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What changed in SYPRIS SOLUTIONS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SYPRIS SOLUTIONS INC's 2024 and 2025 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 2025 report.

+168 added−164 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-27)

Top changes in SYPRIS SOLUTIONS INC's 2025 10-K

168 paragraphs added · 164 removed · 129 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe focus on those markets where we believe we have the expertise, qualifications and leadership position to sustain a competitive advantage. We target our resources to support the needs of industry participants that embrace technological innovation and flexibility, coupled with multi-year contractual relationships, as a strategic component of their supply chain management.
Biggest changeWe target our resources to support the needs of industry participants that embrace technological innovation and flexibility, coupled with multi-year contractual relationships, as a strategic component of their supply chain management. These contracts, many of which are sole-source by part number, have historically created opportunities to invest in leading-edge processes or technologies to help our customers remain competitive.
Over the long-term, we may consider the strategic acquisition of assets to consolidate our position in our core markets, expand our presence outside the U.S., create or strengthen our relationships with leading companies and expand our range of products in return for multi-year supply agreements.
Pursue the Strategic Acquisition of Assets . Over the long-term, we may consider the strategic acquisition of assets to consolidate our position in our core markets, expand our presence outside the U.S., create or strengthen our relationships with leading companies and expand our range of products in return for multi-year supply agreements.
We will consider assets that can be integrated with our core businesses and that can be used to support other customers, thereby improving asset utilization and achieving greater productivity, flexibility and economies of scale. Grow Through the Addition of New Value-Added Manufacturing Capabilities.
We will consider assets that can be integrated with our core businesses and that can be used to support other customers, thereby improving asset utilization and achieving greater productivity, flexibility and economies of scale. 3 Grow Through the Addition of New Value-Added Manufacturing Capabilities.
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.
In addition to contract awards from DoW prime contractors related to weapons systems, electronic warfare and infrared countermeasures in our traditional aerospace and defense markets, we have also been awarded subcontracts for manufacturing services to the communication and navigation markets, which require our advanced capabilities for delivering products for complex, high cost of failure platforms.
Our manufacturing contracts for the aerospace and defense electronics market are generally sole-source by part number. Our customers include large aerospace and defense companies such as Northrop Grumman Corporation (Northrop Grumman), Lockheed Martin (Lockheed), L3Harris Technologies (L3Harris), Raytheon Technologies including Collins Aerospace Systems (Raytheon), BAE Systems (BAE) and Analog Devices, Inc. (ADI).
Our manufacturing contracts for the aerospace and defense electronics market are generally sole-source by part number. Our customers include large aerospace and defense companies such as Northrop Grumman Corporation (Northrop Grumman), Lockheed Martin (Lockheed), L3Harris Technologies (L3Harris), Collins Aerospace Systems (RTX Corporation), BAE Systems (BAE) and Analog Devices, Inc. (ADI).
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.
Sypris Technologies represented approximately 43% of our net revenues in 2025. 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.
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.
Customer Concentration Our five largest customers in 2025 were Northrop Grumman, Detroit Diesel, SubCom, LLC (SubCom), ADI and Sistemas Automotrices de Mexico, S.A de C.V. (Sistemas), which in the aggregate accounted for 63% of net revenue.
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.
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. In 2025, Northrop Grumman, Detroit Diesel and SubCom, represented approximately 23%, 13% and 11% of our net revenue, respectively.
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.
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. 2 Sypris Electronics accounted for approximately 57% of net revenue in 2025. Our Markets Sypris Technologies.
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.
For each of the years ended December 31, 2025 and 2024, “other (income) expense, net” included foreign currency translation losses of less than $0.3 million. Net revenues from our Mexican operations were $31.7 million, or 26%, and $53.3 million, or 38%, of our consolidated net revenues in 2025 and 2024, respectively.
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 2025, net loss from our Mexican operations was $0.1 million, as compared to our consolidated net loss of $6.3 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, 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 2024, Northrop Grumman, Sistemas, and Detroit Diesel, represented approximately 23%, 21% and 11% of our net revenue, respectively. No other customer accounted for more than 10% of our net revenue in 2025 or 2024. Geographic Areas and Currency Fluctuations Our operations are located in the U.S. and Mexico.
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.
Human Capital As of December 31, 2025, we had a total of 548 employees, of which 406 were engaged in manufacturing, 14 were engaged in sales and marketing, 62 were engaged in engineering and 66 were engaged in administration. Approximately 224 of our employees were covered by collective bargaining agreements with various unions that expire on various dates through 2028.
We will continue to prioritize our resources to support the needs of industry leaders that embrace multi-year contractual relationships as a strategic component of their supply chain management and have the potential for long-term growth.
We will continue to prioritize our resources to support the needs of industry leaders that embrace multi-year contractual relationships as a strategic component of their supply chain management and have the potential for long-term growth. We prefer contracts that are sole-source by part number so we can work closely with the customer to the mutual benefit of both parties.
