CPS Technologies Corporation (CPSH) Bundle
A Brief History of CPS Technologies Corporation
Company Overview
CPS Technologies Corporation, originally incorporated as Ceramics Process Systems Corporation in 1984, underwent a name change in March 2007 to its current name. The company went public in July 1987, offering 1.5 million shares of common stock.
Recent Financial Performance
For the third quarter of 2024, CPS reported total revenues of $4.25 million, a significant decrease of 32% from $6.29 million in the same quarter of 2023. The decline was attributed to the completion of a major armor contract for the U.S. Navy in 2024 and reduced purchases from a major customer due to excess inventory.
Operational Results
The company experienced a gross loss of $523,000 in Q3 2024, compared to a gross profit of $1.24 million in Q3 2023. The gross margin fell to -12% from 20% year-over-year, reflecting fixed costs impacting significantly lower revenues.
Income Statement Highlights
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenues | $4,247,116 | $6,285,041 |
| Gross Profit (Loss) | ($523,432) | $1,235,864 |
| Operating Income (Loss) | ($1,486,496) | $130,637 |
| Net Income (Loss) | ($1,042,839) | $171,081 |
Balance Sheet Overview
As of September 28, 2024, CPS reported total assets of $19.22 million, down from $21.60 million at year-end 2023. The company’s cash and cash equivalents were reported at $4.69 million, a decrease from $8.81 million in December 2023.
Stockholders’ Equity
| Metrics | September 28, 2024 | December 30, 2023 |
|---|---|---|
| Total Stockholders’ Equity | $15,449,045 | $17,321,974 |
| Accumulated Deficit | ($24,895,093) | ($22,754,796) |
Cash Flow Analysis
During the first nine months of 2024, CPS reported a net cash outflow from operating activities of ($2.10 million), compared to an inflow of $1.07 million in the same period of 2023. The company incurred significant capital expenditures, totaling $895,868 for property and equipment.
Market Conditions and Challenges
CPS Technologies continues to face challenges with supply chain disruptions and pricing pressures due to inflation and competition, particularly from Japanese manufacturers. The company does not rely on raw materials from conflict regions, mitigating some risks associated with geopolitical tensions.
Future Outlook
Management believes that existing cash balances will be sufficient to fund operations for the foreseeable future, despite the ongoing uncertainties in financial performance and market conditions.
A Who Owns CPS Technologies Corporation (CPSH)
Ownership Structure
As of 2024, CPS Technologies Corporation (CPSH) has a total of 14,661,487 shares issued. The ownership structure includes various stakeholders, with institutional investors and individual shareholders holding significant portions.
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | Approx. 5,000,000 | 34.1% |
| Insider Holdings | Approx. 1,500,000 | 10.2% |
| Retail Investors | Approx. 8,161,487 | 55.7% |
Recent Shareholder Changes
In recent months, there has been a notable change in the shareholder composition. The percentage of shares held by institutional investors has increased slightly, reflecting growing interest in CPS Technologies' performance and strategy.
Financial Performance Overview
CPS Technologies reported a net loss of $2,140,297 for the first nine months of 2024, compared to a net income of $1,230,785 in the same period of 2023. This significant shift has impacted investor sentiment and ownership dynamics.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Total Revenue | $15,190,063 | $20,803,447 |
| Net Loss | $(2,140,297) | $1,230,785 |
| Operating Loss | $(3,061,945) | $1,555,727 |
| Cash and Cash Equivalents | $4,689,004 | $8,813,626 |
Stock Performance
The stock price of CPS Technologies has been volatile, reflecting broader market trends and company-specific challenges. As of September 28, 2024, the stock price was $1.50, down significantly from $2.65 at the same time in the previous year.
Share Repurchase Program
As of September 28, 2024, CPS Technologies repurchased 135,527 shares at an average price of $1.80. This program is aimed at enhancing shareholder value amid fluctuating stock performance.
| Year | Shares Repurchased | Average Price |
|---|---|---|
| 2024 | 135,527 | $1.80 |
| 2023 | 82,272 | $2.10 |
Future Outlook
Despite challenges, CPS Technologies is focusing on increasing operational efficiency and exploring new markets to improve financial performance and attract more investors.
CPS Technologies Corporation (CPSH) Mission Statement
CPS Technologies Corporation focuses on providing innovative solutions in advanced materials and manufacturing technologies. The company aims to enhance customer performance through its proprietary Metal Matrix Composites (MMC) and other advanced technologies. CPS is dedicated to delivering high-quality products and services tailored to meet the specific needs of its clients while maintaining a commitment to sustainability and operational excellence.
Financial Overview
As of September 28, 2024, CPS Technologies Corporation reported significant financial metrics reflecting its operational performance:
| Financial Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Total Revenue | $4,247,116 | $6,285,041 | $15,190,063 | $20,803,447 |
| Gross Profit (Loss) | ($523,432) | $1,235,864 | $152,886 | $5,676,826 |
| Operating Income (Loss) | ($1,486,496) | $130,637 | ($3,061,945) | $1,555,727 |
| Net Income (Loss) | ($1,042,839) | $171,081 | ($2,140,297) | $1,230,785 |
| Basic Earnings Per Share | ($0.07) | $0.01 | ($0.15) | $0.08 |
Operational Insights
CPS Technologies has experienced a decline in total revenue by 32% in Q3 2024 compared to Q3 2023, primarily due to the completion of a significant armor contract for the US Navy. Additionally, one major customer reduced their purchases significantly due to excess inventory, impacting sales volume.
