Slide 1: 2016 Fourth Quarter and Full Year Earnings Conference Call
Jeffrey T. Gill 2016 Fourth Quarter and Full Year President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO March 28, 2017
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 recen
Slide 3: Table of Contents
Table of Contents • Overview • Transition Plan Update • Contract Wins and Recognition • Results • Financial Review • Cost Reduction Goals • Key Takeaways • Q&A Session 3
Slide 4: Overview: 2016 Highlights
Overview 2016 Highlights • 2016 was a year of significant accomplishment – Reported earnings of $0.30 per diluted share – Raised $54 million through the sale of underutilized and underperforming assets – Used the proceeds to repay all commercial debt, invest in working capital and fund the Company’s
Slide 5: Transition Plan Update: Objectives
Transition Plan Update Objectives • To significantly improve our cost-competitiveness on a sustained basis • To establish and maintain a highly-liquid balance sheet • To achieve a balanced diversification of customers and markets served • To complete the Broadway relocation utilizing internally gene
Slide 6: Transition Plan Update: Actions Taken in 2016
Transition Plan Update Actions Taken in 2016 • Entered into sale-leaseback for underutilized real estate generating $12.0 million • Divested CSS business, generating $42.0 million • Eliminated high-cost commercial debt: savings of $5.5 million annually • Downsized Sypris Electronics facility to 50,0
Slide 7: Transition Plan Update: Initiatives to be Completed
Transition Plan Update Initiatives to be Completed • The timely approval and launch of programs in Toluca • The successful implementation of a single ERP platform • The management of the transition of operations from the Broadway Plant • The liquidation of certain idle and underutilized non-core ass
Slide 8: Contract Wins and Recognition
Contract Wins and Recognition • Radar system development program for the U.S. Navy • Circuit card assemblies for major missile program • Large international oil field project with TengizChevroil • Axle shafts for U.S. auto production • Gears sets for ATVs • Transmission shafts for European Heavy Tru
Slide 9: Results: Sypris Technologies
Results Sypris Technologies • Globally competitive platform – Lower variable cost – Elimination of redundant fixed overhead – Elimination of redundant capital requirements – Increased capacity utilization • Reduced breakeven point and increased margins • Talent redistributed between locations – Acce
Slide 10: Results: Sypris Electronics and Consolidated
Results Sypris Electronics • Clear, singular strategic vision • Material improvement in competitive profile – Reduction in fixed overhead – Substantially lower SG&A; elimination of R&D – Improved operational visibility and reduced cycle times – Additional absorption will further reduce rates and inc
Slide 11: Financial Review Fourth Quarter 2016
Financial Review Anthony C. Allen Vice President & CFO Fourth Quarter 2016 March 28, 2017
Slide 12: Financial Results
Financial Results $ millions 4Q 2016 FY 2016 Consolidated ST SE Consolidated ST SE Net Revenue $ 20.0 $ 15.9 $ 4.0 $ 91.8 $ 63.3 $ 28.5 Gross Profit $ (0.2) $ 1.0 $ (1.2) $ 0.7 $ (0.3) $ 1.0 EBITDA $ (3.2) $ 1.3 $ (3.1) $ 19.0 $ 0.5 $ 25.8 EPS $ (0.23) $ 0.30 • 4Q results impacted by the sale of the
Slide 13: Transition Plan Update: $26.3 million cost reduction goal
Transition Plan Update • Established $26.3 million cost reduction goal in 2017 and 2018 as compared to 2016 • $18.2 million is expected to be realized in 2017 − Actions to achieve $14.8 million or 81% are complete − Remaining actions to be implemented by mid-2017 • $8.1 million of additional cost el
Slide 14: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 15: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 16: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 17: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 18: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 19: Cost Reduction Goals
Cost Reduction Goals $ millions 2017 2018 Total Cost of sales $ (6.3) $ (5.5) $ (11.8) Selling, general and administrative (7.2) (1.8) (9.0) Research and development (0.3) No change (0.3) Severance, equipment relocation and other costs 1.1 (0.8) 0.3 Interest and loss on extinguishment of debt (5.5)
Slide 20: Key Takeaways
Key Takeaways • Earnings per diluted share for FY 2016 of $0.30 • Gross proceeds of $54 million from sale of assets in 2016 used to retire high-cost commercial debt and reinvest in the business • Strategic actions implemented in 2016 to reduce cost structure to align with revenue profile in both seg
Slide 21: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO 4Q Earnings Conference Call Anthony C. Allen Vice President & CFO March 28, 2017