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Operator
Good day, everyone, and welcome to the CPS Technologies 2022 earnings call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Chuck Griffith. Sir, the floor is yours.
Chuck Griffith - CFO
Thank you, Matthew, and good afternoon, everybody. I'm joined today by Anthony Koski, our Corporate Development Officer, and Michael McCormack, our President and Chief Executive Officer. Michael will offer his comments on our fourth quarter and annual results.
Before we begin the business portion of the call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered as subject to the many uncertainties that exist in CPS's operations and environment. These uncertainties include the impact of COVID-19, the Russian invasion of Ukraine, economic conditions, market demands, and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statements. Now I will turn the call over to Michael to offer his perspective on the year and the fourth quarter results.
Michael McCormack - President & CEO
Thank you, Chuck. Good afternoon, everybody. Today, we are pleased to announce the fourth quarter revenues of $6.1 million and operating profit of $309,000 for the quarter ending December 31, 2022 This compares with revenues of $6.2 million and an operating profit of $312,000 for the fourth quarter ended December 25, 2021.
For the fiscal year, we are delighted to report revenues of $26.6 million as compared to revenues of $22.4 million in fiscal year '21. The 19% annual organic growth rate over the previous fiscal year has been consistent with our strategy for growth since my arrival.
Fiscal year '22 reflects the highest year ever in terms of revenue and operating profit in the Company's 38 year history. For the fiscal year, we are reporting $2.2 million in operating profit compared to $513,000 in fiscal year '21. This is an over 300% improvement compared to last fiscal year. We are also delighted to report an impressive 6% improvement in gross margin over the entire fiscal year.
This also marks our third consecutive year of profitability. Our book-to-bill of over 1.1 for the fiscal year '22 continues to reaffirm our growth strategy is working over a larger sample of data, coupled with growing base. We are cautiously optimistic that the increased sales orders of fiscal year '22 will directly translate into steadily increasing revenue and operating profits in fiscal '23. I'll speak more later about the overall business progress moving forward on the call, but for now, Chuck will discuss the financial matters in more detail.
Chuck Griffith - CFO
Thank you, Michael. Revenues totaled $6.1 million in Q4 2022 compared with $6.2 million generated in Q4 2021, a slight decrease. For the fiscal year '22, revenues totaled $26.6 million compared to $22.4 million for 2021. The revenue for 2022 represents the best year in company history.
Gross margin in Q4 2022 totaled $1.6 million or 27% of sales. This compares with gross margin in Q4 2021 of $1.4 million at 21% of sales. For 2022, gross margin totaled $7.3 million compared with $4.8 million for 2021. This increase in margin was primarily due to the impact of higher sales on fixed factory costs, as well as improved factory efficiencies and product yields. Selling, general, and administrative expenses totaled $1.3 million in Q4 2022, an increase of 30% when compared with SG&A expenses of $1.0 million in Q4 2021.
For fiscal '22, SG&A totaled $5.1 million compared to $4.3 million in 2021. Several factors contributed to this increase. The company hired a Corporate Development Officer in early 2022, which was a new position. The company incurred higher variable compensation costs in 2022 due to its strong financial performance. And travel costs were significantly higher in 2022 due to the limited nature of travel in 2021 due to the COVID-19 pandemic.
The company generated operating income of $309,000 in Q4 2022, compared with operating income of $312,000 in Q4 2021. For 2022, operating income totaled $2.2 million compared with $0.5 million in 2021. This represents our highest annual operating income in CPS's history.
Turning to the balance sheet, we ended the quarter with $8.3 million of cash, increasing from $5.1 million on hand at the end of 2021. The increase in cash was primarily due to our net profit, somewhat offset by inventory increases to support higher sales. Although it remains open and available to us, no additional cash was raised in 2022 under the ATM program.
Accounts receivable at December 31, 2022 totaled $3.8 million, down from $4.9 million at December 25, 2021. This change was due to the reduction of deferred revenue occurring in the fourth quarter. Pre-payments received in 2021 were used to pay for shipments shipped in the fourth quarter, thus immediately reducing accounts, receivable rather than having to wait for the customer to pay their bill typically 30 to 45 days later. As such our days accounts receivable -- our days sales outstanding improved to 52 days compared to 72 days at the end of 2021. We also have an other receivable of $686,000, primarily due to the employee retention tax credit.
