Financial Data and Key Metrics Changes - The company's revenue for Q4 2024 was $5.9 million, down from $6.7 million in the same quarter last year, primarily due to the fulfillment of a U.S. Navy armor contract [10][11] - The operating loss for Q4 was approximately $1.3 million, compared to an operating income of about $0.1 million in Q4 2023 [16] - A net loss of $1 million or $0.07 per share was reported, contrasting with a net income of $0.2 million or $0.01 per diluted share in Q4 of fiscal 2023 [17] - The gross loss in Q4 was $0.3 million, representing approximately negative 4.6% of sales, compared to a gross profit of $1.1 million or 17% of sales last year [14] Business Line Data and Key Metrics Changes - Sales declined year-over-year due to the completion of the armor contract, but there was a significant sequential increase of 40% in revenue from Q3 2024 due to increased customer shipments [6][21] - The company is fulfilling a $13.3 million contract with a semiconductor manufacturer for power module components, which is expected to continue through September 2025 [23] - Continued strong demand for power module components and related solutions from both new and existing customers was noted [12] Market Data and Key Metrics Changes - The company is experiencing strong demand for its metal matrix composites and hermetic packaging applications, particularly in high-speed rail, wind turbines, and electric vehicle applications [24][39] - The company is actively seeking new customers in the aerospace industry for its fiber reinforced aluminum (FRA) products [39] Company Strategy and Development Direction - The company aims to expand its product offerings and target new applications in key markets with demanding technical requirements [25] - Plans to add new product lines leveraging proprietary technology, including aluminum infiltrated products, were discussed [27] - The company is optimistic about securing additional armor orders for Navy vessels in fiscal 2025, despite current budget challenges [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a turnaround from Q3 results, with expectations for improved financial performance and operational execution in 2025 [21][38] - The company anticipates improving gross margins and bottom-line results as production volumes increase and one-time expenses are behind them [38] - Management highlighted the importance of ongoing strong customer demand and expanded manufacturing capabilities for future growth [41] Other Important Information - The company has transitioned to a new auditing firm, PKF O'Connor Davies, for its 2024 audit [9][19] - The company reported a significant increase in cash and marketable securities, ending the year with $3.3 million in cash and $1 million in marketable securities, compared to $8.8 million in cash at the start of 2024 [17] Q&A Session Summary Question: What is the market size for radiation shielding in the trucking business? - Management indicated that the market is still in development, with early interest from various applications beyond trucking, including facility management and aerospace [44][48] Question: What kind of revenues might be expected in the next year or two for those applications? - Management stated it is difficult to quantify revenues at this stage due to the diverse markets and the need for certification as a supplier [49][50] Question: Will the company manufacture munitions rounds if accepted by the army? - Management explained that the SBIR funding allows for potential sole source provision if the company can meet the army's needs through the development process [53][56] Question: What is the timeline for the munitions development process? - The SBIR program has a 6-month Phase-1, followed by a potential 24-month Phase-2, depending on the progress made [58][60] Question: What is the status of the Southeast Asian Armor contract? - Management confirmed that development work is ongoing to restore potential for the armor contract, but a timeline for further testing is not currently available [104][106]
CPS Technologies(CPSH) - 2024 Q4 - Earnings Call Transcript