Our manufacturing processes frequently involve the fabrication or assembly of a product or subassembly according to specifications provided by our customers. We strive to enhance our manufacturing capabilities by advanced quality and manufacturing techniques, lean manufacturing, continuous flow manufacturing, six sigma, total quality management, stringent and real-time engineering change control routines and total cycle time reduction techniques.
We strive to enhance our manufacturing capabilities by advanced quality and manufacturing techniques, lean manufacturing, continuous flow manufacturing, six sigma, total quality management, stringent and real-time engineering change control routines and total cycle time reduction techniques.
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.
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.
The industry has continued to grow with more companies developing printed circuit board assembly capabilities and others entering the market via mergers and acquisitions of smaller companies. This competitive business environment, along with the impact of federal government spending uncertainties in the U.S. and the allocation of funds by the U.S.
The industry has continued to grow with more companies developing printed circuit board assembly capabilities and others entering the market via mergers and acquisitions of smaller companies.
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.
While the U.S. presidential administration has announced their proposal for a significant increase in defense spending in FY 2027, we anticipate the federal budget, debt ceiling and regulatory environment will continue to be subject to debate and compromise shaped by, among other things, the new U.S. presidential administration and Congress, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions.
These contracts, many of which are sole-source by part number, have historically created opportunities to invest in leading-edge processes or technologies to help our customers remain competitive. 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.
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. Our manufacturing processes frequently involve the fabrication or assembly of a product or subassembly according to specifications provided by our customers.
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.
Supply chain volatility has been the primary driver for disruptions in the electronics manufacturing market for the past several years. Certain electronic component price increases and extensive lead-time issues are prevalent in many of the segments in the electronic manufacturing industry that we serve. These increases and extended lead times are expected to continue for the foreseeable future.
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.
The competitive business environment, together with evolving U.S. federal spending and Department of War (“DoW”) funding priorities, has influenced Sypris Electronics’ operating environment, even as demand across key defense and space markets has strengthened in recent periods. During 2024 and 2025, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026.
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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.
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Item 1. Business General We were formed as a Delaware corporation in 1997. We provide products and engineering, design, and manufacturing services for a variety of critical infrastructure sectors, including energy, space, communications, defense, transport, chemical, and water. Sypris serves its customers globally through its operations located in North America.
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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.
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We produce a wide range of manufactured products, often under multi-year, sole-source contracts. We focus on those markets where we believe we have the expertise, qualifications and leadership position to sustain a competitive advantage.
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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.
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The Administration published its FY 2026 budget request in June 2025. The budget request includes $848.3 billion in the base budget (discretionary) funding, and $113.3 billion in reconciliation (mandatory) funding for the DoW. The One Big Beautiful Bill Act passed the Senate and House and was signed by the President on July 4, 2025.
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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.
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The bill provides more than $150 billion in mandatory funding (inclusive of the $113.3 billion) for DoW available until September 30, 2029. The National Defense Authorization Act (NDAA) for FY2026 was signed into law on December 18, 2025. This legislation authorizes $901 billion for defense spending which includes an $8 billion increase over the President’s DoW budget request.
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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.
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On November 12, 2025, the President signed into law a continuing resolution funding the DoW through January 30, 2026. On January 20, 2026, Congress unveiled its final appropriations package, which includes the Defense Appropriations Act conference report.
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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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This legislation provides $839.2 billion in funding for the DoW representing an $8.4 billion increase over the topline in the President’s DoW budget request. On February 3, 2026, the Consolidated Appropriations Act of 2026 was passed, which further extended government funding through September 30, 2026.
Removed
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.
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Additionally, the U.S. presidential administration continues to take steps to evaluate government-wide and defense-specific staffing and procurement, which includes assessing mission priorities, procurement methods, program performance, and other factors and then potentially taking action based on those assessments. The impact on demand for our products and services and our business are difficult to predict.
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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 expected to cause challenges at the start of the 119th Congressional negotiations.
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We expect to compete for follow-on business opportunities as a subcontractor on future builds of several existing government programs.
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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.
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We are working with our customers to qualify alternative components or suppliers to mitigate the impact on our business. The majority of our aerospace and defense programs require specific components that are sole-sourced from specific suppliers; therefore, the resolution of supplier constraints requires coordination with our customers or the end-users of the products.
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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.
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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.
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We prefer contracts that are sole-source by part number so we can work closely with the customer to the mutual benefit of both parties. 3 Pursue the Strategic Acquisition of Assets .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe routinely experience cyber security threats, threats to our information technology infrastructure and attempts to gain access to our sensitive information, as do our customers, vendors, suppliers and subcontractors, including the threat of ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business, all of which may become more pronounced in the event of geopolitical events and other uncertainties, such as the war in Ukraine or the Israel and Gaza conflict.
Biggest changeSypris Electronics, as a U.S. defense subcontractor, and our Company overall, face cybersecurity threats, threats to the physical security of our facilities and employees and terrorist or criminal acts, as well as the potential for business disruptions associated with information technology failures and natural disasters. 12 We routinely experience cybersecurity threats, threats to our information technology infrastructure and attempts to gain access to our sensitive information, as do our customers, vendors, suppliers and subcontractors, including the threat of ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business, all of which may become more pronounced in the event of geopolitical events and other uncertainties, such as the military hostilities between Russia and Ukraine, Israel and Hamas, and the U.S., Israel and Iran.
