Sypris Reports 2012 Results ─────────────────────

  Sypris Reports 2012 Results ─────────────────────

                    Margins and EPS Expand over Prior Year

Business Wire

LOUISVILLE, Ky. -- March 12, 2013

Sypris Solutions, Inc. (Nasdaq/NM: SYPR) today reported financial results for
its fourth quarter and full year ended December31,2012.

                                  HIGHLIGHTS

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For the Full Year:

  *Revenue increased to $342 million.
  *Gross profit increased 24% to $44 million compared to the prior year.
  *Gross margin increased to 12.8%, up 230 basis points from the prior year.
  *Earnings per share from continuing operations increased 16% to $0.50 per
    diluted share, up from $0.43 per diluted share in 2011.
  *The Company reinstated its common dividend in March of 2012.
  *The Company was added to the Russell 2000 Index effective June of 2012.

                            ─────────────────────

The Company reported revenue of $341.6million for 2012 compared to
$335.6million for the prior year period and income from continuing operations
of $10.3million, or $0.50per diluted share, as compared to $8.4million, or
$0.43per diluted share, for the prior year.

“Our Industrial Group responded well to the reduction in the production of
commercial vehicles during the second half of 2012,” said Jeffrey T. Gill,
president and chief executive officer. “We now expect the commercial vehicle
market to remain stable at current levels in the short-term, as OEMs focus on
the introduction of the new model year vehicles and engine technologies early
in 2013.”

“However, with an estimated 70% of the vehicles on the road today being of an
age that is in excess of eight years, the eventual replacement cycle is
expected to be robust for an extended period of time. In the interim, we
believe that our improved cost profile and strong operational performance,
which resulted in an 80 basis point increase in gross margin for our
Industrial Group during the year when compared to 2011, will enable us to
sustain the profitability of this business.”

“Our Aerospace and Defense business continues to be affected by budgetary and
funding uncertainties within the U.S. Department of Defense that are not
expected to be eliminated in the near term. Despite the decline in revenue in
2012, our improved product mix resulted in a 61.9% increase in gross profit
when compared to 2011."

“In the long-term, we will continue to invest in new products and programs to
further improve the attractiveness of our business portfolio, with a specific
emphasis on trusted solutions for identity management, cryptographic key
distribution and cyber analytics. We believe that our product mix going
forward should help us to maintain our margin in the face of what is likely to
be lumpy revenue until the many macroeconomic and policy issues are
successfully resolved.”

Consolidated income from continuing operations for the full year ended
December31,2012 included a foreign currency related loss of $0.8million, a
gain of $2.6million on the sale of idle assets, a gain of $1.9million in
connection with the sale of marketable securities and a $1.7million write-off
of deferred contract costs, while income from continuing operations for the
prior year included gains of $3.0million in connection with a customer
settlement, $4.5million from the disposition of idle assets and a foreign
currency related gain of $2.6million.

The Company reported revenue of $67.5million for the fourth quarter compared
to $83.6million for the prior year period. The Company’s loss from continuing
operations for the three months ended December31,2012 was $0.9million, or
$0.04 per diluted share, as compared to income from continuing operations of
$1.4million, or $0.07 per diluted share, for the prior year period. The loss
from continuing operations for the three months ended December31,2012
included a $1.7million non-cash write-off of deferred contract costs, as
mentioned above, due to the current uncertainty surrounding sequestration.

The Industrial Group

Revenue for our Industrial Group decreased 23.2% to $55.5million in the
fourth quarter compared to $72.2million for the prior year period and 14.8%
sequentially, primarily as a result of a recent move by commercial vehicle
OEM’s to rebalance inventory with lower levels of demand. Gross profit for the
quarter was $5.6million, or 10.1% of revenue, compared to $8.2million, or
11.4% of revenue for the same period in 2011.

The Electronics Group

Revenue for our Electronics Group was $12.0million in the fourth quarter
compared to $11.4million in the prior year period, reflecting higher revenue
within our space business. Gross profit for the quarter was $3.1million, or
25.6% of revenue, compared to $0.5million, or 4.5% of revenue for the same
period in 2011, reflecting improved product mix, including increase product
sales to overseas customers, which typically carry higher margins.

