Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jul. 05, 2015 | Aug. 05, 2015 | |
Entity Registrant Name | SYPRIS SOLUTIONS INC | |
Entity Central Index Key | 864,240 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 20,788,544 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 5, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Net revenue: | ||||
Outsourced services | $ 32,942,000 | $ 83,233,000 | $ 64,814,000 | $ 159,753,000 |
Products | 7,814,000 | 9,880,000 | 12,951,000 | 17,604,000 |
Total net revenue | 40,756,000 | 93,113,000 | 77,765,000 | 177,357,000 |
Cost of sales: | ||||
Outsourced services | 35,326,000 | 73,816,000 | 71,112,000 | 141,797,000 |
Products | 5,464,000 | 8,470,000 | 9,844,000 | 14,169,000 |
Total cost of sales | 40,790,000 | 82,286,000 | 80,956,000 | 155,966,000 |
Gross (loss) profit | (34,000) | 10,827,000 | (3,191,000) | 21,391,000 |
Selling, general and administrative | 7,327,000 | 9,141,000 | 16,445,000 | 17,133,000 |
Research and development | 195,000 | 10,000 | 528,000 | 161,000 |
Severance | 281,000 | 0 | 566,000 | 0 |
Operating (loss) income | (7,837,000) | 1,676,000 | (20,730,000) | 4,097,000 |
Interest expense, net | 1,154,000 | 155,000 | 1,488,000 | 287,000 |
Other (income) expense, net | (575,000) | 75,000 | (754,000) | (453,000) |
(Loss) income before taxes | (8,416,000) | 1,446,000 | (21,464,000) | 4,263,000 |
Income tax (benefit) expense | 0 | 1,076,000 | (15,000) | 2,241,000 |
Net (loss) income | $ (8,416,000) | $ 370,000 | $ (21,449,000) | $ 2,022,000 |
(Loss) income per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ 0.02 | $ (1.09) | $ 0.10 |
Diluted (in dollars per share) | $ (0.43) | $ 0.02 | $ (1.09) | $ 0.10 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 19,701 | 19,622 | 19,675 | 19,525 |
Diluted (in shares) | 19,701 | 19,682 | 19,675 | 19,566 |
Dividends declared per common share (in dollars per share) | $ 0 | $ 0.02 | $ 0 | $ 0.04 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Net (loss) income | $ (8,416,000) | $ 370,000 | $ (21,449,000) | $ 2,022,000 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (395,000) | 73,000 | (1,053,000) | 99,000 |
Total comprehensive (loss) income | $ (8,811,000) | $ 443,000 | $ (22,502,000) | $ 2,121,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
Series A Preferred Stock [Member] | ||
Stockholders’ equity: | ||
Preferred stock | $ 0 | $ 0 |
Nonvoting Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Cash and cash equivalents | 1,579,000 | 7,003,000 |
Accounts receivable, net | 13,197,000 | 47,666,000 |
Inventory, net | 24,464,000 | 29,031,000 |
Other current assets | 7,454,000 | 5,666,000 |
Assets held for sale – current | 9,410,000 | 0 |
Total current assets | 56,104,000 | 89,366,000 |
Property, plant and equipment, net | 27,798,000 | 37,654,000 |
Other assets | 4,006,000 | 2,661,000 |
Total assets | 87,908,000 | 129,681,000 |
Accounts payable | 15,021,000 | 39,027,000 |
Accrued liabilities | 13,333,000 | 18,775,000 |
Note payable – Meritor | 3,047,000 | 0 |
Note payable – related party | 5,500,000 | 0 |
Current portion of long-term debt | 16,749,000 | 17,000,000 |
Liabilities held for sale – current | 1,833,000 | 0 |
Total current liabilities | 55,483,000 | 74,802,000 |
Other liabilities | 7,615,000 | 7,991,000 |
Total liabilities | 63,098,000 | 82,793,000 |
Preferred stock | 0 | 0 |
Common stock | 208,000 | 206,000 |
Additional paid-in capital | 151,736,000 | 151,314,000 |
Retained deficit | (101,045,000) | (79,596,000) |
Accumulated other comprehensive loss | (26,088,000) | (25,035,000) |
Treasury stock, 34,692 and 82,692 shares in 2015 and 2014, respectively | (1,000) | (1,000) |
Total stockholders’ equity | 24,810,000 | 46,888,000 |
Total liabilities and stockholders’ equity | $ 87,908,000 | $ 129,681,000 |
Consolidated Balance Sheets (U5
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Jul. 05, 2015 | Dec. 31, 2014 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 24,850 | 24,850 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Nonvoting Common Stock [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 975,150 | 975,150 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 20,826,236 | 20,567,735 |
Common stock, shares outstanding (in shares) | 20,791,544 | 20,485,043 |
Treasury stock (in shares) | 34,692 | 82,692 |
Consolidated Cash Flow Statemen
Consolidated Cash Flow Statements (Unaudited) - USD ($) | 6 Months Ended | |
Jul. 05, 2015 | Jun. 29, 2014 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (21,449,000) | $ 2,022,000 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 4,950,000 | 5,396,000 |
Stock-based compensation expense | 501,000 | 914,000 |
Deferred revenue recognized | (4,200,000) | (4,329,000) |
Deferred loan costs recognized | 630,000 | 39,000 |
Gain on sale of assets | 0 | (4,000) |
Provision for excess and obsolete inventory | 1,125,000 | 445,000 |
Other noncash items | (1,587,000) | 81,000 |
Contributions to pension plans | (281,000) | (441,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 25,317,000 | (26,343,000) |
Inventory | 1,400,000 | (1,032,000) |
Other current assets | (3,006,000) | 755,000 |
Accounts payable | (14,026,000) | 23,581,000 |
Accrued and other liabilities | (355,000) | 3,593,000 |
Net cash (used in) provided by operating activities | (10,981,000) | 4,677,000 |
Cash flows from investing activities: | ||
Capital expenditures, net | (883,000) | (2,474,000) |
Proceeds from sale of assets | 0 | 8,000 |
Net cash used in investing activities | (883,000) | (2,466,000) |
Cash flows from financing activities: | ||
Net change in debt under revolving credit agreements | (251,000) | (1,000,000) |
Proceeds from note payable – Meritor | 3,047,000 | 0 |
Proceeds from note payable – related party | 5,500,000 | 0 |
Debt modification costs | (1,369,000) | 0 |
Common stock repurchases | 0 | (236,000) |
Indirect repurchase of shares of minimum statutory tax withholdings | (77,000) | (419,000) |
Cash dividends paid | (410,000) | (814,000) |
Proceeds from issuance of common stock | 0 | 4,000 |
Net cash provided by (used in) by financing activities | 6,440,000 | (2,465,000) |
Net decrease in cash and cash equivalents | (5,424,000) | (254,000) |
Cash and cash equivalents at beginning of period | 7,003,000 | 18,674,000 |
Cash and cash equivalents at end of period | $ 1,579,000 | $ 18,420,000 |
Note 1 - Nature of Business
Note 1 - Nature of Business | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | (1) Nature of Business All references to “Sypris,” the “Company,” “we” or “our” include Sypris Solutions, Inc. and its wholly-owned subsidiaries. Sypris is a diversified provider of outsourced services and specialty products. The Company performs a wide range of manufacturing, engineering, design, and other technical services, often under multi-year, sole-source contracts with corporations and government agencies in the markets for truck components and assemblies and aerospace and defense electronics. The Company provides such services through its two segments, Sypris Technologies, Inc. (Sypris Technologies) and Sypris Electronics, LLC (Sypris Electronics). See Note 13, “Segment Data,” to the consolidated financial statements. |
Note 2 - Basis of Presentation
