CPS Technologies Corporation Announces Second Quarter 2020 Results
July 29 2020 - 4:07PM
CPS Technologies Corporation (NASDAQ: CPSH) today announced
revenues of $5.8 million and an operating profit of $331 thousand
for the quarter ended June 27, 2020. This compares with
revenues of $6.4 million and an operating profit of $258 thousand
for the quarter ended June 29, 2019.
For the six months ending June 27, 2020, revenues are $12.3
million with an operating profit of $952 thousand. This
compares with revenue of $11.6 million and an operating loss of
$486 thousand for the six months ended June 29, 2019.
Grant Bennett, President and CEO, said: “Revenues, while strong,
were down compared to the first quarter of 2020 due primarily to
impacts of the coronavirus pandemic on the purchasing decisions of
a major customer. This customer increased inventory in
Q1 to guard against possible supply chain interruptions; they then
reduced purchases in Q2 to bring inventory down to more appropriate
levels.
Gross margins and operating profits were considerably higher in
the three-month and six-month periods just ended than they were in
the corresponding periods a year ago. This significant
positive swing in performance reflects the pricing, product mix and
operational improvements discussed in previous
quarters.
CPS has been open and operating throughout the pandemic.
To date most of our customers remain open and
operational. We saw in Q2 and expect to see in future
quarters increased volatility in short-term demand as individual
customers address pandemic-related issues including managing
inventories up and down, shortages of other components, short-term
shutdowns, longer approval cycles given many employees are working
from home, etc.
CPS continues to follow CDC and OSHA guidance in our
workplace. Employees’ temperatures are taken at the beginning
of each shift, shifts have been staggered to reduce employee
overlap, workstations have been rearranged to ensure social
distancing, all employees are using facemasks, etc.
Any forward looking comments must begin with the clear caveat
that the pandemic is injecting considerable uncertainty at
customers and suppliers so conditions can and may change
quickly. Nonetheless, we currently anticipate continued
strong performance for the remainder of 2020, albeit not as strong
as we were anticipating pre-pandemic. Our product sales
pipeline is strong. Our sales team continues to generate new
business both from existing and new customers. We note that
over the past six months we have seen some customer programs using
SiC die accelerating and we are particularly excited about the
near-term revenue growth potential in this area.”
The Company will be hosting its second quarter conference call
with investors at 4:45pm on Wednesday, July 29. Those interested in
participating in the conference call should dial:
Call in Number: 1-833-953-1394
Conference ID: 6958894
About CPS CPS Technologies Corporation is a global leader in
producing metal-matrix composite components used to improve the
reliability and performance of various electrical systems.
CPS products are used in motor controllers for hybrid and electric
vehicles, high-speed trains, subway cars and wind turbines.
They are also used as heatspreaders in internet switches, routers
and high-performance microprocessors. CPS also develops and
produces metal-matrix composite armor.
Safe Harbor Statements made in this document that are not
historical facts or which apply prospectively, including those
relating to 2020 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
Statements of Operations
(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 27, |
|
|
|
June 29, |
|
|
June 27, |
|
|
June 29, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
Revenues: |
|
|
|
|
|
|
|
|
Product sales |
$ |
5,758,015 |
|
|
$ |
6,366,951 |
|
|
$ |
12,269,586 |
|
|
$ |
11,636,489 |
|
|
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
Total revenues |
|
5,758,015 |
|
|
|
6,366,951 |
|
|
|
12,269,586 |
|
|
|
11,636,489 |
|
|
|
|
|
|
|
|
|
|
Cost of product
sales |
|
4,574,686 |
|
|
|
5,191,964 |
|
|
|
9,536,047 |
|
|
|
10,302,078 |
|
|
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
Gross Margin |
|
1,183,329 |
|
|
|
1,174,987 |
|
|
|
2,733,539 |
|
|
|
