What changed in SYPRIS SOLUTIONS INC's 2024 10-K compared to 2023?

Across the narrative sections we track, SYPRIS SOLUTIONS INC (SYPR) added 188 paragraphs, removed 175, and edited 134 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+81/−76), Item 1A. Risk Factors (+50/−47), Item 1. Business (+40/−38).

Did SYPRIS SOLUTIONS INC add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 50 new/edited paragraphs and 47 removed paragraphs versus the 2023 10-K.

What changed in SYPRIS SOLUTIONS INC's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 81 new/edited paragraphs and 76 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did SYPRIS SOLUTIONS INC update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 12 paragraph-level changes between the 2023 and 2024 filings.

Where does this SYPR 10-K diff come from?

The source filings are SYPRIS SOLUTIONS INC's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in SYPRIS SOLUTIONS INC's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of SYPRIS SOLUTIONS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+188 added−175 removedSource: 10-K (2025-03-27) vs 10-K (2024-04-01)

Item 1. Business

Business — how the company describes what it does

27 edited+13 added−11 removed67 unchanged

2023 filing

2024 filing

Biggest changeIf enacted, this could ease DoD funding limits under the FRA or other limiting scenarios such as a prolonged continuing resolution. 2 On March 11, 2024, the President’s FY 2025 budget request was submitted to Congress, initiating the FY 2025 defense authorization and appropriations legislative process, which proposed $850 billion for the base budget of the DoD.

Biggest changeThe 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.

Tier 1 companies represent the primary suppliers to the OEMs and include Meritor, Detroit Diesel Corporation (Detroit Diesel), American Axle & Manufacturing Holdings, Inc. (America Axle) and Transmisiones y Equipos Mecanicos, S.A. de C.V. (Tremec), among others. Below this group of companies reside numerous suppliers that either supply the OEMs directly or supply the Tier I companies.

Tier 1 companies represent the primary suppliers to the OEMs and include Cummins Inc., Meritor, Detroit Diesel Corporation (Detroit Diesel), American Axle & Manufacturing Holdings, Inc. (America Axle) and Transmisiones y Equipos Mecanicos, S.A. de C.V. (Tremec), among others. Below this group of companies reside numerous suppliers that either supply the OEMs directly or supply the Tier I companies.

Item 1. Business General We were formed as a Delaware corporation in 1997. We are a diversified provider of truck components, oil and gas pipeline components and aerospace and defense electronics. We produce a wide range of manufactured products, often under multi-year, sole-source contracts.

Item 1. Business General We were formed as a Delaware corporation in 1997. We are a diversified provider of truck components, oil and gas and water pipeline components and aerospace and defense electronics. We produce a wide range of manufactured products, often under multi-year, sole-source contracts.

However, for a meaningful part of our business, we arrange our own suppliers and assume the additional risks of price increases, quality concerns and production delays. 5 Raw steel and fabricated steel parts are a major component of our cost of sales and net revenue for the industrial manufacturing business.

However, for a meaningful part of our business, we arrange our own suppliers and assume the additional risks of price increases, quality concerns and production delays. Raw steel and fabricated steel parts are a major component of our cost of sales and net revenue for the industrial manufacturing business.

Our ability to deliver on this commitment over time is expected to have a significant impact on customer satisfaction, loyalty and follow‑on business. We have signed long-term supply agreements with Detroit Diesel, Volvo, Tremec and Sistemas.

Our ability to deliver on this commitment over time is expected to have a significant impact on customer satisfaction, loyalty and follow‑on business. 4 We have signed long-term supply agreements with Detroit Diesel, Volvo, Tremec and Sistemas.

Customer Concentration Our five largest customers in 2023 were Sistemas Automotrices de Mexico, S.A de C.V. (Sistemas), Northrop Grumman, Detroit Diesel, SubCom, LLC (SubCom) and ADI, which in the aggregate accounted for 70% of net revenue.

Customer Concentration Our five largest customers in 2024 were Northrop Grumman, Sistemas Automotrices de Mexico, S.A de C.V. (Sistemas), Detroit Diesel, SubCom, LLC (SubCom) and ADI, which in the aggregate accounted for 70% of net revenue.

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 related to the communication and navigation markets, which align with our advanced capabilities for delivering products for complex, high cost of failure platforms.

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.

The Code of Conduct also emphasizes the importance of having an open, welcoming environment in which all employees feel empowered to do what is right and are encouraged to voice concerns should violations of the Code of Conduct be observed. All employees are required to complete training on the Code of Conduct annually.

Sypris Technologies represented approximately 57% of our net revenues in 2023. 1 Sypris Electronics. Sypris Electronics generates revenue primarily through circuit card and full box build manufacturing, high reliability manufacturing, systems assembly and integration, design for manufacturability and design to specification, for customers in the aerospace and defense electronics markets.

Sypris Technologies represented approximately 54% of our net revenues in 2024. 1 Sypris Electronics. Sypris Electronics generates revenue primarily through circuit card and full box build manufacturing, high reliability manufacturing, systems assembly and integration, design for manufacturability and design to specification, for customers in the aerospace, defense, space and other high-reliability electronics markets.

(PACCAR), Volvo Truck Corporation (Volvo) and Bombradier Recreational Products (BRP). We support our customers’ strategies to outsource non-core operations by supplying additional components and providing additional value added operations for drive train assemblies. We also manufacture high-pressure closures and other fabricated products for oil and gas pipelines.

(PACCAR), Volvo Truck Corporation (Volvo) and Bombardier Recreational Products (BRP). We support our customers’ strategies to outsource non-core operations by supplying additional components and providing additional value added operations for drive train assemblies. We also design and manufacture high-pressure closures and other fabricated products for oil and gas, water pipelines and miscellaneous industrial applications.

Department of Defense has challenged Sypris Electronics over the past several years. During 2022 and 2023, we announced new program awards for Sypris Electronics, with certain programs continuing into 2025.

Department of Defense has challenged Sypris Electronics over the past several years. During 2023 and 2024, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026.

In 2022, Sistemas, Detroit Diesel and Northrop Grumman, represented approximately 22%, 18% and 14% of our net revenue, respectively. No other customer accounted for more than 10% of our net revenue in 2023 or 2022. Geographic Areas and Currency Fluctuations Our operations are located in the U.S. and Mexico.

In 2023, Sistemas, Northrop Grumman, Detroit Diesel and ADI, represented approximately 22%, 17%, 13% and 10% of our net revenue, respectively. No other customer accounted for more than 10% of our net revenue in 2024 or 2023. Geographic Areas and Currency Fluctuations Our operations are located in the U.S. and Mexico.

In 2023, net income from our Mexican operations was $1.9 million, as compared to our consolidated net loss of $1.6 million. In 2022, net income from our Mexican operations was $2.2 million, as compared to our consolidated net loss of $2.5 million.

In 2024, net income from our Mexican operations was $2.6 million, as compared to our consolidated net loss of $1.7 million. In 2023, net income from our Mexican operations was $1.9 million, as compared to our consolidated net loss of $1.6 million.

In an effort to ensure business continuity of our operations during events where senior leadership personnel is impacted, we endeavor each year to examine the top roles within our corporate and subsidiary organizations and identify individuals who could step into those positions if called upon to do so and to identify a set of individuals who could do so with additional time, experience and development.

All employees are required to complete training on the Code of Conduct annually. 6 In an effort to ensure business continuity of our operations during events where senior leadership personnel is impacted, we endeavor each year to examine the top roles within our corporate and subsidiary organizations and identify individuals who could step into those positions if called upon to do so and to identify a set of individuals who could do so with additional time, experience and development.

We rely largely upon a combination of trade secret laws, non-disclosure agreements with customers, suppliers and consultants, and our internal security systems, confidentiality procedures and employee confidentiality agreements to maintain the trade secrecy of our designs and manufacturing processes.

