Slide 1: 2018 Fourth Quarter and Full Year Earnings Conference Call
Jeffrey T. Gill 2018 Fourth Quarter and Full Year President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO March 28, 2019
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 • Outlook • Financial Review • Key Takeaways • Q&A Session 3
Slide 4: Overview: 4Q18 Highlights
Overview 4Q18 Highlights • Revenue increased 11.5% year-over-year to $24.0 million ‒ Automotive and commercial vehicle shipments up 20% ‒ Sypris Electronics up 26.7% ‒ Production and supply chain challenges dampened growth during 4Q for energy; however, up 22% sequentially ‒ Backlog strongly support
Slide 5: Overview: 2018 Highlights
Overview 2018 Highlights • Revenue increased 6.9% year-over-year to $88.0 million ‒ Sypris Technologies up 9.0% ‒ Sypris Electronics up 2.7% • Gross margin more than doubled in 2018, reaching 8.6% as compared to 4.0% for the prior year – Sypris Technologies increased to 12.6%, up from 1.4% in 2017 –
Slide 6: Overview: Truck and Light Vehicle Markets
Overview 2018 Highlights • The heavy-duty truck market is showing considerable strength – N.A. Class 8 orders surpassed a 14-year industry record in 2018 • Executed new long-term agreements with Sisamex ‒ Expanded product lines with various driveline components ‒ Diversified end-use applications in
Slide 7: Overview: Energy Markets Are Expanding
Overview 2018 Highlights • Energy markets are expanding – US oil and natural gas production reached record levels in 2018 – WTI crude oil prices at approximately $58 per barrel after peaking at nearly $77 per barrel – US LNG exports grew by more than 50% in 2018 • Oil production in the Permian Basin
Slide 8: Overview: Defense and Aerospace, Sypris Electronics
Overview 2018 Highlights • DoD and Aerospace & Defense spending trends remain positive – US military spending is expanding significantly – Well positioned with top-tier DoD prime contractors on targeted programs • Sypris Electronics revenue and gross margin affected by the availability of electronic
Slide 9: Outlook
Outlook • New contract awards, positive market conditions and lower costs align for positive year • Growth, mix and operational performance expected to support positive margin expansion • Both business units expected to be solidly profitable for the year • Guidance 2019 – Revenue $100.0-$110.0 – Gro
Slide 10: Financial Review Fourth Quarter 2018
Financial Review Anthony C. Allen Vice President & CFO Fourth Quarter 2018 March 28, 2019
Slide 11: 4Q Financial Results
4Q Financial Results $ millions 4Q 2018 4Q 2017 Consolidated ST SE Consolidated Change Net Revenue $ 24.0 $ 15.1 $ 8.8 $ 21.5 $ 2.5 Gross Margin 5.9% 14.3% (8.5)% 7.0% (110) bps Adjusted Operating Income $ 0.2 $ 3.0 $ (1.4) $ (1.4) $ 1.6 • Consolidated revenue up 11.5% over the prior-year; up 13.5%
Slide 12: Full Year Financial Results
Full Year Financial Results $ millions 2018 2017 Consolidated ST SE Consolidated Change Net Revenue $ 88.0 $ 59.8 $ 28.2 $ 82.3 $ 5.7 Gross Margin 8.6% 12.6% 0.2% 4.0% 460 bps Adjusted Operating Income $ (2.9) $ 4.6 $ (2.6) $ (9.8) $ 6.9 • Consolidated revenue up 6.9% and gross margin increased 460
Slide 13: Outlook Update
Outlook Update $ millions Outlook FY 2019 Net Revenue $100 to $110 Gross Margin 14% to 16% SG&A 11% to 13% • Revenue outlook reflects backlog and favorable market conditions • Gross margin expected to improve sequentially throughout 2019 • Continuous improvement initiatives for ST expected to contri
Slide 14: YOY Revenue and Margin Improvements
YOY Revenue and Margin Improvements 16.0% 10.9% • Forecasting double digit growth to surpass 2016 • Continue upward trend of margin improvements • New programs expected to contribute to 2019 • Continuous improvement actions planned to revenue in both segments increase labor productivity • Auto, heav
Slide 15: Key Takeaways
Key Takeaways • 4Q revenue increased 11.5% over the prior-year and 13.5% sequentially • FY revenue increased 6.9% to $88 million in 2018 • Gross profit increased to $7.6 million in 2018 from $3.3 million in 2017 • Gross margin expanded 460 basis points to 8.6% in 2018 • Sypris Technologies reported
Slide 16: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO 2018 Earnings Conference Call Anthony C. Allen Vice President & CFO March 28, 2019