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.
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; 11 ● 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; ● 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.
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.
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. Changes in interest rates and asset returns could increase our pension funding obligations and reduce our profitability.
Furthermore, even if we are successful in defending against a claim relating to our products, claims of this nature could cause our customers to lose confidence in our products and us. General Risks Fluctuations in foreign currency exchange rates have increased, and could continue to increase, our operating costs. We have manufacturing operations located in Mexico.
Furthermore, even if we are successful in defending against a claim relating to our products, claims of this nature could cause our customers to lose confidence in our products and us. 16 General Risks Fluctuations in foreign currency exchange rates have increased, and could continue to increase, our operating costs. We have manufacturing operations located in Mexico.
If insurance coverage, customer indemnifications and/or other legal protections are not available or are not sufficient to cover risks or losses, it could have a material adverse effect on our financial position, results of operations and/or cash flows. 17 We face other factors which could seriously disrupt our operations.
If insurance coverage, customer indemnifications and/or other legal protections are not available or are not sufficient to cover risks or losses, it could have a material adverse effect on our financial position, results of operations and/or cash flows. We face other factors which could seriously disrupt our operations.
The costs related to cyber security or other security threats or disruptions may not be fully insured or indemnified by other means. Additionally, obtaining external providers with expertise for assisting with the recovery from or defense against a cyber incident may not be obtainable on acceptable terms.
The costs related to cybersecurity or other security threats or disruptions may not be fully insured or indemnified by other means. Additionally, obtaining external providers with expertise for assisting with the recovery from or defense against a cyber incident may not be obtainable on acceptable terms.
If we are unable to purchase components from our suppliers, we may not be able to continue to service our customers which could adversely affect our financial position, results of operations and/or cash flows. Shortages or increased costs of utilities could harm our business and our customers.
If we are unable to purchase components from our suppliers, we may not be able to continue to service our customers which could adversely affect our financial position, results of operations and/or cash flows. 13 Shortages or increased costs of utilities could harm our business and our customers.
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.
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.
We endeavor to obtain insurance from financially solid, responsible, highly rated counterparties in established markets to cover significant risks and liabilities (including, for example, natural disasters, space launches and on-orbit operations, cyber security, hazardous operations, energetics and products liability). Not every risk or liability can be insured, and insurance coverage is not always reasonably available.
We endeavor to obtain insurance from financially solid, responsible, highly rated counterparties in established markets to cover significant risks and liabilities (including, for example, natural disasters, space launches and on-orbit operations, cybersecurity, hazardous operations, energetics and products liability). Not every risk or liability can be insured, and insurance coverage is not always reasonably available.
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.
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 45% and 36% of net revenue in 2025 and 2024, respectively. Budget uncertainty, the potential for U.S.
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.
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 2025 were Northrop Grumman, Detroit Diesel, SubCom, ADI, and Sistemas, which in the aggregate accounted for 63% of net revenue.
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.
The Company received the benefit of additional loans of $2.5 million during year ended December 31, 2024, and $3.0 million during the year ended December 31, 2025 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.
Similarly, expanding production for our energy-related products without effective process or quality controls could materially increase scrap rates and may impact the safety of our operating environment or expose our business to warranty risks and contractual violations. Cyber security risks could negatively affect operations and result in increased costs.
Similarly, expanding production for our energy-related products without effective process or quality controls could materially increase scrap rates and may impact the safety of our operating environment or expose our business to warranty risks and contractual violations. Cybersecurity and artificial intelligence risks could negatively affect operations and result in increased costs.
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).
Additionally, during the first quarter of 2026, the Company and GFCM amended the secured promissory note (the “Note”) to extend the maturity dates for $2.0 million of the obligation to April 1, 2027, $2.0 million to April 1, 2028, $5.0 million to April 1, 2029 and $3.0 million to April 1, 2030 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K).
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.
As reflected in the consolidated financial statements, the Company reported a net loss of $6.3 million and $1.7 million for the year ended December 31, 2025, and 2024, respectively, and cash used in operations of $5.7 million for the year ended December 31, 2025.
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 $1.7 million in 2024 and $1.6 million in 2023.
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 net losses of $6.3 million and $1.7 million in 2025 and 2024, respectively.
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. 14 Our ability to finance expansion or new business opportunities may be limited .
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.
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.
Certain Mexico employees are covered by an annually ratified collective bargaining agreement. These employees in Mexico represented approximately 36% of the Company’s workforce, or 200 employees as of December 31, 2025.
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.
Disputes with labor unions could disrupt our business plans. As of December 31, 2025, we had collective bargaining agreements covering approximately 224 employees (all of which were in Sypris Technologies), or 41% 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.
If we were to be audited and receive an adverse outcome in such an audit, we could be required to return the full amount of the PPP Loan and may potentially be subject to civil and criminal fines and penalties. We may not have the resources to repay the PPP Loan if required to do so by the federal government.
