Slide 1: 2021 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2021 Second Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO August 12, 2021
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 rece
Slide 3: Table of Contents
Table of Contents • Overview • Outlook • Financial Review • Key Takeaways 3
Slide 4: Overview: 2Q21 Highlights
Overview 2Q21 Highlights • Revenue increased 51.4% YOY and 30.0% sequentially – Driven by the accelerating expansion of shipments at Sypris Technologies • Gross profit increased 103.2% YOY and 137.3% sequentially – Gross margin up 420 bps YOY and 750 bps sequentially • EPS rose to $0.17, up from a l
Slide 5: Overview: New Contract Awards
Overview New Contract Awards • Sypris Electronics – Entered into a contract to build and test electronic assemblies for a Deep Space program; 2021 start date – Announced an agreement to produce electronic power supply modules for multiple Subsea Communication Networks; 2021 start date – Received a f
Slide 6: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 demand expected to increase 34.6% in 2021 and a further 24.6% in 2022 − Strong US economic expansion − Housing strength − Manufacturing prosperity − Transition to e-commerce − Carrier profitability − Goods for services swap • “Freight demand is overwhelming capac
Slide 7: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • Oil prices have increased significantly over the past year, with the price of WTI up 75% from August 2020; Brent crude up 64% • Outlook for oil prices to increase to $72 per barrel fo
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 30- Specialty Automotive 35% YOY, resulting in a slight change Communications in mix • New programs and the strength of the Commercial Vehicle market are Commercial Vehicle expected to expand its share in 2021 • The future growth of Defense Elect
Slide 10: Outlook: Summary
Outlook Summary • New contract awards and market strength are expected to fuel a 30-35% growth in the top line for 2021 on a YOY basis – The commercial vehicle market is forecast to expand 34.6% in 2021 and an additional 24.6% in 2022; new program awards are expected to add further growth to 2022 –
Slide 11: Financial Review Second Quarter 2021
Financial Review Anthony C. Allen Vice President & CFO Second Quarter 2021 August 12, 2021
Slide 12: 2Q Financial Results
2Q Financial Results $ millions except per share data 2Q 2021 2Q 2020 Consolidated ST SE Consolidated Change Net Revenue $ 26.0 $ 17.1 $ 8.8 $ 17.2 $ 8.8 Gross Margin 16.6% 14.6% 20.4% 12.4% 420 bps Operating Income (Loss) $ 0.9 $ 1.3 $ 0.8 $ (0.9) $ 1.8 Net Income (Loss) $ 3.8 $ (0.3) $ 4.2 EPS $ 0
Slide 13: 1H Financial Results
1H Financial Results $ millions except per share data 1H 2021 1H 2020 Consolidated ST SE Consolidated Change Net Revenue $ 46.0 $ 30.3 $ 15.6 $ 39.6 $ 6.4 Gross Margin 13.3% 12.1% 15.7% 14.8% (150) bps Operating Income (Loss) $ (0.2) $ 1.4 $ 0.7 $ (0.6) $ 0.4 Net Income (Loss) $ 2.2 $ (0.7) $ 2.8 EP
Slide 14: Gross Margin Performance
Gross Margin Performance • 2Q gross margin of 16.6% up 750 bps from 1Q and 420 bps YOY • Updated outlook for 2H gross margin to increase 300-400 bps YOY • Margin improvement expected for both segments in second half as revenues increase and efficiencies improve • Class 8 production forecast, recent
Slide 15: Key Takeaways
Key Takeaways • Consolidated revenue increased 51.4% YOY, gross margin improved 420 bps and PPP forgiveness contributed to EPS of $0.17 for 2Q • Sypris Electronics backlog up 29.3% YOY and 51.9% YTD, driven by the strength of orders in the first half of 2021; long-term outlook for defense spending r