Slide 1: 2015 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2015 Second Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO August 18, 2015
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 recen
Slide 3: Table of Contents
Table of Contents • Overview • Segment Review – Sypris Electronics – Sypris Technologies • Financial Review • Summary • Q&A Session 3
Slide 4: Overview: Q2 Highlights
Overview Q2 Highlights • Q2 marked a significant improvement over Q1 – Revenue increased 10% – Gross profit increased by $3.1 million, or 100% – EBITDA increased $5.5 million, or 53% • The team did an outstanding job maintaining core technical and operational capabilities, positioning the Company fo
Slide 5: Sypris Electronics Q2 Highlights
Sypris Electronics Q2 Highlights • Financial Results – Revenue declined 7% from 2Q14 and was down 2% from 1Q15 – Gross profit was flat year-over-year • Awarded an important contract to develop an embedded encryption module to protect UAVs from cyber attack • Conducted multiple demonstrations and ent
Slide 6: Sypris Electronics Outlook
Sypris Electronics Active Nation State Outlook A Threat Level • US defense industry challenges are likely to continue Advanced Persistent Threat Most B Organizations – We remain committed to improving our portfolio Passive C E D Conventional Threat through diversification, achieving a better Agility
Slide 7: Sypris Technologies Q2 Highlights
Sypris Technologies Q2 Highlights • Financial Results – Sales increased 14% sequentially – Gross profit increased by $4.7 million, or 114% – EBITDA increased by $7.2 million, or 99% • Headcount reduced by over 350 in Q1; additional 85 in Q2; with the sale of Morganton, expected to be stable • New pr
Slide 8: Sypris Technologies Highlights
Sypris Technologies Q1 Highlights • New contract awards in house – Forging and machining of axle shafts for Volvo – Forging and machining of Ultra Series axle shafts • New business development remains brisk, with quoting activity at very high levels • Ultra series axle shaft successfully completed t
Slide 9: Sypris Technologies Outlook
Sypris Technologies Outlook • Markets Remain Positive – Class 5-8 commercial vehicle production is expected to be up 8% versus 2014 (ACT Research August 2015) – Light vehicle and trailer markets remain positive – Oil and gas outlook is uncertain given recent price volatility • Performance – Q3 will
Slide 10: Financial Review Second Quarter 2015
Financial Review Anthony C. Allen Vice President & CFO Second Quarter 2015 August 18, 2015
Slide 11: Consolidated Financial Results
Consolidated Financial Results $ millions Sequential 2015 Q2 2015 Q1 Change 2014 Q2 Net Revenue $ 40.8 $ 37.0 $ 3.8 $ 93.1 Gross Profit (Loss) $ - $ (3.2) $ 3.2 $ 10.8 EBITDA $ (4.8) $ (10.3) $ 5.5 $ 4.3 Free Cash Flow $ (6.3) $ (5.6) $ (0.7) $ 0.3 Revenue growth from commercial vehicle volume for
Slide 12: Q1 to Q2 Sequential EBITDA Walk
Q1 to Q2 Sequential EBITDA Walk $ millions 2015 Q1 $ (10.3) Conversion on Revenue Growth & Cost Reductions 3.3 Legal & Professional Fees 1.7 Arbitration Settlement 0.5 2015 Q2 $ (4.8) 12
Slide 13: Segment Performance
Segment Performance $ millions Sypris Technologies Sypris Electronics 2015 Q2 2015 Q1 2015 Q2 2015 Q1 Net Revenue $ 32.0 $ 28.1 $ 8.7 $ 8.9 Gross Profit (Loss) $ 0.6 $ (4.1) $ (0.6) $ 0.9 EBITDA $ - $ (7.3) $ (2.4) $ (1.1) Net Revenue ST increase attributable to new program ramps and demand from exi
Slide 14: Debt Status
Debt Status $ millions 2015 Q2 August 10, 2015 Change Senior Debt $ 16.8 $ 2.9 $ (13.9) Subordinated Debt $ 8.5 $ 9.0 $ 0.5 Total Debt $ 25.3 $ 11.9 $ (13.4) 14
Slide 15: Summary
Summary • Sequential improvements in operating results from Q1 to Q2 driven by actions to replace revenue and drive cost reductions • Additional cost reductions identified for implementation beginning in Q3 to deliver $4.7 million in annualized savings • Sale of the Morganton facility and Meritor no
Slide 16: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO Q2 Earnings Conference Call Anthony C. Allen Vice President & CFO August 18, 2015