SYPRIS SOLUTIONS INC
For the period ended Dec 31, 2025. Filed Mar 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 26, 2026
SYPR$1.24+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001437749-25-009524
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-26.
0001437749-26-009882
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 68 current paragraphs.
33 unchanged; 27 reworded; 7 added; 6 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
We provide products and engineering, design, and manufacturing services for a variety of critical infrastructure sectors, including energy, space, communications, defense, transport, chemical, and water. Sypris serves its customers globally through its operations located in North America. We produce a wide range of manufactured products, often under multi-year, sole-source contracts.
Current report
While we do not serve as a prime contractor to the U.S. government, we serve as a subcontractor on various U.S. government programs. Funding for U.S. Government programs is subject to a variety of factors that can affect our business, including the U.S. presidential administration’s budget requests and procurement priorities and policies, annual congressional budget authorization and appropriation processes, and other U.S. government domestic and international priorities. U.S. government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term.
Current report
The U.S. presidential administration published its FY 2026 budget request in June 2025. The budget request includes $848.3 billion in the base budget (discretionary) funding, and $113.3 billion in reconciliation (mandatory) funding for the DoW. The One Big Beautiful Bill Act passed the Senate and House and was signed by the President on July 4, 2025. The bill provides more than $150 billion in mandatory funding (inclusive of the $113.3 billion) for DoW available until September 30, 2029.
Current report
The National Defense Authorization Act (NDAA) for FY2026 was signed into law on December 18, 2025. This legislation authorizes $901 billion for defense spending which includes an $8 billion increase over the President’s DoW budget request. On November 12, 2025, the President signed into law a continuing resolution funding the DoW through January 30, 2026. On January 20, 2026, Congress unveiled its final appropriations package, which includes the Defense Appropriations Act conference report. This legislation provides $839.2 billion in funding for the DoW representing an $8.4 billion increase over the topline in the President’s DoW budget request. On February 3, 2026, the Consolidated Appropriations Act of 2026 was passed, which further extended government funding through September 30, 2026.
Current report
Gross Profit. Sypris Technologies’ gross profit decreased $6.4 million to $6.4 million in 2025 as compared to $12.8 million in the prior year due to the significant decrease in volumes and lower absorption of fixed overhead costs as a result of lower production.
Current report
Other (Income) Expense, Net. Other (income) expense, net, was income of $2.0 million in 2025 as compared to expense of $1.2 million for 2024. During the year ended December 31, 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $0.4 million for net cash proceeds of approximately $2.9 million. The Company recognized a gain of $2.5 million on this transaction, which is included in other income (expense), net in the consolidated statements of operations. This gain was partially offset by pension expense of $0.6 million. Foreign currency related expenses were not material for the year ended December 31, 2025.
Current report
*Investing Activities.*Net cash provided by investing activities was $2.2 million during the year ended December 31, 2025. During 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $0.4 million for net cash proceeds of approximately $2.9 million. Partially offsetting this was capital expenditures during the same period of $0.8 million.
Removed paragraphs (6)
Previous report
We are a diversified provider of truck components, oil and gas pipeline components and aerospace and defense electronics. We offer a wide range of manufactured products, often under multi-year sole-source contracts.
Previous report
On March 22, 2024, President Biden signed the second Fiscal Year (“FY”) 2024 Consolidated Appropriations package into law, which includes the DoD. This legislation reflects the Fiscal Responsibility Act (“FRA”) spending limit of $886 billion for national defense, of which $842 billion was for the DoD base budget.
Previous report
The President’s FY 2025 budget request was submitted to Congress on March 11, 2024, initiating the FY 2025 defense authorization and appropriations legislative process. The request included $895 billion for national defense, of which $850 billion is for the DoD base budget, in keeping with the limit established by the FRA. While compression on overall requirements driven by the FRA limit is evident, the Office of the Secretary of Defense has stated the FY 2025 budget proposal meets their objectives of keeping National Defense Strategy priorities on track.
Previous report
The House and Senate continue the legislative process on the FY 2025 budget. The National Defense Authorization Act for Fiscal Year 2025, signed by the President on December 24, 2024, is consistent with the FY 2025 President’s Budget Request (PBR) and congressionally mandated budget caps established by the FRA with a topline of $849.8 billion. The House Appropriations Committee also marked its bill at this same level. The Senate Appropriations Committee, however, did not adhere to the FRA spending caps and marked budgets above the PBR, providing between a $21 billion and $25 billion increase over the PBR level.