Note 2 - Basis of Presentation | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | (2) Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Sypris Solutions, Inc. and its wholly-owned subsidiaries, and have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission. The Company’s operations are domiciled in the United States (U.S.), Mexico and the United Kingdom (U.K.) and serve a wide variety of domestic and international customers. All intercompany transactions and accounts have been eliminated. These unaudited consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to fairly state the results of operations, financial position and cash flows for the periods presented, and the disclosures herein are adequate to make the information presented not misleading. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses (see, e.g., Note 12 “Debt,” to the consolidated financial statements) . Actual results for the three and six months ended July 5, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements, and notes thereto, for the year ended December 31, 2014 as presented in the Company’s Annual Report on Form 10-K. |
Note 3 - Recent Accounting Pron
Note 3 - Recent Accounting Pronouncements | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | (3 ) Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued guidance that revises the definition of a discontinued operation. The revised definition limits discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on operations and financial results. The guidance also requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The guidance will apply to covered transactions that occur after 2014 and was optional for the initial reporting of disposals completed or approved in 2014. The Company adopted the standard effective January 1, 2015. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” This ASU supersedes the revenue recognition requirements in “Accounting Standard Codification 605 - Revenue Recognition” and most industry-specific guidance. The standard requires that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. The new guidance will also require new disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 was originally effective for us on January 1, 2017; however, in July 2015 the FASB decided to defer the effective date by one year. Early application is not permitted, but reporting entities may choose to adopt the standard as of the original effective date. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently assessing the impact of the adoption of ASU 2014-09 on its results of operations, financial position and cash flows. In August 2014, the FASB issued ASU No. 2014-15 Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 changes the presentation of debt issuance costs for term debt in the balance sheet by requiring the debt issuance costs to be presented as a direct deduction from the related debt liability, rather than recorded as an asset. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2015, and interim periods within those annual periods and will need to be applied retrospectively. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on our consolidated results of operations and financial condition . In July 2015, the FASB issued ASU No. 2015-11, which simplifies the subsequent measurement of inventory. It replaces the current lower of cost or market test with a lower of cost or net realizable value test. The standard is effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods therein. Early adoption is permitted. The new guidance must be applied prospectively. The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements. |
Note 4 - Loss of a Key Customer
Note 4 - Loss of a Key Customer and Management's Recovery Plans | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | ( 4 ) Management’s Plans Our supply agreement with Dana Holding Corporation (“Dana”) was originally scheduled to expire on December 31, 2014. For the year ended December 31, 2014, Dana represented approximately 59% of our net revenue. In July 2013, Sypris and Dana signed an amended and restated supply agreement to extend the supply agreement term beyond December 31, 2014, the binding effect of which is currently in dispute. Dana has repudiated this July 2013 agreement, and Dana has ordered a minimal amount of components from us since December 31, 2014. Sypris disputes Dana’s ability to do so and is seeking to recover its lost margins and additional remedies with respect to the revenues to which Sypris was entitled under the renewed agreement. Dana initiated an ancillary action in Ohio state court challenging the arbitrability of the existence and enforceability of the amended and restated July 2013 supply agreement on January 17, 2014. The parties have conducted discovery, and the Ohio trial court has granted an initial motion for judgment on the pleadings or summary judgment, which Sypris has appealed. If the case goes to trial and if ruled in the Company’s favor, the dispute would revert to an arbitrator to determine damages. Additionally, the parties also asserted various damages claims against each other arising out of their prior supply agreement and sought the assistance of an arbitrator in connection with these disputes. The parties had an arbitration hearing in January 2015, and the ruling was received on April 29, 2015, awarding Sypris $505,000. As a result of these disputes with Dana and the loss of the Dana business, the Company has taken significant actions during the fourth quarter of 2014 and the first half of 2015, including but not limited to the following: (i) bid on significant new business opportunities with existing and potential customers resulting from the strength of the commercial vehicle market and a perceived shift in market share among tier one suppliers, (ii) reduced workforce at the locations most impacted by the loss of Dana, (iii) reduced employment costs by reduced work schedules, senior management pay reductions, deferral of merit increases and certain benefit payments, and (iv) utilized labor for preventative maintenance on equipment and facilities, and deployment of Toyota Production System management and production practices. The Company is in the advanced stages of negotiations with several customers about potential new programs, although the typical cycle time for adding such programs can require six months or more. Additionally, subsequent to quarter end, the Company sold certain assets used in the Company’s manufacturing facility in Morganton, North Carolina within the Sypris Technologies segment (see Note 5 “Assets Held for Sale,” and Note 19 “Subsequent Events,” to the consolidated financial statements). The Company has engaged an investment banking firm to provide financial advisory services in connection with its effort to secure new subordinated debt and a financial advisor to assist in the management of the Company’s cash flows and expense levels. Separately, the Company has engaged Needham & Co., Inc. to assist in the potential sale of other appropriate business lines. The Company has also engaged a commercial real estate firm to provide advisory and brokerage services related to the potential disposition of certain real property owned by the Company. There can be no assurance that we will be able to secure debt financing or dispose of assets on a timely basis or at all. In addition, there can be no assurance that our plans to mitigate the loss of the Dana business and to effectively manage our costs during the transition will be successful. The Company has amended its Credit Facility in March and again in July 2015 which provides for up to $10,000,000 of liquidity through September 30, 2015. The Company plans to secure debt financing and/or to dispose of certain assets prior to September 30, 2015, unless the lenders and the Company have otherwise agreed to an appropriate extension of that date. See Note 12 “Debt,” to the consolidated financial statements for more detail on the Credit Facility, these recent amendments to the