|
17,010,562
|
1,165,884
|
||
Robert
E. Gill
|
16,928,235
|
1,248,211
|
||
William
L. Healey
|
16,989,734
|
1,186,712
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
Exhibit
|
||
Number
|
Description
|
|
10.1
|
Form
of 2009 Sypris Three-Year Bonus Agreement, effective as of May 12,
2009.
|
|
31(i).1
|
CEO
certification pursuant to Section 302 of Sarbanes - Oxley Act of
2002.
|
|
31(i).2
|
CFO
certification pursuant to Section 302 of Sarbanes - Oxley Act of
2002.
|
|
32
|
CEO
and CFO certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes - Oxley Act of
2002.
|
SYPRIS
SOLUTIONS, INC.
|
||||
(Registrant)
|
||||
Date:
|
August 18, 2009
|
By:
|
/s/ Brian A. Lutes
|
|
(Brian
A. Lutes)
|
||||
Vice
President & Chief Financial Officer
|
||||
Date:
|
August 18, 2009
|
By:
|
/s/ Rebecca R. Eckert
|
|
(Rebecca
R. Eckert)
|
||||
Controller
(Principal Accounting Officer)
|