If we were to be audited and receive an adverse outcome in such an audit, we could be required to return the full amount of the PPP Loan and may potentially be subject to civil and criminal fines and penalties.
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.
Each of these factors could adversely affect operating results. As discussed below, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and at various times during 2024, 2025 and into 2026. Suppliers may not sell to us given our liquidity position.
On November 24, 2020, the Company submitted an application for forgiveness of the entire amount due on the PPP Loan. On June 28, 2021, the Company received notice from BMO that BMO had received confirmation from the SBA that the application for forgiveness of the PPP Loan had been approved.
On June 28, 2021, the Company received notice from BMO that BMO had received confirmation from the SBA that the application for forgiveness of the PPP Loan had been approved.
Although we implement various measures and controls to monitor and mitigate risks associated with these threats and to increase the cyber resiliency of our infrastructure and products, there can be no assurance that these processes will be sufficient.
Although we implement various measures and controls to monitor and mitigate risks associated with these threats and to increase the cyber resiliency of our infrastructure and products, there can be no assurance that these processes will be sufficient. Moreover, business policies and internal controls may not keep pace with rapidly evolving AI enabled threats.
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 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.
If they fail to deter, detect or report cyber incidents in a timely manner, we may suffer financial and other harm, including to our information, operations, performance, employees and reputation.
We depend on our customers, suppliers, and other business partners to implement adequate controls and safeguards to protect against and report cyber incidents. If they fail to deter, detect or report cyber incidents in a timely manner, we may suffer financial and other harm, including to our information, operations, performance, employees and reputation.
The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and early 2024, The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers during 2024 and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships.
The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships.
Our insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risks, which could adversely affect our profitability and overall financial position.
If such insurance is not available or not available on economically acceptable terms, our business could be materially and adversely affected. 17 Our insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risks, which could adversely affect our profitability and overall financial position.
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.
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.
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.
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.
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.
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. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and 2024.
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.
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.
Groundwater and other contamination has occurred at certain of our current and former facilities during the operation of those facilities by their former owners, and this contamination may occur at future facilities we operate or acquire.
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. 15 Groundwater and other contamination has occurred at certain of our current and former facilities during the operation of those facilities by their former owners, and this contamination may occur at future facilities we operate or acquire.
It is likely that the tight insurance market will continue into the foreseeable future. Our business requires that we maintain various types of insurance. If such insurance is not available or not available on economically acceptable terms, our business could be materially and adversely affected.
It is likely that the tight insurance market will continue into the foreseeable future. Our business requires that we maintain various types of insurance.
The effects of climate change create short and long-term financial risks to our business, both in the U.S. and Mexico. We have significant operations located in regions that have been, and may in the future be, exposed to significant weather events and other natural disasters.
We have significant operations located in regions that have been, and may in the future be, exposed to significant weather events and other natural disasters.
Oil prices are particularly sensitive to actual and perceived threats to global political stability and to changes in production from OPEC member states. The war in Ukraine could continue to contribute to the volatility in global oil and gas prices and continued sanctions against Russia could impact demand for our products and adversely affect our profitability.
Oil prices are particularly sensitive to actual and perceived threats to global political stability and to changes in production from OPEC member states.
Removed
Sypris Electronics, as a U.S. defense subcontractor, and our Company overall, face cyber security threats, threats to the physical security of our facilities and employees and terrorist or criminal acts, as well as the potential for business disruptions associated with information technology failures and natural disasters.
Added
The outbreak or escalation of military hostilities, including between Russia and Ukraine, Israel and Hamas, the U.S., Israel and Iran, continued instability in the Middle East, and the potential destabilizing effect such conflicts may pose for the global oil and natural gas markets could impact demand for our products and adversely affect our profitability.
Removed
Insider or employee cyber and security threats are also a significant concern for all companies, including ours. We depend on our customers, suppliers, and other business partners to implement adequate controls and safeguards to protect against and report cyber incidents.
Added
For example, the evolving use of artificial intelligence (“AI”) increases the risk of cyberattacks and data breaches, which themselves can evolve more rapidly when artificial intelligence is used to facilitate the attack.
Removed
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.
Added
Despite our network and application security, threat intelligence services, internal control measures, and physical security procedures we employ to safeguard our systems, we may still be vulnerable to a security breach, intrusion, or loss or theft of confidential client data, transaction data, or proprietary company information, which may harm our business, reputation and future financial results.
Removed
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.
Added
Use of artificial intelligence by our team members, whether authorized or unauthorized, could increase the risk that our intellectual property and other proprietary information may be unintentionally disclosed.
Added
Insider or employee cyber and security threats are also a significant concern for all companies, including ours. Use of artificial intelligence by team members, whether authorized or unauthorized, could increase the risk that intellectual property or other proprietary information is unintentionally disclosed.
Added
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.
Added
We may not have the resources to repay the PPP Loan if required to do so by the federal government. 14 On November 24, 2020, the Company submitted an application for forgiveness of the entire amount due on the PPP Loan.
