Sypris Wins Long-Term, Sole-Source Contract Extension to Supply Drivetrain Components for Commercial Vehicles
March 08 2022 - 8:30AM
Business Wire
Includes New Program for Side-by-Side
All-Terrain Vehicles
Sypris Technologies, Inc., a subsidiary of Sypris Solutions,
Inc. (Nasdaq/GM: SYPR), announced today that it has entered into a
long-term, sole-source contract extension to provide drivetrain
components for use in the production of medium and heavy-duty
commercial vehicles, effective for shipments beginning in the first
quarter of 2022. In addition, the Company was awarded a new program
to supply components for use in the production of side-by-side
all-terrain vehicles. Terms of the agreements were not
disclosed.
The components produced by Sypris for use in the drivetrain of
medium and heavy-duty trucks are essential to the performance of
both the drive and the steer axles of the vehicles. The award of
the contract extension is timely for the commercial vehicle market,
which is in the midst of a multi-year expansion. The production of
heavy-duty vehicles increased 23.4% in 2021, while the outlook for
2022 and 2023 includes additional growth of 13.4% and 21.1%,
respectively, according to ACT Research.
The new program award for side-by-side all-terrain vehicles
provides Sypris with the opportunity for further growth in this
burgeoning market. The finished components produced by Sypris to
exacting specifications will be incorporated into the differentials
of these vehicles. The all-terrain vehicle market is set to grow at
a compound annual growth rate of 16.8% between 2020 and 2025,
according to Technavio Research. Production under this long-term
contract award is scheduled to begin in 2023.
Commenting on the announcement, Paul Larochelle, Vice President
& General Manager of Sypris Technologies stated, “We are
pleased to have the opportunity to extend and expand our support
for this important customer, the relationship of which has grown
substantially over the past 20 years. We will continue to support
it with advanced manufacturing systems to ensure that this valued
customer continues to benefit from world-class quality, on-time
delivery and cost-competitive products.”
Sypris Technologies, Inc. is a premier manufacturer and supplier
of drivetrain and other critical components for the commercial
vehicle, automotive, recreational vehicle, mining, agriculture,
industrial and energy markets. Sypris is headquartered in
Louisville, Kentucky. Through its operations in North America,
Sypris continues to meet the needs of the industry after more than
90 years of service. For more information about the Company, visit
its Web site at www.sypris.com.
Forward-Looking Statements
Each forward-looking statement herein is subject to risks and
uncertainties, as detailed in our most recent Form 10-K and Form
10-Q and other SEC filings. Briefly, we currently believe that
such risks also include the following: the impact of COVID-19 and
economic conditions on our future operations; possible public
policy response to the pandemic, including legislation or
restrictions that may impact our operations or supply chain; our
failure to successfully complete final contract negotiations with
regard to our announced contract “orders”, “wins” or “awards”; our
failure to successfully win new business; the termination or
non-renewal of existing contracts by customers; our failure to
achieve and maintain profitability on a timely basis by steadily
increasing our revenues from profitable contracts with a
diversified group of customers, which would cause us to continue to
use existing cash resources or require us to sell assets to fund
operating losses; breakdowns, relocations or major repairs of
machinery and equipment, especially in our Toluca Plant; volatility
of our customers’ forecasts especially in the commercial truck
markets and our contractual obligations to meet current scheduling
demands and production levels (especially in our Toluca Plant),
which may negatively impact our operational capacity and our
effectiveness to integrate new customers or suppliers, and in turn
cause increases in our inventory and working capital levels; cost,
quality and availability or lead times of raw materials such as
steel, component parts, natural gas or utilities; the cost,
quality, timeliness, efficiency and yield of our operations and
capital investments, including the impact of tariffs, product
recalls or related liabilities, employee training, working capital,
production schedules, cycle times, scrap rates, injuries, wages,
overtime costs, freight or expediting costs; dependence on,
retention or recruitment of key employees and distribution of our
human capital; inaccurate data about markets, customers or business
conditions; disputes or litigation involving governmental,
supplier, customer, employee, creditor, product liability, warranty
or environmental claims; our inability to develop new or improved
products or new markets for our products; our reliance on a few key
customers, third party vendors and sub-suppliers; inventory
valuation risks including excessive or obsolescent valuations or
price erosions of raw materials or component parts on hand or other
potential impairments, non-recoverability or write-offs of assets
or deferred costs; failure to adequately insure or to identify
product liability, environmental or other insurable risks;
unanticipated or uninsured disasters, public health crises, losses
or business risks; unanticipated or uninsured product liability
claims; labor relations; strikes; union negotiations; pension
valuation, health care or other benefit costs; costs associated
with environmental claims relating to properties previously owned;
our inability to patent or otherwise protect our inventions or
other intellectual property from potential competitors; adverse
impacts of new technologies or other competitive pressures which
increase our costs or erode our margins; our reliance on revenues
from customers in the oil and gas and automotive markets, with
increasing consumer pressure for reductions in environmental
impacts attributed to greenhouse gas emissions and increased
vehicle fuel economy; changes in licenses, or other legal rights to
operate, manage our work force or import and export as needed;
risks of foreign operations; currency exchange rates; war,
terrorism, or political uncertainty; cyber security threats and
disruptions; or unknown risks and uncertainties. We undertake no
obligation to update our forward-looking statements, except as may
be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20220308005355/en/
Paul Larochelle Vice President & General
Manager (502) 420-1225
Sypris Solutions (NASDAQ:SYPR)
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