The gross loss for Q3 2024 was reported at $523,432, a stark contrast to the gross profit of $1,235,864 in Q3 2023. This change illustrates the company's struggles with fixed costs amidst declining sales volumes. The operating loss for the first nine months of 2024 was $3,061,945 compared to an operating profit of $1,555,727 in the same period the previous year, indicating a substantial shift in profitability.
Cost Management
In response to the financial downturn, CPS Technologies has focused on reducing selling, general, and administrative expenses. For the first nine months of 2024, SG&A expenses totaled $3,214,831, down from $4,121,099 during the same period in 2023, marking a 22% reduction. This reduction is attributed to decreased variable compensation and payroll expenses as the company adjusts to lower profitability.
Liquidity Position
As of September 28, 2024, CPS Technologies reported liquid assets consisting of:
| Asset Type | Amount ($) |
|---|---|
| Cash and Cash Equivalents | $4,689,004 |
| Restricted Cash | $85,000 |
| Marketable Debt Securities (Fair Value) | $1,020,952 |
The company’s cash and cash equivalents decreased significantly from $8,813,626 at the end of 2023, reflecting operational losses and capital expenditures aimed at improving future performance.
Inventory Management
As of September 28, 2024, CPS Technologies reported total inventories of $4,433,412, slightly down from $4,581,930 at the end of 2023. The breakdown of inventory is as follows:
| Inventory Type | Amount ($) |
|---|---|
| Raw Materials | $2,660,125 |
| Work in Process | $1,861,794 |
| Finished Goods | $423,453 |
The inventory turnover ratio for the most recent four quarters is reported at 4.6 times, indicating a slight improvement from 4.3 times in 2023.
Stockholders' Equity
As of September 28, 2024, the stockholders' equity details are as follows:
| Equity Component | Amount ($) |
|---|---|
| Common Stock | $146,615 |
| Additional Paid-In Capital | $40,520,215 |
| Accumulated Deficit | ($24,895,093) |
| Total Stockholders' Equity | $15,449,045 |
The total stockholders' equity decreased from $17,321,974 at the end of 2023 to $15,449,045 due to ongoing operational losses.
How CPS Technologies Corporation (CPSH) Works
Business Model and Operations
CPS Technologies Corporation operates primarily in the advanced materials sector, focusing on Metal Matrix Composites (MMC), housings for hybrid circuits, and specialized armor solutions. The company designs and manufactures custom products tailored to client specifications, emphasizing high performance, reliability, and cost efficiency.
CPS generates revenue through the sale of its products, which include:
- Baseplates for motor controllers used in electric trains and vehicles.
- Housings for radar and satellite applications.
- Light-weight vehicle armor for high-threat environments.
- Components for high-performance integrated circuits utilized in networking equipment.
The company has a significant focus on research and development to innovate and meet evolving customer demands in various industries, including electronics and defense.
Financial Performance
For the first nine months of 2024, CPS reported total revenues of $15.19 million, representing a 27% decrease from $20.80 million in the same period of 2023. The decline was attributed mainly to the completion of a significant armor contract for the US Navy and reduced purchases from a major customer due to excess inventory.
In the third quarter of 2024, revenues totaled $4.25 million, down 32% from $6.29 million in Q3 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | First 9 Months 2024 | First 9 Months 2023 |
|---|---|---|---|---|
| Total Revenue | $4.25 million | $6.29 million | $15.19 million | $20.80 million |
| Gross Profit (Loss) | $(0.52) million | $1.24 million | $0.15 million | $5.68 million |
| Operating Income (Loss) | $(1.49) million | $0.13 million | $(3.06) million | $1.56 million |
| Net Income (Loss) | $(1.04) million | $0.17 million | $(2.14) million | $1.23 million |
Cost Structure and Profitability
CPS's gross margin for the first nine months of 2024 was 2%, down from 27% in the prior year. The gross loss in Q3 2024 was 12% of sales, compared to a gross profit margin of 20% in Q3 2023. This decline is primarily due to the fixed costs not being adequately covered by lower revenues.
Selling, General and Administrative (SG&A) expenses for the first nine months of 2024 amounted to $3.22 million, a reduction of 22% compared to $4.12 million in the same period of 2023.
Liquidity and Capital Resources
As of September 28, 2024, CPS had cash and cash equivalents of $4.69 million, down from $8.81 million at the end of 2023. The company also had restricted cash of $0.085 million and marketable securities valued at $1.02 million.
