CPS Technologies Corporation Q3 FY2024 earnings call

• Revenue declined year-over-year primarily due to the end of the U.S. Navy Armor contract with Kinetic Protection and another major customer working through excess inventory. - Third shift startup costs and supply chain issues impacted Q3. - Recently improved product throughput and recent wins make them optimistic about Q4 and beyond. - Received DOE Phase II award of $1.1 million over 24 months for modular radiation shielding. - New semiconductor contract expected to significantly boost revenue in fiscal 2025. - Secured a $200,000 Navy contract for Metal Matrix Composite Solutions development. - Expanded product line includes FRA composites, with commercialization expected in fiscal 2025. - 5-axis CNC machine up and running for higher production in Q4 and beyond.

Third quarter revenue was $4.2 million. Gross loss was approximately $0.5 million, which is about negative 12% of sales. Selling, general and administrative expenses (SG&A) totaled $1 million in the third quarter compared to $1.1 million in the prior year. The company posted an operating loss of $1.5 million in the third quarter, versus operating income of approximately $0.1 million last year. Net loss was $1.0 million or $0.07 per share versus net income of $0.2 million or $0.01 per diluted share in Q3 of fiscal 2023.

• Optimistic about fourth quarter and fiscal 2025 due to third shift, new contracts, operating leverage, and improved margins. - First four weeks of Q4 are off to a solid start relative to Q3, attributed to third shift and low shipments early in Q3.

• Uncertainties including wars in Ukraine and Israel, other geopolitical events, economic conditions, market demands, and competitive factors.

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