Inventories totaled $4.9 million at the end of December 31, '22, compared to $3.9 million at December 25, '21. This increase in inventory is due to increased work in process and raw materials needed to support our sales growth. In addition, in 2022, we had several large orders in inventory that were not scheduled to ship until early 2023. The inventory turnover in the most recent four quarters was 4.2 times an increase compared to the 4.7 times for the period ended December 25, 2021, for the reasons stated above.
Turning to the liability side, payables and accruals totaled $2.7 million at December 31, '22, down from $3.2 million at December 25, 2021. This change is due to the final payments in 2022 of accruals for our 2021 restructuring costs. Deferred revenue increased from $1.7 million at the end of 2021 to $2.5 million on December 31, 2022. Deferred revenue predominantly represents pre-payments from large orders to help defray the impact on cash of large inventory purchases for these large sales orders.
So for further discussion, I'd like to turn the call back over to Michael.
Michael McCormack - President & CEO
Thank you, Chuck. What a fantastic year. We established new records for the company in terms of revenue and operating profits. First, I would like to thank our investors for their patience. Your vision over the past two years to continuously support a small material science company as we competed against companies significantly larger than CPS was truly appreciated. We are beginning to realize there is an incredible pent-up demand for the products we have engineered. Investors giving us the resource to compete and win is essential to our success. I must thank the incredible increasing number of customers for their continued confidence in our engineering and manufacturing capabilities.
Lastly, all the employees did an outstanding job over the course of the year, and redefined what creating shareholder value looks like moving forward at CPS. As I look back over the year, I'm very proud of the team we have assembled and the accomplishments of the team. Not only did we execute commerce at the highest and most profitable levels in history, but we transitioned from an outdated ERP to an integrated MRP-ERP system that is already beginning to help us achieve even greater results.
We returned to our technical cutting edge routes, operating numerous Small Business Innovative Research, SBIR, and Small Business Technology Transfer, STTR proposals for various federal agencies within the government. We won four awards and are hopeful to begin to convert some of these to Phase 2 awards that are multimillion multiyear awards.
So the obvious question is what's next. What are we -- we are continuing to invest in people, processes, and tools to build an even greater company. We are not content with results. I know we can do even more. I'm quite pleased with the progress we are making in all aspects of the business; sales, product development, operation, finance and support activities.
Our business development efforts are now being run by Anthony Koski. We are sad to see the imminent retirement of our Vice President of Sales, Cheryl Oliveira, and wish her and her husband Rick the best in their next chapter.
Anthony and his team have built upon a base of clients that Cheryl has established and now have numerous growth opportunities, including some breakout prospects that could alter our future significantly in all three of our product lines; metal matrix composites, hermetic packaging, and armor.
As a part of the transition, the Business Development Group has restructured our growing technical product development team to jointly focus on building new customer relations and identifying new opportunities and build a more robust sales pipeline. As a result, we have several developing opportunities in defense, aerospace, and alternative energy markets with significant near and long-term upside. Given both application and competitive sensitivities. I cannot divulge too many details. However, I am confident that our ability to listen to our customers and effectively respond with diverse and unique advanced material solutions that solve their most challenging issues will allow us convert these opportunities and continue to identify new avenues for growth.
Under the leadership of Dr. Steve Kachur and Dr. Mark Occhionero, we have reenergized the contract research and development R&D service business as evidenced by our SBIR and STTR program awards. These programs a highly competitive awards that encourage domestic small business to engage in federal research and development with the potential for commercialization. In addition to these programs, as they advance through R&D to commercialization, they are afforded additional intellectual property protection and sole source manufacturing rights within the federal government.
Operations led by Dan Barton have made significant strides in the past year that positioned for even greater results moving forward. The integration of the MRP with our new ERP has enabled the business to make more informed decisions on process and yield improvements as evidenced by the 6% improvement to gross margin during fiscal '22. We have made a concerted effort to ensure we grew the bottom line with the top line, and Dan's organization executed the plan.
