CORRECTING and REPLACING Sypris Reports First Quarter Results

  CORRECTING and REPLACING Sypris Reports First Quarter Results

         Revenue Increases Sequentially on Improved Industrial Sales

CORRECTION...by Sypris Solutions, Inc.

Business Wire

LOUISVILLE, Ky. -- May 14, 2013

In the table titled “Goodwill Impairment Charge Per Share,” the “Three Months
Ended” date should read: March 31, 2013 (sted April 1, 2011).

The corrected release reads:

                     SYPRIS REPORTS FIRST QUARTER RESULTS

         Revenue Increases Sequentially on Improved Industrial Sales

Sypris Solutions, Inc. (Nasdaq/NM: SYPR) today reported financial results for
its first quarter ended March 31,2013.

                                  HIGHLIGHTS

  *Revenue for the Company increased 16% sequentially to $78.4million, up
    from $67.5 million for the fourth quarter of 2012.
  *Revenue for the Industrial Group increased 28% sequentially to
    $71.1million, up from $55.5 million for the fourth quarter of 2012.
  *Gross profit for the Industrial Group increased 45% to $8.1 million, up
    from $5.6 million for the fourth quarter of 2012.
  *Revenue and gross profit for the Electronics Group declined sequentially
    to $7.3million and breakeven, respectively, reflecting the impact of
    sequestration and other Defense related spending delays.
  *In conjunction with the decline in quarterly revenue, the Electronics
    Group recorded a non-cash charge of $6.9million, or $0.36 per share, to
    recognize an impairment of goodwill.

The Company reported revenue of $78.4million for the first quarter compared
to $67.5million for the fourth quarter of 2012 and $96.5million for the
first quarter of last year. Additionally, the Company reported a net loss of
$6.5million, or $0.34per share, as compared to a net loss of $0.9million,
or $0.05per share, for the fourth quarter of 2012 and compared to net income
of $5.3million, or $0.27per diluted share, for the prior year comparable
period. The results for the first quarter of 2013 included a $6.9million, or
$0.36 per share, non-cash impairment of goodwill.

“Our Industrial Group responded well to the rebound in demand from our
commercial vehicle customers,” said Jeffrey T. Gill, president and chief
executive officer. “We now expect the commercial vehicle market to continue to
recover during the course of 2013, as OEMs focus on the introduction of the
new model year vehicles and engine technologies that offer far greater fuel
efficiency than previous models. In addition, with an estimated 70% of the
vehicles on the road today being in excess of eight years of age, the
replacement cycle is expected to support current levels of demand for an
extended period of time.”

“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. For the longer term, we are
continuing to pursue strategic investments in new products and programs to
further improve the growth and profitability of our business portfolio, with a
specific emphasis on trusted solutions for identity management, cryptographic
key distribution and cyber analytics.”

The consolidated loss from continuing operations for the first quarter ended
March31,2013 included a gain of $1.7million on the sale of idle assets and
a foreign currency related loss of $0.6million, while income from continuing
operations for the first quarter of the prior year included a gain of
$2.6million on the sale of idle assets and a foreign currency related loss of
$0.6million.

The Industrial Group

Revenue for our Industrial Group was $71.1million in the first quarter
compared to $55.5million for the fourth quarter of 2012 and $82.5million for
the first quarter of last year. Gross profit for the quarter was $8.1million,
or 11.4% of revenue, compared to $5.6 million, or 10.1% of revenue for the
fourth quarter of 2012 and $9.9million, or 12.0% of revenue for the first
quarter of 2012.

The Electronics Group

Revenue for our Electronics Group was $7.3million in the first quarter
compared to $12.0 million for the fourth quarter of 2012 and $13.9million in
the first quarter of last year, reflecting a number of factors including
budgetary and funding uncertainties within the U.S. Department of Defense.
Gross profit for the quarter was breakeven, compared to a profit of $3.1
million, or 25.6% of revenue for the fourth quarter of 2012 and $2.6million,
or 18.6% of revenue for the same period in 2012, primarily reflecting the
lower sales volume and change in product mix.