We regard our manufacturing processes and certain designs as proprietary trade secrets and confidential information. We rely largely upon a combination of trade secret laws, non-disclosure agreements with customers, suppliers and consultants, and our internal security systems, confidentiality procedures and employee confidentiality agreements to maintain the trade secrecy of our designs and manufacturing processes.

For each of the years ended December 31, 2023 and 2022, “other expense, net” included foreign currency translation losses of less than $0.2 million. Net revenues from our Mexican operations were $56.8 million, or 42%, and $51.2 million, or 47%, of our consolidated net revenues in 2023 and 2022, respectively.

For each of the years ended December 31, 2024 and 2023, “other expense, net” included foreign currency translation losses of less than $0.3 million. Net revenues from our Mexican operations were $53.3 million, or 38%, and $56.8 million, or 42%, of our consolidated net revenues in 2024 and 2023, respectively.

There can be no assurance that supply interruptions, tariffs or price increases will not slow production, delay shipments to our customers or increase costs in the future, any of which could adversely affect our financial results. Delays, interruptions or non-optimal scheduling of production related to disruptions in raw materials supplies can be expected to increase our costs.

Human Capital As of December 31, 2023, we had a total of 752 employees, of which 550 were engaged in manufacturing, 16 were engaged in sales and marketing, 51 were engaged in engineering and 135 were engaged in administration. Approximately 406 of our employees were covered by collective bargaining agreements with various unions that expire on various dates through 2025.

Human Capital As of December 31, 2024, we had a total of 713 employees, of which 557 were engaged in manufacturing, 16 were engaged in sales and marketing, 64 were engaged in engineering and 76 were engaged in administration. Approximately 356 of our employees were covered by collective bargaining agreements with various unions that expire on various dates through 2025.

Our five largest customers in 2022 were Sistemas, Detroit Diesel, Northrop Grumman, ADI and SubCom, which in the aggregate accounted for 70% of net revenue. In 2023, Sistemas, Northrop Grumman, Detroit Diesel and ADI, represented approximately 22%, 17%, 13% and 10% of our net revenue, respectively.

Our five largest customers in 2023 were Sistemas, Northrop Grumman, Detroit Diesel, SubCom and ADI, which in the aggregate accounted for 70% of net revenue. In 2024, Sistemas, Northrop Grumman, Detroit Diesel and ADI, represented approximately 23%, 21% and 11% of our net revenue, respectively.

We are focused on harmonizing our approach to talent to provide seamless opportunities and better experiences to our employees. We have a Code of Conduct (“Code of Conduct”) applicable to all of our employees, our officers and directors and others (such as contractors) performing services for the Company.

We have a Code of Conduct (“Code of Conduct”) applicable to all of our employees, our officers and directors and others (such as contractors) performing services for the Company.

Although we believe overall that relations with our labor unions are positive, there can be no assurance that present and future issues with our unions will be resolved favorably, that negotiations will be successful or that we will not experience a work stoppage, which could adversely affect our consolidated results of operations. 6 Throughout our Company’s history, we always recognized that people drive the strength of our business and our ability to effectively serve our customers and sustain our competitive position.

We supplement these selling efforts with a variety of sales literature, advertising in trade media and participating in trade shows. We also utilize engineering specialists to facilitate the sales process by working with potential customers to reduce the cost of the products they need.

We also utilize engineering specialists to facilitate the sales process by working with potential customers to reduce the cost of the products they need.

Sypris Electronics accounted for approximately 43% of net revenue in 2023. Our Markets Sypris Technologies. The industrial manufacturing markets of this segment include automotive, truck and off-highway components and assemblies and specialty closures.

The industrial manufacturing markets of this segment include automotive, truck and off-highway components and assemblies and specialty closures.

You can find more information about our regional operating results, including our export sales, in Note 20 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. 4 Sales and Business Development Our principal sources of new business originate from the expansion of existing relationships, referrals and direct sales through senior management, direct sales personnel, domestic and international sales representatives, distributors and market specialists.

You can find more information about our regional operating results, including our export sales, in Note 21 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

We expect to compete for follow-on business opportunities as a subcontractor on future builds of several existing government programs. However, the federal budget and debt ceiling are expected to continue to be the subject of considerable uncertainty and the impact on demand for our products and services and our business are difficult to predict.

However, the federal budget and debt ceiling are expected to continue to be the subject of considerable uncertainty and the impact on demand for our products and services and our business are difficult to predict. Sypris Electronics accounted for approximately 46% of net revenue in 2024. Our Markets Sypris Technologies.

Patents, Trademarks and Licenses We own or license a number of patents and trademarks, but our business as a whole is not materially dependent upon any one patent, trademark, license or technologically related group of patents or licenses. We regard our manufacturing processes and certain designs as proprietary trade secrets and confidential information.

Delays, interruptions or non-optimal scheduling of production related to disruptions in raw materials supplies can be expected to increase our costs. 5 Patents, Trademarks and Licenses We own or license a number of patents and trademarks, but our business as a whole is not materially dependent upon any one patent, trademark, license or technologically related group of patents or licenses.

On March 9, 2023, President Biden's Administration submitted to Congress the President’s Fiscal Year (FY) 2024 budget request, which proposed $886 billion in total national defense spending, of which $842 billion was for the base budget of the DoD. On June 3, 2023, the President signed H.R. 3746 “The Fiscal Responsibility Act” (FRA) into law.

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.

Removed

The legislation suspended the debt ceiling until January 1, 2025, and, among other provisions, capped national defense spending at $886 billion for FY 2024 (President’s Budget Request level) and $895 billion for FY 2025. Supplemental funding legislation is not subject to the budget caps.

Added

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. The House and Senate continue the legislative process on the FY 2025 budget.

Removed

If a continuing resolution is enacted and still in effect and Congress does not pass all twelve defense and non-defense discretionary appropriations bills by April 30, 2024, the FRA will result in a decrease in government spending for FY 2024 by one percent from FY 2023 enacted levels.

Added

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.

Removed

The United States House of Representatives (House) and Senate continue the legislative process on the FY 2024 budget. On December 22, 2023, the President signed the FY 2024 National Defense Authorization Act (NDAA) into law. The NDAA authorizes funding at the FRA cap of $886 billion for National Defense.

Added

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.

Removed

Recently, the President signed a continuing resolution that extends funding of six appropriations bills to March 22, 2024 and the remaining six to September 30, 2024. This will provide Congress additional time to work on enacting all twelve FY 2024 appropriations bills based on the overarching U.S.

Added

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.

Removed

Government spending agreement reached by House and Senate leaders on January 7, 2024 which comports with the FRA cap of $886 billion for national defense in FY 2024. Under the continuing resolution, funding at amounts consistent with appropriated levels for FY 2023 are available, subject to certain restrictions, but new contract and program starts are not authorized.

Added

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 expected to cause challenges at the start of the 119th Congressional negotiations.

Removed

We expect our key programs will continue to be supported and funded under the continuing resolution. However, during periods covered by continuing resolutions, we may experience delays in new awards of our products and services, and those delays may adversely affect our results of operations.

Added

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.

Removed

On October 20, 2023, the President submitted a $106 billion supplemental funding request to Congress for assistance to Ukraine, Israel and the Indo-Pacific, related U.S. restock of capacity transfers to Ukraine and Israel, and U.S. border security. Congress has not yet acted on this request, which is part of the broader debate on FY 2024 U.S.

Added

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.

Removed

Government funding and border security policy. Supplemental and emergency funding are not subject to the FRA cap.

Added

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.

Removed

If Congress is not able to enact FY 2024 appropriations bills or extend the continuing resolution, the U.S. Government will enter a whole or partial shutdown. The impact of any government shutdown is uncertain.

Added

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. 2 We expect to compete for follow-on business opportunities as a subcontractor on future builds of several existing government programs.

Removed

However, if a government shutdown were to occur and were to continue for an extended period, we could be at risk of reduced orders, program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could adversely affect our results of operations.