Credit Facility, our other debt arrangements and our current liquidity position. Non-compliance with the Company’s debt covenants, including its covenants to repay the Credit Facility and the Meritor Note, as amended, in full by September 30, 2015, would provide the debt holders with certain contractual rights, including the right to demand immediate repayment of all outstanding borrowings. Since the loss of the Dana business, the Company has also experienced negative cash flows from operating activities which could hamper or materially increase the costs of the Company’s ability to comply with such covenants by refinancing its debts before September 30, 2015. T he Company’s consolidated financial statements have been prepared assuming the ongoing realization of assets, satisfaction of liabilities and continuity of operations as a going concern in the ordinary course of business, but there can be no assurances that the Company’s current initiatives and plans will ultimately succeed and a substantial doubt exists with respect to such assumptions, which could materially and adversely impair the Company’s ability to operate, its cash flows, financial condition and ongoing results. However, management currently believes that the Company’s ongoing initiatives, including its current initiatives to refinance its current debt obligations and its parallel efforts to sell certain non-core or underutilized assets or business lines, as more fully described elsewhere in this report, will be successful within the time frames and on terms acceptable to PNC Bank, NA (“PNC”) and Meritor, Inc. (“Meritor”) . |
Note 5 - Assets Held for Sale
Note 5 - Assets Held for Sale | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ( 5 ) Assets Held for Sale In June 2015, the Company’s management approved a plan to sell certain assets and related liabilities used in the Company’s manufacturing facility in Morganton, North Carolina within the Sypris Technologies segment. The Company concluded that the assets and related liabilities qualified for Assets Held for Sale (AHFS) accounting in accordance with ASC 205 as of July 5, 2015. On July 9, 2015, the Company entered an asset purchase agreement (the “Agreement”) to sell certain assets used in the Company’s manufacturing facility in Morganton, North Carolina, to its largest customer, Meritor. The Company retained the Morganton plant’s axle shaft manufacturing lines and certain related assets, intellectual property and inventories, which will be transitioned to the Company’s Louisville, Kentucky plant later in 2015. All other Morganton equipment, related assets and intellectual property were sold to Meritor (the “Morganton Sale”) for $10,500,000 in cash paid at the closing and other consideration. Meritor purchased related inventories and accounts receivable and assumed or released certain accounts payable and other accrued liabilities, for $2,000,000 (subject to customary post-closing adjustments to actual). Meritor also agreed to lease the Morganton facility for an initial five-year term for $2,000,000 in rent, pre-paid at the closing, and an additional $1,200,000 paid within 30 days of closing either to purchase the facility or to extend the lease for an additional 15 years at Meritor’s option. The proceeds of $14,500,000 at closing, and $1,200,000 received within 30 days of closing, approximated $15,700,000 in total consideration for the Morganton Sale, which was used to pay down the Company’s outstanding debt with PNC. At closing, the parties also entered into a Meritor Note Amendment, whereby the Company has issued an additional secured obligation to Meritor of $412,000 on July 9, 2015 and further agreed to increase the Meritor Note by up to an additional $335,000 in the near future as needed to reflect certain potential roof repairs required at the Morganton facility ( see Note 19 “Subsequent Events”). The following assets and liabilities have been segregated and included in assets held for sale and liabilities held for sale, as appropriate, in the consolidated balance sheets (in thousands): July 5 , 2015 (Unaudited) Accounts receivable, net $ 1,062 Inventory, net 2,076 Other current assets 374 Property, plant and equipment, net 5,898 Total assets $ 9,410 Accounts payable $ 1,466 Accrued and other liabilities 367 Total liabilities $ 1,833 |
Note 6 - Milestone Revenue Reco
Note 6 - Milestone Revenue Recognition | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Milestone Revenue Recognition [Text Block] | ( 6 ) Milestone Revenue Recognition The Company periodically enters into research and development contracts with customers related primarily to key encryption products. When the contracts provide for milestone or other interim payments, the Company will recognize revenue under the milestone method in accordance with Accounting Standards Codification (“ASC”) 605-28 Revenue Recognition, Milestone Method |
Note 7 - Dana Claim
Note 7 - Dana Claim | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Extraordinary Items Disclosure [Text Block] | ( 7 ) Dana Claim On March 3, 2006, Dana and 40 of its U.S. subsidiaries, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. On August 7, 2007, the Company entered into a comprehensive settlement agreement with Dana to resolve all outstanding disputes between the parties, terminate previously approved arbitration payments and replace three existing supply agreements with a single, revised contract running through 2014. In addition, Dana provided the Company with an allowed general unsecured non-priority claim in the face amount of $89,900,000 (the “Claim”). The Claim provided to the Company was agreed to by the Company and Dana as consideration for the aggregate economic impact of the various elements the two parties were negotiating. After the aggregate Claim value of $89,900,000 was established, the Company recorded the claim at the estimated fair value of $76,483,000 and allocated the estimated fair value to each commercial issue negotiated. The revenues and resulting net income associated with each of those issues requiring the Company’s continued involvement were deferred and were recognized over the applicable period of the involvement. For the six months ended June 29, 2014, the Company recognized into revenue $4,329,000 related to the Claim. The Claim was fully amortized as of December 31, 2014. |
Note 8 - Other (Income) Expense
Note 8 - Other (Income) Expense, Net | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Other Income and Other Expense Disclosure [Text Block] | ( 8 ) Other (Income) Expense, Net During the three and six months ended July 5, 2015, the Company recognized other income of $505,000 related to an arbitration settlement in the Dana dispute received in the second quarter. See Note 4 “ During the three and six months ended June 29, 2014, the Company recognized net gains of $123,000 and $714,000, respectively, within the Sypris Technologies segment from the receipt of federal grant funds for improvements made under a flood relief program. Additionally, for the three and six months ended June 29, 2014, the Company recognized foreign currency translation losses of $65,000 and $96,000, respectively. These gains and losses are included in other (income) expense, net on the consolidated statements of operations. |
Note 9 - (Loss) Earnings Per Co
