CPS Technologies(CPSH) - 2023 Q4 - Annual Results

Executive Summary & Fourth Quarter 2023 Highlights Overall Financial Performance CPS Technologies Corporation reported mixed financial results for Q4 2023, with revenue growth but a decline in operating profit and net income compared to the prior year, while achieving its highest annual revenue in history for fiscal year 2023 | Metric | Q4 2023 ($) | Q4 2022 ($) | | :---------------- | :---------- | :---------- | | Revenue | $6.7M | $6.1M | | Operating Profit | $0.1M | $0.3M | | Net Income | $0.2M | $0.3M | | Diluted EPS | $0.01 | $0.02 | - Annual revenue for 2023 reached $27.6 million, marking the highest in the Company's history[9] Key Financial Metrics (Q4 & Full Year) A detailed breakdown of key financial metrics for the fourth quarter and full fiscal year 2023, showing revenue growth but a decrease in gross margin, income from operations, and net income compared to the prior year | Metric | Three Months Ended Dec 30, 2023 ($) | Three Months Ended Dec 31, 2022 ($) | Year Ended Dec 30, 2023 ($) | Year Ended Dec 31, 2022 ($) | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | :-------------------------- | :-------------------------- | | Product sales | $6,747,199 | $6,115,352 | $27,550,646 | $26,586,926 | | Total revenues | $6,747,199 | $6,115,352 | $27,550,646 | $26,586,926 | | Cost of product sales | $5,598,616 | $4,489,640 | $20,725,237 | $19,285,846 | | Gross Margin | $1,148,583 | $1,625,712 | $6,825,409 | $7,301,080 | | Selling, general, and administrative expense | $1,004,948 | $1,316,530 | $5,126,046 | $5,066,660 | | Income from operations | $143,635 | $309,182 | $1,699,363 | $2,234,420 | | Net income | $139,510 | $268,991 | $1,370,296 | $2,131,400 | | Net income per basic common share | $0.01 | $0.02 | $0.09 | $0.15 | Gross Margin Analysis The gross margin for the fourth quarter of 2023 significantly decreased compared to the prior-year period, primarily attributed to quality issues with a major customer | Metric | Q4 2023 (%) | Q4 2022 (%) | | :---------- | :---------- | :---------- | | Gross Margin | 17.0% | 26.6% | - The lower gross margin year-over-year was largely due to quality issues with one of the Company's major customers[9] CEO Commentary and Business Outlook CEO Brian Mackey highlighted record annual revenue for 2023 and expressed cautious optimism regarding mitigated quality issues, noting strong opportunities in diverse end markets despite short-term headwinds, while emphasizing continued investment for future growth - The Company finished the year with the highest annual revenue in its history, reaching $27.6 million[9] - Management is cautiously optimistic that previously disclosed quality issues have been largely mitigated and should not materially impact 2024 results[9] - The U.S. Navy contract for HybridTech Armor® panels is expected to be completed during the second quarter of 2024, while the company pursues other fast-growing industrial and technological applications[9] Company Information About CPS Technologies Corporation CPS is a technology and manufacturing leader providing high-performance materials solutions for critical applications across various industries, including clean energy, defense, and telecommunications, with a focus on innovation - CPS is a technology and manufacturing leader in producing high-performance materials solutions[11] - Products address critical needs in applications such as electric trains, wind turbines, hybrid/electric vehicles, Navy ships, smart grids, 5G infrastructure, aerospace, and satellite applications[11] - The company is committed to innovation and supporting customers in building solutions for the transition to clean energy[11] Contact Information Contact details for CPS Technologies Corporation, including physical address, website, and investor relations contact - Address: 111 South Worcester Street, Norton, MA 02766[6] - Website: **www.cpstechnologysolutions.com**[6](index=6&type=chunk) - Investor Relations Contact: Chris Witty at 646-438-9385 or cwitty@darrowir.com[6] Detailed Financial Statements (Unaudited) Statements of Operations The unaudited Statements of Operations provide a comprehensive view