Slide 1: Driving Change: Third Quarter 2011 Earnings Conference Call
Driving Change Third Thi d Quarter Q t 2011 Earnings Conference Call November 8, 2011 Jeffrey T. Gill President and CEO B i A. Brian A Lutes L t 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 • S Segment t Review R i – Aerospace & Defense – Industrial • Q3 Financial Review • Summary • Q&A Session 3
Slide 4: Overview
Overview • Key Highlights for Q3 – Revenue increased 24% from the prior year quarter quarter, driven by a 38% increase in sales for our Industrial Group. – Gross profit increased 42% from the prior year period, reflecting a 197% increase in gross profit for our Industrial Group. – Th The C Company r
Slide 5: Aerospace & Defense
Aerospace & Defense • Revenue declined slightly from prior year levels reflecting the short-term impact on backlogg as a result of the delayed y approval pp of the 2011 Defense Appropriations pp p Bill,, but increased 15% sequentially from Q2 of this year. • Gross profit improved 223% on a sequentia
Slide 6: Aerospace & Defense
Aerospace & Defense • Progress continues in the development of several new products supported by increased customer and market interaction,, including g the demonstration of our new crypto prototype unit to the Army during the quarter. • We met with the Singapore Government regarding our Cyber Range
Slide 7: Industrial
Industrial • Revenue increased 38% during the quarter when compared to the prior year period and rose 5% sequentially from Q2 driven by the continued recovery of the commercial vehicle and trailer markets. • Gross profit increased 197% on a year-over-year basis, reflecting positive conversion on inc
Slide 8: Industrial
Industrial • Company announced a new long-term supply agreement to provide drive train components p to Sisamex Automotrices de Mexico. • Subsequent to quarter-end, the Company entered into a new, multi-year agreement to increase the sales of heavy vehicle axle components to a customer in North Ameri
Slide 9: Industrial
Industrial • According to ACT, 76% of demand in any given year represents the replacement of equipment. 2011 Q1 Q2 Q3 Q4 Total 2012 2013 Class 5-7 39.7 44.6 38.3 40.8 163.5 176.8 198.7 Year-Over-Year 46.6% 57.5% 28.2% 25.2% 38.6% 8.2% 12.4% Class 8 51.4 60.5 68.8 69.1 249.8 292.0 323.4 Year-Over-Yea
Slide 10: Consolidated Financial Results
Consolidated Financial Results ($ in thousands) 3Q11 3Q10 ∆ Highlights Revenue 91,177 73,412 24.2% SIG revenue growth of 38% Gross Profit 10,263 7,225 42.0% Positive conversion on incremental SIG sales Gross Margin 11.3% 9.8% EBITDA(1) 11,549 3,029 281.3% Positive conversion on incremental revenue;
Slide 11: Aerospace & Defense Financial Results
Aerospace & Defense Financial Results ($ in thousands) 3Q11 3Q10 ∆ Highlights Revenue 18,530 20,674 (10.4%) Delay in defense budget approval Gross Profit 3,332 4,891 (31.9%) Decreased revenues; product mix; product support costs Gross Margin 18.0% 23.7% (1) EBITDA 159 1,798 (91.2%) Decreased margin;
Slide 12: Industrial Financial Results
Industrial Financial Results ($ in thousands) 3Q11 3Q10 ∆ Highlights Revenue 72,647 52,738 37.8% Continuing expansion of CV market Gross Profit 6,931 2,334 197.0% Positive conversion; productivity and efficiency Gross Margin 9.5% 4.4% Seeing positive results from CI/Lean initiatives (1) EBITDA 13,62
Slide 13: Summary
Summary • Sales increased 24%, while gross profit rose 42% from the prior year period, reflecting strong conversion on incremental Industrial Group revenue driven by our reduced cost structure and sustained operational performance: – Industrial Group gross margin was 9.5% of revenue, up from 4.4% fo
Slide 14: Q & A Session
Earnings Conference Call Q & A Session 14