CPS Technologies (CPSH) 7 Mar 232022 Q4 Earnings call transcript

Good day everyone and welcome to the CPS Technologies 2022 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Chuck Griffith. Sir, the floor is yours.

Thank you, Matthew, and good afternoon, everybody. Anthony President Corporate and by Michael Officer, today our McCormack, Chief joined Koski, Development our and I'm Executive Officer. his offer annual will comments fourth our Michael quarter results. on and

I XXXX statements in in Litigation economic CPS' actual the factors. exist and the demands the conference the environment. the those subject of include business that to could are Before results many strictly competitive uncertainties operations are Private impact from materially and Reform Russian this considered in These uncertainties cause to and the differ forward-looking factors we Such invasion that the Securities conditions, statements call begin any COVID-XX, to within call, of should forward-looking out be of point would Ukraine, not market statements. portion of historical that Act like of meaning

call to year Now to and I'll fourth his the quarter the over turn results. perspectives on the Michael offer

pleased afternoon, XXXX. profit Thank the $XXX,XXX of you, operating revenues of December good the revenues and $XXX,XXX an fourth and fourth the XX, ended Chuck, we quarter for everyone. million compares operating quarter an to $X.X and of with XX, This quarter for profit ending announce of million XXXX. December are $X.X Today

revenue since operating strategy history. our XX% For ever growth with organic my Fiscal $XX.X company's of delighted revenues The the the fiscal consistent growth for highest been fiscal the XX profit to reflects and to has year, rate we of as annual fiscal year year million in previous 'XX. arrival. are year in terms in year 'XX the year compared report revenues of million over $XX.X

'XX. to fiscal reporting over we in $X.X year, compared operating to year profit fiscal year. XXX,XXX compared is million fiscal improvement XXX% the an last are in This For

an also delighted gross also X% report year our are fiscal This third marks to year. margin of the profitability. over improvement entire in consecutive impressive We

reaffirm our continues growth the sample for coupled over a year larger data strategy over of of book-to-bill working fiscal base. Our is to 'XX X.X growing with

that will increased orders fiscal optimistic the operating now, but on matters in into cautiously more 'XX profits sales more moving are steadily fiscal Chuck year speak progress will of call, business I'll forward translate about We later 'XX. the for discuss the the overall increasing revenue in and detail. directly financial

million Thank totaled a you, decrease. in Michael. Revenues QX million XXXX, generated XXXX, $X.X with QX compared in $X.X slight

For the XXXX $X.X XX% QX in year XXXX for in totaled margin with for XXXX of or 'XX at million gross the Gross This fiscal revenue history. million sales. million million $X.X XX% totaled revenues best of compared sales. represents in $XX.X $XX.X The to of year XXXX. company QX, margin compares

with costs For the and factory product higher yields. due XXXX, margin of million for was XXXX. million, as $X.X factory impact totaled gross margin to in well as primarily $X.X increase fixed on sales improved This compared efficiencies

and general SG&A XXXX. an QX, administrative expenses XX% of Selling QX, expenses totaled in X.X in million compared with increase XXXX, million when of $X.X

increase. The which For early to million corporate due to performance the new compensation in hired contributed due XXXX. to in pandemic. this position. company XXXX financial limited company higher due in strong factors higher in costs to travel XXXX compared were and 'XX, incurred million fiscal travel of significantly XXXX, in Several $X.X variable its nature XXXX to COVID-XX costs the a a totaled The officer development $X.X SG&A was

in operating XXXX, QX of company generated XXXX. of with The income operating $XXX,XXX income in QX, $XXX,XXX compared

with $X.X CPS's $X.X totaled million XXXX. represents highest compared income XXXX, million our in This history. in annual operating For operating income

inventory at million net The of primarily increase cash, increases cash quarter end the offset higher from increasing to to the balance hand our on support was in due to by with XXXX. Turning ended the million $X.X sheet. sales. of We profit, $X.X somewhat

remains XXXX in under available it ATM the and no Although program. raised us, was to cash additional open

to down at $X.X December revenue quarter, shipments than for for at the totaled $X.X occurring Prepayments from shipped receivable XXXX wait typically were the receivable in to in pay fourth thus used reducing to million XXXX immediately of quarter. XX December fourth received days in XX, their change bill later. XX, customer the the pay reduction to Accounts having to accounts rather deferred XX million, was XXXX. due This

