Sypris Solutions, Inc. · NASDAQ:SYPR
Sypris Solutions — Q2 2022 Earnings Presentation
16 slides from Sypris Solutions's earnings presentation, Aug 16, 2022
Slide 1: 2022 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2022 Second Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO August 16, 2022
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: 2Q22 Highlights
Overview 2Q22 Highlights • Revenue rose 11.8% – 25.6% increase for Sypris Electronics – 4.7% increase for Sypris Technologies • Orders increased 360% year-over-year and 169% sequentially, resulting in a 77.4% rise in backlog from 2Q21 – Orders for Sypris Electronics jumped 524.5% – Orders for energy
Slide 5: Overview: New Contract Awards and Releases
Overview 2Q22 Highlights • New Contract Awards and Releases – Sypris Electronics • A follow-on contract to produce advanced, integrated electronic warfare and communications avionics modules for a U.S. stealth, multirole, combat aircraft program, with production expected to begin in 2022 • A multi-y
Slide 6: Overview: Contract Awards and Outlook
Overview 2Q22 Highlights • New Contract Awards and Releases – Sypris Technologies • Multi-year contract extension to provide drivetrain components for use in commercial vehicles with a leading global commercial vehicle OEM • Outlook – Confirmed 25%-30% year-over-year revenue growth – 25 to 50 basis
Slide 7: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 production is expected to increase 17.2% in 2022 − Pent-up demand − Capacity shortfalls − Carrier profitability − Goods for services swap − Transition to e-commerce • Shortage of semiconductors and other key components has caused OEM production disruptions throug
Slide 8: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • U.S. natural gas prices are up significantly, with Henry Hub spot prices of $7.70 per million BTU, up from $3.26 last year • Oil prices have increased significantly over the past year
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%- Specialty Automotive 30% in 2022 Communications • New programs and the strength of the commercial vehicle market drives an increase in volume in 2022, but mix will Commercial Vehicle decline due to strength of other markets • Backlog for def
Slide 11: Outlook: Summary
Outlook Summary • Revenue expanded 11.8% • Backlog jumped 77.4% year-over-year on a 360.7% increase in orders from multiple new contract awards • Our markets are stable – Production of commercial vehicles is forecast to expand 17.2% in 2022 – Defense spending is expected to remain robust, especially
Slide 12: Financial Review Second Quarter 2022
Financial Review Anthony C. Allen Vice President & CFO Second Quarter 2022 August 16, 2022
Slide 13: 2Q Financial Results
2Q Financial Results $ millions except per share data 2Q 2022 2Q 2021 ST SE Consolidated Consolidated Change Net Revenue $ 18.0 $ 11.1 $ 29.0 $ 26.0 $ 3.1 Gross Profit 2.1 1.6 3.8 4.3 (0.5) Gross Margin 11.9% 14.9% 13.0% 16.6% (360) bps SG&A 3.7 3.4 0.3 Operating Income 0.0 0.9 (0.9) Net (Loss) Inco
Slide 14: 1H Financial Results
1H Financial Results $ millions except per share data 1H 2022 1H 2021 ST SE Consolidated Consolidated Change Net Revenue $ 35.1 $ 20.1 $ 55.2 $ 46.0 $ 9.3 Gross Profit 5.3 3.0 8.3 6.1 2.2 Gross Margin 15.0% 15.1% 15.0% 13.3% 170 bps SG&A 7.1 6.3 0.8 Operating Income (Loss) 1.2 (0.2) 1.3 Net (Loss) I
Slide 15: Gross Margin Performance
Gross Margin Performance • Gross margin for 1H 2022 of 15.0% in line with FY 2021 • Outlook for FY 2022 adjusted to 25 to 50 bps YOY improvement • Lower Q2 margin performance, 2H revenue mix, material price adjustments and inflationary pressures contribute to FY outlook • Sequential and YOY quarterl
Slide 16: Key Takeaways
Key Takeaways • Revenue for 2Q increased 11.8% with SE up 25.6% and ST up 4.7% • Revenue for 1H increased 20.1% with SE up 28.7% and ST up 15.8% • Gross margin decreased in 2Q but YTD margin of 15.0% above PY by 170 bps • Orders for 2Q increased 360% year over year and 169% sequentially to drive bac