CPS Technologies Corporation (CPSH): Business Model Canvas [10-2024 Updated]

Discover how CPS Technologies Corporation (CPSH) harnesses its innovative metal-matrix composite technology to deliver high-performance solutions across various industries. This blog post delves into the company's comprehensive Business Model Canvas, outlining its key partnerships, activities, and value propositions, as well as the customer segments it serves. Join us as we explore how CPSH is positioned to meet the demands of the defense, aerospace, and automotive sectors.

CPS Technologies Corporation (CPSH) - Business Model: Key Partnerships

Collaborations with suppliers for raw materials

CPS Technologies Corporation collaborates closely with various suppliers to secure raw materials necessary for its manufacturing processes. The company does not rely on raw materials from geopolitical hotspots such as Ukraine, Russia, Israel, Lebanon, or Gaza, which mitigates certain supply chain risks. As of September 28, 2024, the total inventory was reported at $4,945,372, which included raw materials valued at $2,660,125.

Strategic alliances with defense contractors

CPS has established strategic alliances with several defense contractors, which are pivotal for its operations in the defense sector. The company has been involved in contracts with the U.S. Navy, notably completing an armor order in 2024. This contract significantly influenced CPS's revenue, which totaled $15,190,063 in the first nine months of 2024, representing a 27% decrease compared to $20,803,447 in the same period of 2023. The decrease was attributed to the completion of significant contracts and reduced orders from major customers.

Partnerships with research institutions for product development

CPS actively partners with research institutions to foster innovation and product development, particularly in advanced materials and manufacturing techniques. These collaborations enhance CPS's ability to develop proprietary technologies, including Metal Matrix Composites (MMC) utilized in various applications such as hybrid circuits and vehicle armor. The demand for these advanced materials is expected to grow as industries seek higher performance and reliability.

Partnership Type	Key Partners	Purpose/Goal	Financial Impact
Raw Material Suppliers	Various suppliers	Secure necessary raw materials for production	Raw materials inventory: $2,660,125
Defense Contractors	U.S. Navy, other defense contractors	Supply armor solutions and fulfill defense contracts	Revenue from defense contracts: $15,190,063 (9M 2024)
Research Institutions	Multiple research partners	Innovate and develop advanced materials	Investment in R&D (exact figure not disclosed)

CPS Technologies Corporation (CPSH) - Business Model: Key Activities

Manufacturing advanced material solutions

CPS Technologies Corporation engages in the manufacturing of advanced material solutions, particularly focusing on Metal Matrix Composites (MMC). In Q3 2024, the company reported product sales of $4.25 million, down from $6.29 million in Q3 2023, reflecting a decrease of 32% due to the completion of a significant armor contract for the US Navy. The cost of product sales in Q3 2024 was $4.77 million, leading to a gross loss of $523,000.

Research and development for new products

CPS invests in research and development (R&D) to innovate and enhance its product offerings. The company reported share-based compensation expenses related to R&D of $249,922 for the nine months ending September 28, 2024. This investment is crucial as it helps the company address evolving customer requirements and maintain a competitive edge in the advanced materials sector.

Quality assurance and testing of products

Quality assurance is a vital activity for CPS, ensuring that its products meet stringent performance standards. The company incurred significant costs in quality control, reflected in its operating expenses. In Q3 2024, selling, general, and administrative (SG&A) expenses totaled $963,000, down 13% from $1.11 million in Q3 2023. This reduction was partly due to lower variable compensation, aligning with the company's focus on efficiency amid declining revenues.

Key Activities	Q3 2024 Data	Q3 2023 Data	Notes
Product Sales	$4.25 million	$6.29 million	Decrease due to completion of major contracts
Cost of Product Sales	$4.77 million	$5.05 million	Higher costs impacting gross margin
Gross Loss	($523,000)	$1.24 million	Significant decline in profitability
SG&A Expenses	$963,000	$1.11 million	Reduction in variable compensation
R&D Investment (Share-based Compensation)	$249,922	$175,698	Focus on innovation and new product development

CPS Technologies Corporation (CPSH) - Business Model: Key Resources

Proprietary metal-matrix composite technology

CPS Technologies Corporation specializes in proprietary metal-matrix composite (MMC) technology, which is critical for producing high-performance components used in various industries, particularly defense and electronics. The demand for MMC is increasing as industries seek solutions that offer improved performance, reliability, and cost-effectiveness. CPSH's innovative approach positions it favorably in the market, providing a competitive edge in technology offerings.

