Slide 1: 2020 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2020 Second Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO August 13, 2020
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 • Q&A Session 3
Slide 4: Overview: 2Q20 Highlights
Overview 2Q20 Highlights • Revenue decreased 29.8% YOY; 23.5% sequentially – Lower market volumes as a result of the temporary closure of customer plants in April and May for Sypris Technologies • Recovery commenced in June – Sypris Electronics sales up 28.3% YOY; 11.5% sequentially • Gross margin o
Slide 5: Overview: 2Q20 Highlights - Sypris Electronics
Overview 2Q20 Highlights • Sypris Electronics – Revenue increased 28.3% YOY; 11.5% sequentially • Strong backlog of orders; up 22.5% from 2019 year-end • Improved component availability – Gross profit increased 72.9% YOY; 61.6% sequentially – Gross margin increased to 18.3%; up 470 basis points YOY
Slide 6: Overview: 2Q20 Highlights - Sypris Technologies
Overview 2Q20 Highlights • Sypris Technologies – Revenue declined 55.9% YOY and 45.7% sequentially – Many customers idled operations during April and May due to the pandemic; opened back up in June – Retained workforce; performed preventative maintenance; trained individuals to improve capabilities
Slide 7: Revenue Mix by Market
Revenue Mix by Market • Significant shift in markets served provides balanced revenue mix Specialty Automotive • Launch of transmission shaft program Communications for Specialty Automotive market adds a new market that did not exist in 2019 Commercial Vehicle • Defense Electronics, Energy and Speci
Slide 8: Outlook
Outlook • The market for defense electronics remains positive; we have a strong focus on ensuring that we maintain deliveries for our customers – Order backlog is up 22.5% from year-end – Margins have expanded significantly with volume • Demand from commercial vehicle, specialty automotive, all- ter
Slide 9: Financial Review Second Quarter 2020
Financial Review Anthony C. Allen Vice President & CFO Second Quarter 2020 August 13, 2020
Slide 10: 2Q Financial Results
2Q Financial Results $ millions 2Q 2020 2Q 2019 Consolidated ST SE Consolidated Change Net Revenue $ 17.2 $ 7.4 $ 9.7 $ 24.4 $ (7.3) Gross Margin 11.7% 3.1% 18.3% 16.3% (460) bps SG&A $ 2.8 $ 3.6 $ (0.8) Operating Income (Loss) $ (0.9) $ (0.8) $ 1.0 $ 0.3 $ (1.1) • Consolidated revenue down $7.3 mil
Slide 11: 1H Financial Results
1H Financial Results $ millions 1H 2020 1H 2019 Consolidated ST SE Consolidated Change Net Revenue $ 39.6 $ 21.2 $ 18.4 $ 44.0 $ (4.4) Gross Margin 14.1% 12.9% 15.6% 11.0% 310 bps SG&A $ 6.1 $ 7.1 $ (1.0) Operating (Loss) Income $ (0.6) $ 0.3 $ 1.4 $ (2.4) $ 1.8 • Consolidated revenue down $4.4 mill
Slide 12: Quarterly Revenue
Quarterly Revenue • Class 8 downturn beginning in 4Q 2019 offset by SE growth and ST market diversification in 1Q • COVID-19 impacted revenue beginning late March • ST 2Q revenue decreased 55.9% vs PY and 45.7% sequentially • SE 2Q revenue of $9.7m is highest since 2015 • Rebound in ST orders starti
Slide 13: Gross Margin Performance
Gross Margin Performance • 2Q gross margin above historical levels despite depressed market conditions • SE quarterly gross margin of 18.3% ranks best since 2012 • Margin conversion on SE revenue growth along with improved material availability and higher backlog provide opportunity for further expa
Slide 14: Key Takeaways
Key Takeaways • 2Q revenue decreased 29.8% over the prior year and 23.5% sequentially • Gross profit impacted by the decline in volume; Consolidated 2Q margin of 11.7% and 1H margin of 14.1% • Demand for Sypris Technologies began to recover in June and all customer plants are open at this time • 2Q
Slide 15: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO 2Q Earnings Conference Call Anthony C. Allen Vice President & CFO August 13, 2020