As we look beyond '22 and into fiscal year '23 and future years, CPS is continuing to follow up on the success of the past years with improving production volumes. We have a plethora of advancing material solutions that will enable our customers products to function even more efficiently. We are qualifying more parts every week and are in dialogue with several large aerospace and defense clients that see the value of CPS as an enabling technology.
The future is quite bright at CPS. We have several large-scale future opportunities in all three product lines. These opportunities are (inaudible), also within the markets we are focusing on, aerospace and defence, and commercial consumer electronics. The entire staff is working diligently towards growth and product offerings while improving profitability.
We are pleased with the recent fiscal year '24 performance and continued financial support of our ever-growing shareholder base. We expect that we will continually and incrementally improve as we move forward quarter-to-quarter and year-to-year. We are aware of the unpredictability of the global marketplace, but have positioned the business so we have more diversification in our product offerings and customer base. We believe that this diversification will lead to more consistent and growing results in the future. We have lots of additional opportunities today, both small and large, that keep the entire staff focused on finding the ideal innovative materials solution for our customers' needs.
In closing, my prepared remarks. I would just like to thank the Board of Directors for their continued faith and confidence in my leadership, for our investors, thank you for your patience and belief that CPS is truly a unique material science company with a lot more to offer to clients. For all of our employees, teammates, and agents, thank you for a tremendous year, and we are looking forward to another prosperous '23 and beyond.
Thank you. Chuck and I and Anthony are prepared to answer any questions at this time.
Operator
Certainly. At this time, we'll be conducting a question and answer session. (Operator Instructions)
Michael White.
Michael White - Shareholder
Hey, Mike, congratulations on the record-setting 2022, and very impressive increase in gross margins.
Before I ask my question, I would like to thank you and Dan Barton for your service to the country, as well as acknowledge the tremendous job you have to do at CPS. I'm a long-term shareholder and my question is, with the record operating income in 2022 at cash balances of $8.3 million, any plan to get that cash back to shareholders in a dividend or a share buyback?
Michael McCormack - President & CEO
Hi, Mike, this is Michael. Thank you for your comments about Dan and I service. It was our privilege to serve. The cash position currently is there to help us grow, Michael. We have plans to expand operations, and we are using the cash that we are building up to give us more options to build greater growth in the company.
A dividend or a share buyback program is not a recommendation I have made for the Board of Directors and they are obviously the deciding factor on that. But to date, we are in a growth mode. And growth requires cash. So we're very pleased with our position right now in our cash.
Michael White - Shareholder
Very strong position, yes.
Michael McCormack - President & CEO
Thank you for the question, Michael.
Operator
Thank you.
[Erwin Gomberg].
Unidentified Participant
Yes, hi, Mike. Congratulations on a record sales and earnings year. Can you give us some update on your armor efforts?
Michael McCormack - President & CEO
Sure, Erwin. Nice to talk to you again. Yes, a tremendous year. I think the entire team performed really well. Our armor efforts are continuing to go as planned. We, I think, announced during the year additional orders of the strike based panels to our partner KP, who in turn provides those to the US Navy. We still continue to advance our overseas partners. A solution that we think by the end of '23 may have the final decision for our production award.
Not only Erwin, we also won or Small Business Innovative Research award to develop a new UH-60 Black Hawk armor floor. And we continue to do testing and evaluation with the Southwest Research Institute down in San Antonio, Texas to try to qualify our armor for even greater applications on the larger formations in the military.
Unidentified Participant
In the past in some conference calls, you have referenced the possible armor contract for military vehicles going to South Asia. Can you help us update us on this program?
Michael McCormack - President & CEO
Yes, so that program is still alive and going well. We continue to do optimization testing. We are actually moving into a new phase now, which is integration testing. So where we have to make provisions for mounting onto a vehicle. And we expect that that test will happen sometime in Q2 and then hopefully like I alluded to Erwin, the data production decision will be made later in the year.
Unidentified Participant
All right. Do you have competition on the system or?
Michael McCormack - President & CEO
Well, yes. We always have competition, right. And so one of the advantages of our armor system is that it's relatively lightweight for the threats we're trying to defeat. So when you go with a monolithic steel or aluminum, we have a significant advantage in weight, which provides the vehicle to operate as intended. I think as you recall, there were lots of instances during the US to warfront where we were overburdening vehicles with so much armor that they had second and third [level of flex] on the vehicle drive chain and chassis. So I think one of the advantage of our solution is lightweight to stop a significant threat.
