CPS Technologies Corporation Announces Third Quarter 2023 Financial Results

Revenue of $6.3 Million; Company Remains on Track for Record Year

NORTON, Mass., Nov. 01, 2023 (GLOBE NEWSWIRE) -- CPS Technologies Corporation (NASDAQ:CPSH) (“CPS” or the “Company”) today announced financial results for the fiscal third quarter ended September 30, 2023.

Third Quarter Highlights

  • Revenue of $6.3 million for the third quarter of 2023 versus $6.7 million in the prior-year period, reflecting a shift in certain orders into the fourth quarter, as previously discussed
  • Gross margin of 19.7 percent versus 27.9 percent in the third quarter of 2022, primarily due to lower revenue year-over-year
  • Operating profit of $0.1 million for the quarter ended September 30, 2023, compared to $0.7 million in the prior-year period
  • Company recently announced a new contract, valued at approximately $7.7 million, to provide power module components and related solutions to a European customer, as well as the Company’s first SBIR grant funded by the Department of Energy

“As anticipated, revenue during the period was negatively impacted by certain shipments being delayed into the fourth quarter, which is looking to be particularly strong,” said Brian Mackey, President and CEO. “I’m excited that we remain in solid shape to finish fiscal 2023 with a record-setting performance, setting the stage for continued success going forward. We recently announced two major wins for CPS that will positively impact fiscal 2024, including a new SBIR award, complemented by a $7.7 million contract with one of our larger customers.

“Now with three months under my belt at CPS, I am upbeat about the future of the Company, as we focus on R&D investment and business development initiatives to drive higher returns and top line expansion. CPS provides unique, cutting-edge solutions across many fast-growing industries, and we are well positioned to take the Company to the next level in terms of both size and scope. I look forward to executing on a strategic plan that accelerates growth, improves operating performance, and enhances value for our shareholders.”

Results of Operations
CPS reported revenue of $6.3 million for the third quarter of fiscal 2023 versus $6.7 million in the prior-year period, reflecting order timing. Gross profit was to $1.2 million, or 19.7 percent of revenue, versus $1.9 million, or 27.9 percent of revenue, in the fiscal 2022 third quarter. The lower gross margin year-over-year reflects lower overall sales.

Operating profit was $0.1 million in the fiscal 2023 third quarter, compared with $0.7 million in the prior-year period. Reported net income was $0.2 million, or $0.01 per diluted share, versus $1.0 million, or $0.07 per diluted share, in the quarter ended October 1, 2022.

Conference Call
The Company will be hosting its third quarter 2023 earnings call at 9:00 am on Thursday, November 2. Those interested in participating in the conference call should dial the following:

Call in Number: 1-844-943-2942
Participant Passcode: 230366
The Company encourages those who wish to participate to call in 10 minutes before the scheduled start time to ensure the operator can connect all participants.

About CPS
CPS is a technology and manufacturing leader in producing high-performance energy management components that facilitate the electrification of the economy. Our products and intellectual property include critical pieces of the technology puzzle for electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, the smart electric grid, 5G infrastructure, and others. CPS' armor products provide exceptional ballistic protection and environmental durability at a very light weight. CPS also assembles housings and packages for hybrid circuits.   CPS is committed to innovation and to supporting our customers in building solutions to this planet's problems.

Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2023 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                                       
111 South Worcester Street
Norton, MA 02766

Investor Relations:
Chris Witty

Statements of Operations (Unaudited)

 Fiscal Quarters Ended  Nine Months Ended 
 September 30,  October 1,  September 30,  October 1, 
 2023  2022  2023  2022 
Product sales$6,285,041  $6,748,117  $20,803,447  $20,471,574 
Total Revenues 6,285,041   6,748,117   20,803,447   20,471,574 
Cost of product sales 5,049,177   4,864,876   15,126,621   14,796,206 
Gross Profit 1,235,864   1,883,241   5,676,826   5,675,368 
Selling, general and administrative expense 1,105,227   1,174,581   4,121,099   3,750,131 
Operating income (loss) 130,637   708,660   1,555,727   1,925,237 
Interest income (expense), net 78,181   (1,892)  176,325   (6,245)
Other income (expense), net (1,228)  645,594   (4,130)  649,628 
Net income (loss) before income tax expense 207,590   1,352,362   1,727,922   2,568,620 
Income tax provision (benefit) 36,509   364,497   497,137   706,211)
Net income$171,081  $987,865  $1,230,785  $1,862,409 
Net income per basic common share$0.01  $0.07  $0.08  $0.13 
Weighted average number of basic common shares outstanding 14,517,364   14,434,468   14,487,873   14,417,995 
Net income per diluted common share$0.01  $0.07  $0.08  $0.13 
Weighted average number of diluted common shares outstanding 14,636,241   14,686,476   14,632,591   14,683,632 


Balance Sheets (Unaudited)

 September 30,  December 31, 
 2023  2022 
Current assets:       
Cash and cash equivalents$8,778,856  $8,266,753 
Accounts receivable-trade, net 5,006,451   3,777,975 
Accounts receivable-other 17.043   685,668 
Inventories, net 4,827,957   4,875,901 
Prepaid expenses and other current assets 337,476   211,242 
Total current assets 18,967,783   17,817,539 
Property and equipment:       
Production equipment 11,195,993   10,770,427 
Furniture and office equipment 952,883   952,883 
Leasehold improvements 985,649   985,649 
Total cost 13,134,525   12,708,959 
Accumulated depreciation and amortization (11,810,209)  (11,446,901)
Construction in progress 206,693   64,910 
Net property and equipment 1,531,009   1,326,968 
Right-of-use lease asset 367,000   466,000 
Deferred taxes, net 1,645,467   2,069,436 
Total assets$22,511,259  $21,679,943 

 October 1,  December 31, 
 2022  2022 
Current liabilities:       
Note payable, current portion 57,457   43,711 
Accounts payable 2,151,127   1,836,865 
Accrued expenses 1,067,293   820,856 
Deferred revenue 1,675,086   2,521,128 
Lease liability, current portion 159,000   157,000 
Total current liabilities 5,109,963   5,379,560 
Note payable less current portion 8,655   54,847 
Deferred revenue-long term 31,277   231,020 
Long term lease liability 208,000   309,000 
Total liabilities 5,357,895   5,974,427 
Commitments (note 4)       
Stockholders` equity:       
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601487 and 14,460,486, respectively; outstanding 14,519,215 and 14,450,470, respectively; at September 30, 2023 and December 31, 2022; 146,015   144,605 
Additional paid-in capital 40,151,794   39,726,851 
Accumulated deficit (22,894,307)  (24,125,092)
Less cost of 82,272 and 10,016 common shares repurchased, respectively; at September 30, 2023 and December 31, 2022 (250,138)  (40,848)
Total stockholders` equity 17,153,364   15,705,516 
Total liabilities and stockholders` equity$22,511,259  $21,679,943