Norton, Massachusetts, July 29, 2020. CPS Technologies Corporation (NASDAQ: CPSH) today announced revenues of $5.8 million and an operating profit of $331 thousand for the quarter ended June 27, 2020. This compares with revenues of $6.4 million and an operating profit of $258 thousand for the quarter ended June 29, 2019.
For the six months ending June 27, 2020, revenues are $12.3 million with an operating profit of $952 thousand. This compares with revenue of $11.6 million and an operating loss of $486 thousand for the six months ended June 29, 2019.
Grant Bennett, President and CEO, said: “Revenues, while strong, were down compared to the first quarter of 2020 due primarily to impacts of the coronavirus pandemic on the purchasing decisions of a major customer. This customer increased inventory in Q1 to guard against possible supply chain interruptions; they then reduced purchases in Q2 to bring inventory down to more appropriate levels.
Gross margins and operating profits were considerably higher in the three-month and six-month periods just ended than they were in the corresponding periods a year ago. This significant positive swing in performance reflects the pricing, product mix and operational improvements discussed in previous quarters.
CPS has been open and operating throughout the pandemic. To date most of our customers remain open and operational. We saw in Q2 and expect to see in future quarters increased volatility in short-term demand as individual customers address pandemic-related issues including managing inventories up and down, shortages of other components, short-term shutdowns, longer approval cycles given many employees are working from home, etc.
CPS continues to follow CDC and OSHA guidance in our workplace. Employees’ temperatures are taken at the beginning of each shift, shifts have been staggered to reduce employee overlap, workstations have been rearranged to ensure social distancing, all employees are using facemasks, etc.
Any forward looking comments must begin with the clear caveat that the pandemic is injecting considerable uncertainty at customers and suppliers so conditions can and may change quickly. Nonetheless, we currently anticipate continued strong performance for the remainder of 2020, albeit not as strong as we were anticipating pre-pandemic. Our product sales pipeline is strong. Our sales team continues to generate new business both from existing and new customers. We note that over the past six months we have seen some customer programs using SiC die accelerating and we are particularly excited about the near-term revenue growth potential in this area.”
The Company will be hosting its second quarter conference call with investors at 4:45pm on Wednesday, July 29. Those interested in participating in the conference call should dial:
Call in Number: 1-833-953-1394
Conference ID: 6958894
CPS Technologies Corporation is a global leader in producing metal-matrix composite components used to improve the reliability and performance of various electrical systems. CPS products are used in motor controllers for hybrid and electric vehicles, high-speed trains, subway cars and wind turbines. They are also used as heatspreaders in internet switches, routers and high-performance microprocessors. CPS also develops and produces metal-matrix composite armor.
Safe Harbor Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2020 financial results, are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as “will,” “intends,” “believes,” “expects,” “plans,” “anticipates” and similar expressions. Investors should not rely on forward looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company’s expectation. Additional information concerning risk factors is contained from time to time in the company’s SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.