of the company's financial performance for the three months and full fiscal years ended December 30, 2023, and December 31, 2022, detailing revenue, cost of sales, gross margin, operating expenses, and net income | Metric | Three Months Ended Dec 30, 2023 ($) | Three Months Ended Dec 31, 2022 ($) | Year Ended Dec 30, 2023 ($) | Year Ended Dec 31, 2022 ($) | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | :-------------------------- | :-------------------------- | | Product sales | $6,747,199 | $6,115,352 | $27,550,646 | $26,586,926 | | Total revenues | $6,747,199 | $6,115,352 | $27,550,646 | $26,586,926 | | Cost of product sales | $5,598,616 | $4,489,640 | $20,725,237 | $19,285,846 | | Gross Margin | $1,148,583 | $1,625,712 | $6,825,409 | $7,301,080 | | Selling, general, and administrative expense | $1,004,948 | $1,316,530 | $5,126,046 | $5,066,660 | | Income from operations | $143,635 | $309,182 | $1,699,363 | $2,234,420 | | Interest/Other income (expense) | $80,823 | $9,866 | $253,018 | $635,248 | | Net income before income tax | $224,458 | $319,048 | $1,952,381 | $2,887,668 | | Income tax provision (benefit) | $84,948 | $50,057 | $582,085 | $756,268 | | Net income | $139,510 | $268,991 | $1,370,296 | $2,131,400 | | Wtd. Avg. basic common shares outstanding - diluted | 14,617,473 | 14,649,719 | 14,628,811 | 14,675,646 | | Net income per basic common share | $0.01 | $0.02 | $0.09 | $0.15 | Balance Sheets The unaudited Balance Sheets present the company's financial position as of December 30, 2023, and December 31, 2022, detailing assets, liabilities, and stockholders' equity | ASSETS | December 30, 2023 ($) | December 31, 2022 ($) | | :-------------------------------------- | :-------------------- | :-------------------- | | Cash and cash equivalents | $8,813,626 | $8,266,753 | | Accounts receivable-trade, net | $4,389,155 | $3,777,975 | | Accounts Receivable - other | $83,191 | $685,668 | | Inventories, net | $4,581,930 | $4,875,901 | | Prepaid expenses and other current assets | $276,349 | $211,242 | | Total current assets | $18,144,251 | $17,817,539 | | Net property and equipment | $1,556,139 | $1,326,968 | | Right-of-use lease asset | $332,000 | $466,000 | | Deferred taxes, net | $1,569,726 | $2,069,436 | | Total Assets | $21,602,116 | $21,679,943 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities: | | | | Note payable, current portion | $46,797 | $43,711 | | Accounts payable | $2,535,086 | $1,836,865 | | Accrued expenses | $1,075,137 | $820,856 | | Deferred revenue | $251,755 | $2,521,128 | | Lease liability, current portion | $160,000 | $157,000 | | Total current liabilities | $4,068,775 | $5,379,560 | | Note payable less current portion | $8,090 | $54,847 | | Deferred revenue – long term | $31,277 | $231,020 | | Long term lease liability | $172,000 | $309,000 | | Total liabilities | $4,280,142 | $5,974,427 | | Total stockholders' equity | $17,321,974 | $15,705,516 | | Total liabilities and stockholders' equity | $21,602,116 | $21,679,943 | Conference Call Information Conference Call Details Details for the upcoming conference call to discuss the fourth quarter 2023 earnings, scheduled for March 7, 2024 - The fourth quarter 2023 earnings call is scheduled for March 7, 2024, at 9:00 am[4] - Participants can dial 1-844-943-2942 using passcode 531915[4] - It is recommended to call in 10 minutes before the scheduled start time[4] Safe Harbor Statement Forward-Looking Statements and Risks This section serves as a disclaimer, indicating that statements regarding future financial results and prospective applications are forward-looking and subject to various risks and uncertainties, advising investors not to solely rely on these statements, and disclaiming any obligation to update them - Statements about 2024 financial results and prospective applications are forward-looking and involve risks and uncertainties[12] - Investors should not rely on forward-looking statements as actual results may differ materially due to various factors[12] - Additional risk factors are detailed in the company's SEC filings, including its Annual Report on Form 10-K, and the company disclaims any obligation to update these statements[12]