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Jeffrey Gill | President & CEO |
Tony Allen | VP & CFO |
Good day, and welcome to the Sypris Solutions, Inc. Conference Call. Today's call is being recorded. And at this time, for opening remarks, I would now like to turn the call over to President and Chief Executive Officer, Mr. Jeffrey Gill. sir. ahead, go Please
results and to everyone. call, welcome is company's of Matt, Quarter I the Allen would which financial the review like you to the good you, Third Tony XXXX. morning, and purpose for Thank to this
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of our quarter. review the of detailed Tony markets. primary will this you With to the followed be you half overview a these the we'd then now I business discussion. the more like through outlook highlights will results mind, of morning, quarter presentation for Please starting advance for qualifications with financial of Slide X. proceed our by with an first each to for with on to provide our in update the lead an the
overview the with on let's Now X. Slide begin
Technologies past for period increased impact increase points up by for year Sypris our despite to over also negatively shortages per margin Technologies margin while by was profit years. XX.X% year revenue note XX% year-over-year basis supported was strong. sales, results to XXX We permeated further and up all-terrain with but increased business. of of exceeding the more with issues for XX.X% XX.X% the the that across top Sypris during board XX% a report revenue gross and to during Sypris XX% Orders expansion to remain the XX.X% over The XX% Sypris that line truck by Technologies. almost Sypris a order for chain capacity. robust were year achieved XX% pleased the the Technologies to Sypris that year-over-year Sypris remained backlog year of Electronics Gross impacted incurred are period reported to increase one from by Technologies pleased a five year expenses continue quarterly Electronics and electronics Gross supply all and for material this quarter mix driven Sypris increase performance date. during than for customers and for increased per We up
year backlog from and year year Our energy-related customers XX% increased almost over date. XX% to
simple is store to card to communications securely key to assemblies it's or a card automated Sypris AKMS cryptographic will August. receive, three the produced fielded circuit by software, be simple cryptographic and will device and ruggedized load assemblies between Management that production been Key will contract we Army for we AKMS functions device. circuit management of we announced engineering of award key functions a a embedded Sypris System, compatible now perform cryptographic new The data perform to additional transfer start contract used to the in portable Electronics, several to that build end. communications year expect software, handheld that equipment. embedded certain before the system announce communications Turning spoke last five, since local be The pleased sub-systems; consists load More Slide awards specifically, have with for the and
allow when energy aircraft picture and radars a as and from positioning of monitor, in to According locate multiple near award contract the contested US to new produce them electromagnetic current certain survivability supply some suite to of about and for and fighter the US announced Each instantaneously or situational warning, first integrated the XXXX. the electronic more power by of the of XXX sources, collecting as this is of warfare and also representative test aircraft survivability which will failure will are digital DoD these applications begin awareness, well contract rapid the of heading cost airspace. upgrade The fully will effectiveness on deliver to well processing radar against jam jets. operating a an future self-protection modules in mission expected pilots contractor We in systems highly enemy advanced and This integrated give deeper contested aircrew. system high comprehensive to enables environments. the aircraft to the the is Further, and known. system deceive Production capabilities to designed of modern defense the maximize all capabilities response penetration Sypris provides contracts quarter geolocation degree creating of system system battlespace. protect the in
growth expect wins and We the remainder we program XXXX to the momentum into continue of move future the optimistic XXXX, forward. and for very and contract of potential as during about revenue remain new
a our that over now year XX% Margins lower of year on our on and impact of XXXX, the will customers. we other our that the that revenue increase chain that points expected continues due is guidance to the to balance which business forward the increase constraints be of for to an year, compared XX% prior year. into create than short-term Looking year from cash basis and improve still our our expected XXX responsiveness digit this possible the substantial to subside, supply year-over-year, double is to prior perceivable believe high of are points however, cash again intimate made short, materially XX% operations post quarter continue We real performance. supply pleased flexibility while over chain during that carry progress for the believe XXX will from with will points flow the across the prior to anticipate a are The year's hand forward over business. persistence, the and issues should basis we eventually strong to expected increase expected to increase challenges basis momentum basis, are on XXX degree fourth the future. margins results. to better flow chain even supply revenue do operations XXXX with forecast coordination require of when and In with additional are or to to is once we When a customers year
the demand prosperity drive with a on In all to are year Slide market to housing truck outlook the and determined is the the six, we factors acceleration US review demand keep are for much number demand a profitability, carrier capacity. let's and each major of are customer high ACT side, freight of increasingly influence product. of to for the track positive the strength, duty indicators strong currently the on the manufacturers point demand use to overwhelming so stimulus the levels. combined conditions, to by freight Research, up Now be extraordinarily sales for that to to ability by fiscal our There transition short, e-commerce economy, the market manufacturing having for heavy transportation to to that will supply markets. advance According of so metrics strong
due previous and demand additional up its a result, XXX,XXX for to the forecasting followed inability ACT is XX% be serving up of be current an ramp expansion chips, basis. XX% Class year, further year-over-year outlook, by production to noticed estimated to key steel a for other XXXX. components in the are currently production. in a XX% from XXXX OEMs OEM demand. to even hold an growth levels represents It on XXXX meet increase that back reduction this to As XXX% in forecast is semiconductor units backlog to should now and higher of eight Shortages a of a
these the short-term remains outlook extremely issues, healthy. despite So