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; our ability to
successfully develop, launch or sustain new products and programs within the
Electronics Group especially in new market segments and technologies;
dependence on, recruitment or retention of key employees; 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; the costs of
compliance with our auditing, regulatory or contractual obligations; potential
impairments, non-recoverability or write-offs of assets or deferred costs;
inventory valuation risks including obsolescence, shrinkage, theft,
overstocking or underbilling; volatility of our customers’ forecasts,
financial conditions, market shares, product requirements or scheduling
demands; the cost, quality, timeliness, 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; regulatory actions or sanctions (including FCPA,
OSHA and Federal Acquisition Regulations, among others); changes in licenses,
security clearances, or other legal rights to operate, manage our work force
or import and export as needed; 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 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; 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.

Non-GAAP Measures

In addition to the results reported in accordance with accounting principles
generally accepted in the United States ("GAAP") included in this press
release, the company has provided information regarding goodwill impairment
charge per share, which is a non-GAAP financial measure.

This non-GAAP measure should not be considered a substitute for our reported
results prepared in accordance with GAAP.


GOODWILL IMPAIRMENT CHARGE PER SHARE
(in thousands, except for per share data)
                                     
                                       Three Months
                                       Ended
                                       March 31,
                                       2013
                                       (Unaudited)
Impairment of goodwill                 $  6,900
Weighted average shares outstanding       19,151  
Goodwill impairment charge per share   $  (0.36   )
                                                  

SYPRIS SOLUTIONS, INC.
Financial Highlights
(In thousands, except per share amounts)
                                                     
                                            Three Months Ended
                                            March 31,    April 1,
                                             2013       2012   
                                            (Unaudited)
Revenue                                     $ 78,411     $ 96,463
Net (loss) income                           $ (6,459 )   $ 5,288
Basic (loss) income per common share:
Continuing operations                       $ (0.34  )   $ 0.28
Discontinued operations                      -          (0.01  )
Net (loss) income per share                 $ (0.34  )   $ 0.27   
Diluted (loss) income per common share:
Continuing operations                       $ (0.34  )   $ 0.28
Discontinued operations                      -          (0.01  )
Net (loss) income per share                 $ (0.34  )   $ 0.27   
Weighted average shares outstanding:
Basic                                         19,151       18,938
Diluted                                       19,151       19,148

Sypris Solutions, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data)
                                                                 
                                                       Three Months ended
                                                       March 31,    April 1,
                                                        2013       2012   
                                                       (Unaudited)
Net revenue:
Industrial Group                                       $ 71,149     $ 82,522
Electronics Group                                       7,262      13,941 
Total net revenue                                        78,411       96,463
Cost of sales:
Industrial Group                                         63,039       72,600
Electronics Group                                       7,296      11,349 
Total cost of sales                                      70,335       83,949
Gross profit (loss):
Industrial Group                                         8,110        9,922
Electronics Group                                       (34    )    2,592  
Total gross profit                                       8,076        12,514
Selling, general and administrative                      7,158        7,595
Research and development                                 877          394
Amortization of intangible assets                        22           22
Impairment of goodwill                                  6,900      -      
Operating (loss) income                                  (6,881 )     4,503
Interest expense, net                                    146          117
Other (income), net                                     (1,195 )    (2,074 )
(Loss) income from continuing operations before          (5,832 )     6,460
taxes
Income tax expense, net                                 627        949    
(Loss) income from continuing operations                 (6,459 )     5,511
Loss from discontinued operations, net of tax           -          (223   )
Net (loss) income                                      $ (6,459 )   $ 5,288  
Basic (loss) income per share:
(Loss) income per share from continuing operations     $ (0.34  )   $ 0.28
Loss per share from discontinued operations             -          (0.01  )
Net (loss) income per share                            $ (0.34  )   $ 0.27   
Diluted (loss) income per share:
(Loss) income per share from continuing operations     $ (0.34  )   $ 0.28
Loss per share from discontinued operations             -          (0.01  )
Net (loss) income per share                            $ (0.34  )   $ 0.27   
Dividends declared per common share                    $ 0.02       $ 0.02
Weighted average shares outstanding:
Basic                                                    19,151       18,938
Diluted                                                  19,151       19,148


