Company: CPSH
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001437749-25-024312
Chunk: 12

Company: CPS TECHNOLOGIES CORP/DE/
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 due to significantly increased revenue were partially offset by a reduction in accounting and legal fees as well as the cost of a settlement with a former outside consultant in 2024.

During the first half of 2025, the Company had net other income of $70. This compares with net other income of $170 realized during the first half of 2024. The decrease in net other income is primarily due to reduced cash balances in the first half of 2025 as compared to 2024.

In the first six months of 2025 the Company had operating income of $267 compared with an operating loss $1,575 in the same period last year. The net income for the first six months of 2025 totaled $200 versus a net loss of $1,097 in the first six months of 2024.

CPS does not rely on raw materials from Ukraine, Russia, Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or the conflict in Israel and Gaza will have a direct impact on our results. Nevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result of these conflicts.

Inflation has had an impact on our costs. Thus far, we have 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. Further, several of our larger customers buy from our major competitor in Japan. The impact of the fluctuation of foreign exchange rates can create situations where our pricing to foreign customers can either more or less competitive as compared to our Japanese competitor.

We are beginning to see an impact of tariffs on our cost structure. While many of our raw materials are sourced domestically, we are seeing instances where the domestic supplier is able to raise prices due to the impact of tariffs on prices charged by their foreign competitors. While the overall impact of these cost increases is relatively small, they are still enough to impact our margins. Given that our major competitor is from outside the U. S., our ability to pass on these cost increases to our foreign customers is somewhat limited.

These factors combine to create a higher degree of uncertainty regarding future financial performance.

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

The Company