Slide 1: 2008 Earnings Conference
2008 Earnings Conference July 30, 2008 Jeffrey T. Gill President and CEO Anthony C. Allen Acting CFO
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer 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 serious risks and should not be relied upon, as detai
Slide 3: Agenda
Agenda Overview Market Outlook Strategic Direction Conclusion Financial Discussion – Q2 2008 Results – Q3 and FY 2008 Outlook Q&A Session 2
Slide 4: Overview
Overview Q2 2008 – Key Results: ● EPS within the lower end of guidance ● Revenue $6 million below mid-point of guidance > Electronics Group revenue increased 13% sequentially ¾ 15% increase in Aerospace & Defense ¾ 9% increase in Test & Measurement > Industrial Group revenue remained steady at $69
Slide 5: Market Outlook
Market Outlook ACT North American Production Forecast Heavy-Duty Vehicles Class 8 400,000 July forecast for 2008 down 4% from 350,000 March forecast 300,000 250,000 Reflects impact of rising crude oil 200,000 150,000 Current view shows modest 2% 100,000 50,000 increase over 2007 - 2004 2005 20
Slide 6: Market Outlook
Market Outlook ACT North American Production Forecast Class 8 Heavy-Duty Vehicles 80,000 Q308 9% higher than Q307, but 9% 70,000 60,000 lower than Q208 50,000 40,000 Economy and fuel prices placing 30,000 pressure on recovery forecast 20,000 10,000 Q408 up 26% vs. prior year period - and 15% s
Slide 7: Market Outlook
Market Outlook Industrial Group – The outlook for the production of trailers continues to weaken, with 2008 volume now expected to decline 30% from 2007 levels – The road to recovery in class 5-7 production has slowed considerably, driven largely by the economy – Light truck production has fallen
Slide 8: 2008 Priorities
2008 Priorities Complete Phase 1 of SIG restructuring…prepare for market upturn – New business transfers are on track – Exiting non-core lines of business on schedule – New leadership team populated and driving commercial and operating improvements – Productivity results beginning to show from ent
Slide 9: Strategic Review
Strategic Review NAFTA economic environment challenging – Housing and industrial production are down – Energy prices are on the front end of placing a real drag on the economy – Credit continues to tighten across all industry and market segments – Consumer confidence continues to be at risk Resu
Slide 10: Conclusion
Conclusion The second quarter results met guidance for EPS despite a material shortfall in revenue from our Industrial Group The outlook for Electronics remains positive, while our Industrial Group continues to fight short-term reductions in demand – especially for light, medium and trailer comp
Slide 11: Q2 2008 / Outlook
Q2 2008 / Outlook 10 SOLUTIONS
Slide 12: Q2 2008 Results
Q2 2008 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $115 – $118 $110 ($13) ($0.00) – ($0.05) ($0.05) ($14) – ($16) Guidance Actual Guidance Actual Guidance Actual Revenue below guidance PBT and EPS within guidance Cash flow above guidance SIG volumes decline in l
Slide 13: Q3 2008 Outlook
Q3 2008 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $105 $100 – $110 $0.14 $3 – $5 ($0.20) – ($0.25) ($9) 2007 Guidance 2007 Guidance 2007 Guidance Revenue flat with prior year Market decline offsets productivity Cash flow improves by $12-$14 SIG down 12% from PY
Slide 14: Total Year 2008 Outlook
Total Year 2008 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $460 – $480 $425 – $445 $0.05 – $0.10 $7 – $10 $0 ($0.33) – ($0.43) Prior Guidance Current Fcast Prior Guidance Current Fcast Prior Guidance Current Fcast Revenue down $25 in SIG markets EPS decreased due
Slide 15: Wrap-Up
Wrap-Up Missed Q2 revenue but held within EPS range Updated Q3 and Q4 guidance to reflect deterioration in market forecasts Customer demand down in light truck, class 5-8, and trailer markets Operational improvements delivering expected results but overshadowed by revenue decline 2009 to b