Nasdaq:SYPR
SYPRIS SOLUTIONS INC
A specialized provider of enterprise data integration and analytics solutions helping organizations modernize their IT infrastructure.
Key Metrics
Investment Thesis
Bull Case
Investors may view SYPR as an opportunity if they believe the company can transition to profitability through cost rationalization and margin expansion in its data services. The positive operating cash flow suggests the business model is generating sufficient liquidity to fund growth without excessive reliance on external financing.
Bear Case
The stock carries substantial risk due to a significant retained earnings deficit and recurring net losses over the last three years, which may deter institutional investors. High accounts payable relative to current assets and volatile non-cash adjustments indicate potential liquidity pressures and accounting complexities that could impact future stability.
About SYPRIS SOLUTIONS INC
Sypris Solutions Inc. (SYPR) specializes in providing enterprise data solutions, including data integration, cloud migration, and analytics services primarily serving North American markets. The company leverages its proprietary technology to help clients transform raw data into actionable business intelligence across various industries.
Analysis
Management Discussion
While revenue grew to $140.2M in 2024, the company reported a net loss of -$1.7M, with operating profit of $2.9M offset by non-operating losses. Cash flow from operations turned positive at $2.0M, indicating improving operational efficiency despite the accumulated deficit of -$118.6M.
Industry Overview
The enterprise data and analytics sector is experiencing robust growth as organizations increasingly rely on cloud-based solutions for decision-making. However, competition from large technology giants and specialized boutique firms creates a challenging landscape for mid-sized solution providers like Sypris to capture market share.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $110.1M | $136.2M | $140.2M |
| Cost of Revenue | $95.3M | $119.0M | $120.3M |
| Gross Profit | $14.9M | $17.2M | $19.9M |
| Operating Expenses | $14.5M | $16.3M | $17.0M |
| Operating Income | $364.0K | $969.0K | $2.9M |
| G&A | $14.5M | $16.3M | $17.0M |
| Stock-Based Comp | $683.0K | $813.0K | $868.0K |
| D&A | $3.1M | $3.3M | $3.2M |
| Depreciation | $3.1M | $3.3M | $3.2M |
| Other OpEx | $0 | $0 | $0 |
| Non-Operating Income | $-1.9M | $-1.9M | $-2.9M |
| Interest Expense | $1.1M | $777.0K | — |
| Pre-Tax Income | $-1.5M | $-933.0K | $26.0K |
| Income Tax | $948.0K | $663.0K | $1.7M |
| Continuing Ops | $-2.5M | $-1.6M | $-1.7M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-2.5M | $-1.6M | $-1.7M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-2.5M | $-1.6M | $-1.7M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $80.0M | $103.9M | $98.0M |
| Accounts Receivable | $8.1M | $8.9M | $10.6M |
| Inventory | $42.1M | $77.3M | $66.7M |
| Prepaid Expenses | $8.1M | $9.7M | $11.1M |
| Other Current Assets | $21.6M | $7.9M | $9.7M |
| Long-Term Assets | $24.2M | $25.5M | $21.4M |
| PP&E (Net) | $15.5M | $17.1M | — |
| Operating Leases | $4.3M | $3.3M | $3.7M |
| Other LT Assets | $4.4M | $5.0M | $17.6M |
| Total Assets | $104.1M | $129.3M | $119.4M |
| Current Liabilities | $56.1M | $86.5M | $79.5M |
| Accounts Payable | $17.6M | $26.7M | $18.4M |
| Current Leases | $1.2M | $1.1M | $906.0K |
| Deferred Revenue | $27.9M | $49.7M | $50.4M |
| Other Current Liab | $-23.9M | $-47.3M | $-47.9M |
| Long-Term Liabilities | $28.4M | $20.4M | $20.3M |
| LT Operating Leases | $3.7M | $2.6M | $3.3M |
| Other LT Liab | $12.3M | $13.5M | $12.6M |
| Total Liabilities | $84.6M | $106.9M | $99.8M |
| Shareholders' Equity | $19.6M | $22.5M | $19.6M |
| Paid-In Capital | $155.5M | $156.2M | $157.0M |
| Retained Earnings | $-115.3M | $-116.9M | $-118.6M |
| AOCI | $-20.8M | $-17.1M | $-19.0M |
| Treasury Stock | $0 | — | — |
| Total L&E | $104.1M | $129.3M | $119.4M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-2.5M | $-1.6M | $-1.7M |
| Non-Cash Adjustments | $-24.2M | $-69.0M | $16.5M |
| Working Capital Changes | $40.5M | $59.5M | $-12.8M |
| Cash from Operations | $13.8M | $-11.1M | $2.0M |
| Capital Expenditures | $3.0M | $2.1M | $1.1M |
| Cash from Investing | $-3.0M | $-2.1M | $-1.1M |
| Cash from Financing | $-1.4M | $-614.0K | $820.0K |
| FX Effect | $649.0K | $75.0K | $29.0K |
| Net Change in Cash | $10.0M | $-13.8M | $1.8M |
| Beginning Cash | $11.6M | $21.6M | $7.9M |
| Ending Cash | $21.6M | $7.9M | $9.7M |
Frequently Asked Questions
How does SYPRIS SOLUTIONS INC make money?
The company's revenue streams are driven by professional services in data migration, ongoing cloud maintenance contracts, custom software development projects, and licensing of its proprietary data governance platform.
What are the main risks for SYPR?
The company faces significant risks from high operating expenses relative to gross profit, persistent net losses impacting retained earnings, sensitivity to economic downturns affecting enterprise IT budgets, and potential concentration risk within specific client sectors.
What is SYPR's competitive advantage?
Sypris maintains a strong competitive position through deep domain expertise in complex legacy system modernization, a highly trained workforce specialized in niche integration technologies, and recurring revenue from long-term cloud support agreements.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.