Accounts receivable totaled $4.02 million, with Days Sales Outstanding (DSO) increasing from 60 days at the end of 2023 to 78 days by Q3 2024.
| Liquidity Metrics | September 28, 2024 | December 30, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $4.69 million | $8.81 million |
| Restricted Cash | $0.085 million | $0 million |
| Marketable Securities | $1.02 million | $0 million |
| Accounts Receivable | $4.02 million | $4.47 million |
Future Outlook
CPS Technologies does not rely on raw materials from conflict-affected areas, which mitigates some risk from geopolitical tensions. However, inflation has impacted costs, and while CPS has managed to pass these increases to customers, future ability to do so remains uncertain. Management believes that existing cash balances will suffice to fund operations through 2025, but emphasizes the importance of maintaining customer relationships to avoid financial strain.
How CPS Technologies Corporation (CPSH) Makes Money
Revenue Sources
CPS Technologies Corporation generates revenue primarily through the sale of custom-engineered products, particularly focusing on Metal Matrix Composites (MMC) and advanced materials used in various high-performance applications. In 2024, total revenue was reported at $15,190,063, a decrease of 27% from $20,803,447 in 2023.
| Period | Total Revenue | Product Sales | Cost of Product Sales | Gross Profit (Loss) |
|---|---|---|---|---|
| Q3 2024 | $4,247,116 | $4,247,116 | $4,770,548 | $(523,432) |
| Q3 2023 | $6,285,041 | $6,285,041 | $5,049,177 | $1,235,864 |
| First 9 Months 2024 | $15,190,063 | $15,190,063 | $15,037,177 | $152,886 |
| First 9 Months 2023 | $20,803,447 | $20,803,447 | $15,126,621 | $5,676,826 |
Cost Structure
The cost structure includes variable costs tied to production and fixed costs related to operational overhead. In Q3 2024, CPS reported a gross loss of $523,432, which represents a 12% loss of sales. The significant decline in gross margin reflects the fixed costs being spread over a reduced sales volume.
Operating Expenses
Selling, general, and administrative (SG&A) expenses amounted to $3,214,831 for the first nine months of 2024, down from $4,121,099 in the same period of 2023, marking a 22% reduction. This decrease was attributed to lower variable compensation and a reduction in payroll expenses.
Net Income and Loss
CPS Technologies reported a net loss of $2,140,297 for the first nine months of 2024, compared to a net income of $1,230,785 in the same period of 2023. The net loss for Q3 2024 was $1,042,839, a stark contrast to a net profit of $171,081 in Q3 2023.
| Period | Net Income (Loss) | Operating Income (Loss) | SG&A Expenses |
|---|---|---|---|
| Q3 2024 | $(1,042,839) | $(1,486,496) | $963,064 |
| Q3 2023 | $171,081 | $130,637 | $1,105,227 |
| First 9 Months 2024 | $(2,140,297) | $(3,061,945) | $3,214,831 |
| First 9 Months 2023 | $1,230,785 | $1,555,727 | $4,121,099 |
Interest Income
During the first nine months of 2024, CPS reported net interest income of $241,686, up from $176,325 in the same period of 2023, primarily due to higher interest rates affecting cash and cash equivalents.
Cash and Liquidity Position
At September 28, 2024, CPS had cash and cash equivalents of $4,689,004, down from $8,813,626 at December 30, 2023. Accounts receivable stood at $4,017,000, showing a decrease from $4,472,000 at the end of 2023. Days Sales Outstanding (DSO) increased from 60 days at the end of 2023 to 78 days at the end of Q3 2024.
| Category | Amount (in $) |
|---|---|
| Cash and Cash Equivalents (Sept 2024) | $4,689,004 |
| Accounts Receivable (Sept 2024) | $4,017,000 |
| Days Sales Outstanding (Sept 2024) | 78 days |
| Cash and Cash Equivalents (Dec 2023) | $8,813,626 |
| Accounts Receivable (Dec 2023) | $4,472,000 |
| Days Sales Outstanding (Dec 2023) | 60 days |
Inventory Management
As of September 28, 2024, total inventories amounted to $4,433,412, a decrease from $4,581,930 at December 30, 2023. The inventory turnover for the last four quarters ending Q3 2024 was 4.6 times, compared to 4.3 times in 2023.
| Inventory Category | Amount (in $) |
|---|---|
| Raw Materials | $2,660,125 |
| Work in Process | $1,861,794 |
| Finished Goods | $423,453 |
| Total Inventory | $4,945,372 |
| Reserve for Obsolescence | $(511,960) |
| Net Inventory | $4,433,412 |
Contractual Obligations
CPS Technologies has operating lease obligations totaling $224,000 as of September 28, 2024. The lease payments are structured as follows: $41,000 in 2024, $165,000 in 2025, and $28,000 in 2026.
| Year | Lease Payment (in $) |
|---|---|
| 2024 | $41,000 |
| 2025 | $165,000 |
| 2026 | $28,000 |
| Total Undiscounted Lease Payments | $234,000 |
| Less: Imputed Interest | $(10,000) |
| Present Value of Lease Liability | $224,000 |
Research and Development
The company is engaged in research and development activities aimed at developing new products that meet customer requirements. This ongoing investment is crucial for maintaining competitiveness in the advanced materials sector.
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Article updated on 8 Nov 2024
Resources:
- CPS Technologies Corporation (CPSH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CPS Technologies Corporation (CPSH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CPS Technologies Corporation (CPSH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.