Good day, and welcome to the Sypris Solutions Incorporated conference call. Today's call is being recorded. At this time, for opening remarks, I would like to turn the call over to the President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir.

Thank you, Michael, and good morning, everyone. Tony and I would like to welcome you to this call, the purpose of which is to review the trends reflected in the company's financial results for the first quarter of 2014. For those of you who have access to our PowerPoint presentation this morning, please advance to Slide 2 now. We always begin these calls with a note that some of what we might discuss here today may include projections and other forward-looking statements. No assurance can be given that these projections and statements will be achieved, and actual results could differ materially from those projected as a result of several factors. These factors are included in the company's filings with the Securities and Exchange Commission. And in compliance with Regulation G, you can access our website at sypris.com to review the definitions of any non-GAAP financial measures that may be discussed during this call. With these qualifications in mind, we'd now like to proceed with the business discussion. Please advance to Slide 3. I will lead you through the first half of our presentation this morning, starting with an overview of the highlights for the quarter to be followed by a brief discussion of each of our 2 business segments. Tony will then provide you with a more detailed review of our financial results for the quarter. Now let's begin with an overview on Slide 4. I'm pleased to report that the company got off to a strong start for 2014 with revenue, gross profit, gross margin and earnings per share all rising on both a year-over-year and on a sequential basis. Consolidated sales increased 7% to $84.2 million, up from $78.4 million for the first quarter of 2013. Gross profit rose 31% to $10.6 million, up from $8.1 million for…

Thanks, Jeff, and good morning, everyone. And I'd like to take you through the highlights of our financial results for the first quarter of 2014. I will begin with our consolidated group results and ask you to advance to Slide 10. Q1 consolidated revenue totaled $84.2 million, up $5.8 million, or 7%, as compared to the prior year. While both segments report increased revenue year-over-year, the Industrial Group led the way with a $4.7 million improvement. This increase was primarily due to higher commercial vehicle volumes. The A&D segment also increased $1.1 million year-over-year to $8.4 million for the quarter. Gross profit increased to $10.6 million in the quarter from $8.1 million in the prior year period. We achieved a gross margin of 12.5%, driven by the performance of our Industrial Group, reflecting favorable product mix and greater operating efficiencies. Earnings per diluted share came in at $0.08 per share versus a loss of $0.34 per share in the first quarter of 2013. Our bottom line improvement was driven by revenue growth, favorable mix and operating efficiencies for the Industrial Group and provides a solid foundation for the year given our current view of the market for the balance of 2014. One further note. As you will recall, our 2013 results included a $6.9 million or $0.36 per share goodwill impairment. Let me move on to our sequential consolidated first quarter results and ask you to please advance to Slide 11. Consolidated revenues increased 14% sequentially from the fourth quarter of last year, rising to $84.2 million and driven by a 19% increase in revenue for -- from our Industrial Group. Our consolidated gross profit of $10.6 million for the quarter was up $4.2 million or 66% sequentially from Q4 attributable to the conversion on additional Industrial Group revenue, favorable…

[Operator Instructions] And we'll take our first question from Jim Ricchiuti of Needham & Company.

I have a few questions on the electronics portion of the business. First off, on the Singapore contract, can you say how much of that you might see in revenue in 2014? Is it -- is the bulk of it in 2015? Can you give us some sense as to how that plays out?

Yes, it's really difficult to lay that out at this point, Jim. What we're working through right now as we close the quarter and move into the second quarter is really matching up the contract with the accounting guidance. It's a complex area. We don't think that it's going to be material in the near term, but we still have a lot to work through on that issue.

Okay. And you alluded to additionally some business, and I think the number that you put out there, potentially $25 million, now is that cyber-related business, Jeff, that you see over the next couple of years?

Yes, that's -- it's -- Jim, that's -- the $25 million is with regard to the Cyber Range specifically.

Okay. And is there -- obviously, there are some milestones and there's timelines associated with that. But can you give us any feel as to whether you see this opportunity playing out in 2015 where it could be meaningful? Or is it looking beyond 2015?

No, I think that the opportunity to secure additional awards for the Cyber Range is very positive this year. And each contract will be somewhat different, and so the revenue and profit recognition off of that will be dependent upon the milestones within each contracts. So I guess the best way to answer your question, Jim, is we see the opportunity to book additional cyber contracts this year, the recognition of which revenue will take place over different periods depending upon the composition or nature of the contract.

Okay, that's helpful. And when I look at your R&D spend, it's fairly modest. And given what you're doing, it's -- to what extent can you maintain this level of investment given the opportunities? I mean, clearly, you're trying to get some additional fundings from -- externally. What needs to be done? I mean, will we see your R&D ramp up if you're not able to secure this additional funding?

Well, for 2014, our R&D under any circumstances will be less than prior years because we have secured some funding to take SYPHER, for example, to implementation stage. Some of the R&D funding we incurred in the past was for the Cyber Range. So we're looking at ways to further support a reduction in R&D expense in terms of our burn rate as well as to accelerate these other 2 platforms into the marketplace. But as you model 2014, under any alternative, R&D will be less than prior years.

Got it. And then one final question and I'll jump back in the queue is also on the electronics business. It sounds like you see some potential pickup in the EMS portion of the business. You alluded to what, I guess, is a fairly sizable piece of business where you already acquired materials for. Is -- can you give us any time line as to when that could kick in? Is that something as -- or potentially as early as Q3?

Yes, I would say Q3 would be a reasonable estimate. So somewhere between Q3 and Q4.

[Operator Instructions] We will take our next question from Tristan Thomas with Sidoti & Company.

Two quick questions. First was a continuation of Jim's R&D question. Do you expect R&D to remain lower in 2015 as well? Or is it a little too early to tell?

It's a little too early to tell, Tristan. I think that the success that we're having today in getting products to the point where we can seek customer funding, we're going to continue down that path and hopefully be able to externally fund a lot of the R&D that we have today. So I wouldn't see a significant ramp in 2015. But it's a bit early.

Okay. And then I know you mentioned product mix in the Industrial Group was favorable. Could you elaborate a little more on that and then if you expect that to continue into the rest of 2014?

Tristan, this is Jeff. The mix is coming. We're having an improved or higher shipment levels in going to some of our more niche markets such as off-highway, agriculture. Our energy markets remain strong, and so that's influencing it. Our margins are also being driven by the efficiency and the TPS initiatives that have been under way now for several years. And so we're really seeing some benefits coming from not just reduced scrap and those types of things but reduced cycle times, which means we're -- and reduced setup times. And so we're just being much more efficient. We're turning the work more quickly. We're able to do it in smaller lots. And so the plants are just running better. And that's also a big contributor.

Okay. And do you think there's still significant room for you to improve your internal processes?

Oh, yes. Yes. Absolutely.

[Operator Instructions] And at this time, we have no further questions in the queue.

All right. Well, thank you, Michael. Tony and I would like to thank you for joining us for this call. We welcome your continued interest and, of course, your questions about our business. Thank you, and have a great day.

And ladies and gentlemen, that does conclude today's conference. We thank you for your participation.