Sypris Solutions, Inc. · NASDAQ:SYPR
Sypris Solutions — Q3 2022 Earnings Presentation
15 slides from Sypris Solutions's earnings presentation, Nov 16, 2022
Slide 1: 2022 Third Quarter Earnings Conference Call
Jeffrey T. Gill 2022 Third Quarter President & CEO Earnings Conference Call Richard L. Davis Vice President & CFO November 16, 2022
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Non-GAAP Financial Measures Any non-GAAP measures, and their related reconciliation to GAAP measures, are provided and available on the company’s website: www.sypris.com Each forward-looking statement herein is subject to risks and uncertainties, as detailed in our most recent
Slide 3: Table of Contents
Table of Contents • Overview • Outlook • Financial Review • Key Takeaways 3
Slide 4: Overview: 3Q22 Highlights
Overview 3Q22 Highlights • Orders were robust for the period; backlog rising 92% YOY – Sypris Electronics • Orders up 75% YOY • Backlog exceeds $100.0 million, up 99% YOY; up 86% YTD – Sypris Technologies • Energy orders up 33% YOY • Energy backlog up 15% YOY; up 84% YTD • Demand for commercial vehi
Slide 5: Overview: 3Q22 Highlights - Important Announcements
Overview 3Q22 Highlights • Important Announcements – An award to provide specialty high-pressure closures for use in the Permian Highway Pipeline Expansion Project; up to 70” in diameter and 20,000 pounds in weight; shipments to be completed by year-end – The purchase of intellectual property rights
Slide 6: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 production is expected to increase 17.5% in 2022 − Pent-up demand − Capacity shortfalls − Carrier profitability − Goods for services swap − Transition to e-commerce • Shortage of semiconductors and other key components has caused OEM production disruptions • Long
Slide 7: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • U.S. natural gas prices are up significantly, with Henry Hub spot prices of $7.88 per million BTU, up from $5.16 last year • Oil prices have continued to increase over the past year,
Slide 8: Outlook: Defense Electronics
Outlook Defense Electronics • The long-term outlook for defense spending remains positive • Technology upgrades to existing strategic platforms will take precedence − Naval electronic warfare; surveillance − Avionics upgrades; electronic warfare − Missile guidance − Secure communications • Deep-sea
Slide 9: Outlook: Revenue Mix
Outlook Revenue Mix • Revenue is expected to increase 20%- 25% in 2023 Specialty Automotive Communications • Record backlog of $100 million for defense electronics leads to expanded Energy mix in 2023 • New programs and the strength of the commercial vehicle market drives an increase in volume in 20
Slide 10: Outlook: Summary
Outlook Summary • Backlog jumped 92% YOY as a result of multiple new contract awards; provides platform for strong 2023 growth – Backlog now exceeds $100 million at Sypris Electronics, reflecting a 99% YOY increase – Backlog for energy products up 84% YTD • Our markets overall are stable – Defense i
Slide 11: Financial Review Third Quarter 2022
Financial Review Richard L. Davis Vice President & CFO Third Quarter 2022 November 16, 2022
Slide 12: 3Q Financial Results
3Q Financial Results $ millions except per share data 3Q 2022 3Q 2021 ST SE Consolidated Consolidated Change Net Revenue $ 17.0 $ 8.2 $ 25.2 $ 25.7 $ (0.5) Gross Profit 1.1 0.9 2.0 4.0 (2.0) Gross Margin 6.3% 11.0% 7.8% 15.5% (770) bps Operating (Loss) Income (1.6) 1.0 (2.6) Net (Loss) Income (2.2)
Slide 13: YTD Financial Results
YTD Financial Results $ millions except per share data 3Q YTD 2022 3Q YTD 2021 ST SE Consolidated Consolidated Change Net Revenue $ 52.1 $ 28.3 $ 80.4 $ 71.6 $ 8.8 Gross Profit 6.3 3.9 10.3 10.1 0.2 Gross Margin 12.2% 13.9% 12.8% 14.1% (130) bps Operating (Loss) Income (0.4) 0.8 (1.2) Net (Loss) Inc
Slide 14: Gross Margin Performance
Gross Margin Performance • Outlook for FY 2022 reduced on lower revenue in Q3, related production inefficiencies and unfavorable mix • Reduction in revenue due to supply chain issues in Q3 expected to ship in Q4, partly restoring gross margin • FY 2022 outlook also impacted by material price adjustm
Slide 15: Key Takeaways
Key Takeaways • Sypris Electronics orders up 75% YOY, backlog up 99% YOY and 86% YTD to a record $100 million • Energy product orders up 33% YOY, backlog up 15% over the prior year and 84% YTD • Purchase of intellectual property rights for a closure product line from a competitor; expands our energy