Investment Thesis
Sypris Solutions exhibits severe financial distress with accelerating losses, negative operating cash flow, and declining revenue. The company's 3.2% gross margin and negative 16% net margin indicate fundamental operational challenges that cannot support its current asset base or liabilities.
Strengths
- Debt-to-Equity ratio of 0.20x remains manageable relative to leverage norms
- Current ratio of 1.20x above critical distress levels
- Asset base of $105.2M provides some liquidation value cushion
Risks
- Negative operating cash flow of -$2.3M with deteriorating profitability indicates unsustainable business model
- Quick ratio of 0.39x signals acute liquidity stress and inability to meet short-term obligations without inventory conversion
- Revenue declining 14.5% YoY while operating losses expand, suggesting competitive or demand-driven structural decline
- Net margin of -16% with negative interest coverage (-3.9x) creates refinancing risk and debt servicing concerns
- Gross margin of only 3.2% indicates severe operational inefficiency or pricing pressure
Key Metrics to Watch
- Quarterly revenue trend and gross margin stabilization
- Operating cash flow return to positive
- Quick ratio improvement and cash balance sustainability
- Operating margin trajectory and cost structure adjustment
Financial Metrics
Revenue
25.8M
Net Income
-4.1M
EPS (Diluted)
$-0.18
Free Cash Flow
-2.6M
Total Assets
105.2M
Cash
5.2M
Profitability Ratios
Gross Margin
3.2%
Operating Margin
-14.0%
Net Margin
-16.0%
ROE
-29.8%
ROA
-3.9%
FCF Margin
-10.0%
Balance Sheet & Liquidity
Current Ratio
1.20x
Quick Ratio
0.39x
Debt/Equity
0.20x
Debt/Assets
86.8%
Interest Coverage
-3.91x
Long-term Debt
2.8M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-20T07:28:34.223795 |
Data as of: 2026-04-05 |
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