1,334,411 |
|
|
|
|
|
|
|
|
|
|
Selling, general,
and |
|
|
|
|
|
|
|
|
administrative expense |
|
852,773 |
|
|
|
917,079 |
|
|
|
1,781,362 |
|
|
|
1,820,765 |
|
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
Income (loss) from
operations |
|
330,556 |
|
|
|
257,908 |
|
|
|
952,176 |
|
|
|
(486,354 |
) |
|
|
|
|
|
|
|
|
Interest income
(expense), net |
|
(31,325 |
) |
|
|
(7,310 |
) |
|
|
(51,291 |
) |
|
|
(7,261 |
) |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
Net income (loss)
before |
|
|
|
|
|
|
|
|
income tax |
|
299,231 |
|
|
|
250,598 |
|
|
|
900,885 |
|
|
|
(493,615 |
) |
Income tax provision
(benefit) |
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
Net income (loss) |
$ |
299,231 |
|
|
$ |
250,598 |
|
|
$ |
900,885 |
|
|
$ |
(493,615 |
) |
|
|
========= |
|
|
========= |
|
|
========= |
|
|
========= |
|
Net income (loss)
per |
|
|
|
|
|
|
|
|
basic common share |
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
|
------------ |
|
CPS TECHNOLOGIES
CORPORATIONBalance Sheets (Unaudited)
|
|
|
June 27, |
|
December 28, |
|
|
|
|
2020 |
|
|
2019 |
ASSETS |
------------- |
|
------------- |
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
$ |
116,612 |
|
$ |
133,965 |
|
Accounts
receivable-trade, net |
|
4,975,842 |
|
|
4,086,945 |
|
Inventories, net |
|
3,872,868 |
|
|
3,099,824 |
|
Prepaid expenses and
other current assets |
|
173,237 |
|
|
147,786 |
|
|
|
------------- |
|
------------- |
|
|
Total current assets |
|
9,138,559 |
|
|
7,468,520 |
|
|
|
------------- |
|
------------- |
Property and
equipment: |
|
|
|
|
Production
equipment |
|
10,008,886 |
|
|
9,649,169 |
|
Furniture and office
equipment |
|
508,423 |
|
|
508,423 |
|
Leasehold
improvements |
|
934,195 |
|
|
934,195 |
|
|
|
------------- |
|
------------- |
|
|
Total cost |
|
11,451,504 |
|
|
11,091,787 |
|
|
|
|
|
|
|
Accumulated
depreciation and amortization |
|
(10,357,620) |
|
|
(10,110,663) |
|
Construction in
progress |
|
320,209 |
|
|
255,754 |
|
|
|
------------- |
|
------------- |
|
|
Net property and
equipment |
|
1,414,093 |
|
|
1,236,878 |
|
|
|
------------- |
|
------------- |
Right-of-use lease
asset |
|
100,000 |
|
|
171,000 |
Deferred taxes,
net |
|
147,873 |
|
|
147,873 |
|
|
------------- |
|
------------- |
|
Total
assets |
$ |
10,800,525 |
|
$ |
9,024,271 |
|
|
|
========= |
|
========= |
(continued)
CPS TECHNOLOGIES
CORPORATIONBalance Sheets
(Unaudited)(concluded)
LIABILITIES AND
STOCKHOLDERS` |
June 27, |
|
December 28, |
|
EQUITY |
|
2020 |
|
|
2019 |
|
|
|
------------- |
|
------------- |
Current
liabilities: |
|
|
|
|
Borrowings against
line of credit |
|
1,026,765 |
|
|
1,249,588 |
|
Note payable, current
portion |
|
37,311 |
|
|
-- |
|
Accounts payable |
|
1,770,160 |
|
|
1,436,417 |
|
Accrued expenses |
|
908,994 |
|
|
815,166 |
|
Deferred revenue |
|
482,997 |
|
|
21,110 |
|
Lease liability,
current portion |
|
100,000 |
|
|
148,000 |
|
|
|
------------- |
|
------------- |
Total current
liabilities |
|
4,326,227 |
|
|
3,670,281 |
|
|
|
------------- |
|
------------- |
Note payable less
current portion |
|
159,360 |
|
|
-- |
Long term lease
liability |
|
-- |
|
|
23,000 |
|
|
|
------------- |
|
------------- |
Total
liabilities |
|
4,485,587 |
|
|
3,693,281 |
|
|
|
|
Commitments (note
4) |
|
|
|
|
|
|
|
Stockholders`
equity: |
|
|
|
|
Common stock, $0.01
par value, |
|
|
|
|
|
authorized 20,000,000
shares; |
|
|
|
|
|
issued 13,427,492; |
|
|
|
|
|
outstanding 13,207,436; |
|
|
|
|
|
at
June 27, 2020 and December 28, 2019; |
|
134,275 |
|
|
134,275 |
|
Additional paid-in
capital |
|
36,177,264 |
|
|
36,094,201 |
|
Accumulated
deficit |
|
(29,479,548) |
|
|
(30,380,433) |
|
Less cost of 220,056
common shares repurchased |
|
|
|
|
|
at June 27, 2020 and December 28,
2019 |
|
(517,053) |
|
|
(517,053) |
|
|
|
------------- |
|
------------- |
Total stockholders`
equity |
|
6,314,938 |
|
|
5,330,990 |
|
|
|
------------- |
|
------------- |
Total liabilities and
stockholders` |
|
|
|
|
equity |
$ |
10,800,525 |
|
$ |
9,024,271 |
|
|
|
========== |
|
========== |
CPS Technologies
Corporation
Chuck Griffith, Chief Financial
Officer
111 South Worcester
Street
Norton, MA 02766 Telephone: (508) 222-0614 Web Site:
www.alsic.com
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