CPS Technologies Corporation Announces First Quarter 2024 Financial Results

Investing to Drive Higher Growth as the Year Progresses


NORTON, Mass., May 01, 2024 (GLOBE NEWSWIRE) -- CPS Technologies Corporation (NASDAQ:CPSH) (“CPS” or the “Company”) today announced financial results for the fiscal first quarter ended March 30, 2024.

First Quarter Summary

  • Revenue of $5.9 million for the first quarter of 2024 versus $7.1 million in the prior-year period, primarily due to further quality control testing and production staffing challenges
  • Gross margin of 15.3 percent versus 31.6 percent in the first quarter of 2023, largely due to lower manufacturing efficiencies and non-revenue producing quality control costs
  • Operating loss of $0.3 million for the quarter ended March 30, 2024 compared to an operating profit of $0.7 million in the prior-year period
  • The Company announced the signing of a manufacturing license agreement with Triton Systems for Fiber-Reinforced Aluminum (FRA) Composites® to address key customer requirements through the expansion of its product portfolio

“Our revenue came in lower than last year, given the use of production resources for quality control and other long-term improvements,” said Brian Mackey, President and CEO. “As previously discussed, we anticipate the coming quarters to also be impacted by lower HybridTech Armor® sales. However, we remain very optimistic on a number of fronts, including our long-term growth trajectory. The Company’s order intake is increasing across its other product lines, our recent technology license agreement with Triton is expected to provide new avenues for expansion, and ongoing R&D is addressing critical customer requirements. In addition, we are working with Kinetic Protection on the very real opportunities for additional armor orders with the Navy. The current fiscal year is clearly focused on preparing CPS for its next phase of growth, encompassing all key markets, as well as business development initiatives to accelerate contract bookings and revenue generation.

“Our R&D efforts enable us to directly address clearly defined market requirements. For example, last week we presented our initial results from a recently completed Phase I SBIR at the National Reactor Innovation Center Program Review at Idaho National Lab. Our novel composite material demonstrated neutron and gamma radiation shielding with performance similar to lead or tungsten but with a reduction in mass of more than 55%. We continue to aggressively pursue relevant growth opportunities, as evidenced by our recent submission of four Phase I and two Phase II proposals. As we leverage these programs to expand our portfolio of market-driven offerings, we anticipate revenue opportunities with both government and commercial customers. These efforts will strengthen customer demand and improve the Company’s operating outlook going forward. I look forward to discussing these programs in more detail on our upcoming investor call.”

Results of Operations
CPS reported revenue of $5.9 million in the first quarter of fiscal 2024 versus $7.1 million in the prior-year period, reflecting lower demand from certain over-stocked customers and reduced production capacity due to continued quality control testing. Gross profit was $0.9 million, or 15.3 percent of revenue, versus $2.2 million, or 31.6 percent of revenue, in the fiscal 2023 first quarter, with the lower gross margin year-over-year due to the lower sales volumes in Q1 2024 on consistent fixed costs as well as ongoing quality control testing.

The Company reported an operating loss of $0.3 million in the fiscal 2024 first quarter compared with an operating profit of $0.7 million in the prior-year period. Reported net loss was $0.1 million, or $(0.01) per diluted share, versus net income of $0.5 million, or $0.03 per diluted share, in the quarter ended April 1, 2023.

Conference Call
The Company will be hosting its first quarter 2024 earnings call at 9:00 am on May 2, 2024. Those interested in participating in the conference call should dial the following: 
Call in Number: 1-844-943-2942
Participant Passcode: 175645
The Company encourages those who wish to participate to call in 10 minutes before the scheduled start time to ensure the operator can connect all participants.

About CPS
CPS is a technology and manufacturing leader in producing high-performance materials solutions for its customers. The company’s products and intellectual property address critical needs in a variety of applications, including electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, Navy ships, the smart electric grid, 5G infrastructure and others. CPS hermetic packages can be found in many Aerospace and Satellite applications. CPS’ armor products provide exceptional ballistic protection and environmental durability at very light weight. CPS is committed to innovation and to supporting our customers in building solutions for the transition to clean energy.

Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2024 financial results, are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as "will," "intends," "believes," "expects," "plans," "anticipates" and similar expressions. Investors should not rely on forward looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company's expectation. Additional information concerning risk factors is contained from time to time in the company's SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.

CPS Technologies Corporation
111 South Worcester Street
Norton, MA 02766
www.cpstechnologysolutions.com

Investor Relations:
Chris Witty
646-438-9385
cwitty@darrowir.com

 
CPS TECHNOLOGIES CORPORATION
Statements of Operations (Unaudited)
 
  Fiscal Quarters Ended 
  March 30, 2024  April 1, 2023 
         
Revenues:        
Product sales $5,912,634  $7,100,267 
         
Total revenues  5,912,634   7,100,267 
Cost of product sales  5,006,324   4,855,564 
         
Gross Margin  906,310   2,244,703 
Selling, general, and administrative expense  1,165,922   1,550,522 
         
Operating income (loss)  (259,612)  694,181 
Other income, net  79,171   15,590 
         
Income (loss) before taxes  (180,441)  709,771 
Income tax provision  (37,288)  250,570 
         
Net income (loss) $(143,153) $459,201 
         
Net income (loss) per basic common share $(0.01) $0.03 
         
Weighted average number of basic common shares outstanding  14,519,215   14,452,284 
         
Net income (loss) per diluted common share $(0.01) $0.03 
         
Weighted average number of diluted common shares outstanding  14,519,215   14,639,600 


CPS TECHNOLOGIES CORP.
Balance Sheets (Unaudited)
 
  March 30, 2024  December 30, 2023 
ASSETS        
         
Current assets:        
Cash and cash equivalents $8,667,728  $8,813,626 
Accounts receivable-trade, net  3,848,635   4,389,155 
Accounts receivable-other  27,490   83,191 
Inventories, net  4,611,460   4,581,930 
Prepaid expenses and other current assets  391,953   276,349 
Total current assets  17,547,266   18,144,251 
Property and equipment:        
Production equipment  11,155,183   11,271,982 
Furniture and office equipment  952,883   952,883 
Leasehold improvements  985,649   985,649 
Total cost  13,093,715   13,210,514 
Accumulated depreciation and amortization  (11,581,885)  (11,936,004)
Construction in progress  206,250   281,629 
Net property and equipment  1,718,080   1,556,139 
Right-of-use lease asset (note 4, leases)  297,000   332,000 
Deferred taxes  1,609,982   1,569,726 
Total Assets $21,172,328   21,602,116 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
         
Current liabilities:        
Note payable, current portion  43,478   46,797 
Accounts payable  2,409,773   2,535,086 
Accrued expenses  843,770   1,075,137 
Deferred revenue  207,247   251,755 
Lease liability, current portion  160,000   160,000 
         
Total current liabilities  3,664,268   4,068,775 
         
Note payable less current portion  -   8,090 
Deferred revenue – long term  31,277   31,277 
Long term lease liability  137,000   172,000 
         
Total liabilities  3,832,545   4,280,142 
Commitments & Contingencies        
Stockholders’ equity:        
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601,487 and 14, 601,487 shares; outstanding 14,519,215 and 14,519,215 shares; at March 30, 2024 and December 30, 2023, respectively  146,015   146,015 
Additional paid-in capital  40,341,855   40,180,893 
Accumulated deficit  (22,897,949)  (22,754,796)
Less cost of 82,272 and 82,272 common shares repurchased at March 30, 2024 and December 30, 2023, respectively  (250,138)  (250,138)
         
Total Stockholders’ Equity  17,339,783   17,321,974 
         
Total Liabilities and Stockholders’ Equity $21,172,328  $21,602,116