Note 9 - (Loss) Earnings Per Common Share | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | ( 9 ) (Loss) E arnings Per Common Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Restricted stock granted by the Company is considered a participating security since it contains a non-forfeitable right to dividends. Our potentially dilutive securities include potential common shares related to our stock options and restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Diluted earnings per share excludes the impact of common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. For the three and six months ended July 5, 2015, diluted weighted average common shares do not include the impact of any outstanding stock options and unvested compensation-related shares because the effect of these items on diluted net loss would be anti-dilutive. There were 789,000 and 983,000 potential common shares excluded from diluted earnings per share for the three and six months ended June 29, 2014, respectively. A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted earnings (loss) per common share is as follows (in thousands): Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) (Loss) income attributable to stockholders: Net (loss) income as reported $ (8,416 ) $ 370 $ (21,449 ) $ 2,022 Less distributed and undistributed earnings allocable to restricted award holders 0 0 0 (46 ) Less dividends declared attributable to restricted award holders 0 (15 ) 0 (25 ) Net (loss) income allocable to common stockholders $ (8,416 ) $ 355 $ (21,449 ) $ 1,951 (Loss) income per common share attributable to stockholders: Basic $ (0.43 ) $ 0.02 $ (1.09 ) $ 0.10 Diluted $ (0.43 ) $ 0.02 $ (1.09 ) $ 0.10 Weighted average shares outstanding – basic 19,701 19,622 19,675 19,525 Weighted average additional shares assuming conversion of potential common shares 0 60 0 41 Weighted average shares outstanding – diluted 19,701 19,682 19,675 19,566 |
Note 10 - Inventory
Note 10 - Inventory | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | ( 10 ) Inventory Inventory consists of the following (in thousands): Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Raw materials $ 14,300 $ 16,687 Work in process 11,674 11,702 Finished goods 5,589 6,991 Reserve for excess and obsolete inventory (7,099 ) (6,349 ) $ 24,464 $ 29,031 |
Note 11 - Property, Plant and E
Note 11 - Property, Plant and Equipment | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | (11 ) Property, Plant and Equipment Property, plant and equipment consists of the following (in thousands): Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Land and land improvements $ 1,939 $ 2,770 Buildings and building improvements 22,215 26,055 Machinery, equipment, furniture and fixtures 126,930 158,816 Construction in progress 830 2,100 151,914 189,741 Accumulated depreciation (124,116 ) (152,087 ) $ 27,798 $ 37,654 |
Note 12 - Debt
Note 12 - Debt | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Long-term Debt [Text Block] | (12 ) Debt Debt consists of the following: Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Revolving credit facility $ 16,749 $ 17,000 Note payable – Meritor 3,047 0 Note payable – related party 5,500 0 $ 25,296 $ 17,000 The Company’s Revolving Credit and Security Agreement, dated May 12, 2011 with PNC (which we refer to as the "Loan Agreement" or our “Credit Facility”) was amended during the first quarter of 2015 to, among other things: (i) waive certain existing or potential events of default, (ii) limit total borrowings to $25,000,000, (iii) restrict the payment of dividends, (iv) increase the applicable margin on borrowings which will result in an initial interest rate of approximately 6% and increasing by 50 basis points beginning June 2015 and each month thereafter to an estimated interest rate of 10% in January 2016, (v) revise the maturity date to January 15, 2016, (vi) revise certain financial covenants to include a minimum cumulative free cash flow covenant, (vii) establish minimum excess availability of $1,000,000 initially, through May 31, 2015, and then in the amount of up to $5,000,000 on or before September 30, 2015, and (viii) require the Company to raise new capital by securing subordinated debt or divesting certain real property or a combination thereof on or before September 30, 2015 (and, if earlier than September 30, 2015, to maintain minimum excess availability of up to $5,000,000 thereafter). Obligations under the Credit Facility are guaranteed by all of our U.S. subsidiaries and are secured by a first priority lien on substantially all domestic assets of the Company. The Company has engaged an investment banking firm on March 20, 2015 to provide financial advisory services in connection with its efforts to secure new subordinated debt. The Company also engaged a commercial real estate firm to provide advisory and brokerage services related to a potential disposition of certain real property owned by the Company. On July 2, 2015, the Company further amended its Credit Facility to reduce the reserved amount available to be borrowed under the Loan Agreement from $25,000,000 to $22,500,000 prior to the sale of certain assets used in the Company’s manufacturing business in Morganton, North Carolina (“Morganton Sale”), and to further reduce such reserved amount to $10,000,000 after the Morganton Sale. The Amendment also waives certain existing or potential events of default under the Loan Agreement, amends the Company’s borrowing base formula, relaxes the Company’s financial covenants to reflect its near term forecasts, and commits the Company to repay all amounts borrowed under the Loan Agreement on or before September 30, 2015 and to take a number of mutually agreed actions designed to accomplish that goal, including the continued retention of various advisers to assist in the Company’s efforts to divest non-core, underutilized or other appropriate assets and to modify its cost structure as needed, and the completion of the Morganton Sale. The Company agreed to pay PNC a fee of $500,000 in connection with the execution of the Amendment and a success fee of $500,000 on September 30, 2015 (or upon any earlier acceleration or repayment of the Loan Agreement). In addition to the aforementioned pursuit of funding sources, the Company is also considering opportunities to support its cash flow from operations in 2015 through sources of cash from either investing or financing activities. The Company is exploring alternatives to monetize certain assets of the Company for values in excess of the availability being provided under the Credit Facility, in order to generate additional sources of funds to the Company. In connection with the amendments to the Credit Facility, the Company has received the proceeds of subordinated indebtedness from Gill Family Capital Management in an amount of $5,500,000. Gill Family Capital Management (GFCM) is an entity controlled by our president and chief executive officer, Jeffrey T. Gill and one of our directors, R. Scott Gill. Gill Family Capital Management, Inc., Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. The promissory note bears interest at a rate of 8.00% per year and matures on April 12, 2016. All principal and interest on the promissory note will be due and payable on the maturity date. On July 2, 2015, the Company entered into a secured promissory note (the “Meritor Note”) in the principal amount of $3,047,000, with Meritor, in exchange for the release of certain outstanding net trade payables owed to Meritor for ongoing purchases of raw materials and the guarantee of certain inventory values related to Meritor’s business as collateral under the Credit Facility. The Meritor Note is secured by substantially all of the collateral for the Loan Agreement, is senior to the promissory note previously issued to GFCM and is subordinate to the rights under the Credit Facility. The Meritor Note bears interest at