Slide 1: 2013 Second Quarter Earnings Conference Call
Jeffrey T. Gill 2013 Second Quarter President & CEO Earnings Conference Call Brian A. Lutes Vice President & CFO August 6, 2013
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 This press release contains “forward-looking” statements within the meaning of the federal securities laws
Slide 3: Table of Contents
Table of Contents • Overview • Segment Review – Aerospace & Defense – Industrial • Financial Review • Summary • Q&A Session 3
Slide 4: Overview: Q2 Highlights
Overview Q2 Highlights • Revenue increased sequentially – Sales rose to $82.2 million, up 5% from 1Q13 – Supported by growth in our Industrial Group • Gross profit increased to $8.3 million – Gross margin of 10.1% – Strong performance in our Industrial Group • EPS impacted by A&D volume and mix – ($
Slide 5: Aerospace & Defense: Q2 Highlights
Aerospace & Defense Q2 Highlights • Financial Results – US Government budgetary funding delays significantly impacted financial results – Revenue with established programs incurred delays making for yet another difficult quarter – Increased the inventory reserve during Q2 due to reduced demand on an
Slide 6: Aerospace & Defense Outlook
Aerospace & Defense Outlook • US defense industry challenges will continue – We remain committed to improving our portfolio through diversification • Customer funded development opportunities within our core technologies are underway and promising • Working aggressively to expand EDMS opportunities
Slide 7: Industrial: Q2 Highlights
Industrial Q2 Highlights • Financial Results Strong – Q2 sales of $74.4 million, up 5% from 1Q13 – Q2 gross profit of $8.9 million, up 9% from 1Q13 – 1H sales $146 million, up 21% from 2H12 – 1H gross profit of $17 million, up 40% from 2H12 • Quality and delivery at world class levels • TPS(1) train
Slide 8: Industrial Outlook
Industrial Outlook • Markets remain positive – 2H heavy truck market outlook stable – Light truck and trailer also favorable – Oil and gas outlook remains upbeat • Capture new programs – Numerous customer quotes in process that will help diversify product and industry base • Margin performance expec
Slide 9: Financial Review Second Quarter 2013
Financial Review Brian A. Lutes Vice President & CFO Second Quarter 2013 August 6, 2013
Slide 10: Consolidated Financial Results: Year-Over-Year
Consolidated Financial Results Year-Over-Year Results ($ in thousands, except EPS) 2Q12 2Q13 Revenue $ 98,912 $ 82,166 • YOY revenue decline, but sequential SIG growth from prior quarter Gross Profit 13,223 8,336 • GP declines on lower revenue; unfavorable mix Gross Margin 13.4% 10.1% • Lower YOY re
Slide 11: Consolidated Financial Results: Sequential
Consolidated Financial Results Sequential Results ($ in thousands, except EPS) 1Q13 2Q13 Revenue $ 78,411 $ 82,166 • SIG growth drives sequential improvement Gross Profit 8,076 8,336 • SIG results drives profit growth Gross Margin 10.3% 10.1% • Margin stable despite shift in mix and increased reserv
Slide 12: A&D Financial Results
A&D Financial Results Revenue Gross Margin ($ in millions) 26.9% $16.1 $7.7 $7.3 $7.7 (6.7%) (0.5%) (6.7%) 2Q12 2Q13 1Q13 2Q13 2Q12 2Q13 1Q13 2Q13 YOY Results Sequential Results YOY Results Sequential Results • Defense budget cuts and program • Gross margin was a loss for 2Q13, delays continued to i
Slide 13: Industrial Financial Results
Industrial Financial Results Revenue Gross Margin ($ in millions) $82.9 11.9% 11.4 % 11.9% $74.4 $74.4 10.7% $71.1 2Q12 2Q13 1Q13 2Q13 2Q12 2Q13 1Q13 2Q13 YOY Results Sequential Results YOY Results Sequential Results • Renewed demand continues to drive the • Gross margins increased by 120 bps commer
Slide 14: Summary
Summary • Commercial vehicle demand continued its rebound from the 2H 2012 downturn – Industrial revenue continued to improve to $74.4 million for the quarter – Industrial gross margin up 120 bps YOY to 11.9% – Industrial EBITDA of $9.0 million generated for the quarter • Positioned for further impr
Slide 15: Question and Answer Session
Jeffrey T. Gill Question and Answer Session President & CEO Q2 Earnings Conference Call Brian A. Lutes Vice President & CFO August 6, 2013