Slide 1: 2008 Earnings Conference
2008 Earnings Conference November 5, 2008 Jeffrey T. Gill President and CEO Brian A. Lutes Vice President & CFO
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer 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: Agenda
Agenda Overview Market Outlook Strategic Review and Actions Taken Financial Discussion – Q3 2008 Results Conclusion Q&A Session 2
Slide 4: Overview
Overview Q3 2008 – Key Results: ● EPS lower than guidance ● Revenue $5 million below mid-point of guidance > Electronics Group revenue increased 14% compared to prior year ¾ 19% increase in Aerospace & Defense ¾ 6% increase in Test & Measurement > Industrial Group revenue declined to $58 million,
Slide 5: Market Outlook
Market Outlook ACT North American Production Forecast Heavy-Duty Vehicles Class 8 October forecast for 2008 down 5% 400,000 350,000 from July forecast 300,000 250,000 Reflects continued impact of credit 200,000 availability and weak economy 150,000 100,000 Current view shows 9% decline from 20
Slide 6: Market Outlook
Market Outlook ACT North American Production Forecast Class 8 Heavy-Duty Vehicles 80,000 Q308 11% higher than Q307, but 70,000 11% lower than Q208 60,000 50,000 Economy and fuel prices placing 40,000 30,000 pressure on recovery forecast 20,000 Q408 down 4% vs. prior year period 10,000 - and 13
Slide 7: Market Outlook
Market Outlook Industrial Group – The outlook for the production of trailers continues to weaken, with 2008 volume now expected to decline 30% from 2007 levels – The road to recovery in class 5-7 production has slowed considerably, driven largely by the economy – Light truck production has fallen
Slide 8: Strategic Review
Strategic Review NAFTA economic environment challenging – Housing and industrial production are down – Energy prices are on the front end of placing a real drag on the economy – Credit continues to tighten across all industry and market segments – Consumer confidence continues to be at risk Resu
Slide 9: Strategic Review – Actions Taken
Strategic Review – Actions Taken Merging Sypris Data Systems with Sypris Electronics – Will eliminate redundant overhead and costly facility in Southern California – Becomes an integrated product line within Sypris Electronics – Expect annualized savings of $2.5 million once completed Closing In
Slide 10: Q3 2008 Solutions
Q3 2008 SOLUTIONS
Slide 11: Q3 2008 Results
Q3 2008 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $100 – $110 $100 $3 – $5 ($0.20) – ($0.25) ($0.42) ($1) Guidance Actual Guidance Actual Guidance Actual Revenue at low end of guidance PBT and EPS below guidance Cash flow below guidance SIG volumes decline in m
Slide 12: Conclusion
Conclusion The third quarter results fell below our EPS guidance as a result of a material shortfall in revenue from our Industrial Group, foreign exchange losses and absence of tax benefits Our Industrial Group is facing increasingly stiff headwinds in the short-term, driven by reduced freight