Added
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. The effects of climate change create short and long-term financial risks to our business, both in the U.S. and Mexico.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe 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.
Biggest changeThe VP of Administration directs the development of a coordinated response strategy, entailing risk containment, notification processes, system restoration, incident documentation and assessment. 18 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.
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.
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.
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 enhanced cybersecurity training regularly.
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, 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.
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.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed8 unchanged
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.
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) Lease (2045) 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 (2031) 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
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.
Biggest changeOur common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” As of March 20, 2026, there were 434 holders of record of our common stock. No cash dividends were declared during 2025 or 2024. 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 2025. There were no shares of common stock repurchased during the three months ended December 31, 2024.
We do not anticipate paying dividends in 2026. There were no shares of common stock repurchased during the three months ended December 31, 2025.

Item 7. Management's Discussion & Analysis

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

66 edited+22 added−19 removed50 unchanged
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 .
Biggest changeIn addition, as used in the table, “NM” means “not meaningful.” Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 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 2025 2024 (Unfavorable) (Unfavorable) 2025 2024 (in thousands, except percentage data) Net revenue: Sypris Technologies $ 51,746 $ 75,207 $ (23,461 ) (31.2 )% 43.2 % 53.7 % Sypris Electronics 68,141 64,973 3,168 4.9 56.8 46.3 Total net revenue 119,887 140,180 (20,293 ) (14.5 ) 100.0 100.0 Cost of sales: Sypris Technologies 45,343 62,383 17,040 27.3 87.6 82.9 Sypris Electronics 65,146 57,907 (7,239 ) (12.5 ) 95.6 89.1 Total cost of sales 110,489 120,290 9,801 8.1 92.2 85.8 Gross profit: Sypris Technologies 6,403 12,824 (6,421 ) (50.1 ) 12.4 17.1 Sypris Electronics 2,995 7,066 (4,071 ) (57.6 ) 4.4 10.9 Total gross profit 9,398 19,890 (10,492 ) (52.8 ) 7.8 14.2 Selling, general and administrative 16,004 16,963 959 5.7 13.3 12.1 Operating (loss) income (6,606 ) 2,927 (9,533 ) NM (5.5 ) 2.1 Interest expense, net 1,631 1,684 53 3.1 1.4 1.2 Other (income) expense, net (1,960 ) 1,217 3,177 NM (1.6 ) 0.9 (Loss) income before income taxes (6,277 ) 26 (6,303 ) NM (5.2 ) 0.0 Income tax expense, net 61 1,706 1,645 96.4 0.1 1.2 Net loss $ (6,338 ) $ (1,680 ) $ (4,658 ) (274.1 ) (5.3 )% (1.2 )% Net Revenue .
We account for stock-based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. The Company uses historical Company and industry data to estimate the expected price volatility.
We account for stock option based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. The Company uses historical Company and industry data to estimate the expected price volatility.
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.
Our primary sources of funds to meet our liquidity and capital requirements include cash on hand, funds generated through revenue growth from the Company’s consolidated operations and reductions in the Company’s investment in working capital. Based upon our current forecast, we believe that we will have sufficient liquidity to finance our operations for the next twelve months.
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. 26 Income Taxes.
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.
Any of these actions could materially harm our business, results of operations and future prospects. And as noted above, additional financing may not be available to us. Material Cash Requirements Gill Family Capital Management Note .
Any of these actions could materially harm our business, results of operations and future prospects. And as noted above, additional financing may not be available to us. 30 Material Cash Requirements Gill Family Capital Management Note .
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, 2024 or 2023. Pension Plan Funded Status.
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, 2025 or 2024. Pension Plan Funded Status.
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.
Overall, the sector is positioned for growth, with companies focusing on technological innovation, strategic partnerships, and supply chain optimization to maintain competitiveness in a rapidly evolving defense and aerospace market. During 2024 and 2025, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026.
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.
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 2026, which may continue thereafter and could negatively impact our results of operations.
Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated Other Comprehensive Income and amortized to expense following the corridor approach.
Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated Other Comprehensive Loss and amortized to expense following the corridor approach.
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.
In addition to contract awards from DoW prime contractors related to weapons systems, electronic warfare and infrared countermeasures in our traditional aerospace and defense markets, we have also been awarded subcontracts for manufacturing services to the communication and navigation markets, which require our advanced capabilities for delivering products for complex, high cost of failure platforms.
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.
Our U.S. defined benefit pension plans are closed to new entrants and there were no participants still accruing benefits under any of the plans in 2025. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets.
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.
The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $12.0 million in principal as of December 31, 2025 and $9.0 million as of December 31, 2024. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill and one of our directors, R.
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.
Based on the current funded status of our U.S. plans, we expect to contribute $0.3 million during 2026, which represents the minimum funding amounts required by federal law. Reserve for Excess, Obsolete and Scrap Inventory.
Interest on the Note is payable quarterly, and the rate is reset on April 1 of each year at the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period.
Interest on the Note is payable quarterly, unless the deferral option is elected, and the rate is reset on April 1 of each year at the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period.
