UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 20, 2005
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Sypris Solutions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-24020 61-1321992
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
101 Bullitt Lane, Suite 450
Louisville, Kentucky 40222
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (502) 329-2000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 7 - Regulation FD
Item 7.01 Regulation FD Disclosure.
On December 20, 2005, Sypris Solutions, Inc. (the "Company") updated
its revenue and earnings guidance for the fourth quarter and full
year-ended 2005, as well as issued 2006 guidance. The full text of
the press release is set forth in Exhibit 99 hereto.
The information in this Form 8-K and the attached Exhibit is being
furnished pursuant to Item 7.01 "Regulation FD Disclosure" and shall
not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, except as shall be
expressly set forth by specific reference in such filing.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description of Exhibit
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99 Press release issued December 20, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 20, 2005 Sypris Solutions, Inc.
By: /s/ T. Scott Hatton
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T. Scott Hatton
Vice President and Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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99 Registrant's press release dated December 20, 2005.
Exhibit 99
Sypris Lowers Earnings Outlook; Provides Guidance for 2006
LOUISVILLE, Ky.--(BUSINESS WIRE)--Dec. 20, 2005--Sypris Solutions,
Inc. (Nasdaq/NM:SYPR) today reported that it is lowering its financial
outlook for the fourth quarter. The Company now expects earnings for
the fourth quarter to range from breakeven to a loss of $0.05 per
diluted share, compared to a loss of $0.04 per diluted share for the
fourth quarter of 2004 and prior guidance of $0.12 to $0.15 per
diluted share. Revenue for the fourth quarter is expected to be in the
range of $133 to $135 million, compared to $122 million for the fourth
quarter of 2004 and prior guidance of $135 to $140 million.
For the full year ended December 31, 2005, the Company now expects
revenue to approximate $525 million, which represents a 23% increase
from $425 million for the prior year period. With a year-over-year
increase in interest expense of $4.0 million, net income is now
expected to approximate $5.1 million for 2005 compared to $8.3 million
in 2004, while earnings per share are expected to be in the range of
$0.25 to $0.30 per diluted share compared to $0.47 per diluted share
for 2004.
"Revenue for the quarter is expected to be $5 to $7 million below
prior expectations as a result of softening commercial vehicle orders,
significant inventory rebalancing by a customer and the delay of
shipments under an important missile program," said Jeffrey T. Gill,
president and chief executive officer. "Earnings are expected to be
further impacted by unexpected overtime in our Industrial Group as we
worked to maintain deliveries during periods of unplanned equipment
downtime in several of our plants.
"Although the Company's consolidated financial performance for the
fourth quarter is clearly disappointing, our Electronics Group
continues to gain important traction with revenue forecast to increase
7% to $49.5 million during the quarter, while gross profit is expected
to increase 35% to $8.4 million during the period. In addition, the
Company's cash flow from operating activities is expected to
approximate $20 million during the quarter, resulting in full year
cash flow from operating activities of $68 million and free cash flow
of $25 million.
"Orders and backlog remain at record levels and with expansion
activities winding down, existing resources are now being deployed to
focus on process control and productivity efforts. We have spent the
better part of the last quarter recruiting proven, experienced talent
and we are organizing ourselves to lean out operations, reduce
equipment downtime and variability, and drive the Company's operating
performance and margins back to levels that are consistent with our
long-term expectations."
Gill continued, "Revenue for 2006 is expected to be in the range
of $555 to $565 million, reflecting our dedication to improving the
Company's operating performance prior to resuming the double digit
rates of growth experienced in recent years. Earnings per share are
forecast to be in the range of $0.45 to $0.55 per diluted share, which
includes $0.07 per diluted share for the expensing of stock options.
The forecast represents an 82% increase from 2005 at the mid-point of
our range, but remains well below what we believe to be the inherent
long-term earnings potential of the Company. Cash flow from operating
activities is expected to approximate $50 million for the year and
with the investment cycle now complete, we expect to generate $30
million of free cash flow during 2006."
A conference call is scheduled for Tuesday, December 20, 2005, at
10:00 a.m. Eastern Time to discuss the content of this release. The
call can be accessed live via the Internet. Visit www.sypris.com or
www.earnings.com for the link to the call or to listen to a replay of
the call, which will be available for 30 days. Related presentation
materials will also be posted to the "News" section of the Company's
web site at www.sypris.com prior to the call. These materials will be
in Adobe Acrobat format.
Sypris Solutions is a diversified provider of technology-based
outsourced services and specialty products. The Company performs a
wide range of manufacturing and technical services, typically under
multi-year, sole-source contracts with major corporations and
government agencies in the markets for aerospace and defense
electronics, truck components and assemblies, and for users of test
and measurement equipment. For more information about Sypris
Solutions, visit its Web site at www.sypris.com.
This release, the presentation materials available on the
Company's website, and the oral statements referring hereto, each
contain "forward-looking statements," from which actual results may
differ materially due to serious risk factors. Briefly, such risk
factors include: cost and availability of raw materials such as steel,
components, freight, natural gas or other utilities; cost and
inefficiencies associated with increasing our manufacturing capacity
and launching new programs; stability and predictability of customers'
financial strength, forecasts, backlogs, timely payments or scheduling
demands; costs associated with breakdowns or repairs of machinery and
equipment; growth beyond our productive capacity; reductions, cyclical
downturns or competitive pressures in our markets; cost, efficiency
and yield of our operations including inefficient scrap rates, cycle
times, expediting costs, overtime, freight, production schedules or
cost controls; our ability to improve results of acquired businesses
and associated costs; failure to identify environmental or other risks
in due diligence; inventory valuation risks due to obsolescence,
shrinkage, price, overstocking or underbilling; low-margin product
mix; changes in government or other customer programs; reliance on
major customers or suppliers; revised contract prices or estimates of
major contract costs; recruitment or retention of management or other
key employees; labor relations; risks of foreign operations; currency
exchange rates; costs and supply of debt, equity capital, or insurance
due to market conditions or operating or financial results, new
business risks, credit ratings, debt covenants, contract claims,
insurance conditions or regulatory developments; significant increases
in working capital; impairments or write-offs of goodwill or fixed
assets; pension valuation risks; changes in licenses, security
clearances, or other legal rights to operate, manage our work force or
import and export as needed; ongoing design and implementation of
effective internal controls; costs of compliance with regulatory or
contractual obligations; regulatory actions or sanctions; litigation,
including customer, creditor, stockholder, product liability,
environmental or asbestos-related claims; war, terrorism or political
uncertainty; unanticipated or uninsured disasters, losses or business
risks; inaccurate data about markets or business conditions unknown
risks and uncertainties; or risk factors in our SEC filings.
CONTACT: Sypris Solutions, Inc.
T. Scott Hatton, 502-329-2000