Investment Thesis
Sypris Solutions is in financial distress with deteriorating fundamentals across all metrics. Revenue declined 14.5% YoY while the company burns cash with negative operating cash flow of -$5.7M and negative free cash flow of -$6.5M, unable to achieve profitability with a net margin of -5.3%. Critically thin liquidity (0.44x quick ratio) and negative interest coverage (-7.2x) create material risk of financial instability.
Strengths
- Moderate debt-to-equity ratio of 0.16x provides some balance sheet flexibility
- Positive current ratio of 1.28x above immediate solvency threshold
- Asset base of $107.8M provides some intrinsic value
Risks
- Negative operating cash flow of -$5.7M indicates core business is not generating cash
- Revenue declining 14.5% YoY while operating losses expand, suggesting structural deterioration
- Quick ratio of 0.44x and only $5.2M cash with -$6.5M free cash flow burn rate creates liquidity crisis risk
- Negative interest coverage ratio of -7.2x means company cannot service debt from operations
- Extremely thin 7.8% gross margin leaves no buffer for operational challenges
- Negative net margin of -5.3% shows company is unprofitable at scale
Key Metrics to Watch
- Operating cash flow trend - must return to positive to avoid liquidity crisis
- Revenue stabilization and gross margin improvement - current 7.8% is unsustainably low
- Cash burn rate and runway remaining - at current -$6.5M FCF, runway is critically limited
- Path to operating profitability - company needs to demonstrate cost structure adjustment
Financial Metrics
Revenue
119.9M
Net Income
-6.3M
EPS (Diluted)
$-0.28
Free Cash Flow
-6.5M
Total Assets
107.8M
Cash
5.2M
Profitability Ratios
Gross Margin
7.8%
Operating Margin
-5.5%
Net Margin
-5.3%
ROE
-35.6%
ROA
-5.9%
FCF Margin
-5.4%
Balance Sheet & Liquidity
Current Ratio
1.28x
Quick Ratio
0.44x
Debt/Equity
0.16x
Debt/Assets
83.5%
Interest Coverage
-7.16x
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: 2026-04-17T01:27:21.787771 |
Data as of: 2025-12-31 |
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