Previous report
Congress still needs to approve or revise the President’s FY 2025 budget proposal through enactment of appropriations bills and other policy legislation, which would then require final approval from the President in order for the FY 2025 budget process to conclude. In March 2025, the President signed a continuing resolution (CR) that extends government funding through September 30, 2025. The CR also provides flexibility for new starts on programs at the DoD, which are typically not allowed under CRs. Of note, the final version of the bill did not address the debt ceiling, which is set to expire mid-January 2025 and is expected to cause challenges at the start of the 119th Congressional negotiations. Once the debt ceiling is reached, Treasury may have to use extraordinary measures to prevent default. Treasury’s available cash and any extraordinary measures taken is expected to delay the risk of default for at least several months after the end of the first quarter of 2025. In the upcoming months, the new Congress will return to the task of funding the U.S. Government for the balance of FY 2025. Significant differences that must be resolved include the different allocations as noted above and policy matters that arose during consideration of the CR and the underlying bills.
Previous report
Gross Profit. Sypris Technologies’ gross profit increased $3.6 million to $12.8 million in 2024 as compared to $9.2 million in the prior year due to the favorable impact of foreign exchange rates and reduced operating supply spend and lower equipment maintenance expenses for our Mexican subsidiary and an improved mix of our higher-margin energy products for the current year.
Reworded paragraphs (27)
Previous wording
Conditions have remained relatively stable for the North American Class 4-8 commercial vehicle market in addition to the automotive, sport utility vehicle and off-highway markets also served by Sypris Technologies. During 2024, production of Class 8 trucks in North America decreased 2% from 2023. According to industry publications, the outlook for 2025 is for continued weakened demand with production down 5% from 2024 levels driven by lower year-over-year freight volumes and rates, before rebounding 12% in 2026. We believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets has benefited and will continue to benefit the Company as the demand cycles for our products in these markets differs from the Class 8 commercial vehicle market, thereby reducing volatility in our revenue profile.
Current wording
The North American Class 8 commercial vehicle market experienced a downturn in 2025, in addition to the automotive and sport utility vehicle markets also served by Sypris Technologies. New heavy-duty truck demand has historically been cyclical and is particularly sensitive to the industrial sector of the economy, which generates a significant portion of the freight tonnage hauled by commercial vehicles. During 2025, production of Class 8 trucks in North America decreased 24% from 2024. According to industry publications, the outlook for 2026 and 2027 is forecasting a slight increase in production over 2025, before increasing 27% in 2028. We believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets has benefited and will continue to benefit the Company as the demand cycles for our products in these markets differs from the Class 8 commercial vehicle market, thereby reducing volatility in our revenue profile.
Previous wording
The oil and gas markets served by our Tube Turns® brand of engineered products continues to be shaped largely by geopolitical factors, macroeconomic variables such as high interest rates and rising material costs, evolving policies and regulations and the emergence of new technologies. Sales in this market are dependent on, among other things, the level of worldwide oil and natural gas demand, the price of crude oil and natural gas and capital spending by exploration and production companies and drilling contractors. The conflicts in the Middle East, the war between Russia and Ukraine and inflationary pressures have also led to disruption, instability and volatility in global markets and industries that could negatively impact our operations.
Current wording
The oil and gas markets served by our Tube Turns® brand of engineered products continues to be shaped largely by geopolitical factors, macroeconomic variables such as high interest rates and rising material costs, evolving policies and regulations and the emergence of new technologies. Sales in this market are dependent on, among other things, the level of worldwide oil and natural gas demand, the price of crude oil and natural gas and capital spending by exploration and production companies and drilling contractors. The conflicts in the Middle East, including military hostilities between Israel and Hamas and the U.S., Israel and Iran, the war between Russia and Ukraine and inflationary pressures have also led to disruption, instability and volatility in global markets and industries that could negatively impact our operations.
Previous wording
Ongoing demand in the electronic circuit card assembly industry across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain components approach a year or more. We factor supplier-provided lead times into internal planning schedules and new customer quotations. From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which arise after the placement of the customer’s order may cause us to miss projected delivery dates. Inflationary costs are expected to continue but are not expected to have a significant impact on operating income in 2025.
