Slide 1: 2015 First Quarter Earnings Conference Call
Jeffrey T. Gill 2015 First Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO May 14, 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 rece
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: Q1 Highlights
Overview Q1 Highlights • First quarter was a real challenge – as expected – Financial results primarily reflect the cessation of shipments to Dana and the related realignment costs – Offset somewhat by improved performance at Sypris Electronics • The team did an outstanding job managing manpower, wo
Slide 5: Sypris Electronics Q1 Highlights
Sypris Electronics Q1 Highlights • Financial Results – Revenue increased 6% from 1Q14 and increased 27% sequentially from 4Q14 – Gross profit and margin increased materially on revenue growth and favorable mix • Commenced shipments for Northrop Grumman on a long-delayed program • Conducted multiple
Slide 6: Sypris Electronics Outlook
Sypris Electronics Active Nation State Outlook A Threat Level B • US defense industry challenges are likely to continue Advanced Persistent Threat Most Organizations – We remain committed to improving our portfolio Passive C E D Conventional Threat through diversification, achieving a better Agility
Slide 7: Sypris Technologies Q1 Highlights
Sypris Technologies Q1 Highlights • Financial Results – Sales, gross profit and EBITDA were each negatively impacted by the termination of shipments to Dana – Shipments of energy products were lower due to timing and market delays • Headcount reduced by ~ 33% • Inventory was managed effectively, wit
Slide 8: Sypris Technologies Q1 Highlights
Sypris Technologies Q1 Highlights • New program launches underway in all plants, contributing to top line growth beginning in Q2 – Carriers, knuckles, I-beams and axle shafts – Full float tubes – Off-highway components • New business development remains brisk, with quoting activity at very high leve
Slide 9: Sypris Technologies Outlook
Sypris Technologies Outlook • Markets Remain Positive – Class 5-8 commercial vehicle production is expected to be up 9% versus 2014 (ACT Research May 2015) – Light vehicle and trailer markets remain positive – Oil and gas outlook is stable but uncertain • Performance – 2Q15 shipments are targeted to
Slide 10: Financial Review First Quarter 2015
Financial Review Anthony C. Allen Vice President & CFO First Quarter 2015 May 14, 2015
Slide 11: Consolidated Financial Results
Consolidated Financial Results $ millions 2015 Q1 2014 Q1 Net Revenue $ 37.0 $ 84.2 Gross Profit (Loss) $ (3.2) $ 10.6 EBITDA $ (10.5) $ 5.7 Free Cash Flow $ (5.6) $ 1.9 • Dana accounted for 59% of 2014 Q1 revenue • SE gross profit improved to 10.6% of revenue in 2015 Q1 • Severance cost and legal f
Slide 12: Q1 Year-Over-Year EBITDA Walk
Q1 Year-Over-Year EBITDA Walk $ millions 2014 Q1 $ 5.7 Volume, Mix, Labor Productivity, Fixed OH Absorption & Other COS (12.1) Deferred Revenue Amortization (1) (2.2) Legal (1.7) Severance (0.3) SG&A, R&D, FX Translation & Other 0.1 2015 Q1 $ (10.5) (1) Amortization of deferred revenue for claim rel
Slide 13: 2015 Q1 Free Cash Flow
2015 Q1 Free Cash Flow $ millions Net Income (Loss) $ (13.0) Net Capital Spending (D&A less Capital Expenditures) 1.9 Deferred Revenue (2.2) Working Capital 7.6 Other 0.1 Free Cash Flow $ (5.6) Net Debt $ 16.5 Net Debt as % of Total Capital 33% 13
Slide 14: Segment Performance
Segment Performance $ millions Sypris Technologies Sypris Electronics 2015 Q1 2014 Q1 2015 Q1 2014 Q1 Net Revenue $ 28.1 $ 75.8 $ 8.9 $ 8.4 Gross Profit (Loss) $ (4.1) $ 11.2 $ 0.9 $ (0.6) EBITDA $ (7.3) $ 11.1 $ (1.4) $ (2.8) Net Revenue ST decrease is primarily driven by the termination of the Dan
Slide 15: 2015 Q2 Outlook
2015 Q2 Outlook $ millions Metric & Target Range Outlook Net Revenue Sequential Growth from Q1 15% to 30% $42 to $48 Gross Profit Percent of Revenue 5% to 9% $2.1 to $4.3 EBITDA Percent of Revenue (9)% to (3)% $(4.0) to $(1.5) • Organic growth during strong commercial vehicle market cycle driving ST
Slide 16: Summary
Summary • Results of operations for Q1 reflect our most challenging transition period with sequential quarterly improvements targeted for the balance of 2015 • Variable cost reductions for ST were appropriately timed but overshadowed by the immediate and significant drop in revenue • Talent retentio
Slide 17: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO Q1 Earnings Conference Call Anthony C. Allen Vice President & CFO May 14, 2015