Skilled engineering and production workforce

The company boasts a skilled workforce essential for its operations. As of September 28, 2024, CPSH employed a significant number of engineers and production workers trained specifically in the manufacturing of MMC products. This skilled labor force is a vital asset, allowing the company to maintain high-quality standards and innovate within its product lines.

Advanced manufacturing facilities

CPS Technologies operates advanced manufacturing facilities that play a crucial role in its production capabilities. The main facility, located in Norton, Massachusetts, spans approximately 38,000 square feet. The facility is equipped with state-of-the-art machinery and technology essential for the production of its proprietary materials. The capital expenditures for enhancing these facilities were approximately $895,868 in the first nine months of 2024 .

Resource Type	Description	Financial Impact
Technology	Proprietary metal-matrix composite technology	Supports product differentiation and competitive advantage
Human Resources	Skilled engineering and production workforce	Investment in workforce training and development
Facilities	Manufacturing facility in Norton, MA	Capital expenditures of $895,868 in 2024
Cash and Cash Equivalents	Available liquid assets	$4,689,004 as of September 28, 2024
Marketable Securities	Investments in U.S. Treasury Bills	Fair value of $1,020,952 as of September 28, 2024

CPS Technologies Corporation (CPSH) - Business Model: Value Propositions

Customizable advanced material solutions

CPS Technologies Corporation specializes in providing customizable advanced material solutions primarily through its proprietary metal-matrix composites (MMCs). The company’s products are tailored to meet the unique specifications of clients across various sectors, including aerospace, defense, and electronics. This customization capability positions CPS favorably against competitors who may offer standard solutions.

Product Type	Application	Customization Features
Baseplates	Hybrid and electric vehicles	Designed to customer specifications for thermal management
Housings	Radar and satellite systems	Engineered for weight reduction and enhanced performance
Armor Solutions	Military applications	Custom fit for specific threat levels and operational environments

High-performance products for demanding applications

The focus on high-performance products is a cornerstone of CPS's value proposition. The company’s offerings, such as heat spreaders and lids for integrated circuits, are designed to perform under extreme conditions, ensuring reliability and efficiency. CPS's commitment to high performance is evident in its continuous investment in research and development, aiming to innovate and meet the evolving demands of the market.

Performance Metric	Q3 2024	Q3 2023
Revenue	$4,247,116	$6,285,041
Gross Profit (Loss)	($523,432)	$1,235,864
Operating Loss	($1,486,496)	$130,637

Expertise in metal-matrix composites for various industries

CPS Technologies boasts extensive expertise in metal-matrix composites, which is leveraged across multiple industries. This specialization not only enhances product performance but also provides clients with innovative solutions that address complex engineering challenges. The company’s ability to integrate MMCs into various applications, such as those used in high-speed electric trains and advanced electronic systems, reinforces its competitive edge.

Industry	Application	Key Benefit
Aerospace	Lightweight components for aircraft	Improved fuel efficiency
Defense	Armored vehicles	Enhanced protection and reduced weight
Electronics	Heat spreaders for CPUs	Increased thermal conductivity and reliability

CPS Technologies Corporation (CPSH) - Business Model: Customer Relationships

Direct engagement with customers for tailored solutions

CPS Technologies Corporation (CPSH) maintains a strong focus on direct engagement with its customers to provide tailored solutions. This approach allows CPSH to adapt its offerings to meet specific client needs, enhancing customer satisfaction and loyalty.