The table presented below compares our segment and consolidated results of operations from 2024 to 2023.
The table presented below compares our segment and consolidated results of operations from 2025 to 2024.
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.
A change in the assumed rate of return on plan assets of 100 basis points would result in a $0.2 million change in the estimated 2026 pension expense. At December 31, 2025, we have $6.2 million of unrecognized losses relating to our U.S. pension plans.
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.
Plan liabilities at December 31, 2025 are based upon a discount rate of 5.20% which reflects the Above Mean Mercer Yield Curve rate as of December 31, 2025 rounded to the nearest 5th basis point.
Additionally, during the first quarter of 2025, the Company and GFCM amended the Note to increase the principal amount by $3.0 million to $12.0 million, extend the maturity dates for $2.0 million of the obligation to April 1, 2026, $2.0 million to April 1, 2027, $5.0 million to April 1, 2028 and $3.0 million to April 1, 2029 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K).
Additionally, during the first quarter of 2026, the Company and GFCM amended the Note to extend the maturity dates for $2.0 million of the obligation to April 1, 2027, $2.0 million to April 1, 2028, $5.0 million to April 1, 2029 and $3.0 million to April 1, 2030 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K).
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.
The expected increase in revenue during 2026 attributable to order backlog is expected to favorably impact overhead absorption, and the contribution margin from higher volumes is further expected to generate gross profit expansion. Selling, General and Administrative. Selling, general and administrative expense decreased $1.0 million to $16.0 million in 2025 as compared to $17.0 million in 2024.
Deferred tax assets are also recorded for operating losses and tax credit carryforwards. However, ASC 740 requires that a valuation allowance be recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. This assessment is largely dependent upon projected near-term profitability including the effects of tax planning.
However, ASC 740 requires that a valuation allowance be recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. This assessment is largely dependent upon projected near-term profitability including the effects of tax planning.
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.
Based on the most recent analysis of projected portfolio returns, we concluded that the use of 3.95% for the Louisville Hourly Plan, 4.65% for the Marion Plan and 4.45% for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2025 was appropriate.
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.
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.
Sypris Technologies, which is comprised of Sypris Technologies, Inc. and its subsidiaries, generates revenue primarily from the sale of forged, machined, welded and heat-treated steel components primarily for the heavy commercial vehicle and high-pressure energy pipeline applications.
We are organized into two business segments, Sypris Technologies and Sypris Electronics. Sypris Technologies, which is comprised of Sypris Technologies, Inc. and its subsidiaries, generates revenue primarily from the sale of forged, machined, welded and heat-treated steel components primarily for the heavy commercial vehicle and high-pressure energy pipeline applications.
The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers during 2024 and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships.
The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and 2024, The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships.
We account for income taxes as required by the provisions of ASC 740, Income Taxes , under which deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities measured using enacted tax rates.
We account for income taxes as required by the provisions of ASC 740, Income Taxes , under which deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities measured using enacted tax rates. 26 Management judgment is required in determining income tax expense and the related balance sheet amounts.
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.
At December 31, 2025, we had approximately $6.8 million of cash and cash equivalents, of which $1.8 million was held in jurisdictions outside of the U.S. that, if repatriated, could result in withholding taxes.
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.
During the year ended December 31, 2025, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $3.0 million to $12.0 million, (ii) extend the maturity dates for $2.0 million of the obligation to April 1, 2026, $2.0 million to April 1, 2027, $5.0 million on April 1, 2028 and the balance of $3.0 million on April 1, 2029, and (iii) allow for the deferral of payment for up to 100% of the interest due on the Note to April 1, 2026.
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.
As of December 31, 2025, the Company had $1.4 million outstanding under equipment financing facilities, with payments due through 2030, and a weighted average interest rate of 6.9%. Purchase Commitments. We had purchase commitments totaling approximately $25.2 million at December 31, 2025, primarily for inventory. Cash Flows from Operating, Investing and Financing Activities Operating Activities.
Our actual results could differ materially from the results anticipated in the forward-looking statements as a result of a variety of factors, including those discussed in “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. Overview We are a diversified provider of truck components, oil and gas pipeline components and aerospace and defense electronics.
Our actual results could differ materially from the results anticipated in the forward-looking statements as a result of a variety of factors, including those discussed in “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
During the first quarter of 2025, the Company further amended the Note to increase the principal amount by $3.0 million with a maturity date of April 1, 2029, extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2026.
During the first quarter of 2026, the Company further amended the Note to extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2027.
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.
As of December 31, 2025, the Company had $4.6 million outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2031 and a weighted average interest rate of 13.1%. Equipment Financing Obligations.
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.
This additional $5.5 million loaned to the Company by GFCM in 2024 and 2025 was approved by the Audit Committee and provided the Company with necessary liquidity.
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.
Increasing demand for advanced technologies, supply chain diversification, and continued strong government defense spending along with geopolitical factors, including ongoing U.S.-China trade tensions and regulatory shifts, are prompting companies to adopt supply chain resilience strategies, such as "friendshoring", nearshoring and onshoring that benefit domestic suppliers.