Added

Supply chain volatility has been the primary driver for disruptions in the electronics manufacturing market for the past several years, but conditions are expected to continue to improve in 2025.

Removed

Further, if any one of the 12 appropriations bills is under a continuing resolution as of April 30, 2024, USG funding levels will reset to FY 2023 enacted levels minus 1% for the remainder of FY 2024 or until all 12 appropriations are enacted.

Added

Semiconductor shortages, raw materials availability, and lead-times have all improved and are expected to further stabilize as the market continues to recover from disruptions in production and demand during the COVID pandemic.

Added

Sales and Business Development Our principal sources of new business originate from the expansion of existing relationships, referrals and direct sales through senior management, direct sales personnel, domestic and international sales representatives, distributors and market specialists. We supplement these selling efforts with a variety of sales literature, advertising in trade media and participating in trade shows.

Added

Throughout our Company’s history, we always recognized that people drive the strength of our business and our ability to effectively serve our customers and sustain our competitive position. We are focused on harmonizing our approach to talent to provide seamless opportunities and better experiences to our employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+10 added−7 removed113 unchanged

2023 filing

2024 filing

Biggest changeIn addition, the existence of these factors may result in fewer customers in our target markets due to consolidation, bankruptcy, competitive or other market reasons, making it more difficult to obtain new clients and diversify our customer base in the near future. 8 The Company ’ s operating results can be adversely affected by inflation, changes in the cost or availability of labor, raw materials, energy, transportation and other necessary supplies and services, as well as the impact of proposed or imposed tariffs by the U.S. government on imports to the U.S. and/or the imposition of retaliatory tariffs by foreign countries.

A number of major obstacles could include: ● difficulties arising from our present financial condition, including difficulties in maintaining customer and supplier relationships and difficulties acquiring new business due to lingering concerns about our financial condition until we have returned to consistent profitability; ● efforts to increase our manufacturing capacity, maintain quality control systems and launch new programs, especially as we continue to increase production at each of our operating locations; ● the breakdown or the need for major repairs of critical machinery or equipment, especially as we increase production at our Mexico operations; ● the risk of warranty expenses and product liability claims, including the outcome of known or potential recall campaigns, if our products fail to meet or perform to specifications or cause property damage, injury or death; ● tariffs or trade restrictions imposed on imports or exports, particularly in the United States and Mexico; ● our ability to comply with exportation and importation regulations with an expanding global market; ● increased borrowing due to declines in sales; ● changes in anticipated product mix and the associated variances in our profit margins; ● the need to identify and eliminate our root causes of scrap; 11 ● inventory risks due to forecasting errors, shifts in market demand, the unanticipated loss of future business, or the obsolescence and/or price erosion of raw materials or component parts on hand; and ● any inability to successfully manage growth, contraction or competitive pressures in our primary markets.

A number of major obstacles could include: ● difficulties arising from our present financial condition, including difficulties in maintaining customer and supplier relationships and difficulties acquiring new business due to lingering concerns about our financial condition until we have returned to consistent profitability; ● efforts to increase our manufacturing capacity, maintain quality control systems and launch new programs, especially as we continue to increase production at each of our operating locations; ● the breakdown or the need for major repairs of critical machinery or equipment, especially as we increase production at our Mexico operations; 11 ● the risk of warranty expenses and product liability claims, including the outcome of known or potential recall campaigns, if our products fail to meet or perform to specifications or cause property damage, injury or death; ● tariffs or trade restrictions imposed on imports or exports, particularly in the United States and Mexico; ● our ability to comply with exportation and importation regulations with an expanding global market; ● increased borrowing due to declines in sales; ● changes in anticipated product mix and the associated variances in our profit margins; ● the need to identify and eliminate our root causes of scrap; ● inventory risks due to forecasting errors, shifts in market demand, the unanticipated loss of future business, or the obsolescence and/or price erosion of raw materials or component parts on hand; and ● any inability to successfully manage growth, contraction or competitive pressures in our primary markets.

Department of the Treasury and SBA have announced that SBA will conduct audits for PPP loans that exceed $2 million. Should we be audited or reviewed by the U.S.

The U.S. Department of the Treasury and SBA have announced that SBA will conduct audits for PPP loans that exceed $2 million. Should we be audited or reviewed by the U.S.

Unexpected losses have occurred from increases in the value of the Mexican Peso relative to the United States dollar and further unexpected losses could occur, which could be material to our business, financial results, or operations. 16 Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders and other stakeholders on climate change issues, could negatively affect our business and operations.

Additionally, unexpected losses have occurred from increases in the value of the Mexican Peso relative to the United States dollar and further unexpected losses could occur, which could be material to our business, financial results, or operations. 16 Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders and other stakeholders on climate change issues, could negatively affect our business and operations.

Occurrence of any of these events could adversely affect our internal operations, the products we provide to customers, loss of competitive advantages derived from our research and development efforts, early obsolescence of our products, our future financial results, our reputation or our stock price. 12 Supplier Risks Interruptions in the supply of key components and quality systems could disrupt production.

Occurrence of any of these events could adversely affect our internal operations, the products we provide to customers, loss of competitive advantages derived from our research and development efforts, early obsolescence of our products, our future financial results, our reputation or our stock price. Supplier Risks Interruptions in the supply of key components and quality systems could disrupt production.

We may be unable fully to exploit or adequately to protect intellectual property rights resulting from our development efforts, which could materially affect our ability to compete, our reputation and our financial position, results of operations and/or cash flows. 14 Labor Relations Risks We must attract and retain qualified employees while successfully managing related costs.

We may be unable fully to exploit or adequately to protect intellectual property rights resulting from our development efforts, which could materially affect our ability to compete, our reputation and our financial position, results of operations and/or cash flows. Labor Relations Risks We must attract and retain qualified employees while successfully managing related costs.

If we fail to compete in any of these areas, we may lose market share and our business could be seriously harmed. There can be no assurance that we will not experience increased competition or that we will be able to achieve profitability as these new challenges arise. 10 Our technologies could become obsolete, reducing our revenues and profitability.

If we fail to compete in any of these areas, we may lose market share and our business could be seriously harmed. There can be no assurance that we will not experience increased competition or that we will be able to achieve profitability as these new challenges arise. Our technologies could become obsolete, reducing our revenues and profitability.

However, if the cost of energy continues to increase, our results of operations and those of certain customers could be negatively impacted. Access to Capital and Liquidity Risks We may require additional financing to conduct our operations and to repay our outstanding debt obligations.

However, if the cost of energy continues to increase, our results of operations and those of certain customers could be negatively impacted. 13 Access to Capital and Liquidity Risks We may require additional financing to conduct our operations and to repay our outstanding debt obligations.

We cannot guarantee that any particular contract with a customer will result in the anticipated level of revenue or profitability. We depend on a few key customers in challenging industries for most of our revenues. Our five largest customers in 2023 were Sistemas, Northrop Grumman, Detroit Diesel, SubCom and ADI, which in the aggregate accounted for 70% of net revenue.

We cannot guarantee that any particular contract with a customer will result in the anticipated level of revenue or profitability. We depend on a few key customers in challenging industries for most of our revenues. Our five largest customers in 2024 were Northrop Grumman, Sistemas, Detroit Diesel, SubCom and ADI, which in the aggregate accounted for 70% of net revenue.

Many of these risk factors are also identified in connection with the more specific descriptions of our business and results of operations contained throughout this report. Customers and Revenue Growth Risks We seek to generate new business revenues to support our ongoing operations. We had a net loss of $1.6 million in 2023.

Congressional budgetary constraints or reallocations could reduce our government related sales. Sypris Electronics serves as a contractor for large aerospace and defense companies such as Northrop Grumman, BAE Systems and Collins Aerospace, typically under federally funded programs, which represented approximately 31% and 28% of net revenue in 2023 and 2022, respectively. Budget uncertainty, the potential for U.S.

