Company: CPSH
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001437749-25-014320
Chunk: 8

Company: CPS TECHNOLOGIES CORP/DE/
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 impact on our results. Most of our raw materials are sourced domestically. In some cases, our suppliers may be sourcing these materials from a foreign source. To date, we have not seen any cost increases that we believe are attributable to tariffs, however this could change in the future.

Inflation has had an impact on our costs. Thus far, we have largely been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future. In addition, there is often a lag between when the costs increase and when we can adjust customer prices. Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments. Wages have also been impacted by inflation. We have instituted a combination of wage increases as well as more competitive benefits in order to retain the personnel making up our workforce.

The factors mentioned above, including inflation and tariffs, create elevated uncertainty regarding future financial performance.

Liquidity and Capital Resources (all $ in 000’ s unless noted)

The Company’s cash and cash equivalents at March 29, 2025 totaled $1,930, with marketable securities of $1,040. This compares to cash and cash equivalents at December 28, 2024 of $3,281 and marketable securities of $1,031. The change in cash is predominantly due to our increased accounts receivable which are discussed in more detail below.

Trade accounts receivable at March 29, 2025 totaled $6,303 compared with $4,858 at December 28, 2024. Days Sales Outstanding (DSO) increased from 76 days at the end of 2024 to 78 days at the end of Q1 2025. The reason for this increase is that sales dollars per week grew throughout the quarter, resulting in a higher percentage of Q1 sales remaining in accounts receivable than would be expected, had weekly sales been relatively uniform during the quarter. The accounts receivable balances at December 28, 2024, and March 29, 2025 were both net of an allowance for credit losses of $10.

Inventories totaled $4,813 at March 29, 2025 compared with inventory totaling $4,331 at December 28, 2024. The inventory turnover in the most recent four quarters ending Q1 2025 was 5.5 times (based on a 5 quarter end average) compared