Sypris Solutions, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)
                                                    
                                March 31,                 December 31,
                                    2013                    2012       
                                (Unaudited)               (Note)
ASSETS
Current assets:
Cash and cash equivalents       $    18,488               $    18,664
Accounts receivable, net             52,855                    38,530
Inventory, net                       36,477                    33,958
Other current assets                4,759                   4,946      
Total current assets                 112,579                   96,098
Property, plant and                  51,188                    53,050
equipment, net
Goodwill                             -                         6,900
Other assets                        5,038                   4,920      
Total assets                    $    168,805             $    160,968    
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                $    53,565               $    36,267
Accrued liabilities                 21,518                  21,988     
Total current liabilities            75,083                    58,255
Long-term debt                       17,500                    19,000
Other liabilities                   18,490                  20,780     
Total liabilities                    111,073                   98,035
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; 20,082,204
shares issued and                    201                       202
20,005,839 outstanding in
2013 and 20,190,116 shares
issued and 20,155,268
outstanding in 2012
Additional paid-in capital           149,514                   149,576
Retained deficit                     (72,136    )              (65,282    )
Accumulated other                    (19,846    )              (21,562    )
comprehensive loss
Treasury stock, 76,365 and
34,848 shares in 2013 and           (1         )             (1         )
2012, respectively
Total stockholders’ equity          57,732                  62,933     
Total liabilities and           $    168,805             $    160,968    
stockholders’ equity
                                                          
Note: The balance sheet at December 31, 2012 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)
                                                                
                                                     Three Months Ended
                                                                   
                                                     March 31,     April 1,
                                                      2013        2012    
                                                     (Unaudited)
Cash flows from operating activities:
Net (loss) income                                    $ (6,459  )   $ 5,288
Loss from discontinued operations                     -           (223    )
(Loss) income from continuing operations               (6,459  )     5,511
Adjustments to reconcile net (loss) income to net
cash
provided by (used in) operating activities:
Depreciation and amortization                          3,073         3,073
Stock-based compensation expense                       388           439
Deferred revenue recognized                            (2,000  )     (1,973  )
Deferred loan costs recognized                         19            19
Gain on the sale of assets                             (1,665  )     (2,612  )
Provision for excess and obsolete inventory            280           409
Goodwill impairment                                    6,900         -
Other noncash items                                    812           901
Contributions to pension plans                         (11     )     (446    )
Changes in operating assets and liabilities:
Accounts receivable                                    (14,344 )     (17,719 )
Inventory                                              (2,799  )     (5,649  )
Prepaid expenses and other assets                      202           (554    )
Accounts payable                                       17,545        12,193
Accrued and other liabilities                         (1,362  )    5,928   
Net cash provided by (used in) operating               579           (480    )
activities
Cash flows from investing activities:
Capital expenditures                                   (945    )     (1,444  )
Proceeds from sale of assets                           2,141         4,481
Other                                                 -           (90     )
Net cash provided by investing activities              1,196         2,947
Cash flows from financing activities:
Net payments on Credit Facility                        (1,500  )     (1,000  )
Common stock repurchases                               -             (11     )
Indirect repurchase of shares for minimum             (451    )    (457    )
statutory tax withholdings
Net cash used in financing activities                 (1,951  )    (1,468  )
Net (decrease) increase in cash and cash               (176    )     999
equivalents
Cash and cash equivalents at beginning of period      18,664      18,173  
Cash and cash equivalents at end of period           $ 18,488     $ 19,172  

Contact:

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