CPS Technologies(US:CPSH)2024-11-03 05:23Financial Data and Key Metrics - Q3 revenue was $4.2 million, a decline from $6.3 million YoY, primarily due to the end of the U.S. Navy Armor contract with Kinetic Protection [4][5] - Gross loss of $0.5 million (negative 12% of sales) compared to a gross profit of $1.2 million (20% of sales) last year, driven by lower revenue and third shift startup costs [7] - Operating loss of $1.5 million versus operating income of $0.1 million last year [10] - Net loss of $1.0 million or $0.07 per share compared to net income of $0.2 million or $0.01 per diluted share in Q3 2023 [10] - Cash position at the end of Q3 was $4.7 million, down from $8.8 million at the start of 2024 [11] Business Line Data and Key Metrics - The end of the Kinetic Protection contract reduced revenue by approximately $2 million per quarter [5][6] - A major customer purchased significantly less YoY due to excess inventory, but orders have now resumed [4][14] - Recent wins include a $12 million contract with a semiconductor customer and a $200,000 development contract with the U.S. Navy [15][19] Market Data and Key Metrics - The company is optimistic about Kinetic Protection potentially securing new Armor orders for additional naval vessel classes in fiscal 2025 [21] - The semiconductor contract is expected to boost revenue in fiscal 2025, with components used in high-speed rail, wind turbines, and EV/HEV applications [17][18] Company Strategy and Industry Competition - The company is focused on expanding manufacturing capabilities, including the successful training of a third shift [8][14] - Recent contract wins and improved product throughput position the company for growth in fiscal 2025 [8][15] - The company is actively pursuing SBIR opportunities and bidding on new applications with various U.S. agencies, including DoD and NASA [22] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about Q4 and fiscal 2025, citing improved manufacturing capabilities and recent contract wins [8][15] - The company expects gross margins to improve as volumes increase in Q4 and fiscal 2025 [7] - The company is moving into a new era of expansion and is optimistic about future quarters [25] Other Important Information - The company received a $1.1 million Phase II SBIR award from the Department of Energy for Modular Radiation Shielding [16] - The company is developing Fiber Reinforced Aluminum (FRA) composites, with commercialization expected in fiscal 2025 [23] - A new 5-axis CNC machine is operational, enabling higher production of hermetic packaging and other products [25] Q&A Session Summary - No specific questions or answers were provided during the Q&A session [26][28]