Outlook

Mr. Gill added, “We will continue to concentrate on the daily execution of our
business. We expect recent investments in production cells and automation by
our Industrial Group to contribute to further margin expansion going forward
once volumes return to full replacement levels later this year. Our
Electronics Group will continue to face near-term revenue challenges that we
expect to be ongoing until the outlook for defense spending is clarified and
authorized.”

Sypris Solutions is a diversified provider of outsourced services and
specialty products. The Company performs a wide range of manufacturing,
engineering, design and other technical services, typically under multi-year,
sole-source contracts with corporations and government agencies in the markets
for truck components and assemblies and aerospace and defense electronics. For
more information about Sypris Solutions, visit its Web site at www.sypris.com.

Each “forward-looking statement” herein is subject to serious risks and should
not be relied upon, as detailed in our most recent Form 10-K and Form 10-Q and
subsequent SEC filings. Briefly, we currently believe that such risks also
include the following: declining revenues and backlog in our aerospace and
defense business lines as we attempt to transition from legacy products and
services into new market segments and technologies; dependence on, recruitment
or retention of key employees; our ability to successfully develop, launch or
sustain new products and programs within the Electronics Group especially in
new market segments and technologies; reliance on major customers or
suppliers, especially in the automotive or aerospace and defense electronics
sectors; adverse impacts of new technologies or other competitive pressures
which increase our costs or erode our margins; potential impairments,
non-recoverability or write-offs of goodwill, assets or deferred costs;
inventory valuation risks including obsolescence, shrinkage, theft,
overstocking or underbilling; the cost, efficiency and yield of our operations
and capital investments, including working capital, production schedules,
cycle times, scrap rates, injuries, wages, overtime costs, freight or
expediting costs; potential weaknesses in internal controls over financial
reporting and enterprise risk management; U.S. government spending on products
and services that our Electronics Group provides, including the timing of
budgetary decisions; potential liabilities associated with discontinued
operations; fees, costs or other dilutive effects of refinancing, or
compliance with covenants; the costs of compliance with our auditing,
regulatory or contractual obligations; regulatory actions or sanctions
(including FCPA, OSHA and Federal Acquisition Regulations, among others);
breakdowns, relocations or major repairs of machinery and equipment; pension
valuation, health care or other benefit costs; labor relations; strikes; union
negotiations; cyber security threats and disruptions; changes in licenses,
security clearances, or other legal rights to operate, manage our work force
or import and export as needed; changes or delays in customer budgets, funding
or programs; disputes or litigation involving customer, supplier, lessor,
landlord, creditor, stockholder, product liability or environmental claims;
the costs and supply of debt, equity capital, or insurance; cost and
availability of raw materials such as steel, component parts, natural gas or
utilities; volatility of our customers’ forecasts, financial conditions,
market shares, product requirements or scheduling demands; failure to
adequately insure or to identify environmental or other insurable risks;
revised contract prices or estimates of major contract costs; risks of foreign
operations; currency exchange rates; war, terrorism, or political uncertainty;
unanticipated or uninsured disasters, losses or business risks; inaccurate
data about markets, customers or business conditions; or unknown risks and
uncertainties.


SYPRIS SOLUTIONS, INC.
Financial Highlights
(In thousands, except per share amounts)

                            Three Months Ended
                             December 31,
                             2012                        2011
                             (Unaudited)
Revenue                      $     67,466                 $    83,580
Net (loss) income            $     (940        )          $    1,323
Basic income (loss)
per common share:
Continuing operations        $     (0.04       )          $    0.07
Discontinued                      (0.01       )              -          
operations
Net income per share         $     (0.05       )          $    0.07       
Diluted income (loss)
per common share:
Continuing operations        $     (0.04       )          $    0.07
Discontinued                      (0.01       )              -          
operations
Net (loss) income per        $     (0.05       )          $    0.07       
share
Weighted average
shares outstanding:
Basic                              19,172                      18,850
Diluted                            19,172                      19,032
                                                          
                                                          
                                                          
