NORTON, Mass. - CPS Technologies Corp. (NASDAQ:CPSH), a leader in producing high-performance materials solutions, has announced a significant agreement with a major multinational semiconductor manufacturer. The $12 million contract involves supplying power module components for various applications, including high-speed rail, wind turbines, and electric and hybrid vehicles.
The deal, which is subject to cancellation by either party, allows for ongoing discussions about future production volumes and pricing while addressing immediate production needs. Scheduled deliveries are set to occur over the next twelve months, starting this month, and represent a substantial increase from the previous year's figures.
Brian Mackey, President & CEO of CPS, expressed satisfaction with the growth in their core business of aluminum silicon carbide products, emphasizing the company's commitment to meet the increasing demands of their client and its customers in green energy, automotive, and transportation sectors. He also noted the award as evidence of rising demand for CPS's unique offerings and an opportunity to accelerate growth moving forward.
CPS Technologies is known for its contributions to various industrial sectors, including transportation, energy, defense, and telecommunications. Their products and intellectual property are crucial in applications ranging from electric trains and wind turbines to Navy ships and 5G infrastructure. The company's hermetic packages and armor products are also utilized in aerospace, satellite, and ballistic protection applications.
The announcement made today is based on a press release statement, which also included forward-looking statements regarding the company's financial projections for 2024 and 2025. These statements are subject to risks and uncertainties, and the company has disclaimed any obligation to update them. Investors are advised to consult the company's SEC filings for further information on risk factors that may impact actual results.
This new business agreement is set to contribute to CPS Technologies' ongoing efforts to support the transition to clean energy and to provide innovative solutions to its global client base.
In other recent news, CPS Technologies has experienced a series of significant developments. The company recently reported a decline in second-quarter revenue to $5.0 million, a drop from $7.4 million in the same period the previous year. This decrease was attributed to several challenges, including the completion of a significant U.S. Navy Armor contract, labor shortages, and production issues with a new hermetic packaging product.
In addition, CPS Technologies announced a change in its independent accounting firm. The Audit Committee dismissed Wolf & Company, P.C., and approved the engagement of PKF O’Connor Davies as the new independent registered public accounting firm for the fiscal year ending December 28, 2024.
Moreover, the company has secured a $1.1 million contract from the U.S. Department of Energy for a 24-month project advancing modular radiation shielding development for microreactors. This contract marks the company's second Phase II Small Business Innovation Research (SBIR) contract this year. CPS Technologies will continue to refine lightweight shielding materials capable of blocking gamma and neutron radiation under the guidance of materials scientist Matthew Karnick.
These recent developments are part of CPS Technologies' ongoing efforts to innovate and expand its product portfolio. Despite the challenges faced, the company continues to focus on cost control, new product development, and pursuing federal funding opportunities. CPS Technologies has also collaborated with NETCO, a division of Curtiss-Wright (NYSE:CW) Nuclear, bringing additional expertise in radiation shielding to the project.
InvestingPro Insights
To provide additional context to CPS Technologies Corp.'s (NASDAQ:CPSH) recent $12 million contract announcement, let's examine some key financial metrics and insights from InvestingPro.
As of the latest data, CPS Technologies has a market capitalization of $21.43 million, which puts the new contract into perspective, representing a significant portion of the company's market value. This contract could potentially have a substantial impact on the company's financial performance.
InvestingPro Tips highlight that CPS Technologies holds more cash than debt on its balance sheet, which could provide financial flexibility as the company ramps up production to fulfill this new contract. Additionally, the company's liquid assets exceed short-term obligations, suggesting a solid short-term financial position to support the increased production demands.
However, it's important to note that CPS Technologies has been facing some challenges. The company's revenue for the last twelve months as of Q2 2023 was $23.98 million, with a concerning revenue growth decline of -12.44% over the same period. This new contract could potentially help reverse this trend.
The gross profit margin for the last twelve months stands at 12.77%, which aligns with one of the InvestingPro Tips indicating that the company suffers from weak gross profit margins. This metric will be crucial to monitor as CPS Technologies fulfills the new contract, as improved margins could significantly impact profitability.
It's worth noting that CPS Technologies is currently not profitable over the last twelve months, as pointed out by another InvestingPro Tip. The P/E ratio stands at -26.67, reflecting this lack of profitability. Investors will likely be keen to see if this new contract can help push the company towards profitability.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide further insights into CPS Technologies' financial health and growth prospects. In fact, there are 9 additional InvestingPro Tips available for CPSH, which could be valuable for investors looking to make informed decisions about this company in light of its recent contract win.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.