Slide 1: 2007 Q2 Earnings Conference
2007 Q2 Earnings Conference August 2, 2007 Jeffrey T. Gill President and CEO T. Scott Hatton Vice President and CFO
Slide 2: Disclosures: Safe Harbor Disclaimer
Disclosures Safe Harbor Disclaimer Each “forward-looking statement” herein is subject to serious risks and should not be relied upon, as detailed in our most recent Form 10-K and Form 10-Q and subsequent SEC filings. Briefly, we currently believe that such risks also include: the power of the Bankru
Slide 3: Agenda
Agenda Overview Market Outlook Dana Agreement Conclusion Financial Discussion – Q2 2007 Results – Q3 2007 Outlook – Total Year 2007 Outlook – Wrap Up Q&A Session 2
Slide 4: Overview: Q2 2007 Key Results
Overview Q2 2007 Key Results – Revenue of $116 million exceeded guidance by $14 million, or 14% ● Industrial Group beat forecast by $7.4 million, driven by a smaller than anticipated drop in commercial vehicle demand ● Electronics Group was up 27% over Q2'06 and beat forecast by $6.3 million, with
Slide 5: Overview
Overview Q2 2007 Key Results – Sergio de Carvalho – new President of Sypris Technologies ● Former Vice President and General Manager, Trailer and Ride Control division of ArvinMeritor ● Proven executive; global experience; extensive knowledge of commercial vehicle business – Settlement agreement r
Slide 6: Market Outlook: Industrial Group
Market Outlook Industrial Group – ACT July Outlook largely unchanged for years 2007 and 2008 – Heavy Duty Vehicles ● 2007 forecast of 217,000 vehicles, down 43% from 2006 ● 2008 forecast of 261,000 vehicles, up 20% from 2007 ● 2009 forecast of 386,000 vehicles, up 48% from 2008 and 78% from 2007 –
Slide 7: Market Outlook: Electronics Group
Market Outlook Electronics Group – Q2 orders grew 8%, resulting in 21% 1st half orders growth – Aerospace and Defense program launches showing mixed results ● New classified military product is ramping up production > Q2 revenues exceeded Q2 forecast > However, manufacturing yield issues and delay
Slide 8: Dana Settlement Outline
Dana Settlement Outline Comprehensive Settlement – All litigation with regard to prior disputes is resolved – Master supply agreement replaces three existing contracts – Dana and Sypris to exchange production of certain non-core components – Sypris to rebalance production among its plants to reduc
Slide 9: Dana Settlement Outline: Benefits and Key Dates
Dana Settlement Outline Benefits For Sypris – Eliminates cost and distraction of litigation – Exchanges certain low margin business for higher margin products – Sypris to be the exclusive supplier of the components through 2014 – Agreement is consistent with plans to rebalance production to lower
Slide 10: Conclusion
Conclusion Revenue and cash flow exceeded guidance for Q2 Raised revenue outlook for the year, but left earnings and cash flow expectations unchanged pending approval of Dana settlement The market outlook for our business remains challenging in the short-term for Industrial and very positive f
Slide 11: Q2 2007 Results
Q2 2007 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $2 $116 $100 – 105 ($0.11) – (0.13) ($5) – (8) ($0.13) Guidance Actual Guidance Actual Guidance Actual Revenue exceeded guidance by $14 PBT down $0.3, EPS within range Cash Flow exceeded guidance by $8 Industria
Slide 12: Q2 2007 vs. Prior Year
Q2 2007 vs. Prior Year ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $132 $21 $116 ($0.02) $2 ($0.13) Q2'06 Q2'07 Q2'06 Q2'07 Q2'06 Q2'07 Revenue down 12% PBT down $3.4; EPS down $0.11 Cash Flow down $19 Industrial down 25% Industrial Gross Profit down (-$0.7) from Low
Slide 13: Q3 2007 Outlook
Q3 2007 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $126 $11 $105 – 110 ($0.04) ($0.08) – (0.11) ($5) – $0 Q3'06 Q3'07 F Q3'06 Q3'07 F Q3'06 Q3'07 F Revenue down 15% PBT down $1.6; EPS down $0.05 Cash flow down $13 Industrial down 28% driven by heavy Industrial
Slide 14: Total Year 2007 Outlook
Total Year 2007 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $435 – 445 $420 – 430 $10 – 15 $10 – 15 ($0.30) – (0.35) ($0.30) – (0.35) Prior Guidance 2007 F Prior Guidance 2007 F Prior Guidance 2007 F Revenue up $15 from Prior Forecast PBT and EPS equal to Prior For
Slide 15: Wrap-Up
Wrap-Up Deliver on total year financial commitments – 1st half exceeded expectation; outlook for 2nd half largely unchanged – Total year outlook revised upward for 1st half performance – Net Debt at 12% of capital Restructuring efforts – Effectively managing down cycle in Industrial – Productive