Performance Impacted by Contract Completion as Company Focuses on New Business Development

NORTON, Mass., July 31, 2024 (GLOBE NEWSWIRE) -- CPS Technologies Corporation (NASDAQ:CPSH) (“CPS” or the “Company”) today announced financial results for the fiscal second quarter ended June 29, 2024.

Second Quarter Summary

• Revenue of $5.0 million for the second quarter of 2024 versus $7.4 million in the prior-year period, reflecting lower overall shipments due to the end of the Company’s HybridTech Armor^? contract with Kinetic Protection for the US Navy

• Gross margin of (4.6) percent versus 29.6 percent in the second quarter of 2023, largely reflecting lower manufacturing efficiencies and impact of fixed costs on lower revenue.

• Operating loss of $1.3 million for the quarter ended June 29, 2024 compared to an operating profit of $0.7 million in the prior-year period

• The Company’s recent SBIR Phase II award and ongoing product development initiatives in response to customer requirements point to accelerating wins heading into fiscal 2025

“This quarter’s results reflect the previously-announced completion of our HybridTech^? Armor contract with Kinetic Protection, as the Navy’s current needs have been fulfilled after many quarters of delivering our state-of-the-art panels to provide ballistic protection for the U.S. Navy’s fleet of aircraft carriers,” said Brian Mackey, President and CEO. “While this near-term headwind has been well known for quite some time, it does not lessen the impact it has had on our overall performance. Despite the current operating environment, our growth path going forward will be augmented by the continued expansion of our product development pipeline.

“Notably, our latest SBIR contract from the U.S. Navy Air Systems Command, valued at over $1 million, will enable us to continue to develop our novel metal matrix composites for thermal energy storage applications. Our MMCs have been shown to provide cutting-edge thermal energy storage, which supports long-range missile strike capability for the Navy. Potential applications include avionics, weapons, and high-pulse power modules. This new program, along with ongoing efforts to address our customer’s pressing technical challenges, with materials such as fiber reinforced aluminum, or “FRA”, and lightweight radiation shielding material, will continue to enhance company value. Our new Phase II contract, the company’s first in many years, clearly underscores not only our unique capabilities but the successful execution of a long-term growth strategy through expanded product development that addresses critical customer requirements.”

Results of Operations
CPS reported revenue of $5.0 million in the second quarter of fiscal 2024 versus $7.4 million in the prior-year period, reflecting the completion of the Company’s HybridTech Armor^? contract with Kinetic Protection, the prime contractor for the US Navy. Gross loss was $0.2 million, or (4.6) percent of revenue, versus a gross profit of $2.2 million, or 29.6 percent of revenue, in the fiscal 2023 second quarter, with the negative variance year-over-year due to the impact of fixed costs on lower overall revenue and reduced production efficiencies due to new product launches.

The Company reported an operating loss of $1.3 million in the fiscal 2024 second quarter compared with an operating profit of $0.7 million in the prior-year period. Reported net loss was $1.0 million, or $(0.07) per diluted share, versus net income of $0.6 million, or $0.04 per diluted share, in the quarter ended July 1, 2023.

Conference Call
The Company will be hosting its second quarter 2024 earnings call at 9:00 am tomorrow, August 1, 2024. Those interested in participating in the conference call should dial the following: 
Call in Number: 1-844-943-2942
Participant Passcode: 281331

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 materials solutions for its customers. The company’s products and intellectual property address critical needs in a variety of applications, including electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, Navy ships, the smart electric grid, 5G infrastructure and others. CPS hermetic packages can be found in many Aerospace and Satellite applications.  CPS’ armor products provide exceptional ballistic protection and environmental durability at very light weight. CPS is committed to innovation and to supporting our customers in building solutions for the transition to clean energy.

Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2024 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
www.cpstechnologysolutions.com

Investor Relations:
Chris Witty
646-438-9385
[email protected]