a rate of 10.0% per year and matures on September 30, 2015 or upon any earlier acceleration or repayment of the Loan Agreement. All principal and interest on the Meritor Note will be due and payable on the maturity date. On July 9, 2015, the Company entered an asset purchase agreement to sell certain assets and related liabilities used in the Company’s manufacturing facility in Morganton, North Carolina, to Meritor for $12,500,000. The Buyer also agreed to lease the Morganton facility for an initial five-year term, for $2,000,000 in rent, pre-paid at the closing, and an additional $1,200,000 to be paid within 30 days of closing either to purchase the facility or to extend the lease for an additional 15 years at the Buyer’s option. At closing, the parties also entered into a Meritor Note Amendment, whereby the Company has issued an additional secured obligation to Meritor of $412,000 on July 9, 2015 and further agreed to increase the Meritor Note by up to an additional $335,000 in the near future as needed to reflect certain potential roof repairs required at the Morganton facility. Actual borrowing availability under the Credit Facility is determined by a daily borrowing base collateral calculation that is based on specified percentages of the value of eligible accounts receivable, inventory and machinery and equipment, less certain reserves and subject to certain other adjustments. Based on that calculation, at July 5, 2015, we had actual total borrowing availability under the Credit Facility of $19,825,000, of which we had drawn $16,749,000, leaving $2,143,000 available for borrowing, after accounting for the letter of credit. Standby letters of credit up to a maximum of $5,000,000 could be issued under the Credit Facility of which $933,000 and $755,000 were issued at July 5, 2015 and December 31, 2014, respectively. The Credit Facility contains a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in sale and leaseback transactions, prepay other indebtedness, modify organizational documents and certain other agreements, create restrictions affecting subsidiaries, make dividends and other restricted payments without bank approval, create liens, make investments, make acquisitions, engage in mergers, change the nature of our business and engage in certain transactions with affiliates. Non-compliance with the Company’s debt covenants, including its covenants to repay the Credit Facility and the Meritor Note, as amended, in full by September 30, 2015, would provide the debt holders with certain contractual rights, including the right to demand immediate repayment of all outstanding borrowings. Since the loss of the Dana business (see Note 4 “ Management’s Plans” ), the Company has also experienced negative cash flows from operating activities which could hamper or materially increase the costs of the Company’s ability to comply with such covenants by refinancing its debts before September 30, 2015. T he Company’s consolidated financial statements have been prepared assuming the ongoing realization of assets, satisfaction of liabilities and continuity of operations as a going concern in the ordinary course of business, but there can be no assurances that the Company’s current initiatives and plans will ultimately succeed and a substantial doubt exists with respect to such assumptions, which could materially and adversely impair the Company’s ability to operate, its cash flows, financial condition and ongoing results. However, management currently believes that the Company’s ongoing initiatives, including its current initiatives to refinance its current debt obligations and its parallel efforts to sell certain non-core or underutilized assets or business lines, as more fully described elsewhere in this report, will be successful within the time frames and on terms acceptable to PNC and Meritor. |
Note 13 - Segment Data
Note 13 - Segment Data | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | ( 13) Segment Data The Company is organized into two business groups, Sypris Technologies and Sypris Electronics. These segments are each managed separately because of the distinctions between the products, services, markets, customers, technologies and workforce skills of the segments. Sypris Technologies provides manufacturing services for a variety of customers that outsource forged and finished steel components and subassemblies. Sypris Technologies also manufactures high-pressure closures and other fabricated products. Sypris Electronics provides manufacturing and technical services as an outsourced service provider and manufactures complex data storage systems, trusted solutions for identity management, cryptographic key distribution and cyber analytics. There was no intersegment net revenue recognized in any of the periods presented. The following table presents financial information for the reportable segments of the Company (in thousands): Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) Net revenue from unaffiliated customers: Sypris Technologies $ 32,010 $ 83,710 $ 60,080 $ 159,549 Sypris Electronics 8,746 9,403 17,685 17,808 $ 40,756 $ 93,113 $ 77,765 $ 177,357 Gross profit (loss): Sypris Technologies $ 581 $ 11,383 $ (3,523 ) $ 22,537 Sypris Electronics (615 ) (556 ) 332 (1,146 ) $ (34 ) $ 10,827 $ (3,191 ) $ 21,391 Operating (loss) income: Sypris Technologies $ (2,370 ) $ 7,040 $ (11,738 ) $ 15,153 Sypris Electronics (3,111 ) (3,168 ) (4,701 ) (6,245 ) General, corporate and other (2,356 ) (2,196 ) (4,291 ) (4,811 ) $ (7,837 ) $ 1,676 $ (20,730 ) $ 4,097 Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Total assets: Sypris Technologies $ 58,575 $ 95,108 Sypris Electronics 27,010 26,874 General, corporate and other 2,323 7,699 $ 87,908 $ 129,681 |
Note 14 - Commitments and Conti
Note 14 - Commitments and Contingencies | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | ( 14 ) Commitments and Contingencies The provision for estimated warranty costs is recorded at the time of sale and periodically adjusted to reflect actual experience. The Company’s warranty liability, which is included in accrued liabilities in the accompanying balance sheets as of July 5, 2015 and December 31, 2014, was $772,000 and $825,000, respectively. The Company’s warranty expense for the six months ended July 5, 2015 and June 29, 2014 was $83,000 and $145,000, respectively. Additionally, the Company sells three and five-year extended warranties for one of its link encryption products. The revenue from the extended warranties is deferred and recognized ratably over the contractual term. As of July 5, 2015 and December 31, 2014, the Company had deferred $666,000 and $839,000, respectively, related to extended warranties. The Company bears insurance risk as a member of a group captive insurance entity for certain general liability, automobile and workers’ compensation insurance programs and a self-insured employee health program. The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities on a quarterly basis. As facts change, it may become necessary to make adjustments that could be material to the Company’s consolidated results of operations and financial condition. The Company believes that its present insurance coverage and level of accrued liabilities are adequate. The Company is involved in certain litigation and contract issues arising in the normal course of business. While the outcome of these matters cannot, at this time, be predicted in light of the uncertainties inherent therein, management does not expect that these matters will have a material adverse effect on the consolidated financial position or results of operations of the Company. As of July 5, 2015, the Company had outstanding purchase commitments of approximately $6,223,000, primarily for the acquisition of inventory and manufacturing equipment. As of July 5, 2015, the Company also had outstanding letters of credit of $933,000 primarily under the aforementioned captive insurance program. |