Technical support and consultation services

CPSH offers comprehensive technical support and consultation services to its clients. This service is essential, particularly in industries requiring specialized knowledge and expertise in materials and manufacturing processes. For the first nine months of 2024, CPSH reported a net income (loss) of $2,140,297, indicating the financial impact of operational challenges that could influence customer support needs.

Long-term contracts with key clients

The company has established long-term contracts with key clients, which are critical for revenue stability. As of September 28, 2024, CPSH had total revenues of $15,190,063, down from $20,803,447 in the previous year, primarily due to the completion of a significant armor order for the US Navy. These contracts not only secure future sales but also enhance customer relationships through ongoing collaboration and service improvements.

Metric	Q3 2024	Q3 2023	First Nine Months 2024	First Nine Months 2023
Total Revenues	$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
Net Income (Loss)	($1,042,839)	$171,081	($2,140,297)	$1,230,785
SG&A Expenses	$963,064	$1,105,227	$3,214,831	$4,121,099

CPS Technologies Corporation (CPSH) - Business Model: Channels

Direct sales to OEMs in various industries

CPS Technologies Corporation primarily engages in direct sales to Original Equipment Manufacturers (OEMs) across various sectors, including aerospace, defense, and industrial applications. In 2023, CPSH reported approximately $5 million in revenue generated through direct sales to OEMs. The company focuses on building long-term relationships with these clients, providing custom solutions tailored to their specific needs.

Online presence for brand visibility

CPS Technologies maintains an active online presence to enhance its brand visibility and reach potential customers. The company's website has seen an increase in traffic, with over 50,000 unique visitors recorded in 2023. This digital strategy includes search engine optimization (SEO) and content marketing efforts, which have contributed to a 15% increase in lead generation year-over-year. The online platform also facilitates direct inquiries and product information dissemination, further supporting sales initiatives.

Trade shows and industry events for networking

CPSH participates in key trade shows and industry events to network with potential clients and showcase its product offerings. In 2023, the company attended five major trade shows, including the Aerospace & Defense Manufacturing Conference, which attracted over 2,000 attendees. CPSH reported that participation in these events led to an estimated 20% increase in new client inquiries, translating into approximately $1.2 million in potential revenue from leads generated during these events.

Channel Type	Details	Revenue Contribution (2023)
Direct Sales to OEMs	Focus on aerospace, defense, and industrial sectors	$5 million
Online Presence	Website traffic and lead generation strategies	$1 million (estimated from online leads)
Trade Shows	Participation in key industry events for networking	$1.2 million (potential revenue from leads)

CPS Technologies Corporation (CPSH) - Business Model: Customer Segments

Defense and aerospace sectors

CPS Technologies Corporation serves key customers in the defense and aerospace sectors. The company has historically provided advanced materials for armor solutions, particularly for military applications. In 2024, CPSH completed a significant armor order for the US Navy, which contributed substantially to its revenue in prior years. However, this order was completed in Q2 2024, leading to a decline in revenue from this segment in the subsequent quarters.

For the first nine months of 2024, total revenue was $15,190,063, marking a 27% decrease from $20,803,447 in the same period of 2023. This decline was attributed to the completion of the Navy armor order and reduced purchases from one of the major customers due to excess inventory.

Automotive and electric vehicle manufacturers

CPS Technologies has been extending its reach into the automotive and electric vehicle (EV) manufacturing sectors. As the demand for lightweight, high-strength materials increases in these industries, CPS aims to provide innovative solutions that enhance vehicle performance while reducing weight. The company's proprietary materials are well-suited for applications in high-performance automotive components.

In recent years, the automotive sector has been transitioning towards electric vehicles, which require advanced materials for batteries and structural components. CPS is positioned to capitalize on this trend, although specific financial metrics detailing direct contributions from this segment in 2024 are not disclosed separately.

Electronics and telecommunications industries

The electronics and telecommunications sectors represent another critical customer base for CPS Technologies. The company offers materials that improve the performance and reliability of electronic components, including hybrid circuits and related technologies. As industries push for higher performance and lower costs, CPS is positioned to meet these demands through its advanced material solutions.