Congressional budgetary constraints or reallocations could reduce our government related sales. Sypris Electronics serves as a contractor for large aerospace and defense companies such as Northrop Grumman, BAE Systems and Collins Aerospace, typically under federally funded programs, which represented approximately 36% and 31% of net revenue in 2024 and 2023, respectively. Budget uncertainty, the potential for U.S.

In general, there can be no assurance that any price fluctuations relating to tariffs or trade restrictions will not reduce demand, slow production, delay shipments to our customers or increase our costs in the future, any of which could adversely affect our financial results. Competition Risks Increasing competition could limit or reduce our market share.

Additionally, though we believe we were eligible recipients of the PPP Loan under the PPP and our use of PPP Loan proceeds was in compliance with PPP rules and guidance, our receipt of the PPP Loan and the use of PPP Loan proceeds could result in negative publicity, or expose us to claims or potential liability under the federal False Claims Act, which prohibits the known filing of a false claim or the known use of false statements to obtain payment from the federal government, if it is determined that we were in fact not eligible to take the PPP Loan in the first instance.

The Company entered into a promissory note with BMO Harris Bank National Association (“BMO”), effective May 1, 2020, that provided for a loan in the amount of $3.6 million (the “PPP Loan”) pursuant to expansion of the Small Business Administration (“SBA”) 7(a) loan program (the “Paycheck Protection Program” or “PPP”), established under the CARES Act. The U.S.

Competition for labor is becoming more acute and we have experienced increased labor costs as a result. For significant portions of our business, we purchase raw materials and component parts which have been designated or specified by our customers, at prices negotiated by our customers.

We are currently experiencing inflationary pressures on our operating costs. Competition for labor is becoming more acute and we have experienced increased labor costs as a result. For significant portions of our business, we purchase raw materials and component parts which have been designated or specified by our customers, at prices negotiated by our customers.

Volatility in the currencies of our entities and the United States dollar, as well as inflationary costs, could seriously harm our business, operating results and financial condition. The primary impact of currency exchange fluctuations is on the cash, payables and expenses of our Mexican operating entities. The Company does not currently hedge our Mexican Peso denominated expenses.

A material increase in the unfunded obligations of these plans could also result in a significant increase in our pension expense in the future. We may incur additional tax expense or become subject to additional tax exposure.

Such declines could also require us to make significant additional contributions to our pension plans in the future. A material increase in the unfunded obligations of these plans could also result in a significant increase in our pension expense in the future. We may incur additional tax expense or become subject to additional tax exposure.

Disputes with labor unions could disrupt our business plans. As of December 31, 2023, we had collective bargaining agreements covering approximately 406 employees (all of which were in Sypris Technologies), or 54% of our total employees. Excluding certain Mexico employees covered under an annually ratified agreement, there are no collective bargaining agreements expiring within the next twelve months.

Disputes with labor unions could disrupt our business plans. As of December 31, 2024, we had collective bargaining agreements covering approximately 356 employees (all of which were in Sypris Technologies), or 50% of our total employees. Excluding certain Mexico employees covered under an annually ratified agreement, collective bargaining agreements covering 26 employees expire within the next twelve months.

Until we have returned to sustained levels of consistent profitability, our access to capital may be limited. Until the Company is able to achieve and maintain consistent profitability, we may not be able to obtain financing.

We may not be able to secure additional financing on favorable terms, if at all. Until we have returned to sustained levels of consistent profitability, our access to capital may be limited. Until the Company is able to achieve and maintain consistent profitability, we may not be able to obtain financing.

Additionally, potential climate change regulation, including a potential carbon tax, could adversely affect the level of exploration, development and production activity of certain of our customers and the demand for our services and products.

In addition, our global operations expose us to risks associated with public health crises, such as pandemics, epidemics, and quarantines or shutdowns related to public health crisis and other catastrophic events, which could harm our business and cause our operating results to suffer. 15 Changes in interest rates and asset returns could increase our pension funding obligations and reduce our profitability.

We have pursued strategies that rely on research and development efforts to develop and commercialize our new products. We may not have the financial resources or be able to raise funds necessary to pursue these strategies under any future debt agreements which could further limit our ability to replace the loss of revenues.

We may not have the financial resources or be able to raise funds necessary to pursue these strategies under any future debt agreements which could further limit our ability to replace the loss of revenues.

Disagreements over pricing, quality, delivery, capacity, exclusivity or trade credit terms could disrupt order schedules. Orders may also fluctuate due to changing global capacity and demand, new products, changes in market share, reorganizations or bankruptcies, material shortages, labor disputes, freight costs, tariffs or other factors that discourage outsourcing.

Orders may also fluctuate due to changing global capacity and demand, new products, changes in market share, reorganizations or bankruptcies, material shortages, labor disputes, freight costs, tariffs or other factors that discourage outsourcing.

The profitability of our contracts also can be adversely affected by unexpected start-up costs on new programs, inability to negotiate milestone billings, operating inefficiencies, scheduling constraints, ineffective capital investments, inflationary pressures or inaccurate forecasts of future unit costs. 9 Unexpected changes in our customers’ demand levels and our inability to execute our production efficiently have harmed our operating results in the past and could do so in the future.

We also generated negative operating cash flows of $11.1 million in 2023. We believe that we need to increase our revenues through new business generation in order to operate profitably. We are working to increase our revenues with new and existing customers.

We believe that we need to increase our revenues through new business generation in order to operate profitably. We are working to increase our revenues with new and existing customers.

Further, as discussed below, the Company experienced a liquidity shortfall in the fourth quarter of 2023 and the first quarter of 2024. Suppliers may not sell to us given our liquidity position.

Each of these factors could adversely affect operating results. As discussed below, the Company experienced a liquidity shortfall in 2024 and the first quarter of 2025. Suppliers may not sell to us given our liquidity position.

Our ability to finance expansion or new business opportunities may be limited . Our future liquidity and capital requirements depend on numerous factors other than bank borrowings or debt financing, including the pace at which we can effectively cut costs, increase revenues or successfully launch new products.

Our future liquidity and capital requirements depend on numerous factors other than bank borrowings or debt financing, including the pace at which we can effectively cut costs, increase revenues or successfully launch new products. We have pursued strategies that rely on research and development efforts to develop and commercialize our new products.

The valuation of our future payment obligations under the plans and the related plan assets are subject to significant adverse changes if the credit and capital markets cause interest rates and projected rates of return to decline. Such declines could also require us to make significant additional contributions to our pension plans in the future.

We have unfunded obligations under certain of our defined benefit pension plans. The valuation of our future payment obligations under the plans and the related plan assets are subject to significant adverse changes if the credit and capital markets cause interest rates and projected rates of return to decline.

Although we work cooperatively with our customers and our suppliers, subcontractors, vendors and other partners to seek to minimize the impacts of cyber threats, other security threats or business disruptions, we must rely on the safeguards put in place by those entities, and those safeguards might not be effective.

Successful attacks could lead to losses or misuse of sensitive information or capabilities; theft or corruption of data; harm to personnel, infrastructure or products; financial costs and liabilities and protracted disruptions in our operations and performance. 12 Although we work cooperatively with our customers and our suppliers, subcontractors, vendors and other partners to seek to minimize the impacts of cyber threats, other security threats or business disruptions, we must rely on the safeguards put in place by those entities, and those safeguards might not be effective.

The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile. 9 Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic factors that are beyond our control.

Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic factors that are beyond our control.

If we are unable to achieve our forecasted revenue, or if our costs are higher than expected, we may be required to revise our plans to provide for additional cost-cutting measures, seek additional financing or to consider other strategic alternatives. We may not be able to secure additional financing on favorable terms, if at all.

Our ability to service our current liabilities and satisfy our debt obligations will require a significant amount of cash. If we are unable to achieve our forecasted revenue, or if our costs are higher than expected, we may be required to revise our plans to provide for additional cost-cutting measures, seek additional financing or to consider other strategic alternatives.