                                                          
                             Years Ended
                             December 31,
                             2012                         2011
                             (Unaudited)                  (Note)
Revenue                      $     341,604                $    335,625
Net income                   $     3,047                  $    7,907
Basic income (loss)
per common share:
Continuing operations        $     0.51                   $    0.43
Discontinued                      (0.38       )              (0.03      )
operations
Net income per share         $     0.13                  $    0.40       
Diluted income (loss)
per common share:
Continuing operations        $     0.50                   $    0.43
Discontinued                      (0.37       )              (0.03      )
operations
Net income per share         $     0.13                  $    0.40       
Weighted average
shares outstanding:
Basic                              19,050                      18,823
Diluted                            19,415                      19,008
                                                          
Note: The selected data at December 31, 2011 has been derived from the audited
consolidated financial statements at that date and does not include all
information and footnotes required by accounting principles generally accepted
in the United States for a complete set of financial statements.



Sypris Solutions, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data)

                  Three Months Ended               Years Ended
                   December 31,                      December 31,
                   2012            2011             2012         2011
                   (Unaudited)                       (Unaudited)   (Note)
Net revenue:
Industrial         $  55,498        $  72,223        $ 286,046     $ 273,305
Group
Electronics          11,968         11,357        55,558      62,320  
Group
Total net             67,466           83,580          341,604       335,625
revenue
Cost of sales:
Industrial            49,919           64,023          255,065       245,962
Group
Electronics          8,909          10,850        42,790      54,434  
Group
Total cost of         58,828           74,873          297,855       300,396
sales
Gross profit:
Industrial            5,579            8,200           30,981        27,343
Group
Electronics          3,059          507           12,768      7,886   
Group
Total gross           8,638            8,707           43,749        35,229
profit
Selling,
general and           7,871            7,410           30,797        28,315
administrative
Research and          1,303            760             3,816         3,397
development
Amortization of
intangible            23               22              89            102
assets
Nonrecurring
(income)              -                -               -             (3,000  )
expense, net
Restructuring        -              (2      )      -           231     
expense, net
Operating             (559    )        517             9,047         6,184
income
Interest              117              124             437           1,732
expense, net
(Gain) on sale
of marketable         -                -               (1,850  )     -
securities
Other (income),      (85     )       (621    )      (2,055  )    (6,604  )
net
(Loss) income
from continuing       (591    )        1,014           12,515        11,056
operations
before taxes
Income tax
expense              259            (387    )      2,248       2,621   
(benefit), net
(Loss) income
from continuing       (850    )        1,401           10,267        8,435
operations
Loss from
discontinued         (90     )       (78     )      (7,220  )    (528    )
operations, net
of tax
Net (loss)         $  (940    )     $  1,323        $ 3,047      $ 7,907   
income
Basic income
(loss) per
share:
(Loss) income
per share from     $  (0.04   )     $  0.07          $ 0.51        $ 0.43
continuing
operations
Loss per share
from                 (0.01   )       -             (0.38   )    (0.03   )
discontinued
operations
Net (loss)
income per         $  (0.05   )     $  0.07         $ 0.13       $ 0.40    
share
Diluted income
(loss) per
share:
(Loss) income
per share from     $  (0.04   )     $  0.07          $ 0.50        $ 0.43
continuing
operations
Loss per share
from                 (0.01   )       -             (0.37   )    (0.03   )
discontinued
operations
Net (loss)
income per         $  (0.05   )     $  0.07         $ 0.13       $ 0.40    
share
Dividends
declared per       $  0.02          $  -             $ 0.08        $ -
common share
Weighted
average shares
outstanding:
Basic                 19,172           18,850          19,050        18,823
Diluted               19,172           19,032          19,415        19,008
                                                                   
Note: The statement of operations at December 31, 2011 has been derived from
the audited consolidated financial statements at that date but does not
include all information and footnotes required by accounting principles
generally accepted in the United States for a complete set of financial
statements.



