Sypris Solutions (SYPR) Reports In-Line Q2 EPS; Sells CSS Business to Analog Devices
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Sypris Solutions (NASDAQ: SYPR) reported Q2 EPS of ($0.26), in-line with the analyst estimate of ($0.26). Revenue for the quarter came in at $23.5 million versus the consensus estimate of $27.1 million.
- Subsequent to quarter end, the Company:
- Announced the sale of the Cyber Security Solutions business (“CSS”) of Sypris Electronics to Analog Devices, Inc. (Nasdaq: ADI) for $42 million of cash.
- The all-cash transaction was structured as a purchase of assets, including intellectual property and know-how, and included a long-term agreement for Sypris to supply circuit card assemblies to ADI for certain CSS products.
- Proceeds from the sale after expenses and escrow are expected to be in the range of $37.5 million and will be used to reduce debt and reinvest in the Company going forward.
- The CSS business supplies secure communications equipment, identity authentication, key management and encryption services for various agencies and services of the US Government, as well as for foreign allies.
- The transaction closed on Tuesday, August 16.
Commenting on the transaction, Jeffrey T. Gill, President and Chief Executive Officer of Sypris Solutions stated, “We are pleased to complete this transaction with Analog Devices. Analog is a global leader in its markets and as a result, will have the ability to accelerate the introduction of the new, ground-breaking cybersecurity technologies and capabilities that we have developed in recent years into a variety of automotive, industrial, aerospace, healthcare, IoT and safe cities applications.”
The transaction included the intellectual property and know-how for SiOMetricsTM, SypherTM, the Sypris Cyber Range and the Data Systems product line. Approximately 67 people, or 33% of the headcount employed by Sypris Electronics, will be transferring to ADI, including people located in Tampa, Florida; Columbia, Maryland; West Lafayette, Indiana; and Copenhagen, Denmark.
Gill continued, “Going forward, Sypris Electronics will continue to be based in Tampa, Florida and will focus on building upon its core capabilities as a trusted manufacturer for customers such as Harris, Lockheed Martin, Northrop Grumman, Rockwell Collins, TE SubCom and now Analog Devices. The proceeds from the sale will be used to repay the Company’s senior debt and will be available to reinvest in the business to support future growth initiatives. In this regard, the transaction represents an important milestone for all parties.”
“We are delighted to welcome Sypris’ CSS employees, expertise and products to the ADI family,” said Dick Meaney, Senior Vice President, Industrial and Healthcare Group, Analog Devices, Inc. “We believe the combination of Sypris capabilities in ADI silicon, sensors and services will fundamentally change the levels of trust that can be achieved in the next generation of cybersecurity.”
John Walsh, President of Sypris Electronics also commented, “Our CSS capabilities coupled with ADI’s solutions have the potential to transform the levels of trust that can be achieved in the next generation of secure solutions at the intersection of the physical and digital worlds.”
For earnings history and earnings-related data on Sypris Solutions (SYPR) click here.
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