Slide 1: 2021 First Quarter Earnings Conference Call
Jeffrey T. Gill 2021 First Quarter President & CEO Earnings Conference Call Anthony C. Allen Vice President & CFO May 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: 1Q21 Highlights
Overview 1Q21 Highlights • Customer orders were robust during the period – Sypris Electronics orders up 70% YOY – Backlog up 36% YOY and 56% sequentially – Sypris Technologies energy backlog up 38% YOY and 75% sequentially – Order board from commercial vehicle customers continued to increase signifi
Slide 5: Overview: New Contract Awards
Overview New Contract Awards • Sypris Electronics – Received a 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 – Entered into a contract to manufacture and test electro
Slide 6: Outlook: Commercial Vehicle
Outlook Commercial Vehicle • Class 8 demand expected to increase 43% in 2021 and a further 18% in 2022 − Strong US economic expansion − Housing strength − Manufacturing prosperity − Transition to e-commerce − Carrier profitability − Goods for services swap • “Freight demand is overwhelming capacity.
Slide 7: Outlook: Energy
Outlook Energy • Demand for LNG is forecast to outpace all other sources of fossil fuel for the foreseeable future • Oil prices have increased significantly over the past year, with the price of WTI up 176% from May 7, 2020 to May 7, 2021; Brent crude up 132% for the same period • Outlook for oil pr
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 25- Specialty Automotive 30% YOY, resulting in only a slight Communications change in mix • Specialty Automotive and Energy are expected to increase, but remain flat as Commercial Vehicle a percent of the total • The strength of the Commercial Ve
Slide 10: Outlook: Summary
Outlook Summary • Market strength and new contracts are expected to fuel a 25- 30% growth in the top line for 2021 on a YOY basis – The commercial vehicle market is forecast to expand 43% in 2021 and an additional 18% in 2022 – Improving commodity prices are expected to have a positive impact on tra
Slide 11: Financial Review First Quarter 2021
Financial Review Anthony C. Allen Vice President & CFO First Quarter 2021 May 18, 2021
Slide 12: 1Q Financial Results
1Q Financial Results $ millions 1Q 2021 1Q 2020 Consolidated ST SE Consolidated Change Net Revenue $ 20.0 $ 13.2 $ 6.8 $ 22.4 $ (2.4) Gross Margin 9.1% 8.9% 9.5% 16.6% (750) bps SG&A $ 2.9 $ 3.4 $ (0.6) Operating (Loss) Income $ (1.1) $ 0.1 $ (0.2) $ 0.3 $ (1.3) • Consolidated revenue down 10.9% as
Slide 13: Gross Margin Performance
Gross Margin Performance • Order backlog and favorable market conditions provide opportunity to offset the slower than expected start to 2021 • 2021 gross margin performance anticipated to be above historical levels despite 1Q setback • Conversion on SE revenue growth anticipated to drive margin imp
Slide 14: Key Takeaways
Key Takeaways • Management focused on daily execution to support robust business conditions for the balance of 2021 • Sypris Electronics orders up 70% YOY, driving backlog to highest level since 2010; long- term outlook for defense spending remains positive • Class 8 demand expected to increase 43%