CPS TECHNOLOGIES CORP/DE/
For the period ended Jun 27, 2026. Filed Aug 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 27, 2026 · Filed Aug 11, 2026
CPSH$3.83+6.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-28; filed 2026-05-05.
0001437749-26-014881
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-27; filed 2026-08-11.
0001437749-26-027028
Item 2. 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 30 previous paragraphs and 38 current paragraphs.
14 unchanged; 9 reworded; 14 added; 7 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 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 (14)
Current report
Revenues totaled $8,309 in Q2 2026 compared with $8,078 generated in Q2 2025, an increase of 3%. The increase was primarily driven by higher demand for components used in the semiconductor capital equipment and defense supply chains. This growth was partially offset by lower order volumes from certain customers that use baseplates in power electronics, following significant growth in demand from those customers in 2025.
Current report
Gross profit in Q2 2026 totaled $1,229 or 15% of sales. This compares with a gross profit in Q2 2025 of $1,336 or 17% of sales. Excluding the impact of higher gold plating costs, underlying gross margin performance remained consistent with the prior year. Increases in gold costs are passed through to customers without a corresponding markup, resulting in approximately equal increases in both sales and cost of sales. As a result, while gross profit dollars are largely unaffected, the gross profit percentage declines.
Current report
Selling, general and administrative (SG&A) expenses totaled $1,487 in Q2 2026 compared with SG&A expenses of $1,199 in Q2 2025. The increase was primarily attributable to higher stock-based compensation expense resulting from grants to directors that vested immediately during the second quarter of 2026. In 2025 these options were granted during the first quarter. The remaining increase was primarily due to higher marketing expenses and one-time legal costs.
Current report
The Company reported an operating loss of ($259) in Q2 2026, compared with operating income of $137 in Q2 2025. The change was primarily attributable to the increase in SG&A expenses discussed above. Other income, consisting primarily of interest income, increased to $146 during Q2 2026 from $19 during Q2 2025, reflecting higher interest earned on the proceeds from two recent capital issues. Together with the income tax benefit recognized on the operating loss, this resulted in net income of $38 for Q2 2026, compared with $104 in Q2 2025.
Current report
Total revenue was $15,338 in the first half of 2026, a $247 decline compared with total revenue of $15,585 in the first half of 2025. This decline happened in Q1 2026 which saw a reduction in demand from one major customer which has started to be recovered in Q2 2026.
Current report
Gross profit in the first six months of 2026 totaled $1,836 or 12% of sales, compared with $2,567, or 16% of sales, for the first six months of 2025. The decrease in gross margin percentage was partly attributable to higher gold prices, which increased 40% compared with the first half of 2025. As previously mentioned, these higher gold costs without a corresponding markup caused the gross profit percentage to decline without a material impact on gross profit dollars. We also saw increases in other material costs that were partially offset by improved labor and overhead costs compared with the prior year.
Current report
Selling, general and administrative (SG&A) expenses were $2,617 during the first six months of 2026, up $316 compared with SG&A expenses of $2,301 in the first six months of 2025. These increases relate to the previously mentioned business development and legal costs during Q2 as well as the new CFO search and higher foreign exchange costs in Q1.
Current report
The higher material and SG&A costs resulted in an operating loss of ($781) in 2026 compared with an operating profit of $267 in 2025.
Current report
During the first half of 2026, the Company had net other income of $292 This consists primarily of interest income and compares with net other income of $70 realized during the first half of 2025. The increase in net other income is due to funds placed on investment from the capital raise in the last quarter of 2025 and the end of May 2026.
Current report
In the first six months of 2026 the Company had a net loss of ($256) compared with net income of $200 in the same period last year.
Current report
We are beginning to see an impact of tariffs on our cost structure. While many of our raw materials are sourced domestically, we are seeing instances where the domestic supplier is able to raise prices due to the impact of tariffs on prices charged by their foreign competitors. While the overall impact of these costs increases is relatively small, they are still enough to impact our margins. Given that our major competitor is from outside the U.S., our ability to pass on these cost increases to our foreign customers is somewhat limited.
Current report
These factors combine to create a higher degree of uncertainty regarding future financial performance.
