Slide 1: 2016 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2016 Second Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO August 17, 2016
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 • Transaction • Segment Outlook – Sypris Electronics – Sypris Technologies • Financial Review • Summary • Q&A Session 3
Slide 4: Overview: Q2 Highlights
Overview Q2 Highlights • Q2 marked continued improvement over the prior year comparable period, despite softness in the commercial vehicle market – Revenue for the Company was $23.5 million, reflecting a reduction in demand for Class 8 vehicles – Gross profit increased $0.8 million, reflecting an im
Slide 5: Transaction Highlights
Transaction Active Nation State Highlights A Threat Level B • Announced the sale of the Cyber Security Solutions Advanced Persistent Threat Most business of Sypris Electronics to Analog Devices, Inc. Organizations Passive C E D Conventional for $42 million Threat Agility/Speed of Action • The busine
Slide 6: Transaction
Transaction • Approximately 67 people will transfer to ADI, but are expected to remain in their existing geographic locations of Tampa, Florida; Columbia, Maryland; West Lafayette, Indiana; and Copenhagen, Denmark • The transaction includes a long-term supply agreement between Sypris and Analog unde
Slide 7: Sypris Electronics Outlook
Sypris Electronics Active Nation State Outlook A Threat Level B • Sypris will retain its core trusted manufacturing Advanced Persistent Threat Most operations in Tampa, Florida with plans to relocate the Organizations Passive C E D Conventional business into a smaller manufacturing footprint prior t
Slide 8: Sypris Technologies Outlook
Sypris Technologies Outlook • Markets – 2016 Class 8 commercial vehicle production is forecasted to fall 28% versus 2015 (ACT Research August 2016) – Medium and light vehicle markets remain positive – Oil and gas appears to be improving as oil prices show signs of recovery and domestic pipeline proj
Slide 9: Financial Review Second Quarter 2016
Financial Review Anthony C. Allen Vice President & CFO Second Quarter 2016 August 17, 2016
Slide 10: Consolidated Financial Results
Consolidated Financial Results $ millions Consolidated Sypris Technologies Sypris Electronics 2016 Q2 2015 Q2 Change 2016 Q2 2015 Q2 Change 2016 Q2 2015 Q2 Change Net Revenue $ 23.5 $ 40.8 $ (17.3) $ 14.8 $ 32.0 $ (17.2) $ 8.7 $ 8.7 $ - Gross Profit $ 0.7 $ (0.0) $ 0.7 $ (0.3) $ 0.6 $ (0.9) $ 1.0 $
Slide 11: Transaction Considerations
Transaction Considerations • Divestiture of Electronics’ CSS business for $42 million cash • Preliminary estimate for gain on sale is approximately $33 million or $1.67 per share • Net proceeds available at closing is approximately $37.5 million – After deducting direct transaction costs of $3 milli
Slide 12: Transaction Considerations
Transaction Considerations • Assets sold include intellectual property, certain inventory and PPE directly related to CSS business; retained substantially all working capital and manufacturing equipment • Preliminary estimate of net asset value of divested assets is approximately $5 million; book va
Slide 13: Pro Forma Debt & Cash Analysis
Pro Forma Debt & Cash Analysis $ millions 2016 Q2 Pro Forma 2016 Q2 Change Senior Revolving Credit Facility $ 4.8 $ - $ (4.8) Senior Tem Debt 10.8 - (10.8) Subordinated Debt 6.5 6.5 - Capital Lease Obligation 3.3 3.3 - Unamortized Loan Costs (1.3) (0.1) 1.2 Total Debt $ 24.1 $ 9.7 $ (14.4) Cash and
Slide 14: Summary
Summary • Commercial vehicle market conditions provided headwinds, however cost reduction actions and favorable revenue mix for Electronics drove improvements in consolidated gross profit and EBITDA • The Company’s balance sheet will benefit immediately from the transaction for the CSS business, inc
Slide 15: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO Q2 Earnings Conference Call Anthony C. Allen Vice President & CFO August 17, 2016