Shares of CPS Technologies Corporation CPSH have been unchanged since reporting results for the fourth quarter of 2024. This compares to the S&P 500 index’s 0.7% growth over the same time frame. In the past month, the stock has lost 11.6% compared with the S&P 500’s 8.3% decline.
CPS Technologies reported a fourth-quarter 2024 loss per diluted share of 7 cents, falling 800% from earnings of 1 cent per diluted share in the prior-year quarter.
The company reported total quarterly revenues of $5.9 million, a 12.2% decline from $6.7 million in the prior-year quarter. The revenue decrease was primarily attributed to the completion of the company’s HybridTech Armor contract with Kinetic Protection for the U.S. Navy.
However, revenues showed a strong sequential improvement, rising 40% from the third quarter, supported by increased customer shipments and the company’s expanded production capacity.
Gross loss plummeted to$0.3 million, representing a negative gross margin of 4.6%, against a gross profit of $1.1 million and a gross margin of 17% in Q4 2023. The year-over-year decline was primarily due to lower production volumes, reduced economies of scale, and costs associated with hiring and training employees for a third production shift.
The company posted an operating loss of $1.3 million in the quarter, reversing from the operating profit of $0.1 million a year ago.
CPS Technologies Corp. price-consensus-eps-surprise-chart | CPS Technologies Corp. Quote
CPS Technologies ended 2024 with cash and marketable securities totaling $4.3 million, down from $8.8 million in cash at the beginning of the year. Accounts receivable stood at $4.9 million, up from $4.4 million a year earlier. Inventory levels declined to $4.3 million from $4.6 million at the start of the year, reflecting a shift in product mix.
Despite the financial losses, management highlighted that fourth-quarter revenues slightly exceeded the first-quarter 2024 level, indicating the successful replacement of lost revenues from the completed armor contract. Additionally, the company noted a higher backlog at year-end, positioning CPS for stronger results, going forward.
CEO Brian Mackey acknowledged the financial difficulties in the fourth quarter but emphasized that the company is on a path to improved profitability. He cited the successful execution of CPS’s $13.3 million power module contract as a key revenue growth driver. The company also expects the gross margin to improve as the newly hired production staff gains experience and the temporary training-related inefficiencies subside.