Note 15 - Income Taxes
Note 15 - Income Taxes | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | ( 15 ) Income Taxes The provision for income taxes includes federal, state, local and foreign taxes. The Company’s effective tax rate varies from period to period due to the proportion of foreign and domestic pre-tax income expected to be generated by the Company. The Company provides for income taxes for its domestic operations at a statutory rate of 35% and for its foreign operations at a statutory rate of 30% in 2015 and 2014. The Company’s foreign operations are also subject to minimum income taxes in periods prior to 2015 where positive cash flows exceed taxable income. Reconciling items between the federal statutory rate and the effective tax rate also include the expected usage of federal net operating loss carryforwards, state income taxes, valuation allowances and certain other permanent differences. The Company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements in accordance with ASC 740, Income Taxes The Company expects to repatriate available non-U.S. cash holdings in 2015 and 2016 to support management’s strategic objectives and fund ongoing U.S. operational cash flow requirements; therefore current earnings from non-U.S. operations are not treated as permanently reinvested. The U.S. income tax expense recorded in 2015 on these non-U.S. earnings is expected to be offset by the benefit of a partial release of a valuation allowance on U.S. |
Note 16 - Employee Benefit Plan
Note 16 - Employee Benefit Plans | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | (1 6 ) Employee Benefit Plans Pension expense (benefit) consisted of the following (in thousands): Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) Service cost $ 3 $ 0 $ 7 $ 6 Interest cost on projected benefit obligation 411 448 845 895 Net amortizations, deferrals and other costs 177 123 347 265 Expected return on plan assets (558 ) (592 ) (1,122 ) (1,199 ) $ 33 $ (21 ) $ 77 $ (33 ) |
Note 17 - Accumulated Other Com
Note 17 - Accumulated Other Comprehensive Loss | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Comprehensive Income (Loss) Note [Text Block] | (1 7 ) Accumulated Other Comprehensive Loss The Company’s accumulated other comprehensive loss consists of employee benefit-related adjustments and foreign currency translation adjustments. Accumulated other comprehensive loss consisted of the following (in thousands): Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Foreign currency translation adjustments $ (8,318 ) $ (7,265 ) Employee benefit related adjustments – U.S. (17,584 ) (17,584 ) Employee benefit related adjustments – Mexico (186 ) (186 ) Accumulated other comprehensive loss $ (26,088 ) $ (25,035 ) |
Note 18 - Fair Value of Financi
Note 18 - Fair Value of Financial Instruments | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Fair Value, Measurement Inputs, Disclosure [Text Block] | (1 8 ) Fair Value of Financial Instruments Cash, accounts receivable, accounts payable and accrued liabilities are reflected in the consolidated financial statements at their carrying amount which approximates fair value because of the short-term maturity of those instruments. The carrying amount of debt outstanding at July 5, 2015 under the Credit Facility, the Meritor Note and the related party note payable approximates fair value because borrowings mature between September 2015 and April 2016. |
Note 19 - Subsequent Events
Note 19 - Subsequent Events | 6 Months Ended |
Jul. 05, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | (1 9 ) Subsequent Events On July 9, 2015, the Company entered an asset purchase agreement (the “Agreement”) to sell certain assets used in the Company’s manufacturing facility in Morganton, North Carolina, to Meritor. The Company retained the Morganton plant’s axle shaft manufacturing lines and certain related assets, intellectual property and inventories, which will be transitioned to the Company’s Louisville, Kentucky plant later this year. All other Morganton equipment, related assets and intellectual property were sold to Meritor (the “Morganton Sale”) for $10,500,000 in cash paid at the closing and other consideration. Meritor purchased related inventories and accounts receivable and assumed or released certain accounts payable and other accrued liabilities, for $2,000,000 (subject to customary post-closing adjustments to actual). Meritor also agreed to lease the Morganton facility for an initial five-year term for $2,000,000 in rent, pre-paid at the closing, and an additional $1,200,000 to be paid within 30 days of closing either to purchase the facility or to extend the lease for an additional 15 years at Meritor’s option. The proceeds of $14,500,000 at closing, and $1,200,000 received within 30 days of closing, approximated $15,700,000 in total consideration for the Morganton Sale. At closing, the parties also entered into a Meritor Note Amendment, whereby the Company has issued an additional secured obligation to Meritor of $412,000 on July 9, 2015 and further agreed to increase the Meritor Note by up to an additional $335,000 in the near future as needed to reflect certain potential roof repairs required at the Morganton facility. (See Note 12 “Debt”.) |
Note 5 - Assets Held for Sale (
Note 5 - Assets Held for Sale (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | July 5 , 2015 (Unaudited) Accounts receivable, net $ 1,062 Inventory, net 2,076 Other current assets 374 Property, plant and equipment, net 5,898 Total assets $ 9,410 Accounts payable $ 1,466 Accrued and other liabilities 367 Total liabilities $ 1,833 |
Note 9 - (Loss) Earnings Per 27
Note 9 - (Loss) Earnings Per Common Share (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) (Loss) income attributable to stockholders: Net (loss) income as reported $ (8,416 ) $ 370 $ (21,449 ) $ 2,022 Less distributed and undistributed earnings allocable to restricted award holders 0 0 0 (46 ) Less dividends declared attributable to restricted award holders 0 (15 ) 0 (25 ) Net (loss) income allocable to common stockholders $ (8,416 ) $ 355 $ (21,449 ) $ 1,951 (Loss) income per common share attributable to stockholders: Basic $ (0.43 ) $ 0.02 $ (1.09 ) $ 0.10 Diluted $ (0.43 ) $ 0.02 $ (1.09 ) $ 0.10 Weighted average shares outstanding – basic 19,701 19,622 19,675 19,525 Weighted average additional shares assuming conversion of potential common shares 0 60 0 41 Weighted average shares outstanding – diluted 19,701 19,682 19,675 19,566 |
Note 10 - Inventory (Tables)
Note 10 - Inventory (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Raw materials $ 14,300 $ 16,687 Work in process 11,674 11,702 Finished goods 5,589 6,991 Reserve for excess and obsolete inventory (7,099 ) (6,349 ) $ 24,464 $ 29,031 |
Note 11 - Property, Plant and29
Note 11 - Property, Plant and Equipment (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Land and land improvements $ 1,939 $ 2,770 Buildings and building improvements 22,215 26,055 Machinery, equipment, furniture and fixtures 126,930 158,816 Construction in progress 830 2,100 151,914 189,741 Accumulated depreciation (124,116 ) (152,087 ) $ 27,798 $ 37,654 |
Note 12 - Debt (Tables)
Note 12 - Debt (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Revolving credit facility $ 16,749 $ 17,000 Note payable – Meritor 3,047 0 Note payable – related party 5,500 0 $ 25,296 $ 17,000 |
