Slide 1: 2023 Third Quarter Earnings Conference Call
Jeffrey T. Gill 2023 Third Quarter President & CEO Earnings Conference Call Richard L. Davis Vice President & CFO November 15, 2023
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: 3Q23 Highlights
Overview 3Q23 Highlights • Revenue increased 33.3% from the prior year period – Up 73.5% for Sypris Electronics – Up 13.8% for Sypris Technologies • Gross profit grew 105.0% – Up 186.8% for Sypris Electronics – Up 36.2% for Sypris Technologies • Gross margin expanded 420 basis points to 12.0% – 710
Slide 5: Overview: 3Q23 Highlights - Sypris Technologies News
Overview 3Q23 Highlights • Important Public News Releases – Sypris Technologies • We announced an award to provide insulated joints for use in the expansion of the Atoka Water Pipeline for the Oklahoma City Water Utilities Trust with shipments to begin in 2023 – The insulated joints will be 72 inche
Slide 6: Overview: 3Q23 Highlights - Sypris Electronics News and Outlook
Overview 3Q23 Highlights • Important Public News Releases – Sypris Electronics • Subsequent to quarter end, we announced 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
Slide 7: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • The production of commercial vehicles is expected to increase 7.3% in 2023, rising to 625,000 units for the year • The current outlook for 2024 indicates some softening in demand in 2024, resulting in a 13.4% YOY decline, before rebounding in 2025 • All-time peak of buil
Slide 8: Outlook: Energy
Outlook Energy • European countries boosted LNG imports by 60% in 2022 to make up for declining pipeline gas shipments from Russia • New LNG terminals could boost the continent’s import capacity by one-third by the end of 2024 • With four LNG export facilities in operation, the U.S. became the world
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 Specialty Automotive 15%-20% YOY in 2024 Communications • Backlog of $109.5 million for Defense Energy Electronics leads to expanded mix in 2024 • Anticipated cyclical decline in Commercial Vehicle Commercial Vehicle partially offset by new progr
Slide 11: Outlook: Summary
Outlook Summary • Revenue increased 33.3%, with SE up 73.5% and ST up 13.8% YOY • Gross profit increased 105.0%, with SE up 186.8% and ST up 36.2% YOY • New contract awards and market strength are expected to fuel a 25% growth in the top line for 2023 on a YOY basis • Defense is robust, especially f
Slide 12: Financial Review Third Quarter 2023
Financial Review Richard L. Davis Vice President & CFO Third Quarter 2023 November 15, 2023
Slide 13: 3Q Financial Results
3Q Financial Results $ millions except per share data 3Q 2023 3Q 2022 ST SE Consolidated Consolidated Change Net Revenue $ 19.3 $ 14.2 $ 33.6 $ 25.2 $ 8.4 Gross Profit 1.5 2.6 4.0 2.0 2.1 Gross Margin 7.5% 18.1% 12.0% 7.8% 420 bps SG&A 4.2 3.6 0.6 Operating Income (Loss) (0.1) (1.6) 1.5 Net Loss (0.
Slide 14: YTD Financial Results
YTD Financial Results $ millions except per share data 3Q YTD 2023 3Q YTD 2022 ST SE Consolidated Consolidated Change Net Revenue $ 58.9 $ 42.6 $ 101.5 $ 80.4 $ 21.1 Gross Profit 6.1 6.8 12.9 10.3 2.6 Gross Margin 10.4% 15.9% 12.7% 12.8% (10) bps SG&A 11.6 10.7 0.9 Operating Income (Loss) 1.3 (0.4)
Slide 15: Gross Margin Performance
Gross Margin Performance • FY 2023 outlook decreased on unfavorable foreign exchange rates • Absent the impact of foreign exchange, our estimated FY 2023 outlook would increase by 90 basis points to 14.4% for the year • The 2024 outlook improves on SE’s increasing share of mix and higher margins – H
Slide 16: Key Takeaways
Key Takeaways • Revenue for 3Q 2023 increased 33.3%, gross profit increased 105.0% and gross margin expanded 420 basis points • 2024 DOD budget, including emergency funding for allies, will likely exceed $1 trillion • Contract extensions, expansions and new programs provide the opportunity for comme