Current report
The Company’s liquid assets at June 27, 2026 consist of cash and cash equivalents of $15,355 and marketable debt securities with a fair value of $3,801. This compares to cash and cash equivalents at December 27, 2025 of $4,466 and $8,769 marketable debt securities. The increase in liquidity came from a capital raise on May 29, 2026 involving the issuance of 1,200,000 shares of common stock for net proceeds of $8,997.
Current report
In March 2020, the Company acquired a scanning acoustic microscope for a price of $208 thousand. The full amount was financed through a 5 year note payable with a financing company. This note was paid in full in the first quarter of 2025.
Removed paragraphs (7)
Previous report
CPS was incorporated in Massachusetts in 1984 as Ceramics Process Systems Corporation and reincorporated in Delaware in April 1987 through a merger into a wholly-owned Delaware subsidiary organized for purposes of the reincorporation. In July 1987, CPS completed our initial public offering of 1.5 million shares of our Common Stock. In March 2007, we changed our name from Ceramics Process Systems Corporation to CPS Technologies Corporation.
Previous report
Revenues totaled $7,029 in Q1 2026 compared with $7,506 in Q1 2025, a decrease of 6%. The major factor contributing to this decrease is the reduction in demand from one of our major customers. As announced in Q4 2025, CPS received a large order from this customer covering the twelve month period beginning October 2025. Through Q1 the customer has taken well less than half of the quantities ordered. CPS has continued to produce their products at the higher rate, both so we can meet there needs if their demand increases without putting undue stress on our production line, and in anticipation of our potential move to a larger facility, allowing us to continue to meet their needs during the move.
Previous report
Gross margin in Q1 2026 totaled $607 or 9% of sales. This compares with gross margin in Q1 2025 totaled $1,231 or 16% of sales. This decrease was primarily due to the impact of lower sales volumes on fixed costs, the impact of the price of gold, billed at $1,019 at approximately a 0% margin, and increased R&D spending on our margins.
Previous report
Selling, general and administrative (SG&A) expenses totaled $1,130 in Q1 2026 compared with SG&A expenses of $1,101 in Q1 2025, a 3% increase year over year. This increase was primarily due to fees associated with the Company’s CFO search, in anticipation of the future retirement of the current CFO, and higher foreign exchange costs this year as compared to last year.
Previous report
The Company had an operating loss of $523 in Q1 2026 compared with operating income of $130 in Q1 2025. This decrease was a result of the decreased gross margin discussed above. The net after tax loss was $294 in Q1 2026 compared to after tax income of $96 in Q1 2025.
Previous report
The factors mentioned above, including inflation and tariffs, create elevated uncertainty regarding future financial performance.
Previous report
The Company’s cash and cash equivalents at March 28, 2026 totaled $5,724, with marketable securities of $6,798. This compares to cash and cash equivalents at December 27, 2025 of $4,466 and marketable securities of $8,769. The change in cash and securities is predominantly due to our increased inventory, purchases of fixed assets and reduction of accrued expenses, offset by a reduction in accounts receivable.
Reworded paragraphs (9)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company’s actual results to differ materially from those forecasted or projected in such forward-looking statements. This includes the impact of the Russian invasion of Ukraine, the war in Iran and other conflicts and potential conflicts, including economic conflicts, throughout the world, which are discussed in Item 3 of this report. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company’s actual results to differ materially from those forecasted or projected in such forward-looking statements. This includes the impact of the Russian invasion of Ukraine, the war in Iran and other conflicts and potential conflicts, including economic conflicts, throughout the world, which are discussed in Item 3 of this report. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made.
Previous wording
CPS’s products are custom rather than catalog items. They are made to customers’ designs and are used as components in systems built and sold by our customers. At any point in time our product mix will consist of some products with on-going production demand, and some products which are in the prototyping or evaluation stages at our customers. The Company seeks to have a portfolio of products which include products in every stage of the technology adoption lifecycle at our customers. CPS’ growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.
Current wording
CPS’s products are custom rather than catalog items. They are made to customers’ designs and are used as components in systems built and sold by our customers. At any point in time our product mix will consist of some products with on-going production demand, and some products which are in the prototyping or evaluation stages at our customers. The Company seeks to have a portfolio of products which include products in every stage of the technology adoption lifecycle at our customers. CPS’s growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.
