Slide 1: Second Quarter 2011 Earnings Conference Call
Driving Change Second Quarter 2011 Earnings Conference Call August 9, 2011 Jeffrey T. Gill President and CEO Brian A. Lutes Vice President & CFO Anthony C. Allen Vice President & Treasurer
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 serious risks and should not be relied upon, as detai
Slide 3: Table of Contents
Table of Contents • Overview • Segment Review – Aerospace & Defense – Industrial • Q2 Financial Review • Summary • Q&A Session 3
Slide 4: Overview
Overview • Key Highlights for Q2 – Revenue increased 35% from the prior year quarter, driven by a 48% increase in sales for our Industrial Group. – Gross profit increased 77% from the prior year period, reflecting a 210% increase in gross profit for our Industrial Group. – Profit conversion on incre
Slide 5: Aerospace & Defense
Aerospace & Defense • Revenue declined slightly from prior year levels reflecting the delay in the approval of the 2011 Defense Appropriations Bill. • The approval of the fiscal year 2011 Federal budget in April shifted the timing of anticipated US Government agency customer orders to the second hal
Slide 6: Aerospace & Defense
Aerospace & Defense • We continued to fund efforts to support existing and new business opportunities including: – The development of a centralized cryptographic key management system to protect the Smart Grid from cyber attacks for the Department of Energy; – The development of advanced prototypes
Slide 7: Industrial
Industrial • Revenue increased 48% during the quarter when compared to the prior year period and rose 16% sequentially from Q1 driven by the continued expansion of the commercial vehicle and trailer markets. • Gross profit increased 210% and 38% on a year-over-year and sequential basis, respectively
Slide 8: Industrial
Industrial • The fundamentals of the commercial vehicle market remain favorable. – Freight volumes continue to increase. – The price of diesel fuel has retreated. – The cost of money remains low and the availability of credit is increasing. – Active truck capacity is tight, as is the availability of
Slide 9: Industrial
Industrial • ACT is currently forecasting robust demand across all segments extending out through 2013. Q1 Q2 Q3 Q4 2011 2012 2013 Class 5-7 39.7 39.6 43.3 46.2 168.8 177.9 201.2 Year-Over-Year 46.7% 42.5% 42.3% 41.5% 43.1% 5.4% 13.1% Class 8 52.1 62.1 68.6 71.9 254.6 329.9 334.2 Year-Over-Year 49.0
Slide 10: Consolidated Financial Results
Consolidated Financial Results ($ in thousands) 2Q11 2Q10 ∆ Highlights Revenue 85,058 63,106 34.8% SIG revenue growth of 48% Gross Profit 8,111 4,592 76.6% Positive conversion on incremental SIG sales Gross Margin 9.5% 7.3% EBITDA(1) 3,592 898 300.0% Positive SIG conversion of increased volumes (1)
Slide 11: Aerospace & Defense Financial Results
Aerospace & Defense Financial Results ($ in thousands) 2Q11 2Q10 ∆ Highlights Revenue 16,173 16,535 (2.2%) Delayed budget approval slowed funding to 2H Gross Profit 1,031 2,306 (55.3%) Engineering support costs for current products Gross Margin 6.4% 13.9% (1) EBITDA (1,974) (840) (135.0%) Adjusted o
Slide 12: Industrial Financial Results
Industrial Financial Results ($ in thousands) 2Q11 2Q10 ∆ Highlights Revenue 68,885 46,571 47.9% Continuing expansion of CV market Gross Profit 7,080 2,286 209.7% Positive conversion; productivity and efficiency Gross Margin 10.3% 4.9% Seeing positive results from CI/Lean initiatives (1) EBITDA 7,52
Slide 13: Summary
Summary • Sales increased 35%, while gross profit rose 77% from the prior year period, reflecting strong conversion on incremental revenue driven by our reduced cost structure and sustained operational performance: – Industrial Group gross margin exceeded 10% of revenue, up from less than 5% for the
Slide 14: Q & A Session
Earnings Conference Call Q & A Session 14