Slide 1: 2015 Fourth Quarter and Full Year Earnings Conference Call
Jeffrey T. Gill 2015 Fourth Quarter and Full Year President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO March 30, 2016
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 • Segment Review – Sypris Electronics – Sypris Technologies • Financial Review • Summary • Q&A Session 3
Slide 4: Overview: 2015 Highlights
Overview 2015 Highlights • 2015 represented a period of significant change and adjustment – as expected – Financial results primarily reflect the cessation of shipments to Dana and the related realignment costs – Offset somewhat by improved performance at Sypris Electronics • Cost reductions initiat
Slide 5: Overview: 2015 Highlights (Subsequent to Year-End)
Overview 2015 Highlights • Subsequent to Year-End: – Awarded a $5.0 million engineering services contract for a defense program – Received a $13.8 million purchase order for circuit card assemblies for a US Armed Services program – Received a purchase order from Kyushu University and were notified b
Slide 6: Sypris Electronics 2015 Highlights
Sypris Electronics 2015 Highlights • Financial Results – Revenue increased 14% to $37.2 million – Gross profit and operating income increased significantly relative to sales growth, reflecting improved mix and reduced costs • Orders increased 20%, outpacing the growth in sales – Bookings of $24 mill
Slide 7: Sypris Electronics 2015 Highlights
Sypris Electronics 2015 Highlights • Exploring additional business models for the Range to further expand penetration in a variety of markets • Important advancements were made with patented SiOMetricsTM identity authentication security solution – Demonstrated end-to-end security features at Dell Wo
Slide 8: Electronics 2016 Outlook
Sypris Electronics Active Nation State 2016 Outlook A Threat Level B • Cyber Security Solutions poised for solid growth in Advanced Persistent Threat Most 2016 Organizations Passive C E D Conventional Threat – NEC, Kyushu and others Agility/Speed of Action E D C B A – Mature opportunities exist in V
Slide 9: Sypris Technologies 2015 Highlights
Sypris Technologies 2015 Highlights • Revenue decreased to $108 million from over $300 million in 2014, reflecting the contract loss and the divestiture of the Morganton operation • However: – EBITDA was positive at $908K – Free cash flow was also positive • The company sold its Morganton manufactur
Slide 10: Sypris Technologies 2015 Highlights
Sypris Technologies 2015 Highlights • Secured long-term contracts with Volvo and Detroit Axle • Sales of commercial vehicle components expanded with all other customers due to market strength and market penetration • While the global energy market fell dramatically during 2015, sales of our closures
Slide 11: Sypris Technologies 2016 Outlook
Sypris Technologies 2016 Outlook • Market Outlooks – 2016 Class 5-8 production expected to be down approximately 16% versus 2015 (ACT Research, March 2016) – Oil and gas outlook appears to be stabilizing as oil prices show signs of recovery and domestic pipeline projects continue to be active. • Exp
Slide 12: Financial Review Fourth Quarter 2015
Financial Review Anthony C. Allen Vice President & CFO Fourth Quarter 2015 March 30, 2016
Slide 13: Consolidated Financial Highlights
Consolidated Financial Highlights $ millions 2015 Q4 2014 Q4 Change 2015 FY 2014 FY Change Net Revenue $ 29.1 $ 87.2 $ (58.1) $ 145.3 $ 354.8 $ (209.5) Gross Profit $ 1.0 $ 9.2 $ (8.2) $ 0.3 $ 38.8 $ (38.5) EBITDA $ (2.8) $ 1.7 $ (4.5) $ (12.0) $ 14.4 $ (26.4) Free Cash Flow $ (2.4) $ (3.8) $ 1.4 $
Slide 14: Sypris Technologies
Sypris Technologies $ millions 2015 Q4 2014 Q4 Change 2015 FY 2014 FY Change Net Revenue $ 20.2 $ 80.2 $ (60.0) $ 108.1 $ 322.3 $ (214.2) Gross Profit $ 0.8 $ 10.2 $ (9.4) $ (0.8) $ 42.0 $ (42.8) EBITDA $ (0.2) $ 7.2 $ (7.4) $ 0.9 $ 35.8 $ (34.9) • Dana accounted for 65% of Technologies revenue in F
Slide 15: Sypris Electronics
Sypris Electronics $ millions 2015 Q4 2014 Q4 Change 2015 FY 2014 FY Change Net Revenue $ 8.9 $ 7.1 $ 1.8 $ 37.2 $ 32.5 $ 4.7 Gross Profit $ 0.3 $ (1.0) $ 1.3 $ 1.1 $ (3.2) $ 4.3 EBITDA $ (0.5) $ (3.4) $ 2.9 $ (4.7) $ (12.5) $ 7.8 • Revenue for Electronics increased 26% and 14% in Q4 and FY 2015, re
Slide 16: Debt Status
Debt Status $ millions 2015 Q3 2015 Q4 Change Prior Credit Facility $ 6.2 $ - $ (6.2) Senior Revolving Credit Facility - 2.1 2.1 Senior Tem Debt - 11.7 11.7 Subordinated Debt 9.3 5.5 (3.8) Total Debt $ 15.5 $ 19.3 $ 3.8 • Entered into new loan agreements in Q4 2015 consisting of $15 million revolver
Slide 17: Summary
Summary • Results of operations for 2015 reflect the challenges resulting from the loss of a major customer for Sypris Technologies, while results for Sypris Electronics gained traction • The Company’s fixed overhead has been reduced, underperforming and underutilized assets have been divested, sign
Slide 18: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO Q4 Earnings Conference Call Anthony C. Allen Vice President & CFO March 30,2016