Current wording
Ongoing demand in the electronic circuit card assembly industry across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain components approach a year or more. We factor supplier-provided lead times into internal planning schedules and new customer quotations. From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which arise after the placement of the customer’s order may cause us to miss projected delivery dates. Inflationary costs are expected to continue through 2026.
Previous wording
The electronic circuit card assembly industry is expected to experience steady growth in 2025, driven by increasing demand for advanced technologies, supply chain diversification, and continued strong government defense spending. Geopolitical factors, including ongoing U.S.-China trade tensions and regulatory shifts, are prompting companies to adopt supply chain resilience strategies, such as "friendshoring", nearshoring and onshoring that benefit domestic suppliers. Additionally, OEMs are expected to continue the trend of outsourcing lower-level electronic assemblies, while focusing on their core competencies of design and system integration. However, challenges such as labor cost fluctuations, raw material constraints, and evolving trade policies may impact operational efficiency and cost structures. Overall, the sector is positioned for growth, with companies focusing on technological innovation, strategic partnerships, and supply chain optimization to maintain competitiveness in a rapidly evolving defense and aerospace market. During 2023 and 2024, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026. In addition to contract awards from Department of Defense (“DoD”) prime contractors related to weapons systems, electronic warfare and infrared countermeasures in our traditional aerospace and defense markets, we have also been awarded subcontracts for manufacturing services to the communication and navigation markets, which require our advanced capabilities for delivering products for complex, high cost of failure platforms.
Current wording
The electronic circuit card assembly industry is highly competitive, and demand can be volatile from period to period. Increasing demand for advanced technologies, supply chain diversification, and continued strong government defense spending along with geopolitical factors, including ongoing U.S.-China trade tensions and regulatory shifts, are prompting companies to adopt supply chain resilience strategies, such as "friendshoring", nearshoring and onshoring that benefit domestic suppliers. Additionally, OEMs are expected to continue the trend of outsourcing lower-level electronic assemblies, while focusing on their core competencies of design and system integration. However, challenges such as labor cost fluctuations, raw material constraints, and evolving trade policies may impact operational efficiency and cost structures. Overall, the sector is positioned for growth, with companies focusing on technological innovation, strategic partnerships, and supply chain optimization to maintain competitiveness in a rapidly evolving defense and aerospace market. During 2024 and 2025, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026. In addition to contract awards from DoW prime contractors related to weapons systems, electronic warfare and infrared countermeasures in our traditional aerospace and defense markets, we have also been awarded subcontracts for manufacturing services to the communication and navigation markets, which require our advanced capabilities for delivering products for complex, high cost of failure platforms.
Previous wording
Overall congressional sentiment remains strong for supporting the DoD’s National Defense Strategy and defense spending. However, we anticipate that the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, the global security environment, inflationary pressures and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly, and the effect on individual programs or our results cannot be predicted at this time.
Current wording
While the U.S. presidential administration has announced their proposal for a significant increase in defense spending in FY 2027, we anticipate the federal budget, debt ceiling and regulatory environment will continue to be subject to debate and compromise shaped by, among other things, the U.S. presidential administration and Congress, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly, and the effect on individual programs or our results cannot be predicted at this time. Additionally, the U.S. presidential administration continues to take steps to evaluate government-wide and defense-specific staffing and procurement, which includes assessing mission priorities, procurement methods, program performance, and other factors and then potentially taking action based on those assessments. The impact on demand for our products and services and our business are difficult to predict.
Previous wording
Pension Plan Funded Status. Our U.S. defined benefit pension plans are closed to new entrants and an there were no participants still accruing benefits under any of the plans in 2024. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets. Pension obligations are valued using discount rates established annually in consultation with our outside actuarial advisers using a theoretical bond portfolio, adjusted according to the timing of expected cash flows for our future obligations. Plan liabilities at December 31, 2024 are based upon a discount rate of 5.55% which reflects the Above Mean Mercer Yield Curve rate as of December 31, 2024 rounded to the nearest 5th basis point. Declining discount rates increase the present value of future pension obligations; a 25 basis point decrease in the discount rate would increase our U.S. pension liability by about $0.4 million. As indicated above, when establishing the expected long-term rate of return on our U.S. pension plan assets, we consider historical performance and forward-looking return estimates reflective of our portfolio mix and investment strategy. Based on the most recent analysis of projected portfolio returns, we concluded that the use of 3.45% for the Louisville Hourly Plan, 3.75% for the Marion Plan and 3.15% for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2024 was appropriate. A change in the assumed rate of return on plan assets of 100 basis points would result in a $0.2 million change in the estimated 2025 pension expense.