XX As our at days days outstanding end the of days our compared such, XX receivable, sales date to to accounts improved XXXX.

have $XXX,XXX, due primarily the tax other of also receivable We credit. to employee retention

to due the to million $X.X compared of million support in our materials increased to needed end XX, increase XX, totaled in 'XX, raw December This sales process work Inventories at at 'XX. December growth. $X.X is inventory and

XXXX, for addition XXXX not the in several in ended large X.X stated four above. were December had early inventory in orders the inventory period quarters we ship for to until increase X.X the compared XXXX. In the times to XX, an recent was scheduled that turnover reasons most times, The

to December This XXXX million at final large XXXX. Turning December from payments of for costs. accruals sales for $X.X represents change liability of these inventory our impact and Deferred accruals the at XXXX. XX, 'XX, $X.X predominantly side. end due totaled revenue to is increased the at for to prepayments large million down defray from orders. in XX, large $X.X on $X.X XXXX Deferred Payables of million the restructuring December XXXX orders XX, purchases cash help the on million revenue to

to like turn I'd to discussion, Michael. further for over the back call So

a profits. year! new established and Thank We you, Chuck. for terms the in What records operating company revenue fantastic of

our thank patience. First, I would their to investors for like

Your material against support was appreciated. competed larger significantly small truly science years companies vision a continuously than we past as CPS to over company two the

our an in incredible engineering confidence I number up beginning essential the engineered us to and pent our have compete to win the for investors there thank and of to success. their is are we resource realize the We products incredibly demand for must giving capabilities. manufacturing and is customers continued increasing

the did shareholder creating redefined what course like the value over an and moving year all looks at employees CPS. Lastly, outstanding forward of the job

within As Transfer, We achieve of two that cutting of awards. only to even year, the federal to to edge at government. our greater accomplishments Innovative these most Business authoring the assembled awards of proposals highest various technical Small we results. won multi-year over but an Not multimillion Small and already hopeful return beginning history, did Research, levels four and I'm for the commerce transitioned an the look to I Business STTR convert and MRP-ERP integrated awards are we very outdated agencies numerous help the We system some SBIR phase execute team. and from profitable are team back the have proud routes, to is begin ERP in Technology we us that to

what's are continuing processes tools next? in to is the So and obvious to an even build people, We invest greater question company.

we We know support the even with are quite progress aspects and finance sales, activities. do business; of with I'm can we more. product making not pleased content and are all results operation, development,

by development Our Kosky. business run now are Anthony efforts being

the We imminent and retirement our to Vice are see in her her Oliveira, The sad President of best the Cheryl Rick. chapter. of and husband next Sales, with

our hermetic significantly has and packaging including a his and established built team alter growth future product all upon some lines; armor. base in that of Anthony opportunities, could now three and that numerous Cheryl matrix clients of composites, our prospects have breakout have metal

product team customer Business Group jointly building on and even part Development the restructured development has more growing transition, opportunities of our the to a identifying focus and relations robust sales As new pipeline. build technical new

and and near energy long term As we defense, markets with a in significant aerospace result, opportunities alternative have several developing upside.

both Given and too competitive application I cannot divulge sensitivities, many details.

