NORTON, Mass. - CPS Technologies Corporation (NASDAQ:CPSH), a leader in producing high-performance materials solutions, has announced the award of a Phase II Small Business Innovation Research (SBIR) contract by the U.S. Navy Air Systems Command (NAVAIR). The $1 million contract, spanning 30 months, will fund the continued development of CPS's metal matrix composites (MMCs) for thermal energy storage, which are integral to the Advanced Anti-Radiation Guided Missile - Extended Range (AARGM-ER) program.
Brian Mackey, President and CEO of CPS, expressed satisfaction with the company's progress, stating that the novel MMCs are poised to meet a crucial technical challenge for the Department of Defense. This contract marks CPS's first Phase II award since renewing its commitment to federal SBIR/STTR programs, reflecting the company's strategy to drive growth through advanced product development based on customer needs.
During the initial phase, CPS successfully demonstrated the efficacy of aluminum and phase-change materials, including nickel titanium composites, known as nitinol, for compact thermal energy storage devices. The University of North Texas, which holds expertise in nitinol applications, will collaborate as a subcontractor in this next phase.
Mackey highlighted the MMCs' potential to provide advanced thermal energy storage solutions across various applications, including avionics, weapons, and high-pulse power modules. The lightweight and dimensionally stable composites aim to reduce the size and weight of energy storage systems, offering a more durable and manageable alternative to traditional materials.
The AARGM-ER program's mission is to suppress or destroy enemy air defenses, targeting mobile and re-locatable integrated air defense systems. It provides long-range, precision strike capabilities, enabling pilots to engage targets from beyond lethal ranges. Advanced thermal energy storage is crucial for this long-range strike capacity.
CPS Technologies is recognized for its innovative solutions in various sectors, including transportation, renewable energy, military, and telecommunications. The company's products and intellectual property are designed to address critical needs in these applications.
In other recent news, CPS Technologies experienced a dip in its first-quarter revenue, reporting a decrease from $7.1 million in the same period last year to $5.9 million. The company cited production constraints and labor shortages as factors contributing to this decline. Despite these challenges, CPS Technologies remains optimistic about future growth, driven by strong demand across its product portfolio and new business development initiatives.
The company also reported a gross profit of $0.9 million, a decrease from the previous year's $2.2 million, along with an operating loss of $260,000 and a net loss of $143,000 for the quarter. To counter these figures, CPS Technologies is expanding its product range and investing in technical personnel.
In addition, CPS Technologies has been awarded funding through the Department of Energy's SBIR program for its modular radiation shielding technology. The company is also bidding on new opportunities, including potential Navy orders for 2024, and expects to fulfill a long-term supply agreement with a semiconductor manufacturer throughout 2024.
Analysts have noted that CPS Technologies anticipates profitability in the last three quarters of 2024 and is fully staffed, with labor availability not seen as a long-term issue. The company is also confident about fulfilling its long-term supply agreement and is bidding on opportunities to mitigate the impact of the completion of its current Naval Armor contract. These are the recent developments in the company.
InvestingPro Insights
CPS Technologies Corporation (NASDAQ:CPSH) has recently garnered attention with its latest contract award, but what does the financial data say about the company's performance? According to InvestingPro data, CPSH holds a market capitalization of $25.7 million, showcasing its position in the market. Despite a challenging revenue growth rate, which saw a decrease of 2.48% over the last twelve months as of Q1 2024, the company maintains a Price/Earnings (P/E) ratio of 33.28, indicating investor expectations for future earnings growth.
One of the key InvestingPro Tips highlights that CPSH maintains a stronger liquidity position by holding more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about financial stability. Additionally, the company's gross profit margins may be considered weak at 20.81%, suggesting room for improvement in cost management or pricing strategies.
Those interested in a deeper dive into CPS Technologies' financial health can find additional InvestingPro Tips, with a total of 6 tips available on https://www.investing.com/pro/CPSH. For a more comprehensive analysis, take advantage of the exclusive offer using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to these valuable insights.
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