Current wording
Pension Plan Funded Status. Our U.S. defined benefit pension plans are closed to new entrants and there were no participants still accruing benefits under any of the plans in 2025. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets. Pension obligations are valued using discount rates established annually in consultation with our outside actuarial advisers using a theoretical bond portfolio, adjusted according to the timing of expected cash flows for our future obligations. Plan liabilities at December 31, 2025 are based upon a discount rate of 5.20% which reflects the Above Mean Mercer Yield Curve rate as of December 31, 2025 rounded to the nearest 5th basis point. Declining discount rates increase the present value of future pension obligations; a 25 basis point decrease in the discount rate would increase our U.S. pension liability by about $0.4 million. As indicated above, when establishing the expected long-term rate of return on our U.S. pension plan assets, we consider historical performance and forward-looking return estimates reflective of our portfolio mix and investment strategy. Based on the most recent analysis of projected portfolio returns, we concluded that the use of 3.95% for the Louisville Hourly Plan, 4.65% for the Marion Plan and 4.45% for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2025 was appropriate. A change in the assumed rate of return on plan assets of 100 basis points would result in a $0.2 million change in the estimated 2026 pension expense.
Previous wording
At December 31, 2024, we have $7.1 million of unrecognized losses relating to our U.S. pension plans. Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated Other Comprehensive Income and amortized to expense following the corridor approach. We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy for all active and inactive participants.
Current wording
At December 31, 2025, we have $6.2 million of unrecognized losses relating to our U.S. pension plans. Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated Other Comprehensive Loss and amortized to expense following the corridor approach. We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy for all active and inactive participants.
Previous wording
Based on the current funded status of our U.S. plans, we expect to contribute $0.4 million during 2025, which represents the minimum funding amounts required by federal law.
Current wording
Based on the current funded status of our U.S. plans, we expect to contribute $0.3 million during 2026, which represents the minimum funding amounts required by federal law.
Previous wording
Stock-based Compensation. We account for stock-based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. The Company uses historical Company and industry data to estimate the expected price volatility. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, the Company uses the simplified method to estimate the expected term. Under the simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The dividend yield is assumed to be zero as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Changes in the subjective assumptions can materially affect the fair value estimate of stock-based compensation and consequently, the related expense recognized in the consolidated statements of operations.
Current wording
Stock-based Compensation. We account for stock option based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. The Company uses historical Company and industry data to estimate the expected price volatility. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, the Company uses the simplified method to estimate the expected term. Under the simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The dividend yield is assumed to be zero as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Changes in the subjective assumptions can materially affect the fair value estimate of stock-based compensation and consequently, the related expense recognized in the consolidated statements of operations.
Previous wording
Net Revenue. Sypris Technologies derives its revenue from the sale of forged and finished steel components and subassemblies and high-pressure closures and other fabricated products. Net revenue for Sypris Technologies decreased $2.7 million from the prior year to $75.2 million in 2024. The net revenue decrease was primarily attributable to decreased sales volumes of $2.4 million attributable to the commercial vehicle market, $1.1 million from the automotive, sport utility vehicle and off-highway markets, partially offset by a $0.8 million increase in energy product sales. Revenue for Sypris Technologies is expected to decrease slightly in 2025, due to the anticipated decline in the commercial vehicle market, partially offset by higher energy component sales and new program expansion with existing customers in the commercial vehicle market. Additionally, Sypris Technologies began operating under a sub-maquiladora services agreement with one of its customers in Mexico early in 2025. As a result, the customer retains ownership of the inventory, and revenue will be recognized on the value-add portion only.
Current wording
Net Revenue. Sypris Technologies derives its revenue from the sale of forged and finished steel components and subassemblies and high-pressure closures and other fabricated products. Net revenue for Sypris Technologies decreased $23.5 million from the prior year to $51.7 million in 2025. The net revenue decrease was primarily attributable to the cyclical decline in the commercial vehicle market. During 2025, production of Class 8 trucks in North America decreased 24% from 2024. Additionally, during the first quarter of 2025, Sypris Technologies began operating under a sub-maquiladora services agreement with one of its customers in Mexico. As a result, the customer retains ownership of the inventory, and revenue is recognized on the value-add portion only, resulting in a decrease of $4.8 million for the year ended December 31, 2025 as compared to the prior year. Energy product sales decreased $1.9 million as compared to the prior year due to the impact of tariffs on sales volumes. Revenue for Sypris Technologies is expected to decrease slightly in 2026, due to the anticipated decline in the commercial vehicle market during the first half of 2026, partially offset by higher energy component sales and new program expansion with existing customers in the commercial vehicle market.
