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CPS Technologies Corporation Announces 2012 Results

NORTON, MA--(Marketwire - Mar 18, 2013) - CPS Technologies Corporation ( OTCBB : CPSH ) today announced revenues of $4.1 million and a net loss of $84 thousand for the Fourth Quarter ended December 29, 2012. These results are approximately flat with those of the Fourth Quarter ended December 31, 2011 when the Company generated revenues of $4.2 million and incurred a net loss of $103 thousand.

Revenues for the year ended December 29, 2012 totaled $14.1 million compared with $19.8 million for the year ended December 31, 2011. The net loss for the year was $1.5 million versus a net loss of $46 thousand for the year ended December 31, 2011.

Mr. Grant Bennett, CEO, said, "2012 was a very challenging year for us as we encountered the perfect storm of weak global demand, a slower than anticipated ramp up of hybrid and electric vehicles and the residue of a train crash in China which adversely affected our traction business. As previously stated, we viewed these conditions as temporary and expected to see a turnaround during the last half of the year. Although it took longer than expected and the global economic climate remains weak, we are pleased that we indeed did realize a significant improvement in our business in the Fourth Quarter. Our Fourth Quarter revenues were up 50% versus the Third Quarter, fueled by increases in our traction business. The increased margin on this business narrowed our operating loss to the lowest of any quarter this year. We also were able to operate at cash breakeven during the Fourth Quarter. Our net cash (cash, less bank borrowings) remained flat as the increase in receivables, resulting from higher revenues, was more than offset by a reduction in our inventories."

"Given weak demand, our factory operated on a four-days- a-week basis throughout much of 2012. We are pleased that as of last month the factory is back to a five-days-a-week, three-shifts-a-day operation," said Bennett.

Mr. Bennett continued, "In the Fourth Quarter, in addition to the rebound in our traction business, we saw an increase in the demand for our components used in hybrid and electric vehicles. This increase is the ramp we expected earlier in the year. We continue to explore opportunities for geographic expansion, especially in Japan. Finally, we continue to believe that we have substantial long-term growth opportunities in armor and military markets, despite the near term uncertainties caused by sequestration."

About CPS
CPS Technologies Corporation is a global leader in producing metal-matrix composite components used to improve the reliability and performance of various electrical systems. CPS products are used in motor controllers for hybrid and electric vehicles, high-speed trains, subway cars and wind turbines. They are also used as heatspreaders in internet switches, routers and high-performance microprocessors. CPS also develops and produces metal-matrix composite armor.

Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2012 financial results, are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as "will," "intends," "believes," "expects," "plans," "anticipates" and similar expressions. Investors should not rely on forward looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company's expectation. Additional information concerning risk factors is contained from time to time in the company's SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.

STATEMENT OF OPERATIONS (Audited)                    
  ---Quarter Ended---     ------Year Ended-------  
  Dec. 29,     Dec. 31,     Dec. 29,     Dec. 31,  
  2012     2011     2012     2011  
Total Revenues $ 4,124,488     $ 4,224,007     $ 14,051,710     $ 19,807,152  
Cost of Sales   3,791,583       3,975,559       13,795,773       16,851,237  
Gross Margin   332,905       248,448       255,937       2,955,915  
Operating Expenses   760,299       712,357       3,055,077       3,291,745  
Operating income (loss)   (427,394 )     (463,909 )     (2,799,140 )     (335,830 )
Interest expense, net   (12,330 )     (6,407 )     (28,588 )     (32,671 )
Income (loss) before income taxes   (439,724 )     (470,316 )     (2,827,728 )     (368,501 )
Income tax expense (benefit)   (355,700 )     (367,666 )     (1,305,700 )     (322,766 )
Net income (loss)   (84,024 )     (102,650 )     (1,522,028 )     (45,735 )
Net income (loss) per diluted share $ (0.01 )   $ (0.01 )   $ (0.12 )   $ 0.00  
Shares outstanding, diluted   12,871,671       12,865,659       12,869,618       12,765,774  
BALANCE SHEET (Audited)      
  Dec. 29,   Dec. 31,
  2012   2011
Current assets:          
  Cash and cash equivalents $ 306,854   $ 1,142,429
  Accounts receivable, net   2,876,149     3,112,960
  Inventories   2,457,315     3,138,617
  Prepaid expenses   140,723     152,444
  Deferred taxes, current   354,825     287,056
    Total current assets   6,135,866     7,833,506
Property and equipment, net   1,781,220     2,307,045
Deferred taxes, non-current   2,432,148     1,193,761
Total assets $ 10,349,234   $ 11,334,312
Liabilities and Equity          
Current liabilities:          
  Accounts payable $ 1,179,313   $ 1,463,997
  Accrued expenses   938,043     660,031
  Line of Credit   500,000      
  Capital leases, current   123,366     208,504
    Total current liabilities   2,740,722     2,332,532
Capital leases, non-current   76,372     199,738
Total liabilities   2,817,094     2,532,270
Stockholders' equity   7,532,140     8,802,042
Total liabilities and stockholders' equity $ 10,349,234   $ 11,334,312