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 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.
This change in accounts payable was driven by an effort within Sypris Electronics to pay down past due receivables and reduce inventory purchases during the period.
Accounts payable decreased during 2025, resulting in a use of cash of $8.2 million. This change in accounts payable was driven by an effort within Sypris Electronics to pay down past due payables and reduce inventory purchases during the period.
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.
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. Income Taxes. The 2025 income tax provision consists of a current tax benefit of $0.1 million and deferred tax expense of $0.1 million.
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.
Sypris Technologies derives its revenue from the sale of forged and finished steel components and subassemblies and high-pressure closures and other fabricated products. Net revenue for Sypris Technologies decreased $23.5 million from the prior year to $51.7 million in 2025. The net revenue decrease was primarily attributable to the cyclical decline in the commercial vehicle market.
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.
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.
The decrease in inventory in 2024 resulted in a source of cash of $9.1 million. The decrease in inventory was primarily as a result of a ramp up of shipments within Sypris Electronics and the reflection of our strategic inventory management efforts. Accounts payable decreased during 2024, resulting in a use of cash of $8.2 million.
The decrease in inventory in 2025 resulted in a source of cash of $13.3 million. The decrease in inventory was primarily as a result of a ramp up of shipments within Sypris Electronics and the reflection of our strategic inventory management efforts.
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.
The Company received the benefit of additional loans of $3.0 million and $2.5 million during the years ended December 31, 2025 and 2024, respectively from Gill Family Capital Management, Inc. (“GFCM”) to help the Company manage its liquidity during those periods.
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. We expect to compete for follow-on business opportunities as a subcontractor on future builds of several existing government programs.
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.
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.
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.
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.
From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which arise after the placement of the customer’s order may cause us to miss projected delivery dates.
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 2024 income tax provision consists of current tax expense of $1.5 million and deferred tax expense of $0.2 million. The current tax expense in 2025 and 2024 includes taxes accrued by our Mexican subsidiary and domestic state income taxes and adjustments.
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.
Prepaid expenses and other assets decreased during 2025 resulting in cash provided of $0.6 million primarily as a result of decreased contract assets and capitalized costs associated with programs in the startup phase of production at Sypris Electronics. Investing Activities. Net cash provided by investing activities was $2.2 million during the year ended December 31, 2025.
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.
The decrease in selling, general and administrative expense for the year ended December 31, 2025 was primarily as a result of lower consulting costs, reduced headcount and favorable medical claims. Selling, general and administrative expense increased as a percentage of revenue to 13.3% for the year ended December 31, 2025 from 12.1% for the year ended December 31, 2024.
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.
The 2025 and 2024 deferred tax expense includes net changes in the foreign deferred tax assets during the year. 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.
Actual income taxes paid may vary from estimates, depending upon changes in income tax laws, actual results of operations and the final audit of tax returns by taxing authorities. Tax assessments may arise several years after tax returns have been filed. We believe that our recorded income tax liabilities adequately provide for the probable outcome of these assessments.
Tax assessments may arise several years after tax returns have been filed. We believe that our recorded income tax liabilities adequately provide for the probable outcome of these assessments. Deferred tax assets are also recorded for operating losses and tax credit carryforwards.
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.
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.
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.
Revenue for Sypris Technologies is expected to decrease slightly in 2026, due to the anticipated decline in the commercial vehicle market during the first half of 2026, partially offset by higher energy component sales and new program expansion with existing customers in the commercial vehicle market. 28 Sypris Electronics derives its revenue primarily from circuit card and full “box build” manufacturing, high reliability manufacturing and systems assembly and integration.
Scott Gill. GFCM, Jeffrey T. Gill and R.
Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company.
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.
Sypris Technologies Outlook The North American Class 8 commercial vehicle market experienced a downturn in 2025, in addition to the automotive and sport utility vehicle markets also served by Sypris Technologies.
Net cash used in financing activities in 2023 included principal payments on finance lease and equipment financing obligations of $1.7 million and payments of $0.1 million for minimum statutory tax withholdings on stock-based compensation.
Net cash provided by financing activities was $0.8 million in 2025 and was comprised of proceeds from the Note of $3.0 million, partially offset by payments on finance leases and equipment financing obligation of $2.1 million and $0.1 million for minimum statutory tax withholdings on stock-based compensation.
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.
Interest Expense, Net. Interest expense for the year ended December 31, 2025 decreased $0.1 million due to the reduction in interest incurred on extended terms on certain accounts payable for Sypris Electronics, partially offset by an increase in the weighted average debt outstanding.
Management judgment is required in determining income tax expense and the related balance sheet amounts. In addition, under ASC 740-10, Accounting for Uncertainty in Income Taxes, judgments are required concerning the ultimate outcome of uncertain income tax positions.
In addition, under ASC 740-10, Accounting for Uncertainty in Income Taxes, judgments are required concerning the ultimate outcome of uncertain income tax positions. Actual income taxes paid may vary from estimates, depending upon changes in income tax laws, actual results of operations and the final audit of tax returns by taxing authorities.