Previous wording
Sypris Electronics derives its revenue primarily from circuit card and full “box build” manufacturing, high reliability manufacturing and systems assembly and integration. Net revenue for Sypris Electronics increased $6.7 million to $65.0 million in 2024. The increase in revenue for the year ended December 31, 2024 was primarily related to the ramping of production during the year a follow-on program and shipments on several new programs that began shipping in 2024. This was partially offset by a decrease in sales to customers serving the communications market. The order backlog for Sypris Electronics is expected to support an increase in revenue during 2025.
Current wording
Sypris Electronics derives its revenue primarily from circuit card and full “box build” manufacturing, high reliability manufacturing and systems assembly and integration. Net revenue for Sypris Electronics increased $3.2 million to $68.1 million in 2025. The increase in revenue for the year ended December 31, 2025 was primarily related to the ramping of production during the year on several new programs. This was partially offset by the completion of shipments under one of its long-term contracts. The order backlog for Sypris Electronics is expected to support an increase in revenue during 2026.
Previous wording
Sypris Electronics’ gross profit decreased $0.9 million to $7.1 million as compared to $8.0 million in the prior year. The decrease in gross profit for the year ended December 31, 2024 was primarily a result of an unfavorable mix of programs and a high amount of unusable inventory on two programs that ramped production during the year. Additionally, Sypris Electronics incurred additional costs for scope modifications on a new contract during 2024. The Company submitted a $0.6 million request for equitable adjustment (“REA”) during the first quarter of 2025 to offset some of these incurred costs. The REA was finalized during the first quarter of 2025. No amount was recorded as revenue for the REA during 2024. The expected increase in revenue during 2025 attributable to order backlog is expected to favorably impact overhead absorption and the contribution margin from higher volumes is further expected to generate gross profit expansion.
Current wording
Sypris Electronics’ gross profit decreased $4.1 million to $3.0 million as compared to $7.1 million in the prior year. The decrease in gross profit for the year ended December 31, 2025 was primarily a result of an unfavorable mix of programs and delays of certain customer deliveries, which has limited our ability to ramp up production to the levels anticipated and resulted in increased costs and decreased operational efficiency. Additionally, Sypris Electronics incurred additional engineering costs for scope modifications on new contracts during 2025. Furthermore, Sypris Electronics recorded charges of $1.2 million related to excess and obsolete inventory during the year as a result of changes in estimated future demand on various programs. The expected increase in revenue during 2026 attributable to order backlog is expected to favorably impact overhead absorption, and the contribution margin from higher volumes is further expected to generate gross profit expansion.
Previous wording
Selling, General and Administrative. Selling, general and administrative expense increased $0.7 million to $17.0 million in 2024 as compared to $16.3 million in 2023. The increase in selling general and administrative expense for the year ended December 31, 2024 was primarily as a result of experienced higher employee medical insurance claim expense during 2024. Additionally, selling, general and administrative expenses increased as a result of an increase in headcount to support the increase in volumes for Sypris Electronics and increased insurance costs. Selling, general and administrative expense increased as a percentage of revenue to 12.1% for the year ended December 31, 2024 from 12.0% for the year ended December 31, 2023.
Current wording
Selling, General and Administrative. Selling, general and administrative expense decreased $1.0 million to $16.0 million in 2025 as compared to $17.0 million in 2024. The decrease in selling, general and administrative expense for the year ended December 31, 2025 was primarily as a result of lower consulting costs, reduced headcount and favorable medical claims. Selling, general and administrative expense increased as a percentage of revenue to 13.3% for the year ended December 31, 2025 from 12.1% for the year ended December 31, 2024.
Previous wording
Interest Expense, Net. Interest expense for the year ended December 31, 2024 increased $0.9 million due to an increase in the weighted average debt outstanding and an increase in the weighted average interest rate. Our weighed average debt outstanding under the Note increased to $8.7 million during 2024 from $5.0 million during 2023. The weighted average interest rate increased to 9.2% in 2024 from 8.7% in 2023. Additionally, the interest expense, net for the year ended December 31, 2024 included $0.6 million incurred on extended terms on certain accounts payable for Sypris Electronics.
