Slide 1: Second Quarter 2012 Earnings Conference Call
Driving Change Second Quarter 2012 Earnings Conference Call August 7, 2012 Jeffrey T. Gill President & CEO Brian A. Lutes 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 • Segment Review – Aerospace & Defense – Industrial • Financial Review • Summary • Q&A Session 3
Slide 4: Overview: Key Highlights for Q2
Overview Key Highlights for Q2 • Revenue increased 16% to $98.9 million for the second quarter compared to $85.1 million for the prior year period. • Gross profit increased 63% to $13.2 million, reflecting a $5.1 million increase from the second quarter of 2011. • Gross margin increased to 13.4%, up
Slide 5: Overview: Key Highlights for 1H12
Overview Key Highlights for 1H12 • Revenue increased 21% to $195.4 million through June of 2012 compared to $160.9 million for the prior year period. • Gross profit increased 58% to $25.7 million, up from $16.3 million during the first six months of 2011. • Gross margin increased to 13.2%, up 310 ba
Slide 6: Aerospace & Defense Key Highlights
Aerospace & Defense Key Highlights • Revenue was $16.1 million in the second quarter, which was even with the second quarter of last year, but up 15% sequentially from the first quarter of 2012 and up 41% from the fourth quarter of 2011: – Sales to international customers, including those in Austral
Slide 7: Aerospace & Defense Outlook
Aerospace & Defense Outlook • Sustained operational excellence and reliable execution is translating into high levels of customer satisfaction, resulting in an expanding sales funnel. • The on-boarding of new customers (SubCom, L3) and the expansion of coverage with current customers (Northrop, Lock
Slide 8: Industrial Key Highlights
Industrial Key Highlights • Revenue increased 20% to $82.9 million, up from $68.9 million for the prior year period, reflecting continued industry expansion and shipments under new contracts. • Gross profit increased by 26% to $8.9 million from $7.1 million in the second quarter of 2011. • Gross mar
Slide 9: Industrial Outlook
Industrial Outlook • Demand for heavy-duty trucks softened during Q2 and is expected to soften further during the coming months. Our sense is that the pull back reflects increasing economic uncertainty and the recognition that trucks can now be purchased on short lead time – the supply chain is simp
Slide 10: Aerospace & Defense Financial Results
Aerospace & Defense Financial Results ($ in thousands) 2Q12 2Q11 ∆ Highlights Revenue 16,062 16,173 ≈ Sales even, but reflect important change in mix Gross Profit 4,317 1,031 318.7% Increase consistent with strategic objectives Gross Margin 26.9% 6.4% (1) EBITDA 1,048 (1,974) 153.1% Reflects positiv
Slide 11: Aerospace & Defense Financial Results
Aerospace & Defense Financial Results ($ in thousands) 2Q12 1Q12 ∆ Highlights Revenue 16,062 13,941 15.2% Progressive growth from 4Q11 continues Gross Profit 4,317 2,592 66.5% Change in mix beginning to reflect in numbers Gross Margin 26.9% 18.6% Gross margin reflecting strategic initiatives (1) EBI
Slide 12: Industrial Financial Results
Industrial Financial Results ($ in thousands) 2Q12 2Q11 ∆ Highlights Revenue 82,850 68,885 20.3% Market expansion; new business ramp Gross Profit 8,906 7,080 25.8% Productivity and efficiency; positive conversion Gross Margin 10.7% 10.3% Positive expansion; spending on automation and cell rebuilds i
Slide 13: Consolidated Financial Results
Consolidated Financial Results ($ in thousands) 2Q12 2Q11 ∆ Highlights Revenue 98,912 85,058 16.3% SIG revenue growth of 20.3%; A&D even Gross Profit 13,223 8,111 63.0% A&D mix drives gross profit; SIG productivity and conversion on incremental sales Gross Margin 13.4% 9.5% EBITDA(1) 8,517 3,592 137
Slide 14: Aerospace & Defense Financial Results
Aerospace & Defense Financial Results ($ in thousands) 1H12 1H11 ∆ Highlights Revenue 30,003 32,433 (7.5%) Reflects timing of rotation in sales mix Gross Profit 6,909 4,047 70.7% Change in mix consistent with long-term plans Gross Margin 23.0% 12.5% (1) EBITDA 1,224 (1,398) 187.6% Reflects positive
Slide 15: Industrial Financial Results
Industrial Financial Results ($ in thousands) 1H12 1H11 ∆ Highlights Revenue 165,372 128,435 28.8% Market expansion; new business ramp Gross Profit 18,828 12,212 54.2% Productivity and efficiency; positive conversion Gross Margin 11.4% 9.5% Positive results from CI/Lean initiatives helped offset aut
Slide 16: Consolidated Financial Results
Consolidated Financial Results ($ in thousands) 1H12 1H11 ∆ Highlights Revenue 195,375 160,868 21.4% SIG revenue growth of 28.8% Gross Profit 25,737 16,259 58.3% A&D and Industrial margin expansion Gross Margin 13.2% 10.1% Productivity, volume drive 310 bp expansion EBITDA(1) 18,167 10,892 66.8% CI,
Slide 17: Summary
Summary • For the quarter, sales and gross profit increased 16% and 63%, respectively, while gross margin expanded 390 basis points from the prior year period, reflecting the strong operational performance of both business segments: – Industrial Group sales increased 20% and gross profit increased 2
Slide 18: Q & A Session
Earnings Conference Call Q & A Session 18