Sypris Solutions, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)

                               December 31,             December 31,
                                2012                      2011
                                (Unaudited)               (Note)
ASSETS
Current assets:
Cash and cash equivalents       $    18,664               $    18,173
Accounts receivable, net             38,530                    42,984
Inventory, net                       33,958                    33,621
Other current assets                 4,946                     3,468
Assets held for sale                —                       1,739      
Total current assets                 96,098                    99,985
Restricted cash                      —                         3,000
Investment in marketable             —                         1,749
securities
Property, plant and                  53,050                    56,891
equipment, net
Goodwill                             6,900                     6,900
Other assets                        4,920                   7,200      
Total assets                    $    160,968             $    175,725    
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                $    36,267               $    51,303
Accrued liabilities                 21,988                  23,569     
Total current liabilities            58,255                    74,872
Long-term debt                       19,000                    10,000
Other liabilities                   20,780                  30,385     
Total liabilities                    98,035                    115,257
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; 20,190,116
shares issued and                    202                       201
20,155,268 outstanding in
2012 and 20,108,635 shares
issued and 19,995,401
outstanding in 2011
Additional paid-in capital           149,576                   149,160
Retained deficit                     (65,282    )              (66,722    )
Accumulated other                    (21,562    )              (22,170    )
comprehensive loss
Treasury stock, 34,848 and
113,234 shares in 2012 and          (1         )             (1         )
2011, respectively
Total stockholders’ equity          62,933                  60,468     
Total liabilities and           $    160,968             $    175,725    
stockholders’ equity
                                                          
Note: The balance sheet at December 31, 2011 has been derived from the audited
consolidated financial statements at that date but does not include all
information and footnotes required by accounting principles generally accepted
in the United States for a complete set of financial statements.



Sypris Solutions, Inc.
Consolidated Cash Flow Statements
(in thousands)

                               Year Ended December 31,
                                                     
                                2012                      2011
                                (Unaudited)               (Note)
Cash flows from operating
activities:
Net income                      $    3,047                $    7,907
Loss from discontinued              (7,220     )             (528       )
operations
Income from continuing               10,267                    8,435
operations
Adjustments to reconcile
net income to net cash
(used in) provided by
operating activities:
Depreciation and                     12,251                    14,216
amortization
Deferred income taxes                871                       508
Gain on the sale of                  (1,850     )              —
marketable securities
Stock-based compensation             1,826                     979
expense
Deferred revenue                     (7,892     )              (6,884     )
recognized
Deferred loan costs                  78                        172
recognized
Write-off of pre-contract            1,113                     —
costs
Write-off of debt issuance           —                         277
costs
Gain on the sale of assets           (2,590     )              (4,523     )
Provision for excess and             928                       945
obsolete inventory
Other noncash items                  1,209                     (2,545     )
Contributions to pension             (1,598     )              (753       )
plans
Changes in operating
assets and liabilities:
Accounts receivable                  4,307                     (1,509     )
Inventory                            (1,191     )              (4,302     )
Prepaid expenses and other           (1,350     )              564
assets
Accounts payable                     (15,193    )              11,747
Accrued and other                   (6,106     )             100        
liabilities
Net cash (used in)
provided by operating                (4,920     )              17,427
activities
Cash flows from investing
activities:
Capital expenditures                 (7,082     )              (6,848     )
Proceeds from sale of                1,914                     —
marketable securities
Proceeds from sale of                4,595                     5,032
assets
Other                               —                       33         
Net cash used in investing           (573       )              (1,783     )
activities
Cash flows from financing
activities:
Repayment of former                  —                         (10,000    )
Revolving Credit Agreement
Repayment of former Senior           —                         (13,305    )
Notes
Net proceeds from Credit             9,000                     10,000
Facility
Payments for deferred loan           —                         (387       )
costs
Common stock repurchases             (660       )              —
Indirect repurchase of
shares for minimum                   (750       )              (435       )
statutory tax withholdings
Cash dividends paid                  (1,607     )              —
Proceeds from issuance of           1                       64         
common stock
Net cash provided by (used          5,984                   (14,063    )
in) financing activities
Net increase in cash and             491                       1,581
cash equivalents
Cash and cash equivalents           18,173                  16,592     
at beginning of period
Cash and cash equivalents       $    18,664              $    18,173     
at end of period
                                                          
Note: The cash flow statement at December 31, 2011 has been derived from the
audited consolidated financial statements at that date but does not include
all information and footnotes required by accounting principles generally
accepted in the United States for a complete set of financial statements.


Contact:

Sypris Solutions, Inc.
Brian A. Lutes, 502-329-2000
Chief Financial Officer