Current wording
Interest Expense, Net. Interest expense for the year ended December 31, 2025 decreased $0.1 million due to the reduction in interest incurred on extended terms on certain accounts payable for Sypris Electronics, partially offset by an increase in the weighted average debt outstanding. The weighted average debt outstanding under the Note increased to $11.4 million during 2025 from $8.7 million in 2024.
Previous wording
During the year ended December 31, 2023, the Company recognized pension expense of $1.0 million. Foreign currency related expenses were not material for the year ended December 31, 2023.
Current wording
During the year ended December 31, 2024, the Company recognized pension related expense of $0.8 million. Foreign currency related expenses were not material for the year ended December 31, 2024.
Previous wording
Income Taxes. The 2024 income tax provision consists of current tax expense of $1.5 million and deferred tax expense of $0.2 million. The 2023 income tax provision consists of current tax expense of $0.6 million and deferred tax expense of $0.1 million. The current tax expense in 2024 and 2023 includes taxes accrued by our Mexican subsidiary and domestic state income taxes and adjustments. The 2024 and 2023 deferred tax expense includes net changes in the foreign deferred tax assets during the year.
Current wording
Income Taxes. The 2025 income tax provision consists of a current tax benefit of $0.1 million and deferred tax expense of $0.1 million. The 2024 income tax provision consists of current tax expense of $1.5 million and deferred tax expense of $0.2 million. The current tax expense in 2025 and 2024 includes taxes accrued by our Mexican subsidiary and domestic state income taxes and adjustments. The 2025 and 2024 deferred tax expense includes net changes in the foreign deferred tax assets during the year.
Previous wording
As reflected in the consolidated financial statements, the Company reported a net loss of $1.7 million and $1.6 million for the years ended December 31, 2024 and 2023, respectively, and cash used in operating activities of $11.1 million for the year ended December 31, 2023. The Company’s net inventory increased significantly in 2023, primarily related to contracts with Sypris Electronics’ aerospace and defense customers. Shipments to customers on certain of these contracts were delayed beyond the initial delivery dates, which negatively impacted the cycle time to convert inventory to cash. As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023, and the Company is continuing to aggressively manage working capital to improve liquidity. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and early 2024. The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers during 2024 and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships. The Company received the benefit of additional loans of $2.5 million during the year ended December 31, 2024 and $2.5 million during the year ended December 31, 2023 from GFCM to help the Company manage its liquidity during those periods. This additional $5.0 million loaned to the Company by GFCM in the fourth quarter of 2023 and the first quarter of 2024 was approved by the Audit Committee and provided the Company necessary liquidity. Additionally, during the first quarter of 2025, the Company and GFCM amended the Note to increase the principal amount by $3.0 million to $12.0 million, extend the maturity dates for $2.0 million of the obligation to April 1, 2026, $2.0 million to April 1, 2027, $5.0 million to April 1, 2028 and $3.0 million to April 1, 2029 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K).
Current wording
As reflected in the consolidated financial statements, the Company reported a net loss of $6.3 million and $1.7 million for the year ended December 31, 2025 and 2024, respectively, and cash used in operating activities of $5.7 million for the year ended December 31, 2025. The Company’s net inventory increased significantly in 2023, primarily related to contracts with Sypris Electronics’ aerospace and defense customers. Shipments to customers on certain of these contracts were delayed beyond the initial delivery dates, which negatively impacted the cycle time to convert inventory to cash. Additionally, the Company experienced a significant drop in volumes within the Sypris Technologies business attributable to the cyclical decline in the commercial vehicle market in 2025, which led to a corresponding decrease in gross profit. As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and at various times during 2024, 2025 and into 2026. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and 2024, The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships.
Previous wording
Our ability to service our current liabilities will require a significant amount of cash. Management has evaluated our ability to generate this cash to meet our obligations for the next twelve months. Our primary sources of funds to meet our liquidity and capital requirements include cash on hand, funds generated through continued revenue growth from the Company’s consolidated operations and reductions in the Company’s investment in working capital. Based upon our current forecast, we believe that we will have sufficient liquidity to finance our operations for the next twelve months.
Current wording
Our ability to service our current liabilities will require a significant amount of cash. Management has evaluated our ability to generate this cash to meet our obligations for the next twelve months. Our primary sources of funds to meet our liquidity and capital requirements include cash on hand, funds generated through revenue growth from the Company’s consolidated operations and reductions in the Company’s investment in working capital. Based upon our current forecast, we believe that we will have sufficient liquidity to finance our operations for the next twelve months.