As of September 28, 2024, CPS reported total liquid assets of $4,689,004, which includes cash and cash equivalents. Accounts receivable totaled $4,017,000, reflecting ongoing engagements within these sectors.

Customer Segment	Revenue (2024)	Key Products	Market Trends
Defense and Aerospace	$15,190,063	Armor solutions	Increased demand for advanced materials in military applications
Automotive and EV Manufacturers	Not Specified	Lightweight materials for vehicles	Shift towards electric vehicles and lightweight components
Electronics and Telecommunications	Not Specified	Hybrid circuits and electronic materials	Growing demand for high-performance electronic components

CPS Technologies Corporation (CPSH) - Business Model: Cost Structure

Fixed costs related to manufacturing facilities

CPS Technologies Corporation incurs significant fixed costs associated with its manufacturing operations. The company operates a facility comprising approximately 38,000 square feet under a lease agreement. This triple net lease requires the company to pay all real estate taxes, operating costs, and utilities, with annual rental payments ranging from $160,000 to $165,000 through the lease term, which expires in February 2026. As of September 28, 2024, the present value of the operating lease liability was $224,000.

Variable costs tied to raw materials and labor

The variable costs for CPS Technologies are primarily driven by the procurement of raw materials and labor associated with production. As of September 28, 2024, the total cost of product sales was $15,037,177 for the first nine months of 2024, which reflects a decrease from $15,126,621 in the same period of 2023. Labor costs have also been impacted by the addition of a third shift in August 2024, increasing the overall cost of goods sold during that quarter.

Inventory levels as of September 28, 2024, included:

Inventory Type	Value (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)
Inventories, Net	4,433,412

Research and development expenditures

CPS Technologies invests in research and development (R&D) to enhance its product offerings and maintain technological leadership. In the first nine months of 2024, the company recognized $249,922 in share-based compensation expenses related to R&D activities, which reflects the company's commitment to innovation. This is part of the broader strategy to develop new products that address evolving customer needs, particularly in high-performance materials.

CPS Technologies Corporation (CPSH) - Business Model: Revenue Streams

Sales of advanced material products

Total revenue from product sales for the third quarter of 2024 was $4,247,116, a decrease from $6,285,041 in the same quarter of 2023. For the first nine months of 2024, total revenue was reported at $15,190,063, down from $20,803,447 in the first nine months of 2023.

The decline in revenue is attributed to the completion of a significant armor contract for the US Navy in Q2 2024, which contributed heavily to sales in the previous year. Additionally, a major customer reduced their purchases due to excess inventory.

Contract revenue from government projects

Contract revenues specifically from government projects, notably the US Department of Defense, are a critical component of CPSH's revenue streams. The completion of the aforementioned armor contract significantly impacted revenue, resulting in a gross loss of $523,432 in Q3 2024 compared to a gross profit of $1,235,864 in Q3 2023.

In the first nine months of 2024, the gross profit was only $152,886, reflecting a severe drop in profitability due to the reduced volume of government contracts.

Licensing of proprietary technology

CPS Technologies Corporation also generates revenue through licensing its proprietary technology. Although specific figures for licensing revenue were not highlighted in the financial statements, the company has engaged in various research and development activities aimed at enhancing its technology portfolio.

The licensing of proprietary technology is crucial as it allows CPS to monetize its innovations while expanding its market reach. The increase in interest income of $241,686 for the first nine months of 2024 compared to $176,325 in the same period of 2023 indicates a potential growth area in financial investment strategies related to its technological advancements.

Revenue Stream	Q3 2024 Revenue	Q3 2023 Revenue	9M 2024 Revenue	9M 2023 Revenue
Sales of Advanced Material Products	$4,247,116	$6,285,041	$15,190,063	$20,803,447
Contract Revenue from Government Projects	Not Specified	Not Specified	Not Specified	Not Specified
Licensing of Proprietary Technology	Not Specified	Not Specified	Not Specified	Not Specified

Article updated on 8 Nov 2024

Resources:

1. 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.
2. 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.