Sypris Solutions Inc. (SYPR, Financial) filed Annual Report for the period ended 2011-12-31.
Sypris Solution has a market cap of $80.3 million; its shares were traded at around $4.1442 with and P/S ratio of 0.3.
Gross Profit. The Industrial Groups gross profit increased $18.3 million to $27.3 million in 2011 as compared to $9.0 million in the prior year. The increase in sales volume resulted in an increase in gross profit of approximately $14.3 million. Price increases resulted in an increase in gross profit of $1.4 million over the prior year. The Industrial Group also realized an increase in gross profit of $3.3 million as a result of productivity improvements. Partially offsetting this was a $0.7 million cost increase due to the strengthening of the Mexican peso as compared to the prior year and other inflationary items.
Operating Activities. Net cash provided by operating activities of continuing operations was $17.0 million in 2011, as compared to $1.9 million in 2010. The cash flow associated with our accounts receivable and inventory during 2011 reflects the change in net revenue mix between our Industrial and Electronics Groups. The Industrial Groups net revenue increase of $82.2 million resulted in cash investments in accounts receivable and inventory of $11.8 million and $3.3 million, respectively. The Electronics Groups net revenue decrease of $13.2 million contributed to a decrease in accounts receivable of $10.3 million. However, inventory within the Electronics Group increased primarily as a result of the timing of shipments and used $1.0 million of cash. Accounts payable increased during 2011 and provided $11.7 million primarily due to increased purchases by our Industrial Group and the timing of payments to our suppliers.
Investing Activities. Net cash used by investing activities was $1.8 million in 2011 as compared to net cash used of $0.7 million in 2010. Net cash used in investing activities included $6.8 million of capital expenditures. Additionally, the Industrial Group sold certain idle equipment during the year, which generated $5.0 million of cash. If revenues continue to increase within the Industrial Group, the Company expects capital expenditures will increase in future periods to support the growth. Net cash used in investing activities in 2010 includes capital expenditures of $2.2 million partially offset by proceeds from the sale of assets of $1.4 million.
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Sypris Solution has a market cap of $80.3 million; its shares were traded at around $4.1442 with and P/S ratio of 0.3.
Highlight of Business Operations:
Goodwill. Goodwill is tested for impairment annually as of December 31 or more frequently if events occur or circumstances change that would warrant such a review. The Company assesses recoverability using a discounted cash flow analysis and comparisons of multiples of enterprise values to earnings before interest, taxes, depreciation and amortization (EBITDA). The analysis is based upon available information regarding expected future cash flows of each reporting unit discounted at rates consistent with the cost of capital specific to the reporting unit. A growth rate is used to calculate the terminal value of the reporting unit and is added to the present value of the forecasted cash flows. The growth rate is the expected rate at which a reporting units cash flow is projected to grow beyond the period covered by the long-range plan. The cash flow analysis requires significant judgment in our evaluation of the business and establishing an appropriate discount rate and terminal value to apply in the calculation. In selecting these and other assumptions for each business, we consider historical performance, forecasted operating results, expected changes in product mix, general market conditions and industry considerations specific to the business. We make significant assumptions and estimates about the extent and timing of future cash flows, growth rates and discount rates. The cash flows are estimated over a future period of time, which makes those estimates and assumptions inherently subject to a high degree of potential uncertainty. The sum of the calculated fair values of each reporting unit is then reconciled and compared to our total market capitalization, allowing for a reasonable control premium. If the discounted cash flow analysis yields a fair value estimate less than the reporting units carrying value, we proceed to step two of the impairment process. In the second step, the implied fair value of the reporting units goodwill is determined by allocating the reporting units fair value to all of the assets and liabilities of the reporting unit.Gross Profit. The Industrial Groups gross profit increased $18.3 million to $27.3 million in 2011 as compared to $9.0 million in the prior year. The increase in sales volume resulted in an increase in gross profit of approximately $14.3 million. Price increases resulted in an increase in gross profit of $1.4 million over the prior year. The Industrial Group also realized an increase in gross profit of $3.3 million as a result of productivity improvements. Partially offsetting this was a $0.7 million cost increase due to the strengthening of the Mexican peso as compared to the prior year and other inflationary items.
Operating Activities. Net cash provided by operating activities of continuing operations was $17.0 million in 2011, as compared to $1.9 million in 2010. The cash flow associated with our accounts receivable and inventory during 2011 reflects the change in net revenue mix between our Industrial and Electronics Groups. The Industrial Groups net revenue increase of $82.2 million resulted in cash investments in accounts receivable and inventory of $11.8 million and $3.3 million, respectively. The Electronics Groups net revenue decrease of $13.2 million contributed to a decrease in accounts receivable of $10.3 million. However, inventory within the Electronics Group increased primarily as a result of the timing of shipments and used $1.0 million of cash. Accounts payable increased during 2011 and provided $11.7 million primarily due to increased purchases by our Industrial Group and the timing of payments to our suppliers.
Investing Activities. Net cash used by investing activities was $1.8 million in 2011 as compared to net cash used of $0.7 million in 2010. Net cash used in investing activities included $6.8 million of capital expenditures. Additionally, the Industrial Group sold certain idle equipment during the year, which generated $5.0 million of cash. If revenues continue to increase within the Industrial Group, the Company expects capital expenditures will increase in future periods to support the growth. Net cash used in investing activities in 2010 includes capital expenditures of $2.2 million partially offset by proceeds from the sale of assets of $1.4 million.
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