Sypris Solutions, Inc. · NASDAQ:SYPR
Sypris Solutions — Q3 2021 Earnings Presentation
15 slides from Sypris Solutions's earnings presentation, Nov 10, 2021
Slide 1: 2021 Third Quarter Earnings Conference Call
Jeffrey T. Gill 2021 Third Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO November 10, 2021
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 3
Slide 4: Overview: 3Q21 Highlights
Overview 3Q21 Highlights • Revenue increased 15.9% YOY – Driven by a 38.3% increase for Sypris Technologies • Gross profit increased 12.4% YOY – 14.5% increase for Sypris Electronics – 10.6% increase for Sypris Technologies • Sypris Electronics gross margin increased 460 bps to 20.8% • Sypris Techno
Slide 5: Overview: New Contract Awards and Outlook
Overview New Contract Awards • Sypris Electronics – Announced award to build embedded circuit card assemblies to perform Cryptographic functions for the Army Key Management System; late 2021 start date – Announced award to produce and test power supply modules for the upgrade of the electronic warfa
Slide 6: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 demand expected to increase 18.3% in 2022 and 15.5% in 2023 − Strong US economic expansion − Housing strength − Manufacturing prosperity − Transition to e-commerce − Carrier profitability − Goods for services swap • Supply chain challenges leads to pent-up demand
Slide 7: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • Oil prices have increased significantly over the past year, with the price of WTI up 135% from October 2020; Brent crude up 125% • Outlook for oil prices to increase to ~$80 per barre
Slide 8: 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 9: Outlook: Revenue Mix
Outlook Revenue Mix • Revenue is expected to increase 20- Specialty Automotive 25% in 2021 and an additional 25% in Communications 2022 • New programs and the strength of the commercial vehicle market increases Commercial Vehicle mix in 2021 with further upside in 2022/23 • Backlog for defense elect
Slide 10: Outlook: Summary
Outlook Summary • New contract awards and market strength are expected to fuel a 20-25% growth in the top line for 2021 on a YOY basis • Operating results are expected to accelerate further during the 4Q 2021, resulting in strong YOY comparisons • Outlook for 2022: – 25% top line growth; 200bps marg
Slide 11: Financial Review Third Quarter 2021
Financial Review Anthony C. Allen Vice President & CFO Third Quarter 2021 November 10, 2021
Slide 12: 3Q Financial Results
3Q Financial Results $ millions except per share data 3Q 2021 3Q 2020 Consolidated ST SE Consolidated Change Net Revenue $ 25.7 $ 16.7 $ 9.0 $ 22.2 $ 3.5 Gross Margin 15.5% 12.6% 20.8% 16.0% (50) bps Operating Income $ 1.0 $ 0.9 $ 1.0 $ 0.8 $ 0.1 Net Income $ 0.3 $ 3.5 $ (3.2) EPS $ 0.01 $ 0.17 $ (0
Slide 13: YTD Financial Results
YTD Financial Results $ millions except per share data YTD 2021 YTD 2020 Consolidated ST SE Consolidated Change Net Revenue $ 71.6 $ 47.0 $ 24.6 $ 61.7 $ 9.9 Gross Margin 14.1% 12.3% 17.5% 15.2% (110) bps Operating Income $ 0.8 $ 2.3 $ 1.6 $ 0.3 $ 0.5 Net Income $ 2.2 $ 2.8 $ (0.6) EPS $ 0.11 $ 0.14
Slide 14: Gross Margin Performance
Gross Margin Performance • Revised outlook for 2021 FY revenue to 20-25% YOY and gross margin to 15.1% at midpoint of range • Q4 revenue and margin improvement primarily driven by higher mix of defense electronics and energy products • Q4 margin expected to improve 400- 500 bps YOY reflecting favora
Slide 15: Key Takeaways
Key Takeaways • Consolidated revenue increased for the second consecutive quarter to $25.7 million, up 15.9% YOY • Gross profit increased 12.4%; gross margin of 15.5% impacted by mix and variable manufacturing costs • Cash flow from operations of $2.2 million YTD, inclusive of working capital invest