Slide 1: 2023 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2023 Second Quarter President & CEO Earnings Conference Call Richard L. Davis Vice President & CFO August 15, 2023
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: 2Q23 Highlights
Overview 2Q23 Highlights • Revenue increased 22.6% from the prior year period – Up 40.2% for Sypris Electronics – Up 11.7% for Sypris Technologies • Backlog increased 25.5% on a consolidated basis, reflecting positive demand across both segments – Up $23.3 million or 25.0% to $116.6 million for Sypr
Slide 5: Overview: 2Q23 Highlights - Sypris Technologies News
Overview 2Q23 Highlights • Important Public News Releases – Sypris Technologies • We announced a new program to supply drivetrain components for use in the production of a new model of side-by-side utility-terrain vehicles with production to begin in 2024 • Subsequent to quarter end, we announced an
Slide 6: Overview: 2Q23 Highlights - Sypris Electronics News and Outlook
Overview 2Q23 Highlights • Important Public News Releases – Sypris Electronics • We announced new releases under a multi-year production contract to manufacture and test power supply modules for a large, mission-critical U.S. Navy electronic warfare program – Upgrade to precision-guided anti-ship mi
Slide 7: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 production is expected to increase 7.1% in 2023 − Continued pent-up demand − Large customer backlogs supporting 2023 levels • Long-term contract extensions and expansions provide opportunities to grow through market cycles • The current outlook for 2023 indicates
Slide 8: Outlook: Energy
Outlook Energy • European countries boosted LNG imports by 60% in 2022 to make up for declining pipeline gas shipments from Russia • New LNG terminals could boost the continent’s import capacity by one-third by the end of 2024 • With four LNG export facilities in operation, the U.S. became the world
Slide 9: 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 10: Outlook: Revenue Mix
Outlook Revenue Mix • Revenue is expected to increase 25%-30% YOY in 2023 Specialty Automotive Communications • Backlog of $116.6 million for Defense Electronics leads to expanded mix in Energy 2023 • New Commercial Vehicle programs drive an increase in volume in 2023, but overall share will decline
Slide 11: Outlook: Summary
Outlook Summary • Revenue increased 22.6% – Up 40.2% for Sypris Electronics – Up 11.7% for Sypris Technologies • Backlog remains strong; up 25.5% YOY – Up 25.0% for Sypris Electronics – Up 38.0% for the energy products of Sypris Technologies • Market dynamics are positive, with a bullish outlook for
Slide 12: Financial Review Second Quarter 2023
Financial Review Richard L. Davis Vice President & CFO Second Quarter 2023 August 15, 2023
Slide 13: 2Q Financial Results
2Q Financial Results $ millions except per share data 2Q 2023 2Q 2022 ST SE Consolidated Consolidated Change Net Revenue $ 20.1 $ 15.6 $ 35.6 $ 29.0 $ 6.6 Gross Profit 2.0 2.7 4.7 3.8 0.9 Gross Margin 10.0% 17.1% 13.1% 13.0% 10 bps SG&A 3.7 3.7 (0.0) Operating Income 1.0 0.0 0.9 Net Income (Loss) 0.
Slide 14: 1H Financial Results
1H Financial Results $ millions except per share data 1H 2023 1H 2022 ST SE Consolidated Consolidated Change Net Revenue $ 39.6 $ 28.3 $ 67.9 $ 55.2 $ 12.7 Gross Profit 4.6 4.2 8.8 8.3 0.5 Gross Margin 11.7% 14.8% 13.0% 15.0% (200) bps SG&A 7.4 7.1 0.3 Operating Income 1.4 1.2 0.2 Net Income (Loss)
Slide 15: Gross Margin Performance
Gross Margin Performance • FY 2022 decreased on – Less favorable mix – Supply chain delays and defects which caused production delays and inefficiencies – Material price increase pass- throughs to customers without additional markup • FY 2023 increases despite unfavorable foreign exchange rates to a
Slide 16: Key Takeaways
Key Takeaways • Revenue for 2Q 2023 increased 22.6%, with SE up 40.2% and ST up 11.7% • Revenue for 1H 2023 increased 23.0%, with SE up 41.0% and ST up 12.7% • Backlog increased 25.5% for the period, marking the 12th consecutive quarter of year- over-year growth – leading to the ramp-up of new progr