We are subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous chemicals and substances used in our operations. If we fail to comply with present or future regulations, we could be forced to alter, suspend or discontinue our manufacturing processes and pay substantial fines or penalties.

If we fail to comply with present or future regulations, we could be forced to alter, suspend or discontinue our manufacturing processes and pay substantial fines or penalties.

We cannot be certain that additional capital will be available on terms acceptable to us, or at all. As reflected in the consolidated financial statements, the Company reported a net loss of $1.6 million and cash used in operations of $11.1 million for the year ended December 31, 2023.

As reflected in the consolidated financial statements, the Company reported a net loss of $1.7 million and $1.6 million for the year ended December 31, 2024, and 2023, respectively and cash used in operations of $1.1 million for the year ended December 31, 2023.

Inaccurate forecasting of our customers’ requirements can disrupt the efficient utilization of our manufacturing capacity, inventories or workforce and can cause increases in our inventory and working capital levels. If we receive unanticipated orders or rapid increases in demand, these incremental volumes could be unprofitable due to the higher costs of operating above our optimal capacity.

If we receive unanticipated orders or rapid increases in demand, these incremental volumes could be unprofitable due to the higher costs of operating above our optimal capacity. Disagreements over pricing, quality, delivery, capacity, exclusivity or trade credit terms could disrupt order schedules.

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 during the year ended December 31, 2023. As a result, the Company experienced a liquidity shortfall in the fourth quarter of 2023 and the first quarter of 2024.

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.

Certain Mexico employees are covered by an annually ratified collective bargaining agreement. These employees in Mexico represented approximately 51% of the Company’s workforce, or 382 employees at December 31, 2023. Our ability to maintain our workforce depends on our ability to attract and retain new and existing customers as well as maintain good relations with our employees and labor unions.

Certain Mexico employees are covered by an annually ratified collective bargaining agreement. These employees in Mexico represented approximately 46% of the Company’s workforce, or 330 employees as of December 31, 2024.

(“GFCM”), an entity controlled by the Gill family that beneficially owns approximately 14.6% of our common stock, to help the Company manage its liquidity during those periods. 13 Our ability to service our current liabilities and satisfy our debt obligations will require a significant amount of cash.

The Company received the benefit of additional loans of $2.5 million during year ended December 31, 2023, and $2.5 million during the year ended December 31, 2024 from Gill Family Capital Management, Inc. (“GFCM”), an entity controlled by the Gill family that beneficially owns approximately 14.2% of our common stock, to help the Company manage its liquidity during those periods.

We could experience a work stoppage or other disputes which could disrupt our operations or the operations of our customers and could harm our operating results. Regulatory Risks Environmental, natural disasters, health and safety risks could expose us to potential liability.

Regulatory Risks Environmental, natural disasters, health and safety risks could expose us to potential liability. We are subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous chemicals and substances used in our operations.

Any of these consequences could have a material adverse effect on our results of operations, financial condition and cash flows.

Any of these consequences could have a material adverse effect on our results of operations, financial condition and cash flows. The executive branch of the U.S. government is granted broad authority under Section 232 of the Trade Expansion Act of 1962, as amended, to restrict imports in the interest of national security by imposing tariffs.

Unexpected changes in our customers’ demand levels and our inability to execute our production efficiently have harmed our operating results in the past and could do so in the future. Many of our customers will not commit to firm production or delivery schedules.

Many of our customers will not commit to firm production or delivery schedules. Inaccurate forecasting of our customers’ requirements can disrupt the efficient utilization of our manufacturing capacity, inventories or workforce and can cause increases in our inventory and working capital levels.

Removed

The Company ’ s operating results can be adversely affected by inflation, changes in the cost or availability of labor, raw materials, energy, transportation and other necessary supplies and services, as well as the impact of tariffs. We are currently experiencing inflationary pressures on our operating costs.

Added

Tariffs imposed on imported steel and other goods and raw materials could raise the costs associated with manufacturing our products.

Removed

Added

If tariffs are imposed on the products we manufacture or on our customers’ goods containing components sourced from us, our sales could be negatively impacted.

Removed

Each of these factors could adversely affect operating results. The conflict in Ukraine has increased global tensions and instability, highlighted threats and increased global demand, as well as further disrupted global supply chains. We may not be able to fully offset any cost increases or price increases of our products due to delays in production.

Added

Although we strive to collaborate with our customers to recover part of any increased costs and with our suppliers to mitigate costs related to tariffs, there's no guarantee that our financial performance will not be impacted by proposed or imposed tariffs or changes in trade policies. Customer contracts could be less profitable than expected.

Removed

More recently, the hostilities in Israel and the Gaza Strip have further heightened global tensions and instability. At this time, it is unknown whether hostilities in this region will escalate into an even larger conflict. We do not have a significant business presence in the region, and therefore do not anticipate significant adverse financial impacts directly from the current conflict.

Added

Removed

The Company’s net inventory increased from $42.1 million to $77.3 million as of December 31, 2022 and 2023, respectively, primarily related to contracts with Sypris Electronics’ aerospace and defense customers.

Added

We cannot be certain that additional capital will be available on terms acceptable to us, or at all.

Removed

The Company received the benefit of additional loans of $5.0 million from Gill Family Capital Management, Inc.

Added

As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and is continuing to aggressively manage working capital to improve liquidity.

Removed

For example, the COVID-19 pandemic resulted in travel disruption, trade disruption and adversely affected our operations. 15 Changes in interest rates and asset returns could increase our pension funding obligations and reduce our profitability. We have unfunded obligations under certain of our defined benefit pension plans.

Added

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.

Added

Additionally, during the first quarter of 2025, the Company and GFCM amended the secured promissory note (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).

Added

Our ability to maintain our workforce depends on our ability to attract and retain new and existing customers as well as maintain good relations with our employees and labor unions. We could experience a work stoppage or other disputes which could disrupt our operations or the operations of our customers and could harm our operating results.

Added

During the year ended December 31, 2024, the Company’s Sypris Technologies segment entered into Mexican Peso (“MXP”) put option contracts to manage a portion of the foreign currency exchange risk on forecasted expenses denominated in MXP. There can be no assurance the hedges will fully offset the financial impact resulting from movements in foreign currency exchange rates.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+3 added−0 removed6 unchanged

2023 filing

2024 filing

Biggest changeAccordingly, management assesses and responds to cybersecurity threats as part of our ongoing risk assessment and as an internal control over financial reporting. The VP of Administration directs our cybersecurity operations and risk responses. The CISO, who has 30 years of IT architecture, infrastructure and operations experience working directly with the MSP.

We and our third-party service providers have frequently been the target of cybersecurity threats and expect them to continue, and for an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Governance Board of Directors and Board Committees.

We and our third-party service providers have frequently been the target of cybersecurity threats and expect them to continue, and for an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. 18 Governance Board of Directors and Board Committees.

The scope of our evaluation encompasses risks that may be associated with both our internally managed IT systems and key business functions and sensitive data operated or managed by third-party service providers. Key personnel receive cybersecurity training regularly.

Upon confirmation that a cybersecurity incident has occurred, our IT team will coordinate with our MSP and representatives from other internal departments, legal counsel and other service providers as needed. The Director of IT directs the development of a coordinated response strategy, entailing risk containment, notification processes, system restoration, incident documentation and assessment.

Upon confirmation that a cybersecurity incident has occurred, our IT team will coordinate with our MSP and representatives from other internal departments, the VP of Administration, legal counsel and other service providers as needed. The VP of Administration directs the development of a coordinated response strategy, entailing risk containment, notification processes, system restoration, incident documentation and assessment.

Specifically, the Audit and Finance Committee receives regular updates from the Director of IT, as often as necessary but at least once per year, with respect to our cybersecurity threats and responses to any cybersecurity incidents. Management ’ s Responsibilities. Management has implemented risk management structures, policies and procedures, and manages our risk exposure on a day-to-day basis.

