Sypris Solutions, Inc. · NASDAQ:SYPR
Sypris Solutions — Q4 2010 Earnings Presentation
23 slides from Sypris Solutions's earnings presentation, Mar 15, 2011
Slide 1: Fourth Quarter and Full-Year 2010 Earnings Conference Call
Driving Change Fourth F th Quarter Q t and d Full-Year F ll Y 2010 Earnings Conference Call March 15, 2011 Jeffrey T. Gill President and CEO B i A. Brian A Lutes L t Vice President & CFO Anthony C. Allen Vice President & Treasurer
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 serious risks and should not be relied upon, as detai
Slide 3: Table of Contents
Table of Contents • Overview • Segment Review • Q4 and 2010 Full Year Financial Review • Summary • Q&A Session 3
Slide 4: Overview
Overview • Key Highlights for Q4 – R Revenue iincreased d tto $67 $67.2 2 million illi dduring i ththe period, i d up ffrom $66 $66.1 1 million illi iin the fourth quarter of the prior year period, driven by increased Industrial sales in the commercial vehicle and trailer markets – Gross profit incr
Slide 5: Overview
Overview • Key Highlights for Q4 – S Sypris i El Electronics t i opened d a new wholly h ll owned d subsidiary, b idi S Sypris i EEurope A ApS., S based in Copenhagen, Denmark – The U.S. Air Force selected the RASKL electronic key fill device to serve as the sole replacement for the KYK-13 KYK 13 pr
Slide 6: Overview
Overview • Key Highlights for 2010 – 2010 was the th year in i which hi h the th Company C began b tto demonstrate d t t the th substantial b t ti l benefits from the Restructuring Program. Some examples: • During Q4 of 2010, our Industrial Group generated $47.7 million of revenue compared to $47.3
Slide 7: Overview
Overview • Operational effectiveness increased dramatically. Comparing 2010 results with those of 2008: – Our Electronics Group registered a 93% improvement in quality (in terms of PPMs), an 83% reduction in cycle time and a 72% reduction in scrap – Our Industrial Group registered a 75% increase in
Slide 8: Overview
Overview • Key Highlights for 2010 – Th The d demand d ffor commercial i l vehicles hi l b began tto recover iin 2010 2010, with ith Cl Class 8 production increasing to 154,000 units, up from the low of 118,000 units in 2009 – Received an important contract from the Department of Energy to pursue th
Slide 9: Industrial
Industrial • Market Outlook – Continued C ti d recovery d during i 2011 2011 4Q10 Q1 Q2 Q3 Q4 2011 Class 5-7 32.6 32.0 35.2 38.5 41.0 146.7 Change -1.8% 10.0% 9.4% 6.5% 24.4% Class 8 43.8 52.3 60.0 63.2 68.5 244.0 Change 19.4% 14.7% 5.3% 8.4% 58.1% Trailers 38 6 38.6 43.3 43 3 47.4 47 4 50.8 50 8 53
Slide 10: Industrial
Industrial • Market Outlook – Continued C ti d recovery d during i 2011 2011 vs. 2010 Q1 Q2 Q3 Q4 Total Class 5-7 18.1% 24.4% 28.3% 26.2% 24.4% Class 8 49.4% 70.5% 56.8% 56.4% 58.1% Trailers 116.5% 71.7% 50.7% 39.6% 63.0% ACT N.A. Commercial Vehicle OUTLOOK March 10, 2011 10
Slide 11: Industrial – N.A. Unit Volumes
Industrial – N.A. Unit Volumes Class 5-7 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 11
Slide 12: Industrial – N.A. Unit Volumes
Industrial – N.A. Unit Volumes Class 8 400 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 12
Slide 13: Industrial – N.A. Unit Volumes
Industrial – N.A. Unit Volumes Trailer 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 13
Slide 14: Aerospace & Defense
Aerospace & Defense • Launched new subsidiary, Sypris Europe, based in Copenhagen, Denmark – Sypris Europe will have the primary responsibility for developing and sustaining emerging market needs in Europe, Asia and the Middle East as they relate to information assurance and Cyber security – The off
Slide 15: Aerospace & Defense
Aerospace & Defense • Entered into a technology information exchange agreement with Cassidian, formerly known as EADS Defence and Security – The agreement provides a means for both companies to share best-in-class technologies for several critical information assurance areas, including Key Managemen
Slide 16: Q4 Financial Results – Consolidated
Q4 Financial Results – Consolidated ($ in thousands) Fav/ 4Q09 4Q10 (Unfav) Highlights Revenue 66,097 67,233 1,136 SIG improvement offset by lower A&D revenue Gross Profit 5,799 7,553 1,754 Reduced fixed overhead; Lean/CI; Mix Gross Margin 8.8% 11.2% 2.4% Margin expansion expected longer term (1) EB
Slide 17: Q4 Financial Results – Aerospace & Defense
Q4 Financial Results – Aerospace & Defense ($ in thousands) Fav/ 4Q09 4Q10 (Unfav) Highlights Revenue 25,679 19,494 (6,185) Exit of legacy programs Gross Profit 5,232 5,624 392 Impact of increased efficiency, lower costs Gross Margin 20.4% 28.8% 8.4% Continued focus on higher margin programs (1) EBI
Slide 18: Q4 Financial Results – Industrial
Q4 Financial Results – Industrial ($ in thousands) Fav/ 4Q09 4Q10 (Unfav) Highlights Revenue 40,418 47,739 7,321 Heavy truck, trailer volumes up over last year Gross Profit 567 1,929 1,362 Volumes and productivity Gross Margin 1.4% 4.0% 2.6% Lowered breakeven, efficiencies drive conversion partially
Slide 19: 2010 Financial Results – Consolidated
2010 Financial Results – Consolidated ($ in thousands) Fav/ 2009 2010 (Unfav) Highlights Revenue 265,900 266,654 754 SIG improvement offset by lower A&D revenue Gross Profit 16,018 25,867 9,849 Expansion of SIG and A&D margins Gross Margin 6.0% 9.7% 3.7% SIG and A&D restructurings; Lean/CI efforts (
Slide 20: 2010 Financial Results – Aerospace & Defense
2010 Financial Results – Aerospace & Defense ($ in thousands) Fav/ 2009 2010 (Unfav) Highlights Revenue 113,879 75,501 (38,378) Completion of legacy products/programs Gross Profit 19,679 16,864 (2,815) Lower volumes; design change charges Gross Margin 17.3% 22.3% 5.0% Higher margin product and aeros
Slide 21: 2010 Financial Results – Industrial
2010 Financial Results – Industrial ($ in thousands) Fav/ 2009 2010 (Unfav) Highlights Revenue 152,021 191,153 39,132 SIG market upturn; 26% increase in Class 5-8 Gross Profit (3,661) 9,003 12,664 Volume, productivity, lower fixed costs Gross Margin (2.4%) 4.7% 7.1% Leverage exists with continued ma
Slide 22: 2010 Summary
2010 Summary • Gross profit increased 61.5% to $25.9 million, up from $16.0 million in 2009 • The results of the Restructuring Program are real real. The Company’s Company s cost profile has been reduced by an estimated $25.0 million per year, subject to market volumes – We expect the Industrial Gro
Slide 23: Q & A Session
Earnings Conference Call Q & A Session 23