Slide 1: 2020 Fourth Quarter and Full Year Earnings Conference Call
Jeffrey T. Gill 2020 Fourth Quarter and Full Year President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO March 18, 2021
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 • Outlook • Financial Review • Key Takeaways 3
Slide 4: Overview: 2020 Highlights
Overview 2020 Highlights • Operational performance continued to improve – Gross margin increased 280 bps from 2019 to 14.0% despite a 6.3% decrease in revenue – Gross profit improved 17.0% YOY • EPS of $0.08 per share – Increase in gross profit, lower SG&A spend and release of valuation allowance du
Slide 5: Overview: New Contract Awards
Overview New Contract Awards • Sypris Electronics – Announced contract to build and test a variety of electronic power supply modules for a mission-critical, long-range, precision-guided anti-ship missile system; production to begin in 2021 • Sypris Technologies – Announced a long-term contract exte
Slide 6: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 demand expected to increase 41% in 2021 and a further 15% in 2022 − Housing strength − Manufacturing prosperity − Low fuel prices − Transition to e-commerce − Carrier profitability − Goods for services swap • OEM backlog at the end of February is estimated to be
Slide 7: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • 138 MT of LNG capacity is currently under construction; 100 MT of additional capacity is forecast to be needed by 2035 • Oil prices have increased significantly over the past year, wi
Slide 8: 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 9: Outlook: Revenue Mix
Outlook Revenue Mix • Revenue is expected to increase 20% Specialty Automotive YOY, resulting in only a slight change in Communications mix • Specialty Automotive is expected to increase as a percent of the total, as is Commercial Vehicle Energy • The strength of the Commercial Vehicle market and ne
Slide 10: Outlook: Summary
Outlook Summary • Market strength and new contracts are expected to fuel a 20% growth in the top line for 2021 on a YOY basis – The commercial vehicle market is forecast to expand 41% in 2021 and an additional 15% in 2022 – Improving commodity prices are expected to have a positive impact on transmi
Slide 11: Financial Review Fourth Quarter 2020
Financial Review Anthony C. Allen Vice President & CFO Fourth Quarter 2020 March 18, 2021
Slide 12: 4Q Financial Results
4Q Financial Results $ millions 4Q 2020 4Q 2019 Consolidated ST SE Consolidated Change Net Revenue $ 20.6 $ 12.1 $ 8.5 $ 21.6 $ (1.0) Gross Margin 12.4% 12.7% 11.9% 12.5% (10) bps SG&A $ 2.7 $ 3.5 $ (0.8) Operating (Loss) Income $ (0.2) $ 0.6 $ 0.3 $ (0.9) $ 0.7 • Consolidated revenue down 4.7% as e
Slide 13: Full Year Financial Results
Full Year Financial Results $ millions 2020 2019 Consolidated ST SE Consolidated Change Net Revenue $ 82.3 $ 45.3 $ 37.0 $ 87.9 $ (5.5) Gross Margin 14.0% 13.6% 14.6% 11.2% 280 bps SG&A $ 11.4 $ 13.7 $ (2.3) Operating Income (Loss) $ 0.1 $ 1.7 $ 2.6 $ (4.3) $ 4.4 • Consolidated revenue down 6.3% YOY
Slide 14: Quarterly Revenue
Quarterly Revenue SE Program • Class 8 downturn beginning in 4Q 2019 Growth and ST Market offset by SE growth and ST market Diversification diversification • COVID-19 impacted revenue beginning late March • Rebound in Class 8 market during 2H served to partially offset softness in energy market • SE
Slide 15: Gross Margin Performance
Gross Margin Performance • 2020 gross margin above historical levels despite Q2 setback • SE 2020 gross margin of 14.6%, up 1,420 basis points YOY • Conversion on SE revenue growth along with improved material availability drive margin improvement • ST 2020 gross margin of 13.6%, down 230 basis poin
Slide 16: Key Takeaways
Key Takeaways • FY consolidated revenue was $82.3 million for 2020, a YOY decrease of 6.3% reflecting COVID-19’s impact on 2Q • FY consolidated margin expanded 280 basis points to 14.0% in 2020 • EPS increased to $0.08 per diluted share for 2020 compared to a loss of $0.19 per share for the prior ye