Specifically, the Audit and Finance Committee receives regular updates from the VP of Administration, as often as necessary but at least once per year, with respect to our cybersecurity threats and responses to any cybersecurity incidents. Management ’ s Responsibilities. Management has implemented risk management structures, policies and procedures, and manages our risk exposure on a day-to-day basis.

The employees within our IT team who specialize in cybersecurity operations are responsible for coordinating and overseeing the activities of these third-party vendors. Sypris has a managed service provider (MSP) for incident response of cybersecurity threats and cybersecurity incidents and is managed by the Director of IT, who coordinates activities and monitors response performance.

The employees within our IT team who specialize in cybersecurity operations are responsible for coordinating and overseeing the activities of these third-party vendors. Sypris has a managed service provider (MSP) for incident response of cybersecurity threats and cybersecurity incidents and is managed by the Chief Information Security Officer (“CISO”), who coordinates activities and monitors response performance.

The Director of IT meets with the MSP at least once every quarter to review and assess cybersecurity incidents and non-incident threats (and response measures undertaken) to determine if any adjustment to our cybersecurity managed services is required. 18

VP of Administration meets with the MSP at least once every quarter to review and assess cybersecurity incidents and non-incident threats (and response measures undertaken) to determine if any adjustment to our cybersecurity managed services is required. 19

The Director of IT will notify the other members of our senior management team and the Chairman of the Finance and Audit Committee of our Board of Directors as needed.

The VP of Administration will notify the other members of our senior management team and the Chairman of the Finance and Audit Committee and the Independent Directors of our Board of Directors as needed.

The Director of IT prepares briefings to the Board of Directors, and other relevant committees. Our IT team evaluates security alerts received from our MSP, and any alert or threat that the MSP or the IT team identifies as a cybersecurity incident (such as a data security breach) is promptly escalated for further assessment and immediate remediation.

Our IT team evaluates security alerts received from our MSP, and any alert or threat that the MSP or the IT team identifies as a cybersecurity incident (such as a data security breach) is promptly escalated for further assessment and immediate remediation.

Added

The CISO reports to the VP of Administration who prepares briefings to the Board of Directors, and other relevant committees.

Added

The CISO reports to the VP of Administration who has 30 years of experience in all facets of IT, business process and controls.

Added

The VP of Administration reports to the President, CEO and Chairman of the Board of the Company and reports regularly to the Audit Committee and to the full Board of Directors, providing insights into our cybersecurity posture, incidents, and remediation efforts.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed7 unchanged

2023 filing

2024 filing

Biggest changeLocation Segment (Market Served) Own or Lease (Expiration) Approximate Square Feet Certifications Corporate Office: Louisville, Kentucky Lease (2024) 13,800 Manufacturing Facilities: Louisville, Kentucky Sypris Technologies (Oil & Gas Pipeline Components) Own 57,000 ISO 9001 ASME Certified Tampa, Florida Sypris Electronics (Aerospace & Defense Electronics) Lease (2027) 50,000 ISO 9001 AS 9100 NASA-STD-8739 IPC-A-610, Class 3 J-STD-001, Class 3 NADCAP accredited Toluca, Mexico Sypris Technologies (Truck Components and Oil & Gas Pipeline Components) Lease (2026) 215,000 ISO 14001 TS 16949 ASME Certified Clean Industry Certified PED Certified Below is a listing and description of the various manufacturing certifications or specifications that we utilize at various of our facilities.

Biggest changeLocation Segment (Market Served) Own or Lease (Expiration) Approximate Square Feet Certifications Corporate Office: Louisville, Kentucky Lease (2034) 11,111 Manufacturing Facilities: Louisville, Kentucky Sypris Technologies (Oil & Gas Pipeline Components) Own 57,000 ISO 9001 ASME Certified Tampa, Florida Sypris Electronics (Aerospace & Defense Electronics) Lease (2027) 50,000 ISO 9001 AS 9100 NASA-STD-8739 IPC-A-610, Class 3 J-STD-001, Class 3 NADCAP accredited Toluca, Mexico Sypris Technologies (Truck Components and Oil & Gas Pipeline Components) Lease (2026) 215,000 ISO 14001 TS 16949 ASME Certified Clean Industry Certified PED Certified Below is a listing and description of the various manufacturing certifications or specifications that we utilize at various of our facilities.

ISO 14001 A set of standards and procedures relating to environmental compliance management. 19 Certification/Specification Description ISO 9001 A certification process comprised of quality system requirements to ensure quality in the areas of design, development, production, installation and servicing of products.

ISO 14001 A set of standards and procedures relating to environmental compliance management. 20 Certification/Specification Description ISO 9001 A certification process comprised of quality system requirements to ensure quality in the areas of design, development, production, installation and servicing of products.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged

2023 filing

2024 filing

Biggest changeOur common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” As of March 15, 2024, there were 554 holders of record of our common stock. No cash dividends were declared during 2023 or 2022. Dividends may be paid on common stock only when, as and if declared by our Board of Directors in its sole discretion.

Biggest changeOur common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” As of March 15, 2025, there were 536 holders of record of our common stock. No cash dividends were declared during 2024 or 2023. Dividends may be paid on common stock only when, as and if declared by our Board of Directors in its sole discretion.

We do not anticipate paying dividends in 2024. There were no shares of common stock repurchased during the three months ended December 31, 2023.

We do not anticipate paying dividends in 2025. There were no shares of common stock repurchased during the three months ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+28 added−23 removed54 unchanged

2023 filing

2024 filing

Biggest changeIn addition, as used in the table, “NM” means “not meaningful.” Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Year Over Results as Percentage of Year Over Year Net Revenue for the Year Ended Year Percentage Year Ended December 31, Change Change December 31, Favorable Favorable 2023 2022 (Unfavorable) (Unfavorable) 2023 2022 (in thousands, except percentage data) Net revenue: Sypris Technologies $ 77,920 $ 69,259 $ 8,661 12.5 % 57.2 % 62.9 % Sypris Electronics 58,303 40,862 17,441 42.7 42.8 37.1 Total net revenue 136,223 110,121 26,102 23.7 100.0 100.0 Cost of sales: Sypris Technologies 68,712 60,709 (8,003 ) (13.2 ) 88.2 87.7 Sypris Electronics 50,263 34,559 (15,704 ) (45.4 ) 86.2 84.6 Total cost of sales 118,975 95,268 (23,707 ) (24.9 ) 87.3 86.5 Gross profit: Sypris Technologies 9,208 8,550 658 7.7 11.8 12.3 Sypris Electronics 8,040 6,303 1,737 27.6 13.8 15.4 Total gross profit 17,248 14,853 2,395 16.1 12.7 13.5 Selling, general and administrative 16,279 14,489 (1,790 ) (12.4 ) 12.0 13.2 Operating income 969 364 605 166.2 0.7 0.3 Interest expense, net 777 1,110 333 30.0 0.6 1.0 Other expense, net 1,125 800 (325 ) (40.6 ) 0.8 0.7 Loss before income taxes (933 ) (1,546 ) 613 39.7 (0.7 ) (1.4 ) Income tax expense, net 663 948 285 30.1 0.5 0.9 Net loss $ (1,596 ) $ (2,494 ) $ 898 36.0 (1.2 )% (2.3 )% Net Revenue .

