CPS Technologies Corporation
Chuck Griffith, Chief Financial Officer
111 South Worcester Street
Norton, MA 02766
Telephone: (508) 222-0614
Web Site: www.alsic.com
CPS TECHNOLOGIES CORPORATION ANNOUNCES SECOND QUARTER 2020 RESULTS
Norton, Massachusetts, July 29, 2020. CPS Technologies Corporation (NASDAQ: CPSH) today announced revenues of $5.8 million and an operating profit of $331 thousand for the quarter ended June 27, 2020. This compares with revenues of $6.4 million and an operating profit of $258 thousand for the quarter ended June 29, 2019.
For the six months ending June 27, 2020, revenues are $12.3 million with an operating profit of $952 thousand. This compares with revenue of $11.6 million and an operating loss of $486 thousand for the six months ended June 29, 2019.
Grant Bennett, President and CEO, said: “Revenues, while strong, were down compared to the first quarter of 2020 due primarily to impacts of the coronavirus pandemic on the purchasing decisions of a major customer. This customer increased inventory in Q1 to guard against possible supply chain interruptions; they then reduced purchases in Q2 to bring inventory down to more appropriate levels.
Gross margins and operating profits were considerably higher in the three-month and six-month periods just ended than they were in the corresponding periods a year ago. This significant positive swing in performance reflects the pricing, product mix and operational improvements discussed in previous quarters.
CPS has been open and operating throughout the pandemic. To date most of our customers remain open and operational. We saw in Q2 and expect to see in future quarters increased volatility in short-term demand as individual customers address pandemic-related issues including managing inventories up and down, shortages of other components, short-term shutdowns, longer approval cycles given many employees are working from home, etc.
CPS continues to follow CDC and OSHA guidance in our workplace. Employees’ temperatures are taken at the beginning of each shift, shifts have been staggered to reduce employee overlap, workstations have been rearranged to ensure social distancing, all employees are using facemasks, etc.
Any forward looking comments must begin with the clear caveat that the pandemic is injecting considerable uncertainty at customers and suppliers so conditions can and may change quickly. Nonetheless, we currently anticipate continued strong performance for the remainder of 2020, albeit not as strong as we were anticipating pre-pandemic. Our product sales pipeline is strong. Our sales team continues to generate new business both from existing and new customers. We note that over the past six months we have seen some customer programs using SiC die accelerating and we are particularly excited about the near-term revenue growth potential in this area.”
The Company will be hosting its second quarter conference call with investors at 4:45pm on Wednesday, July 29. Those interested in participating in the conference call should dial:
Call in Number: 1-833-953-1394
Conference ID: 6958894
About CPS
CPS Technologies Corporation is a global leader in producing metal-matrix composite components used to improve the reliability
and performance of various electrical systems. CPS products are used in motor controllers for hybrid and electric vehicles,
high-speed trains, subway cars and wind turbines. They are also used as heatspreaders in internet switches, routers and high-performance
microprocessors. CPS also develops and produces metal-matrix composite armor.
Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2020
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 CORP. | ||||||||||||||||
| STATEMENT OF OPERATIONS (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 27, | June 29, | June 27, | June 29, | |||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product sales | $ | 5,758,015 | $ | 6,366,951 | $ | 12,269,586 | $ | 11,636,489 | ||||||||
| Total revenues | 5,758,015 | 6,366,951 | 12,269,586 | 11,636,489 | ||||||||||||
| Cost of product sales | 4,574,686 | 5,191,964 | 9,536,047 | 10,302,078 | ||||||||||||
| Gross Margin | 1,183,329 | 1,174,987 | 2,733,539 | 1,334,411 | ||||||||||||
| Selling, general, and | ||||||||||||||||
| administrative expense | 852,773 | 917,079 | 1,781,362 | 1,820,765 | ||||||||||||
| Income (loss) from operations | 330,556 | 257,908 | 952,176 | (486,354) | ||||||||||||
| Interest income (expense), net | (31,325) | (7,310) | (51,291) | (7,261) | ||||||||||||
| Net income (loss) before | ||||||||||||||||
| income tax | 299,231 | 250,598 | 900,885 | (493,615) | ||||||||||||
| Income tax provision (benefit) | — | — | — | — | ||||||||||||
| Net income (loss) | $ | 299,231 | $ | 250,598 | $ | 900,885 | $ | (493,615) | ||||||||
| Net income (loss) per | ||||||||||||||||
| basic common share | $ | 0.02 | $ | 0.02 | $ | 0.07 | $ | (0.04) | ||||||||
| CPS TECHNOLOGIES CORP. | ||||||||
| BALANCE SHEET (Unaudited) | ||||||||
| June 27, | December 28, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 116,612 | $ | 133,965 | ||||
| Accounts receivable-trade, net | 4,975,842 | 4,086,945 | ||||||
| Inventories, net | 3,872,868 | 3,099,824 | ||||||
| Prepaid expenses and other current assets | 173,237 | 147,786 | ||||||
| Total current assets | 9,138,559 | 7,468,520 | ||||||
| Property and equipment: | ||||||||
| Production equipment | 10,008,886 | 9,649,169 | ||||||
| Furniture and office equipment | 508,423 | 508,423 | ||||||
| Leasehold improvements | 934,195 | 934,195 | ||||||
| Total cost | 11,451,504 | 11,091,787 | ||||||
| Accumulated depreciation and amortization | (10,357,620) | (10,110,663) | ||||||
| Construction in progress | 320,209 | 255,754 | ||||||
| Net property and equipment | 1,414,093 | 1,236,878 | ||||||
| Right-of-use lease asset | 100,000 | 171,000 | ||||||
| Deferred taxes, net | 147,873 | 147,873 | ||||||
| Total assets | $ | 10,800,525 | $ | 9,024,271 | ||||
| Current liabilities: | ||||||||
| Borrowings against line of credit | 1,026,765 | 1,249,588 | ||||||
| Note payable, current portion | 37,311 | — | ||||||
| Accounts payable | 1,770,160 | 1,436,417 | ||||||
| Accrued expenses | 908,994 | 815,166 | ||||||
| Deferred revenue | 482,997 | 21,110 | ||||||
| Lease liability, current portion | 100,000 | 148,000 | ||||||
| Total current liabilities | 4,326,227 | 3,670,281 | ||||||
| Note payable less current portion | 159,360 | — | ||||||
| Long term lease liability | — | 23,000 | ||||||
| Total liabilities | 4,485,587 | 3,693,281 | ||||||
| Commitments | ||||||||
| Stockholders` equity: | ||||||||
| Common stock, $0.01 par value, | ||||||||
| authorized 20,000,000 shares; | ||||||||
| issued 13,427,492; | ||||||||
| outstanding 13,207,436; | ||||||||
| at June 27, 2020 and December 28, 2019; | 134,275 | 134,275 | ||||||
| Additional paid-in capital | 36,177,264 | 36,094,201 | ||||||
| Accumulated deficit | (29,479,548) | (30,380,433) | ||||||
| Less cost of 220,056 common shares repurchased | ||||||||
| at June 27, 2020 and December 28, 2019 | (517,053) | (517,053) | ||||||
| Total stockholders` equity | 6,314,938 | 5,330,990 | ||||||
| Total liabilities and stockholders` | ||||||||
| equity | $ | 10,800,525 | $ | 9,024,271 | ||||