CPS Technologies (NASDAQ: CPSH) achieved a significant milestone in fiscal 2025, reporting its highest annual revenue to date. This growth was fueled by robust product demand, increased shipments, and enhanced production capabilities. During their fourth-quarter earnings call, company leadership detailed plans for a new manufacturing facility, provided updates on their HybridTech Armor, and discussed ongoing federally funded research initiatives and recent capital expenditures. Despite pressures from elevated gold costs, the company showcased strong operational performance and strategic moves for future expansion.
President and CEO Brian Mackey announced total sales of $32.6 million for fiscal 2025, marking a remarkable recovery from the previous year. For the fourth quarter, CFO Chuck Griffith reported revenue of $8.2 million, a notable increase from $5.9 million in the same period of fiscal 2024. This improvement was largely attributed to surging demand, higher shipment volumes, and the successful implementation of a third production shift, alongside expanded manufacturing capacities.
Griffith clarified that the fourth-quarter revenue saw a dip compared to the third quarter, primarily due to extended holiday periods observed by customers, particularly international ones. Gross profit for the fourth quarter stood at $1.2 million, approximately 14.6% of sales, a substantial improvement from a gross loss of $0.3 million a year prior. While higher revenue and improved manufacturing efficiency contributed to this gain, margins were impacted by a sharp increase in gold prices. As certain CPS products are gold-plated, the company's negligible margin on gold costs means that higher gold prices can compress overall gross margin percentages.
Selling, general, and administrative expenses for the fourth quarter were $1.3 million, up from $1.0 million in the previous year. Griffith emphasized that CPS successfully managed these costs while simultaneously scaling up production and investing in growth, maintaining a relatively consistent SG&A throughout fiscal 2025. The company posted an operating loss of approximately $100,000 for the quarter, a significant reduction from $1.3 million last year. Net income reached approximately $12,000, or $0.00 per share, compared to a net loss of about $1.0 million, or $0.07 per share, in the prior-year's fourth quarter.
A critical highlight from Mackey was the $9.5 million raised in net proceeds through a secondary offering in the fourth quarter. This capital infusion has significantly strengthened the company's financial position, which Mackey noted as being in its best state in recent memory. He expressed optimism that 2026 will further bolster CPS’s long-term growth trajectory. Griffith detailed the company’s financial health at year-end, with $4.5 million in cash and $8.8 million in marketable securities. Trade accounts receivable amounted to $5.2 million, while inventories grew to $4.5 million from $3.5 million at the fiscal year's outset, reflecting increased production and customer demand. Payables and accruals totaled $4.3 million, up from $4.0 million in fiscal 2024.
A major focus of the call was CPS’s strategic plan to relocate to a larger manufacturing facility nearby, partially financed by the capital raised in October. Mackey explained that the current facility's spatial limitations hinder the company's ability to meet demand, especially with the third shift for metal matrix composite manufacturing now fully operational. Dacon Corporation has been appointed as the general contractor to aid in site evaluation, lease negotiations, and managing the build-out to accommodate manufacturing requirements. Mackey indicated that the relocation is expected to commence in a few months, with the entire process, including equipment transfer and revalidation, spanning several months. Management also noted that a shortlist of potential facilities has been identified, and a final site decision is anticipated within weeks.
To mitigate potential disruptions during the move, CPS is proactively increasing its inventory to support customer needs. Mackey also highlighted that the prospective sites are conveniently located near the existing facility, which should help minimize workforce impact by limiting changes to employee commutes. Beyond the relocation, Mackey anticipates that the new facility will bring about operational efficiencies, reduced maintenance costs, and an enhanced working environment. The new site is also expected to provide additional capacity, benefiting from expanded floor space and new equipment delivered directly to the location, with some uncommitted space reserved for future opportunities.
Regarding HybridTech Armor, Mackey stated that following the passage of the FY 2026 Defense Bill, Kinetic Protection—CPS’s prime contractor partner—is confident that U.S. Navy orders will resume in the latter half of the current calendar year. Earlier orders (2021–2024) primarily supported crew-served weapon stations on aircraft carriers, whereas future orders are expected to include a limited number of Navy destroyers, with funding already secured for ballistic shields on several vessels. Detailed contract negotiations are expected to begin in the coming months. Mackey also highlighted the company’s government-funded R&D initiatives, noting 13 awards from the Department of Defense or Department of Energy since re-engaging in SBIR and STTR programs in 2021. Although these programs lapsed at the end of the previous federal fiscal year (September 30, 2025) due to pending reauthorization, CPS's four ongoing contracts—one Phase I and three Phase II—continue without interruption. Mackey mentioned recent indications of a congressional compromise for reauthorization, potentially extending through September 30, 2031.
Recent capital investments were also emphasized by Mackey, including a higher-capacity mill for the AlMax product line that now processes ceramic fiber at double its previous rate. Additionally, a new sintering oven supports Phase II of an Army-funded controlled fragmentation tungsten warhead program, with CPS producing 40-millimeter warhead samples designed to surpass Army performance standards. Ongoing DOE-funded work in radiation shielding, including the development and testing of larger-scale samples and the evaluation of lightweight MMC radiation shielding applications across various industries, was also noted. During the Q&A, management addressed commodity exposure, with Mackey indicating that aluminum, a minor component of product costs, has a minimal impact on margins, though it represents a potential headwind. He added that the sales team can adjust pricing for customers with frequent ordering patterns to reflect changes in material costs. The call also included leadership commentary, with Mackey acknowledging Griffith’s upcoming retirement and the active search for a successor. Looking forward, Mackey anticipates 2026 to be a year of robust revenue as the company completes its relocation and establishes a foundation for sustained growth, with the new facility designed to accommodate higher demand, new gross margin initiatives, and future market expansions.
CPS Technologies, a leader in materials technology, specializes in the development and manufacturing of advanced engineered composites and metal systems. The company's expertise lies in creating bonded metal components, high-performance polymer composites, and ceramic-to-metal brazed assemblies that meet the stringent requirements of high-temperature, high-stress, and high-frequency applications. Their extensive product portfolio includes thermal management solutions, electromagnetic interference (EMI) shielding materials, structural composites, and electronic packaging substrates, all custom-engineered for critical end-markets. Serving key sectors such as aerospace, defense, electronics, and energy industries, CPS Technologies collaborates closely with original equipment manufacturers and system integrators to deliver bespoke material solutions that enhance thermal efficiency, reduce weight, and improve mechanical performance.