Previous wording
Cash Balance. At December 31, 2024, we had approximately $9.7 million of cash and cash equivalents, of which $4.0 million was held in jurisdictions outside of the U.S. that, if repatriated, could result in withholding taxes. We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as capital expenditures, for at least the next twelve months. Significant changes from our current forecasts, including, but not limited to: (i) meaningful shortfalls in our projected revenues, (ii) unexpected costs or expenses, and/or (iii) operating difficulties which cause unexpected delays in scheduled shipments, could require us to seek additional financing or force us to make further reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs. Any of these actions could materially harm our business, results of operations and future prospects. And as noted above, additional financing may not be available to us.
Current wording
Cash Balance. At December 31, 2025, we had approximately $6.8 million of cash and cash equivalents, of which $1.8 million was held in jurisdictions outside of the U.S. that, if repatriated, could result in withholding taxes. We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as capital expenditures, for at least the next twelve months. Significant changes from our current forecasts, including, but not limited to: (i) meaningful shortfalls in our projected revenues, (ii) unexpected costs or expenses, and/or (iii) operating difficulties which cause unexpected delays in scheduled shipments, could require us to seek additional financing or force us to make further reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs. Any of these actions could materially harm our business, results of operations and future prospects. And as noted above, additional financing may not be available to us.
Previous wording
Gill Family Capital Management Note. The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $9.0 million in principal as of December 31, 2024 and $6.5 million as of December 31, 2023. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company.
Current wording
Gill Family Capital Management Note. The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $12.0 million in principal as of December 31, 2025 and $9.0 million as of December 31, 2024. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company.
Previous wording
During the year ended December 31, 2024, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $2.5 million to $9.0 million, (ii) extend the maturity dates for $2.0 million of the obligation to April 1, 2025, $2.0 million to April 1, 2026 and the balance to April 1, 2027, and (iii) allow for the deferral of payment for up to 60% of the interest due on the Note to April 1, 2025. During the first quarter of 2025, the Company further amended the Note to increase the principal amount by $3.0 million with a maturity date of April 1, 2029, extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2026. Interest on the Note is payable quarterly, and the rate is reset on April 1 of each year at the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period. The additional amounts loaned to the Company in 2024 and 2025, were approved by the Audit Committee and provided the Company necessary liquidity.
Current wording
During the year ended December 31, 2025, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $3.0 million to $12.0 million, (ii) extend the maturity dates for $2.0 million of the obligation to April 1, 2026, $2.0 million to April 1, 2027, $5.0 million on April 1, 2028 and the balance of $3.0 million on April 1, 2029, and (iii) allow for the deferral of payment for up to 100% of the interest due on the Note to April 1, 2026. During the first quarter of 2026, the Company further amended the Note to extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2027. Interest on the Note is payable quarterly, unless the deferral option is elected, and the rate is reset on April 1 of each year at the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period. The additional amounts loaned to the Company in 2024 and 2025 and the Note modification in 2026, were approved by the Audit Committee and provided the Company with necessary liquidity.
Previous wording
*Finance Lease Obligations.*As of December 31, 2024, the Company had $2.2 million outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2028 and a weighted average interest rate of 8.7%.
Current wording
*Finance Lease Obligations.*As of December 31, 2025, the Company had $4.6 million outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2031 and a weighted average interest rate of 13.1%.
Previous wording
*Equipment Financing Obligations.*As of December 31, 2024, the Company had $1.3 million outstanding under equipment financing facilities, with payments due through 2028, and a weighted average interest rate of 6.7%.
Current wording
*Equipment Financing Obligations.*As of December 31, 2025, the Company had $1.4 million outstanding under equipment financing facilities, with payments due through 2030, and a weighted average interest rate of 6.9%.
Previous wording
Purchase Commitments. We had purchase commitments totaling approximately $29.7 million at December 31, 2024, primarily for inventory, which are due through 2026.
Current wording
Purchase Commitments. We had purchase commitments totaling approximately $25.2 million at December 31, 2025, primarily for inventory.