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.
The conflicts in the Middle East, including military hostilities between Israel and Hamas and the U.S., Israel and Iran, the war between Russia and Ukraine and inflationary pressures have also led to disruption, instability and volatility in global markets and industries that could negatively impact our operations. 23 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.
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.
Sypris Electronics Outlook Ongoing demand in the electronic circuit card assembly industry across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain components approach a year or more. We factor supplier-provided lead times into internal planning schedules and new customer quotations.
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.
Net revenue for Sypris Electronics increased $3.2 million to $68.1 million in 2025. The increase in revenue for the year ended December 31, 2025 was primarily related to the ramping of production during the year on several new programs. This was partially offset by the completion of shipments under one of its long-term contracts.
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.
Net cash used in investing activities for the year ended December 31, 2024 was comprised of capital expenditures of $1.1 million. Financing Activities.
Net cash provided by operating activities was $2.0 million in 2024, as compared to cash used of $11.1 million in 2023. The aggregate increase in accounts receivable in 2024 resulted in a usage of cash of $1.8 million as a result of an early payment from a Sypris Technologies customer in the prior year, which was not repeated in 2024.
Net cash used in operating activities was $5.7 million in 2025, as compared to cash provided of $2.0 million in 2024. The aggregate decrease in accounts receivable in 2025 resulted in a source of cash of cash of $0.7 million as a result of the timing of shipments during the period.
Interest expense for the year ended December 31, 2024 increased $0.9 million due to an increase in the weighted average debt outstanding and an increase in the weighted average interest rate. Our weighed average debt outstanding under the Note increased to $8.7 million during 2024 from $5.0 million during 2023.
The weighted average debt outstanding under the Note increased to $11.4 million during 2025 from $8.7 million in 2024. Other (Income) Expense, Net. Other (income) expense, net, was income of $2.0 million in 2025 as compared to expense of $1.2 million for 2024.
The order backlog for Sypris Electronics is expected to support an increase in revenue during 2025. Gross Profit.
The order backlog for Sypris Electronics is expected to support an increase in revenue during 2026. Gross Profit. Sypris Technologies’ gross profit decreased $6.4 million to $6.4 million in 2025 as compared to $12.8 million in the prior year due to the significant decrease in volumes and lower absorption of fixed overhead costs as a result of lower production.
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.
On February 3, 2026, the Consolidated Appropriations Act of 2026 was passed, which further extended government funding through September 30, 2026. 24 While the U.S. presidential administration has announced their proposal for a significant increase in defense spending in FY 2027, we anticipate the federal budget, debt ceiling and regulatory environment will continue to be subject to debate and compromise shaped by, among other things, the U.S. presidential administration and Congress, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions.
As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023, and the Company is continuing to aggressively manage working capital to improve liquidity. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and early 2024.
As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and at various times during 2024, 2025 and into 2026.
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.
According to industry publications, the outlook for 2026 and 2027 is forecasting a slight increase in production over 2025, before increasing 27% in 2028.
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.
The decrease in gross profit for the year ended December 31, 2025 was primarily a result of an unfavorable mix of programs and delays of certain customer deliveries, which has limited our ability to ramp up production to the levels anticipated and resulted in increased costs and decreased operational efficiency.
Removed
We offer a wide range of manufactured products, often under multi-year sole-source contracts. We are organized into two business segments, Sypris Technologies and Sypris Electronics.
Added
Overview We provide products and engineering, design, and manufacturing services for a variety of critical infrastructure sectors, including energy, space, communications, defense, transport, chemical, and water. Sypris serves its customers globally through its operations located in North America. We produce a wide range of manufactured products, often under multi-year, sole-source contracts.
Removed
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.
Added
New heavy-duty truck demand has historically been cyclical and is particularly sensitive to the industrial sector of the economy, which generates a significant portion of the freight tonnage hauled by commercial vehicles. During 2025, production of Class 8 trucks in North America decreased 24% from 2024.
Removed
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.
Added
Inflationary costs are expected to continue through 2026. The electronic circuit card assembly industry is highly competitive, and demand can be volatile from period to period.
Removed
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.
Added
While we do not serve as a prime contractor to the U.S. government, we serve as a subcontractor on various U.S. government programs. Funding for U.S.
Removed
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.
Added
Government programs is subject to a variety of factors that can affect our business, including the U.S. presidential administration’s budget requests and procurement priorities and policies, annual congressional budget authorization and appropriation processes, and other U.S. government domestic and international priorities.
Removed
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.
Added
U.S. government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term. The U.S. presidential administration published its FY 2026 budget request in June 2025. The budget request includes $848.3 billion in the base budget (discretionary) funding, and $113.3 billion in reconciliation (mandatory) funding for the DoW.
Removed
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.
Added
The One Big Beautiful Bill Act passed the Senate and House and was signed by the President on July 4, 2025. The bill provides more than $150 billion in mandatory funding (inclusive of the $113.3 billion) for DoW available until September 30, 2029. The National Defense Authorization Act (NDAA) for FY2026 was signed into law on December 18, 2025.

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