Note 13 - Segment Data (Tables)
Note 13 - Segment Data (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Balance Sheet [Member] | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Gross profit (loss): Sypris Technologies $ 581 $ 11,383 $ (3,523 ) $ 22,537 Sypris Electronics (615 ) (556 ) 332 (1,146 ) $ (34 ) $ 10,827 $ (3,191 ) $ 21,391 Operating (loss) income: Sypris Technologies $ (2,370 ) $ 7,040 $ (11,738 ) $ 15,153 Sypris Electronics (3,111 ) (3,168 ) (4,701 ) (6,245 ) General, corporate and other (2,356 ) (2,196 ) (4,291 ) (4,811 ) $ (7,837 ) $ 1,676 $ (20,730 ) $ 4,097 |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) Net revenue from unaffiliated customers: Sypris Technologies $ 32,010 $ 83,710 $ 60,080 $ 159,549 Sypris Electronics 8,746 9,403 17,685 17,808 $ 40,756 $ 93,113 $ 77,765 $ 177,357 Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Total assets: Sypris Technologies $ 58,575 $ 95,108 Sypris Electronics 27,010 26,874 General, corporate and other 2,323 7,699 $ 87,908 $ 129,681 |
Note 16 - Employee Benefit Pl32
Note 16 - Employee Benefit Plans (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Schedule of Net Benefit Costs [Table Text Block] | Three Months Ended Six Months Ended Ju ly 5 , June 29 , Ju ly 5 , June 29 , 201 5 201 4 201 5 201 4 (Unaudited) (Unaudited) Service cost $ 3 $ 0 $ 7 $ 6 Interest cost on projected benefit obligation 411 448 845 895 Net amortizations, deferrals and other costs 177 123 347 265 Expected return on plan assets (558 ) (592 ) (1,122 ) (1,199 ) $ 33 $ (21 ) $ 77 $ (33 ) |
Note 17 - Accumulated Other C33
Note 17 - Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jul. 05, 2015 | |
Notes Tables | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Ju ly 5 , December 31, 201 5 201 4 (Unaudited) Foreign currency translation adjustments $ (8,318 ) $ (7,265 ) Employee benefit related adjustments – U.S. (17,584 ) (17,584 ) Employee benefit related adjustments – Mexico (186 ) (186 ) Accumulated other comprehensive loss $ (26,088 ) $ (25,035 ) |
Note 1 - Nature of Business (De
Note 1 - Nature of Business (Details Textual) | 6 Months Ended |
Jul. 05, 2015 | |
Number of Operating Segments | 2 |
Note 4 - Loss of a Key Custom35
Note 4 - Loss of a Key Customer and Management's Recovery Plans (Details Textual) - Scenario, Unspecified [Domain] - USD ($) | Apr. 29, 2015 | Aug. 07, 2007 | Dec. 31, 2014 | Jul. 01, 2015 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Dana [Member] | ||||
Concentration Risk, Percentage | 59.00% | |||
Revolving Credit Facility [Member] | ||||
Line of Credit Facility Minimum Availability | $ 10,000,000 | |||
Litigation Settlement, Amount | $ 505,000 | $ 89,900,000 |
Note 5 - Assets Held for Sale36
Note 5 - Assets Held for Sale (Details Textual) - Jul. 09, 2015 - Subsequent Event [Member] - USD ($) | Total |
Within 30 Days of Closing [Member] | |
Capital Leases, Future Minimum Payments Receivable | $ 1,200,000 |
Extend Lease at Meritor's Option [Member] | |
Capital Lease Term | 15 years |
Meritor Note [Member] | |
Debt Instrument, Increase (Decrease), Net | $ 335,000 |
Proceeds from Sale of Productive Assets | 10,500,000 |
Proceeds from Disposal Group, Assets and Liabilties | $ 2,000,000 |
Capital Lease Term | 5 years |
Capital Leases, Future Minimum Payments Receivable | $ 2,000,000 |
Proceeds from Asset Purchase Agreement | 14,500,000 |
Disposal Group, Including Discontinued Operation, Consideration | 15,700,000 |
Additional Secured Obligation | $ 412,000 |
Note 5 - Assets Held for Sale -
Note 5 - Assets Held for Sale - Assets Held for Sale and Liabilities Held for Sale (Details) - USD ($) | Jul. 05, 2015 |
Accounts receivable, net | $ 1,062,000 |
Inventory, net | 2,076,000 |
Other current assets | 374,000 |
Property, plant and equipment, net | 5,898,000 |
Total assets | 9,410,000 |
Accounts payable | 1,466,000 |
Accrued and other liabilities | 367,000 |
Total liabilities | $ 1,833,000 |
Note 6 - Milestone Revenue Re38
Note 6 - Milestone Revenue Recognition (Details Textual) - USD ($) | 6 Months Ended | |
Jul. 05, 2015 | Jun. 29, 2014 | |
Revenue Recognition, Milestone Method, Revenue Recognized | $ 300,000 | $ 2,300,000 |
Note 7 - Dana Claim (Details Te
Note 7 - Dana Claim (Details Textual) | Apr. 29, 2015USD ($) | Aug. 07, 2007USD ($) | Jun. 29, 2014USD ($) | Mar. 03, 2006USD ($) |
Fair Value [Member] | ||||
Litigation Settlement, Amount | $ 76,483,000 | |||
Number of Subsidiaries of Client | 40 | |||
Number of Supply Commitments Replaced | 3 | |||
Bankruptcy Claims, Amount of Claims Filed | $ 89,900,000 | |||
Litigation Settlement, Amount | $ 505,000 | $ 89,900,000 | ||
Deferred Revenue, Revenue Recognized | $ 4,329,000 |
Note 8 - Other (Income) Expen40
Note 8 - Other (Income) Expense, Net (Details Textual) - Other Nonoperating Income (Expense) [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Sypris Technologies [Member] | ||||
Gain (Loss) on Disposition of Assets | $ 123,000 | $ 714,000 | ||
Gain (Loss) Related to Litigation Settlement | $ 505,000 | $ 505,000 | ||
Foreign Currency Transaction Gain (Loss), Realized | $ 37,000 | $ 65,000 | $ 171,000 | $ 96,000 |
Note 9 - (Loss) Earnings Per 41
Note 9 - (Loss) Earnings Per Common Share (Details Textual) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 789,000 | 0 | 983,000 |
Note 9 - (Loss) Earnings Per 42
Note 9 - (Loss) Earnings Per Common Share - Reconciliation of Weighted Average Shares Outstanding Used in Calculation of Basic and Diluted (Loss) Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
(Loss) income attributable to stockholders: | ||||
Net (loss) income as reported | $ (8,416,000) | $ 370,000 | $ (21,449,000) | $ 2,022,000 |
Less distributed and undistributed earnings allocable to restricted award holders | 0 | 0 | 0 | (46,000) |
Less dividends declared attributable to restricted award holders | 0 | (15,000) | 0 | (25,000) |
Net (loss) income allocable to common stockholders | $ (8,416,000) | $ 355,000 | $ (21,449,000) | $ 1,951,000 |
(Loss) income per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ 0.02 | $ (1.09) | $ 0.10 |
Diluted (in dollars per share) | $ (0.43) | $ 0.02 | $ (1.09) | $ 0.10 |
Weighted average shares outstanding – basic (in shares) | 19,701,000 | 19,622,000 | 19,675,000 | 19,525,000 |
Weighted average additional shares assuming conversion of potential common shares (in shares) | 0 | 60,000 | 0 | 41,000 |
Weighted average shares outstanding – diluted (in shares) | 19,701,000 | 19,682,000 | 19,675,000 | 19,566,000 |
Note 10 - Inventory - Inventory
Note 10 - Inventory - Inventory Components (Details) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
Raw materials | $ 14,300,000 | $ 16,687,000 |
Work in process | 11,674,000 | 11,702,000 |
Finished goods | 5,589,000 | 6,991,000 |
Reserve for excess and obsolete inventory | (7,099,000) | (6,349,000) |
Total | $ 24,464,000 | $ 29,031,000 |
Note 11 - Property, Plant and44
Note 11 - Property, Plant and Equipment - Property, Plant and Equipment Components (Details) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
Land and Land Improvements [Member] | ||
Land and land improvements | $ 1,939,000 | $ 2,770,000 |
Building and Building Improvements [Member] | ||
Land and land improvements | 22,215,000 | 26,055,000 |
Property, Plant and Equipment, Other Types [Member] | ||
Land and land improvements | 126,930,000 | 158,816,000 |
Construction in Progress [Member] | ||
Land and land improvements | 830,000 | 2,100,000 |
Land and land improvements | 151,914,000 | 189,741,000 |