Previous wording
Results of Operations for the First Fiscal Quarter of 2026 (Q1 2026) Compared to the First Fiscal Quarter of 2025 (Q1 2025); (all $ in 000’s)
Current wording
Results of Operations for the Second Fiscal Quarter of 2026 (Q2 2026) Compared to the Second Fiscal Quarter of 2025 (Q2 2025); (all $ in 000’s)
Previous wording
CPS does not rely on raw materials from Ukraine, Russia, Iran, Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or the conflicts in Middle East will have a direct impact on our results. Most of our raw materials are sourced domestically. In some cases, our suppliers may be sourcing these materials from a foreign source. To date, we have not seen any significant cost increases that we believe are attributable to tariffs, however this could change in the future.
Current wording
CPS does not rely on raw materials from Ukraine, Russia, Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or the conflict in Israel and Gaza will have a direct impact on our results. Nevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result of these conflicts.
Previous wording
Inflation has had an impact on our costs. Thus far, we have largely been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future. In addition, there is often a lag between when the costs increase and when we can adjust customer prices. Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments. Wages have also been impacted by inflation. We have instituted a combination of wage increases as well as more competitive benefits in order to retain the personnel making up our workforce.
Current wording
Inflation has had an impact on our costs. Thus far, we have been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future. In addition, there is often a lag between when the costs increase and when we can adjust customer prices. Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments. Further, several of our larger customers buy from our major competitor in Japan. The impact of the fluctuation of foreign exchange rates can create situations where our pricing to foreign customers can be more or less competitive as compared to our Japanese competitor.
Previous wording
Trade accounts receivable at March 28, 2026 totaled $3,789 compared with $5,245 at December 27, 2025. Days Sales Outstanding (DSO) decreased from 61 days at the end of 2025 to 51 days at the end of Q1 2026. The reason for this decrease is that one of our major customers who historically pays monthly the first week of each month made their April payment early, at the end of March. The accounts receivable balances at December 27, 2025, and March 28, 2026 were both net of an allowance for credit losses of $10.
Current wording
Accounts receivable at June 27, 2026 totaled $4,942 compared with $5,245 at December 27, 2025. Days sales outstanding (DSO) decreased from 61 days at the end of 2025 to 42 days at the end of Q2 2026. The decrease in DSO was primarily due to the timing and mix of sales and related customer collections during the period. The accounts receivable balances at June 27, 2026 and December 27, 2025 are both net of an allowance for credit losses of $10.
Previous wording
Inventories totaled $7,144 at March 28, 2026 compared with inventory totaling $5,598 at December 27, 2025. The inventory turnover in the most recent four quarters ending Q1 2026 was 4.9 times (based on a 5 quarter end average) compared with 5.4 times averaged during the four quarters of 2025. Due to reduced demand from a major customer and the pending move, the Company has been increasing its inventory levels.
Current wording
Inventories totaled $8,649 at June 27, 2026 compared with inventory totaling $5,598 at December 27, 2025. The inventory turnover in the most recent four quarters ending Q2 2026 was 6.6 times (based on a 5 quarter end average) compared with 5.4 times averaged during the four quarters of 2025. Finished goods inventory increased primarily due to the planned build of inventory for products supported by long-term customer orders. The additional inventory is intended to maintain continuity of customer supply during the Company’s planned facility relocation and associated production transition.
Previous wording
The Company maintains a $3.0 million revolving line of credit (LOC) with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal. On March 28, 2026, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted the full $2.7 million to have been borrowed. The LOC remains in effect until terminated per mutual agreement by both parties.
Current wording
The Company has a line of credit (LOC) in the amount of $3.0 million with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal (7.5% on 6/27/2026). On*June 27, 2026,*the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed.
Previous wording
The Company has one real estate lease expiring in February 2028. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these have been capitalized. (Note 6, Commitments and Contingencies)
Current wording
The Company has one real estate lease expiring in February 2028. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these have been capitalized. (Note 8, Leases)
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Results of Operations for the First Six Months of 2026 Compared to the First Six Months of 2025 (all $ in 000s)