Previous wording
*Operating Activities.*Net cash provided by operating activities was $2.0 million in 2024, as compared to cash used of $11.1 million in 2023. The aggregate increase in accounts receivable in 2024 resulted in a usage of cash of $1.8 million as a result of an early payment from a Sypris Technologies customer in the prior year, which was not repeated in 2024. The decrease in inventory in 2024 resulted in a source of cash of $9.1 million. The decrease in inventory was primarily as a result of a ramp up of shipments within Sypris Electronics and the reflection of our strategic inventory management efforts. Accounts payable decreased during 2024, resulting in a use of cash of $8.2 million. This change in accounts payable was driven by an effort within Sypris Electronics to pay down past due receivables and reduce inventory purchases during the period. Prepaid expenses and other current assets increased during 2024 resulting in a cash use of $1.9 million primarily as a result of increased contract assets and capitalized costs associated with programs in the startup phase of production at Sypris Electronics in addition to increased VAT taxes refundable in Mexico.
Current wording
*Operating Activities.*Net cash used in operating activities was $5.7 million in 2025, as compared to cash provided of $2.0 million in 2024. The aggregate decrease in accounts receivable in 2025 resulted in a source of cash of cash of $0.7 million as a result of the timing of shipments during the period. The decrease in inventory in 2025 resulted in a source of cash of $13.3 million. The decrease in inventory was primarily as a result of a ramp up of shipments within Sypris Electronics and the reflection of our strategic inventory management efforts. A significant portion of the inventory had been purchased in previous periods and was funded through prepayments from customers, which was recorded as contract liabilities. As shipments have increased with Sypris Electronics during the year, these contract liabilities have also decreased, which is the primary component of the $10.0 million change in accrued and other liabilities during 2025. Accounts payable decreased during 2025, resulting in a use of cash of $8.2 million. This change in accounts payable was driven by an effort within Sypris Electronics to pay down past due payables and reduce inventory purchases during the period. Prepaid expenses and other assets decreased during 2025 resulting in cash provided of $0.6 million primarily as a result of decreased contract assets and capitalized costs associated with programs in the startup phase of production at Sypris Electronics.
Previous wording
*Investing Activities.*Net cash used in investing activities was comprised of capital expenditures of $1.1 million and $2.1 million in 2024 and 2023, respectively.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was comprised of capital expenditures of $1.1 million.
Previous wording
*Financing Activities.*Net cash provided by financing activities was $0.8 million in 2024 as compared to net cash used of $0.6 million in 2023. Net cash used in financing activities in 2024 was comprised of proceeds from the Note of $2.5 million and proceeds from equipment financing obligations of $0.4 million, partially offset by payments on finance leases and equipment financing obligations of $2.0 million and payments of $0.1 million for minimum statutory tax withholdings on stock-based compensation. Net cash used in financing activities in 2023 included principal payments on finance lease and equipment financing obligations of $1.7 million and payments of $0.1 million for minimum statutory tax withholdings on stock-based compensation. This was partially offset by proceeds from a working capital line of credit in Mexico of $0.5 million and $0.7 million in proceeds received from equipment financing obligations.
Current wording
*Financing Activities.*Net cash provided by financing activities was $0.8 million in 2025 and was comprised of proceeds from the Note of $3.0 million, partially offset by payments on finance leases and equipment financing obligation of $2.1 million and $0.1 million for minimum statutory tax withholdings on stock-based compensation. Net cash used in financing activities in 2024 was comprised of proceeds from the Note of $2.5 million and proceeds from equipment financing obligations of $0.4 million, partially offset by payments on finance leases and equipment financing obligations of $2.0 million and payments of $0.1 million for minimum statutory tax withholdings on stock-based compensation.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company received the benefit of additional loans of $3.0 million and $2.5 million during the years ended December 31, 2025 and 2024, respectively from Gill Family Capital Management, Inc. (“GFCM”) to help the Company manage its liquidity during those periods. This additional $5.5 million loaned to the Company by GFCM in 2024 and 2025 was approved by the Audit Committee and provided the Company with necessary liquidity. Additionally, during the first quarter of 2026, the Company and GFCM amended the Note to extend the maturity dates for $2.0 million of the obligation to April 1, 2027, $2.0 million to April 1, 2028, $5.0 million to April 1, 2029 and $3.0 million to April 1, 2030 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K).
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Other Expense, Net. Other expense, net, was $1.2 million in 2024 as compared to $1.1 million for 2023. During the year ended December 31, 2024, the Company recognized pension related expense of $0.8 million. Foreign currency related expenses were not material for the year ended December 31, 2024.