Accumulated depreciation | (124,116,000) | (152,087,000) |
Property plant and equipment net | $ 27,798,000 | $ 37,654,000 |
Note 12 - Debt (Details Textual
Note 12 - Debt (Details Textual) - USD ($) | Jul. 09, 2015 | Jul. 05, 2015 | Jan. 31, 2016 | Jul. 02, 2015 | Jul. 01, 2015 | Dec. 31, 2014 |
Standby Letters of Credit [Member] | ||||||
Letters of Credit Outstanding, Amount | $ 933,000 | $ 755,000 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||||
Revolving Credit Facility [Member] | Minimum [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||
Revolving Credit Facility [Member] | Maximum [Member] | Scenario, Forecast [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||
Revolving Credit Facility [Member] | Through May Thirty First Two Thous and Fifteen [Member] | ||||||
Line of Credit Facility Minimum Availability | $ 1,000,000 | |||||
Revolving Credit Facility [Member] | On Or Before September Thirtieth Two Thousand Fifteen [Member] | ||||||
Line of Credit Facility Minimum Availability | $ 5,000,000 | |||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |||||
Revolving Credit Facility [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 25,000,000 | $ 22,500,000 | ||||
Debt Instrument Incremental Basis Point Monthly Increase | 0.50% | |||||
Line of Credit Facility Minimum Availability | $ 10,000,000 | |||||
Line of Credit Facility, Amendment Fee | 500,000 | |||||
Line of Credit Facility, Success Fee | $ 500,000 | |||||
Line of Credit Facility, Current Borrowing Capacity | $ 19,825,000 | |||||
Proceeds from Lines of Credit | 16,749,000 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | 2,143,000 | |||||
Within 30 Days of Closing [Member] | Subsequent Event [Member] | ||||||
Capital Leases, Future Minimum Payments Receivable | $ 1,200,000 | |||||
Extend Lease at Meritor's Option [Member] | Subsequent Event [Member] | ||||||
Capital Lease Term | 15 years | |||||
Subsequent Event [Member] | Meritor Note [Member] | ||||||
Debt Instrument, Increase (Decrease), Net | $ 335,000 | |||||
Subsequent Event [Member] | ||||||
Disposal Group, Including Discontinued Operation, Consideration, Assets Transferred and Liabilities Assumed | $ 12,500,000 | |||||
Capital Lease Term | 5 years | |||||
Capital Leases, Future Minimum Payments Receivable | $ 2,000,000 | |||||
Additional Secured Obligation | $ 412,000 | |||||
Gill Family Capital Management [Member] | Promissory Note [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||
Subordinated Debt | $ 5,500,000 | |||||
Meritor Note [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||
Debt Instrument, Face Amount | $ 3,047,000 | |||||
Letters of Credit Outstanding, Amount | $ 933,000 |
Note 12 - Debt - Debt Component
Note 12 - Debt - Debt Components (Details) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
Current portion of long-term debt | $ 16,749,000 | $ 17,000,000 |
Note payable – Meritor | 3,047,000 | 0 |
Note payable – related party | 5,500,000 | 0 |
Long term debt | $ 25,296,000 | $ 17,000,000 |
Note 13 - Segment Data (Details
Note 13 - Segment Data (Details Textual) | 6 Months Ended |
Jul. 05, 2015 | |
Number of Operating Segments | 2 |
Note 13 - Segment Data - Financ
Note 13 - Segment Data - Financial Information From Reportable Segments - Income Statement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Sypris Technologies [Member] | ||||
Net revenue from unaffiliated customers: | ||||
Revenues | $ 32,010,000 | $ 83,710,000 | $ 60,080,000 | $ 159,549,000 |
Gross profit (loss): | ||||
Gross profit (loss) | 581,000 | 11,383,000 | (3,523,000) | 22,537,000 |
Operating (loss) income: | ||||
Operating (loss) income | (2,370,000) | 7,040,000 | (11,738,000) | 15,153,000 |
Sypris Electronics [Member] | ||||
Net revenue from unaffiliated customers: | ||||
Revenues | 8,746,000 | 9,403,000 | 17,685,000 | 17,808,000 |
Gross profit (loss): | ||||
Gross profit (loss) | (615,000) | (556,000) | 332,000 | (1,146,000) |
Operating (loss) income: | ||||
Operating (loss) income | (3,111,000) | (3,168,000) | (4,701,000) | (6,245,000) |
General Corporate and Other [Member] | ||||
Operating (loss) income: | ||||
Operating (loss) income | (2,356,000) | (2,196,000) | (4,291,000) | (4,811,000) |
Revenues | 40,756,000 | 93,113,000 | 77,765,000 | 177,357,000 |
Gross profit (loss) | (34,000) | 10,827,000 | (3,191,000) | 21,391,000 |
Operating (loss) income | $ (7,837,000) | $ 1,676,000 | $ (20,730,000) | $ 4,097,000 |
Note 13 - Segment Data - Fina49
Note 13 - Segment Data - Financial Information From Reportable Segments - Balance Sheet (Details) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
Sypris Technologies [Member] | ||
ASSETS | ||
Assets | $ 58,575,000 | $ 95,108,000 |
Sypris Electronics [Member] | ||
ASSETS | ||
Assets | 27,010,000 | 26,874,000 |
General Corporate and Other [Member] | ||
ASSETS | ||
Assets | 2,323,000 | 7,699,000 |
Assets | $ 87,908,000 | $ 129,681,000 |
Note 14 - Commitments and Con50
Note 14 - Commitments and Contingencies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 05, 2015 | Jul. 05, 2015 | Jun. 29, 2014 | Dec. 31, 2014 | |
Minimum [Member] | Link Encryption Products [Member] | ||||
Extended Product Warranty Term | 3 years | |||
Maximum [Member] | Link Encryption Products [Member] | ||||
Extended Product Warranty Term | 5 years | |||
Product Warranty Accrual | $ 772,000 | $ 825,000 | ||
Product Warranty Expense | 83,000 | $ 145,000 | ||
Extended Product Warranty Accrual, Warranties Issued | 666,000 | $ 839,000 | ||
Purchase Obligation | 6,223,000 | |||
Letters of Credit Outstanding, Amount | $ 933,000 |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details Textual) | 6 Months Ended | 12 Months Ended |
Jul. 05, 2015 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 30.00% | 30.00% |
Note 16 - Employee Benefit Pl52
Note 16 - Employee Benefit Plans - Components of Pension Expense (Benefit) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 05, 2015 | Jun. 29, 2014 | Jul. 05, 2015 | Jun. 29, 2014 | |
Service cost | $ 3,000 | $ 0 | $ 7,000 | $ 6,000 |
Interest cost on projected benefit obligation | 411,000 | 448,000 | 845,000 | 895,000 |
Net amortizations, deferrals and other costs | 177,000 | 123,000 | 347,000 | 265,000 |
Expected return on plan assets | (558,000) | (592,000) | (1,122,000) | (1,199,000) |
Pension expense (benefit) | $ 33,000 | $ (21,000) | $ 77,000 | $ (33,000) |
Note 17 - Accumulated Other C53
Note 17 - Accumulated Other Comprehensive Loss - Accumulated Other Comprehensive Loss Components (Details) - USD ($) | Jul. 05, 2015 | Dec. 31, 2014 |
UNITED STATES | ||
Employee benefit related adjustments | $ (17,584,000) | $ (17,584,000) |
MEXICO | ||
Employee benefit related adjustments | (186,000) | (186,000) |
Foreign currency translation adjustments | (8,318,000) | (7,265,000) |
Accumulated other comprehensive loss | $ (26,088,000) | $ (25,035,000) |
Note 19 - Subsequent Events (De
Note 19 - Subsequent Events (Details Textual) - Jul. 09, 2015 - Subsequent Event [Member] - USD ($) | Total |
Within 30 Days of Closing [Member] | |
Capital Leases, Future Minimum Payments Receivable | $ 1,200,000 |
Extend Lease at Meritor's Option [Member] | |
Capital Lease Term | 15 years |
Meritor Note [Member] | |
Debt Instrument, Increase (Decrease), Net | $ 335,000 |
Proceeds from Sale of Productive Assets | 10,500,000 |
Proceeds from Disposal Group, Assets and Liabilties | $ 2,000,000 |
Capital Lease Term | 5 years |
Capital Leases, Future Minimum Payments Receivable | $ 2,000,000 |
Proceeds from Asset Purchase Agreement | 14,500,000 |
Disposal Group, Including Discontinued Operation, Consideration | 15,700,000 |
Additional Secured Obligation | $ 412,000 |