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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): June 30, 2004
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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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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99 Registrant's press release dated June 30, 2004.
Item 9. Regulation FD Disclosure
The Registrant's press release dated June 30, 2004, reporting it has
completed the purchase of a manufacturing facility located in Toluca, Mexico
from Dana Corporation, is attached as Exhibit 99 to this Form 8-K, and is
furnished to the U.S. Securities and Exchange Commission pursuant to Regulation
FD.
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: June 30, 2004 Sypris Solutions, Inc.
By: /s/ David D. Johnson
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David D. Johnson
Vice President and Chief
Financial Officer
INDEX TO EXHIBITS
Exhibit Description
Number -----------
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99 Registrant's press release dated June 30, 2004
EXHIBIT 99
Sypris Completes Purchase of Dana Plant in Toluca, Mexico;
Begins 8-Year, $500 Million Supply Agreement
LOUISVILLE, Ky.--(BUSINESS WIRE)--June 30, 2004--Sypris Solutions,
Inc. (Nasdaq/NM:SYPR) today announced that it has completed the
purchase of a manufacturing campus located in Toluca, Mexico from Dana
Corporation (NYSE:DCN) ("Dana") and has begun to furnish Dana with a
wide range of drive train components under an eight-year supply
agreement that accompanied the purchase. The transaction, which
represents the second phase of a larger deal, was first announced on
September 4, 2003. The closing of the first phase, which involved the
purchase of Dana's plant in Morganton, North Carolina, occurred on
December 31, 2003.
The outsourcing arrangement will begin in phases over the next
several years and will cover approximately $65 million of business per
year when completed, or approximately $500 million over the term of
the contract, based upon current market conditions. Initial shipments
will begin immediately from Toluca, with the components to be
incorporated into steer and drive axle assemblies for sale by Dana to
commercial vehicle OEMs such as PACCAR and International, and to
medium-duty truck manufacturers such as General Motors.
The purchase of Dana's manufacturing campus in Toluca includes
eight buildings and approximately 370,000 square feet of space under
roof. As part of the transaction, Dana has leased approximately
138,000 square feet in four of the buildings for its continued use for
certain machining and final assembly operations. The plant supplies
the Heavy Vehicle Technologies and Systems Group of Dana with a wide
range of forged and machined components, including axle shafts,
knuckles, I-beams, input shafts, pinions, ring gears and steer arms,
among others. The purchase price approximated $15.6 million and
included the purchase of inventory. Approximately 460 people
transferred to Sypris as part of the transaction.
Commenting on the announcement, Jeffrey T. Gill, president and
chief executive officer of Sypris Solutions, said, "We are pleased to
have this additional opportunity to expand our long-term relationship
with Dana. We intend to support Dana with investments in technology
and state-of-the-art manufacturing processes so that the cost, quality
and reliability of these components remain competitive on a global
scale for years to come."
"We are preparing to invest an additional $10 to $12 million to
improve productivity and increase the plant's capacity to meet the
rapidly escalating demand of Dana's commercial vehicle customers. As
we focus our attention on the balance of this project, which includes
the purchase of equipment located at two other Dana operations, we
intend to work closely with Dana to make certain that the transfer of
assets and production takes place seamlessly."
In September of 2003, Sypris announced that it had signed a letter
of understanding with Dana that included the purchase of the Toluca
and Morganton operations, and certain production equipment located at
Dana's plants in Glasgow, Kentucky and Humboldt, Tennessee, which
Sypris expected to generate approximately $130 million of business per
year when completed, based upon current market conditions.
Gill continued, "As we look to the future, this latest contract
with Dana is expected to generate an additional $7 to $8 million of
revenue for Sypris during each of the third and fourth quarters of
this year, $45 to $50 million of revenue during 2005 and $65 million
of annual revenue upon reaching full production. The earnings impact
of the new contract is expected to be negligible for 2004 as we incur
certain transition expenses associated with the absorption of the new
operation, but is forecast to contribute $0.10 to $0.12 per diluted
share to earnings for 2005, assuming 19.2 million weighted average
shares outstanding."
"With the closing of this transaction, Sypris has now secured a
total of $1.5 billion of new contracts over the past six months and
invested $52 million for the purchase of three additional
manufacturing facilities that have greatly expanded our capabilities
and are expected to make a major contribution to our financial results
for years to come. Our task is to complete the successful integration
of these added capabilities into the Sypris organization and prepare
these operations for additional opportunities going forward."
A conference call is scheduled for Wednesday, June 30, 2004, at
5:30 p.m. Eastern Time to discuss the content of this agreement with
Dana. The call can be accessed live via the Internet. Visit
www.sypris.com or www.fulldisclosure.com for the link to the call or
to listen to a replay of the call, which will be available for 30
days.
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 press release, and any oral statements made with reference to
this cautionary guidance, includes "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934, as
they relate to, or may affect, the Company's future results. These
statements only reflect management's current opinions; and no
assurance can be given, that any of these results will actually occur.
Important factors could cause performance to differ materially from
projected results contained in, or based upon, these statements,
including: the ability to successfully manage growth or contraction in
the economy, or the commercial vehicle or electronics markets; access
to capital on favorable terms as needed for operations or growth; the
ability to achieve expected annual savings and synergies from past and
future business combinations; the ability to successfully integrate
past and future business combinations; competitive factors and price
pressures; availability of raw materials such as steel or third party
component parts on a timely basis at reasonable prices; inventory
risks due to shifts in market demand and/or price erosion of purchased
components; changes in product mix; program changes, delays, or
cancellations by the government or other customers; concentrated
reliance on major customers or suppliers; cost and yield issues
associated with the Company's manufacturing facilities; revisions in
estimated costs related to major contracts; labor relations; risks
inherent in operating abroad, including foreign currency exchange
rates; performance of our pension fund portfolios; changes in
applicable law or in the Company's regulatory authorizations, security
clearances, or other legal rights to conduct its business, deal with
its work force or export goods and services; adverse regulatory
actions, or other governmental sanctions; risks of litigation,
including litigation with respect to environmental or asbestos-related
matters, customer or supplier claims, or stockholders; the effects
(including possible increases in the cost of doing business) resulting
from future war and terrorists activities or political uncertainties;
natural disasters, casualties, utility disruptions, or the failure to
anticipate unknown risks and uncertainties present in the Company's
businesses; dependence on current management; as well as other factors
included in the Company's reports filed with the Securities and
Exchange Commission.
CONTACT: Sypris Solutions Inc., Louisville
David D. Johnson, 502-329-2000
www.sypris.com