allow convert to growth. continue ability effectively listen most identify and I will to opportunities respond and unique that solutions advanced to issues However, new solve confident their material our avenues diverse our these for and with am customers that challenging us

business Under research the Steve as Dr. and in reenergized STTR domestic potential leadership to our development contract Dr. development commercialization. competitive are small federal and that we SBIR and R&D Catcher program and for with highly evidenced awards. Marco engage programs by the research business encourage of These Chanaro, awards the have service

greater intellectual Dan strides they the year The programs, sole protection within federal have are these ERP forward. afforded led informed improvements, significant of to additional and has margin evidenced Barton by rights as addition R&D integration the X% through in more MRP gross manufacturing to the they the during and our past to Operations government. positioned new and business with advance for the moving to make enabled are results improvement decisions by yield commercialization made property In even source on 'XX. fiscal process

we a made executed organization to top concerted line the the with have plan. ensure grew the line effort Dan's and We bottom

of with years, the As and and CPS fiscal improving we into beyond look the up is 'XX on year years past success volumes. future production continuing to follow 'XX

solutions material enable even advancing products of We customers efficiently. have a function more plethora will our that to

the in every an parts more with of aerospace defense dialogue several that are qualifying large are see CPS and enabling value technology. We as and week clients

The is at quite future bright CPS.

several defense staff and and improving consumer working significant have growth product and future while The opportunities commercial markets on opportunities profitability. aerospace within in scale towards is We are lines. also three These are all we large product focusing electronics. entire the diligently offerings

of 'XX our year financial continued with shareholder recent support are the We ever and performance growing pleased fiscal base.

and and that quarter-to-quarter improve as incrementally expect continually we we forward We will year-to-year. move

diversification and more are global customer have we product We future. positioned our the the that marketplace diversification more the this business the but growing and will lead aware consistent results to have of unpredictability of offerings that believe base. We in in

and both solution ideal, focused additional customers' lots the opportunities today, have keep small our that the for on We innovative large, of finding needs. material staff entire

a Board like my investors, In and patience a their more continued truly the to lot leadership, material that just to offer is belief clients. closing unique to of prepared science you remarks, our my for would for and your CPS I with Directors confidence thank thank in company faith for

year our teammates 'XX you prosperous to looking of are and all another thank agents, a and we beyond. tremendous For employees, for forward and

time. are and I questions answer this and Chuck you. prepared any at to Anthony Thank

question this from At session. first answer we'll a Michael Instructions] conducting time, Certainly. [Operator Your question White. coming be is and

Your line is live.

the record impressive a setting margins. and XXXX on gross congratulations Mike, in very Hey, increase

Dan shareholders question, to the you thank to Before buyback? service as you tremendous in and to XXXX country I I are of in operating cash ask income guys a at $X.X job as that All question my I'm cash record my your long or well like to the shareholder, right. the for is CPS. plan Barton and a term share acknowledge million dividend doing back would any get balances

] is to comments I about privilege Michael. for cash The Thank there position our your [Dan This us is help Mike. Hi, grow Michael. and service. It currently was you serve. to

plans growth directors, greater share of in in options board build program we we the up give they're to deciding mode the to A buyback We the But cash. and expand recommendation using or more to a building made are is and to-date, I operations company. have that. cash a a we're are on that and obviously have not dividend growth requires the for factor growth us

pleased with And so our position we're on right very our now cash.

position. strong Very Yes.

you Michael. the Thank for question,

you. Thank

question live. is next line Your from is coming [indiscernible].Your

year. Congratulations earnings updates Yes. us your and the Hi, Can sale Mike. Chuck. you give on efforts? Hi, record armor some on

It nice you Erin. a again. to talk year. to Sure, tremendous Yes,

really entire think performed team I well. the

armor Our are continuing efforts to planned. go as

the our we may additional innovative only continue announced to to solution the Erin, to even San strike we overseas still production based And for down during the of and applications of end military. a armor that advance a U.S. Texas, to provides those turn, year research try Southwest final with Not small the I have our in evaluation our decision qualify UH panels award. by greater KP, business the new the in testing in Antonio, a Navy. for 'XX, partner orders armor award Institute to also on do we floor. We formations the to to blackhawk partners larger who think won XX think, Research develop continue

this In some to past, have update vehicles referenced a conference military us calls, contract on the South Fantastic. program? possible going on for Asia. armor you you Can

Yes.