Biggest changeIn addition, as used in the table, “NM” means “not meaningful.” Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Year Over Results as Percentage of Year Over Year Net Revenue for the Year Ended Year Percentage Year Ended December 31, Change Change December 31, Favorable Favorable 2024 2023 (Unfavorable) (Unfavorable) 2024 2023 (in thousands, except percentage data) Net revenue: Sypris Technologies $ 75,207 $ 77,920 $ (2,713 ) (3.5 )% 53.7 % 57.2 % Sypris Electronics 64,973 58,303 6,670 11.4 46.3 42.8 Total net revenue 140,180 136,223 3,957 2.9 100.0 100.0 Cost of sales: Sypris Technologies 62,383 68,712 6,329 9.2 82.9 88.2 Sypris Electronics 57,907 50,263 (7,644 ) (15.2 ) 89.1 86.2 Total cost of sales 120,290 118,975 (1,315 ) (1.1 ) 85.8 87.3 Gross profit: Sypris Technologies 12,824 9,208 3,616 39.3 17.1 11.8 Sypris Electronics 7,066 8,040 (974 ) (12.1 ) 10.9 13.8 Total gross profit 19,890 17,248 2,642 15.3 14.2 12.7 Selling, general and administrative 16,963 16,279 (684 ) (4.2 ) 12.1 12.0 Operating income 2,927 969 1,958 202.1 2.1 0.7 Interest expense, net 1,684 777 (907 ) (116.7 ) 1.2 0.6 Other expense, net 1,217 1,125 (92 ) (8.2 ) 0.9 0.8 Income (loss) before income taxes 26 (933 ) 959 NM 0.0 (0.7 ) Income tax expense, net 1,706 663 (1,043 ) (157.3 ) 1.2 0.5 Net loss $ (1,680 ) $ (1,596 ) $ (84 ) (5.3 ) (1.2 )% (1.2 )% Net Revenue .

Deferred tax assets and liabilities are determined separately for each tax jurisdiction in which we conduct our operations or otherwise incur taxable income or losses. The Company evaluates its deferred tax position on a quarterly basis and valuation allowances are provided as necessary.

During this evaluation, the Company reviews its forecast of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred tax assets to determine if a valuation allowance is needed. Based on its current forecast, the Company believes it will have sufficient future taxable income to realize the deferred tax assets recorded by its Mexican subsidiary.

Based on its current forecast, the Company has established a valuation allowance against all U.S. deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. tax benefits.

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 than the Class 8 commercial vehicle market, thereby reducing volatility in our revenue profile.

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.

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. Income Taxes.

An improper assessment of salability or improper estimate of future usage or demand, or significant changes in usage or demand could result in significant changes in the reserves and a positive or a negative impact on our consolidated results of operations in the period the change occurs. 25 Stock-based Compensation.

A considerable amount of management judgment and assumptions are required in performing the impairment test, principally in determining whether an adverse event or circumstance has triggered the need for an impairment review. The Company did not have any long-lived assets measured at fair value on a nonrecurring basis as of December 31, 2023 or 2022. Pension Plan Funded Status.

If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. 26 Results of Operations We operate in two segments, Sypris Technologies and Sypris Electronics.

If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. 27 Results of Operations We operate in two segments, Sypris Technologies and Sypris Electronics.

While we have taken pricing actions and implemented transformation initiatives that we expect to improve productivity and offset these cost increases, we expect supply chain pressures and inflationary cost increases to continue throughout 2024, which may continue thereafter and could negatively impact our results of operations.

While we have taken pricing actions and implemented transformation initiatives that we expect to improve productivity and offset these cost increases, we expect supply chain pressures and inflationary cost increases to continue throughout 2025, which may continue thereafter and could negatively impact our results of operations.

Under this measure of progress, the extent of progress towards completion is measured based on the ratio of labor hours incurred to date to the total estimated labor hours at completion of the performance obligation. 24 Long-lived asset impairment.

If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. 28 Liquidity and Capital Resources As reflected in the consolidated financial statements, the Company reported a net loss of $1.6 million and cash used in operating activities of $11.1 million for the year ended December 31, 2023.

If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. 29 Liquidity and Capital Resources 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 increase in selling general and administrative expense for the year ended December 31, 2023 was primarily as a result of an increase in headcount to support the increase in volumes for Sypris Electronics and increased insurance costs. Additionally, the Company experienced higher employee medical insurance claim expense during 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.

The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $6.5 million in principal as of December 31, 2023 and 2022. 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.

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.

Based on the current funded status of our U.S. plans, we expect to contribute $0.8 million during 2024, which represents the minimum funding amounts required by federal law. Reserve for Excess, Obsolete and Scrap Inventory.

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. Reserve for Excess, Obsolete and Scrap Inventory.

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 an equipment financing obligation.

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.

The table presented below compares our segment and consolidated results of operations from 2023 to 2022.

The table presented below compares our segment and consolidated results of operations from 2024 to 2023.

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 2024 pension expense. At December 31, 2023, we have $8.8 million of unrecognized losses relating to our U.S. pension plans.

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. At December 31, 2024, we have $7.1 million of unrecognized losses relating to our U.S. pension plans.

Plan liabilities at December 31, 2023 are based upon a discount rate of 5.10% which reflects the Above Mean Mercer Yield Curve rate as of December 31, 2023 rounded to the nearest 5th basis point.

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.

The current tax expense in 2023 and 2022 includes taxes paid by our Mexican subsidiary and domestic state income taxes and adjustments. The 2023 and 2022 deferred tax expense includes net changes in the foreign deferred tax assets during the year.

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.

Sypris Technologies Outlook 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 2023, production of Class 8 trucks in North America increased 8% over 2022.

Sypris Technologies Outlook 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.

As of December 31, 2023, the Company had $3.2 million outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2026 and a weighted average interest rate of 8.8%. Equipment Financing 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%. Equipment Financing Obligations.

At December 31, 2023, we had approximately $7.9 million of cash and cash equivalents, of which $6.1 million was held in jurisdictions outside of the U.S. that, if repatriated, could result in withholding taxes.

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.

The expected increase in revenue during 2024 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. Selling, General and Administrative. Selling, general and administrative expense increased $1.8 million to $16.3 million in 2023 as compared to $14.5 million in 2022.

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. 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.

Based on the most recent analysis of projected portfolio returns, we concluded that the use of 3.3% for the Louisville Hourly Plan, 3.55% for the Marion Plan and 2.95% for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2023 was appropriate.

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.

Prepaid expenses and other current assets increased during 2023 resulting in a cash use of $1.1 million primarily as a result of increased contract assets and capitalized costs associated with programs in the startup phase of production at Sypris Electronics partially offset by a decrease in taxes refundable in Mexico. Investing Activities.

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. Investing Activities.

As of December 31, 2023, the Company had $2.0 million outstanding under equipment financing facilities, with payments due through 2028, and a weighted average interest rate of 6.8%. Purchase Commitments. We had purchase commitments totaling approximately $39.8 million at December 31, 2023, primarily for inventory, which are due through 2025. Cash Flows from Operating, Investing and Financing Activities Operating Activities.

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%. Purchase Commitments. We had purchase commitments totaling approximately $29.7 million at December 31, 2024, primarily for inventory, which are due through 2026. Cash Flows from Operating, Investing and Financing Activities Operating Activities.

Selling, general and administrative expense decreased as a percentage of revenue to 12.0% for the year ended December 31, 2023 from 13.2% for the year ended December 31, 2022. Interest Expense, Net.

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. Interest Expense, Net.

Net cash used in investing activities was comprised of capital expenditures of $2.1 million and $3.0 million in 2023 and 2022, respectively. Financing Activities. Net cash used in financing activities was $0.6 million in 2023 as compared to $1.4 million in 2022.

Net cash used in investing activities was comprised of capital expenditures of $1.1 million and $2.1 million in 2024 and 2023, respectively. 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.

The amendment increased the aggregate amount previously loaned by GFCM to the Company from $6.5 million to $9.0 million. This additional $5.0 million loaned to the Company in the fourth quarter of 2023 and the first quarter of 2024 was approved by the Audit Committee and provided the Company necessary liquidity.

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.

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 increased $8.7 million from the prior year to $77.9 million in 2023.

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.

Foreign currency related expenses were not material for the year ended December 31, 2023. During the year ended December 31, 2022, the Company recognized pension expense of $0.6 million. Foreign currency related expenses were not material for the year ended December 31, 2022. Income Taxes.

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. 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.

The 2023 income tax provision consists of current tax expense of $0.6 million and deferred tax expense of $0.1 million. The 2022 income tax provision consists of current tax expense of $0.6 million and deferred tax expense of $0.3 million.