Unidentified Participant
On the armored vehicles, I mean these are mostly new programs. So are there any chance of when they upgrade the old systems that they could use your systems?
Michael McCormack - President & CEO
Yes, well certainly there's always opportunity to do that, right? And so what happens right now is it's a more deliberate contracting schedule right now in the US. But Anthony has been attending several meetings up in the Detroit Arsenal to talk about future years and upgrades to the US fleet. And that's obviously a significant opportunity for us. But that's a long process with big friends that we have to work with.
Unidentified Participant
There carriers are called lightning aircraft carriers. Wouldn't there be an obvious area that since there are in a way many aircraft carriers that would use your system?
Michael McCormack - President & CEO
Yes, while it certainly may be that there are a lot of surface vessels in the US Navy and allied navies that could benefit from our HybridTech armor. We know it has the advantage of relatively lightweight for [high-speed] ballistic threats, and also can withstand the harsh environmental conditions. So I think that bodes well for our future with the surface vessels and the US Navy and the allies.
Unidentified Participant
Okay, thank you.
Michael McCormack - President & CEO
Thank you, Erwin, for your time.
Unidentified Participant
Keep up the good work.
Operator
Thank you. (Operator Instructions) again, everyone.
Ron Richards.
Unidentified Participant
Hey, guys. On the last conference call, you talked about being very excited about the electric vehicle market. I was wondering, is there any updates on electric vehicles?
Michael McCormack - President & CEO
Well, we certainly have lots of progress to report. Anthony, are you on the line? Do you want to take this one?
Antony Koski - Corporate Development Officer
Yes. So hi, Ron, thanks for the question. And so yes, we certainly made a lot of progress. Certainly the commercial vehicle market on is definitely a competitive and certainly a cost sensitive market. So we continue to work with customers and the system integrators are try and identify where can we bring value. So we're certainly making progress in those discussions and understanding where some of the gaps are in trying to understand this investment in US infrastructure and the EV market and how we can bring value there.
But again, it's a long process, a long qualification process, and we're really working on understanding what the needs and gaps are in that market so that we can identify a technology to bring value to those needs. So we're certainly making progress, but again, it is a competitive process and it also is very cost sensitive. So we're really focusing on what is the value proposition and how can we meet those needs.
Unidentified Participant
Okay. And one other question I had was, you were talking about possibly hiring on investor relations firm in the fourth quarter also. Any progress on that?
Michael McCormack - President & CEO
Yes. So this is -- hi, Ron, this is Michael. So we have narrowed it down to a few IR firms, if you will. And we decided that we are going to begin by attending two investor relations conferences in fiscal '23 by one remotely and one in person. And so we've targeted -- I think one is in Q2 and one is in -- don't hold me to it, it's either Q3 or Q4. And then we'll measure our success with that. We certainly appreciate the opportunity to talk to investors directly, and we like that approach. And so we're going to drive that first, Ron. But we do have two or three IR firms we are still engaged with talking about how they can help us add value.
Unidentified Participant
Okay, great. Thank you.
Operator
Thank you. (Operator Instructions)
There are no further questions in the queue.
Michael McCormack - President & CEO
Okay, well, Matthew, thank you for hosting us today. Anthony -- I think Dan is out probably in the room too with Chuck. And we think the future is -- go ahead.
Chuck Griffith - CFO
I just said Dan did come in, yes he's here.
Michael McCormack - President & CEO
We think the future is very bright for CPS. We are continuing to make progress on just about every front. We've had a lot of success in '22. We just wanted to share that with investors and the community today. But we're not done. We're going to move forward in '23. You can kind of see the blueprint of our growth plan, and that continues to show very good results. So that's kind of what we're doing. I appreciate everybody calling in today and listening in, and thank you for your continued support.
Operator
Thank you, everyone -- (multiple speakers). You may disconnect at this time and have a wonderful day. Thank you for your participation.
Michael McCormack - President & CEO
Thank you, Matt.