well. program going is alive that still and So

do to continue testing. We optimization

have production we new mounting that We that moving is then test we into expect provisions make made to hopefully, I sometime like testing so integration happen actually will now a [Erin] the for which are QX year. onto and And later a in be decision vehicle. where in alluded phase will to

competition or? Great. system on have Do you this

have always competition. Well, Yes. we Right.

it's one that of of for defeat. armor a threats the to so And lightweight the trying is relatively advantages we're system our

or aluminum, the advantage So when you go vehicle provides steel with monolithic operate significant a in which have intended. to as we weight,

second with I so and we chassis. lots on and think, recall, as they third the vehicles the were of war during much train you U.S. that there of instances had vehicle overburdening armor front were to drive and where effects

significant solution one right. is the advantages I stop a our of threat lightweight to of So think

Great.

are programs. use when they Are On vehicles. mostly old that of systems chance they could armored upgrade These there the new any systems? the your

certainly there's to Right. do Well, Yes. that. opportunity always

what is up significant has obviously Anthony in schedule U.S. now about so talk a future And been years but Arsenal contracting now more it's U.S. right we and the deliberate work that But several happens a us, the Detroit meetings the fleet. in right opportunity with process upgrades that's to a long And to big that's so. with for have to friends attending

Great.

call Wouldn't way be a carriers system? many aircraft are in that area would an carriers aircraft that carriers. this since your So lightning use that obvious they

has that It lot could the ballistic environmental threats withstand surface of there from are the a and relatively conditions. hyper allied hypertech for the also harsh certainly lightweight of advantage our navy vessels in armor. Yes. benefit navies U.S. Well, can and

think for allies. I surface vessels well bodes the that and future with navy our U.S. So and the

Great.

Okay you. well thank

Erin time. the you Thank for

Keep work. up good

[Operator is you. Instructions] Thank Richards. Ron Your next coming from question

line Your live. is

conference vehicle I market. Hey was about guys wondering on being the vehicles? call on talked any very there's the you updates about electric excited electric if last

of lots you you to one? have Anthony are certainly to this Do on take line? we report. progress Well, the want

question. Ron. hi so for Yes the Thanks

the sensitive we've competitive progress. market. a commercial of So Certainly certainly cost market definitely lot yes is and a made vehicle certainly

to So and identify can integrators and work we value. to bring we customers continue where try system the with

are progress in value But how long understand and a needs. a to the bring the those process some to the that we there. making investment in U.S. a understanding this It's and working to needs gaps bring market what are identify process. in technology trying so where can it's infrastructure So of in qualification long we're in discussions we're gaps understanding really and that certainly EV and can those market on value again, we

also it a is process sensitive. competitive we're is it and So cost certainly making But progress. again, very

So the meet we're what is value we those proposition focusing how really on can and needs.

had you on also. about was Okay, were possibly the and I relations other Any investor quarter question in progress an talking that? one firm fourth hiring

is Yes. Hi, Ron, this Michael.

have we narrowed in you it one in two down remotely that IR will, person. we've to by if firms, to and few relations going we fiscal conferences attending investor a and one are So begin decided 'XX,

don't I -- one we'll it's targeted, think then in or our And with is QX QX to QX so we've that. and success measure and in one either is hold me

approach We first, three do directly firms are that to can certainly appreciate with help we're and the opportunity try or to have add talk still how talking engaged so we to investors us they But we and we value. Ron. two like that going about IR

great. Okay, Thank you.

are further questions Thank you. There no in queue. [Operator the Instructions]

ahead. think probably Anthony, Okay. I go too Well, for us -- Matthew, you today. out room thank Dan's Chuck. think in with We hosting future the is the

said did just I future. here Dan in come near

Yes. future for is the bright very We CPS. think

lot with about every investors 'XX. on to We're make to We we're our progress 'XX. that front. today. of the just to We've just in But wanted done. community going forward not We move share in are success continuing in had a

kind blueprint of of our show plan results. can continues the growth good and You that to very see

support. So in that's of continued and what everybody I thank today your we're for in kind you doing. listening and calling appreciate

Thank you, everyone.

participation. your have may for and you Thank a at day. time You disconnect wonderful this

Matt. you, Thank