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 Note provides for a first security interest in substantially all of the Company’s assets, including those in Mexico (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K). Finance Lease Obligations.

The additional amounts loaned to the Company in 2024 and 2025, were approved by the Audit Committee and provided the Company necessary liquidity. The Note provides for a first security interest in substantially all of the Company’s assets, including those in Mexico (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K). Finance Lease Obligations.

The net revenue increase was primarily attributable to increased sales volumes of $3.7 million attributable to the commercial vehicle market, $1.9 million from the automotive, sport utility vehicle and off-highway markets and $3.1 million in energy product sales.

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.

Interest expense for the year ended December 31, 2023 decreased $0.3 million due to a decrease in the weighted average debt outstanding partially offset by an increase in the weighted average interest rate. Our weighed average debt outstanding under the Note decreased to $5.0 million during 2023 from $6.5 million during 2022.

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.

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.

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.

Net cash used in operating activities was $11.1 million in 2023, as compared to cash provided by operating activities of $13.8 million in 2022. The aggregate increase in accounts receivable in 2023 resulted in a usage of cash of $1.1 million as a result of the increase in revenue for Sypris Technologies and Sypris Electronics over the prior year.

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.

Scott Gill are significant beneficial stockholders of the Company. 29 During the fourth quarter ended December 31, 2023, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $2.5 million to $6.5 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 (iii) adjust the interest rate beginning on November 10, 2023 and on each April 1 thereafter, to reflect the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period, and (iv) allow for the deferral of payment for up to 60% of the interest due on the Note to April 1, 2025 On February 7, 2024, the Company further amended the Note to increase the principal amount due on April 1, 2027 by another $2.5 million.

Scott Gill are significant beneficial stockholders of the Company. 30 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.

Our U.S. defined benefit pension plans are closed to new entrants and an insignificant amount of service-related cost was recorded in 2023 related to a small number of participants who are still accruing benefits in the Louisville Hourly and Salaried Plans. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets.

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.

Net cash used in financing activities in 2022 included principal payments on finance lease and equipment financing obligations of $1.3 million and payments of $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.

The productivity and innovation that can result from such investments helps to differentiate us from our competition when it comes to cost, quality, reliability and customer service. Economic Conditions Our operations are impacted by global economic conditions, including inflationary increases of certain raw materials, as well as logistics, transportation, utilities and labor costs, supply chain constraints and increased interest rates.

Economic Conditions Our operations are impacted by global economic conditions, including inflationary increases of certain raw materials, as well as logistics, tariffs, transportation, utilities and labor costs, supply chain constraints and increased interest rates.

On March 11, 2024, the President’s FY 2025 budget request was submitted to Congress, initiating the FY 2025 defense authorization and appropriations legislative process, which proposed $850 billion for the base budget of the DoD. 23 If Congress is not able to enact FY 2024 appropriations bills or extend the continuing resolution, the U.S.

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.

The weighted average interest rate increased to 8.7% in 2023 from 8.0% in 2022. Other Expense, Net. Other expense, net, was $1.1 million in 2023 as compared to $0.8 million for 2022. During the year ended December 31, 2023, the Company recognized pension related expense of $1.0 million.

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. Other Expense, Net. Other expense, net, was $1.2 million in 2024 as compared to $1.1 million for 2023.

Revenue for Sypris Technologies is expected to decrease slightly in 2024, 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. 27 Sypris Electronics derives its revenue primarily from circuit card and full “box build” manufacturing, high reliability manufacturing and systems assembly and integration.

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.

Net revenue for Sypris Electronics increased $17.4 million to $58.3 million in 2023. The increase in revenue for the year ended December 31, 2023 was primarily related to the ramping of production during the year for two follow-on programs and an increase in sales to customers serving the communications market.

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 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.

Sypris Electronics’ gross profit increased $1.7 million to $8.0 million as compared to $6.3 million in the prior year. The increase in gross profit for the year ended December 31, 2023 was primarily a result of the increase in revenue which also had a positive impact on overhead absorption.

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.

However, the escalating conflict in the Middle East, the war between Russia and Ukraine and recessionary fears have also led to disruption, instability and volatility in global markets and industries that could negatively impact our operations. 22 We will continue to pursue new business in a wide variety of markets from light automotive to new pressure vessel and pipeline applications to achieve a more balanced portfolio across our customers, markets and products.

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.

Additionally, material availability improved compared to the prior year period, which resulted in an increase in sales. The order backlog for Sypris Electronics is expected to support an increase in revenue during 2024. Gross Profit. Sypris Technologies’ gross profit increased $0.7 million to $9.2 million in 2023 as compared to $8.6 million in the prior year.

The order backlog for Sypris Electronics is expected to support an increase in revenue during 2025. Gross Profit.

The shipment delays also contributed to an increase in trade payable balances with certain suppliers. The Company has entered into negotiations with these suppliers to amend payment and other terms. The Company received the benefit of additional loans of $5.0 million from GFCM to help the Company manage its liquidity during those periods.

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.

During 2022 and 2023, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2025.

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.

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The outlook for 2024 is for continued strong demand for production during the first quarter of 2024 with a significant decrease starting in the second quarter of 2024.

Added

The productivity and innovation that can result from such investments helps to differentiate us from our competition when it comes to cost, quality, reliability and customer service.

Removed

Reduced travel, business closures, and other economic impacts related to the COVID-19 pandemic suppressed oil and natural gas demand, thereby adversely impacting the oil and gas markets served by our Tube Turns® brand of engineered products.

Added

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.

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This caused major pipeline developers to significantly scale back near-term capital investments in new pipeline infrastructure, which resulted in reduced demand for our products for the oil and gas markets in early 2022.

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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.

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As production activity increased in 2022, particularly in liquefied natural gas shipments to Europe, customer demand in this market increased and remained at a higher level in 2023 compared to early 2022.

Added

We will continue to pursue new business in a wide variety of markets from light automotive to new pressure vessel and pipeline applications to achieve a more balanced portfolio across our customers, markets and products. 23 Sypris Electronics Outlook Ongoing demand in the electronic circuit card assembly industry across multiple manufacturing sectors continues to create shortages and extended lead times.

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Sypris Electronics Outlook Supply chain challenges and delays continued to impact business in 2023. The majority of the government aerospace and defense programs that we support require certain specific components that are sole-sourced to specific suppliers; therefore, the resolution of supplier constraints requires coordination with our customers or the end-users of the products.

Added

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.

Removed

We have partnered with our customers to qualify alternative components or suppliers and will continue to focus on our supply chain to attempt to mitigate the impact of component supply shortages on our business. Electronic component shortages may continue to be a challenge during 2024. We may not be successful in addressing these shortages and other supply chain issues.

Added

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.

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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.

Removed

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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.

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The House and Senate continue the legislative process on the FY 2024 budget. On December 22, 2023, the President signed the FY 2024 National Defense Authorization Act (NDAA) into law. The NDAA authorizes funding at the FRA cap of $886 billion for National Defense.

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Removed

Added

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Government spending agreement reached by House and Senate leaders on January 7, 2024, which comports with the FRA cap of $886 billion for national defense in FY 2024. Under the continuing resolution, funding at amounts consistent with appropriated levels for FY 2023 are available, subject to certain restrictions, but new contract and program starts are not authorized.

Added

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.

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Added

Removed

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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.

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Government funding and border security policy. Supplemental and emergency funding are not subject to the FRA cap. If enacted, this could ease DoD funding limits under the FRA or other limiting scenarios such as a prolonged continuing resolution.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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2023 filing

2024 filing

Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K and thus are not required to provide the quantitative and qualitative disclosures about market risk specified in Item 305 of Regulation S-K. 30

What changed in SYPRIS SOLUTIONS INC's 10-K — 2023 vs 2024

Top changes in SYPRIS SOLUTIONS INC's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other SYPR 10-K year-over-year comparisons