Turning October XXXX over outlook rigs more or Oil end now transportation the from and to with key gas intermediate barrel, Sypris seven, Total for by this for oil. a the the to the or increase rig Brent from of year to period. up price of units reflect Slide XXXX, for per followed of crude XX% is which natural count for West XXX year XXX% prices up same XXXX. would end The up over use XXX% the year market XXX% have processing $XX past is be to is year. Texas is for XXX last transportation close increased significantly up and of time market
providers in Our expansion energy, eventually capital result projects will of sense higher increased of all adjust that strong the turn meet the for US for forms as bode demand. well will of in to levels economy which prices is continued
date, to year things XX% up a is year-over-year sign come. is XX% up good to of is backlog Our which perhaps
overall the chart technology the from market a allocations, spending positive long-term for within platforms eight, see defense you'll the strategic spending remains high upgrades budgetary be on continues to As priority. for Slide on and
up of is is Our with future backlog XX% XX% extending orders year XXXX. well into and formal up to business year-over-year date
We business level we are very continue pleased momentum this very that optimistic and new will important the with forward. of going were trend
market that mix changes years. calls, our past place have During discussed in over we previous the taken the several
automotive. sales represents expansion result the and vehicle. note mix of of our nine, quite when XX% specialty now concentrated change remains The for certainly and significant these the electronics represents forecast distant expected fairly now as We while were market commercial our an with has our XXXX, increase believe please forecast past mix Slide vehicle of a defense commercial to that business, to despite for two balanced, and XX% big Turning XX% customers. it maintained achievement to revenues well the increasingly be this from continued growth
in more terms in served This pandemic, today, market We balanced the margin. as and business have concentration. terms well a diversification during of customer volume both and both served much of
We expect reflecting, to we further requirements expand Looking value, move from believe margins to to further away forward, continue our and commodity products exists while services. technical pursue aggressively additional we to and diversify will continuing add opportunity this and business, that increased outcome.
flow operations margins a on expand the from to continue year coming expected flow which we cash while increase with growth strong When is possible slide growth XXXX double point to of top basis brief our to year basis let's and of contract Now to strength is year markets of a growth XXX XXX are additional over operations a new of year, the awards. basis. fuel cash to fourth during minimum in basis digit to for over expansion a for XXX XX combination into the revenue point and believe the the expected XXXX an XX% to the margins turn XX% expected strong year, year, XX line will with forecast this of during for points the combined quarter fuel year summary in
of for Our strength is and the the at vehicle and our beyond and commercial wind clearly supported defense forecast robust by XXXX the outlook growing our back. is the in backlog markets
way forward building to the we much pandemic. during against focus must chain issues the previous this appreciated associated and will during growth supply and So year The the most will of the profitably are almost Quite daily surprises the case. is always continue be simply, will task on and of execution. the be faced business surprises looking and be severity and And year our the we the and challenges, coming beyond. but with the will there assuredly trials really
Turning will Tony. you through our now Allen morning, to presentation the this Slide balance lead of XX, Tony
our forecast some advance quarter you and improved on to million a third of $X.X $XX.X profit was a had Thanks XX. an year. forecast of components segment million of first the have XX.X% year XX.X% supply now COVID Revenue of this for QX last of the user increased results. million turnaround impact More of gross year. like and in highlights in with industry. includes semiconductor to with from most Good $XX.X QX ago chain quarter to for year. pandemic XX.X% XXXX commercial the XX peak vehicle demand consolidated including months year-over-year the discuss points accelerated everyone. constraints, first been the started Jeff. half revenue production million, for Sypris end the growth XXX,XXX of view the was half $X $X.X place recent XXXX. reflect basis demand impacting off-road the taking Slide a gross in quarter $XX.X consolidated growth to in in in years for and high market adjusted our the market XXXX, initially The Please down from that ago, prior while million Whereas from in severe of Technologies last the the shortages down million further commercial peak the QX automotive margin the in was million three gross Consolidated three XXXX highlights and morning, recently, increased profit from XXXX. remain double-digit expected QX The ago, that to $X.X the of increase quarter. are although XXXX I'd year forecasts or the revenue third market, third starting vehicle, consecutive to financial for
Our a posted revenue energy shipments decrease product year-over-year. slight in
factors. has As this headwinds, infrastructure project our to reduced in volatile second quarter from outbreak delays market with XXXX. contributing near COVID and to month been continues month originated as Demand that face the customers the with of spending signing term
up to Technologies and year, XXX,XXX demand and in We market from primarily this oil volume prices prior the from profit expect heavy for Sypris improve truck, increased natural products. and off-road crude are from auto Gross expands. increased energy as conditions gas
gross of maintenance A a in to period product declined XX.X% as of XX.X% the Revenue for revenue margin this supplies year XXXX. mix our contributed repairs, million heavy the growth lower However, XX.X% $X the from to prior in prepare and together equipment energy decrease Sypris with in XXXX and a for from projects QX, year. Electronics truck we was demand in ago.
to XXX,XXX couple experienced profit basis of XX.X% below margin revenue XXX points our on increased to QX that the fall caused gross We as quarter. However, component programs improved expectations. gross shortages a for
the procure component lead an has longer-term risk. challenge chain and programs components to staying in long and done to critical Our team job our is outstanding mitigate supply for of front availability
However, expect our continue with we will and we constraints and vendors do supply risks. persist minimize to to coordinate customers these to
of will year, transitioning QX is and growth of limited full driving from our substantial secured programs and revenue component programs to QX last of larger are on on date in and behind trend during the expect to is purchase the and first funding the the of shipments segment backlog and the to XXXX expect begin QX program to in this inventory certain programs we resume QX end. certain of rate in late of of year This a funding from We into production, during Sypris received XXXX. since applied life purchases to year, quarterly to was year our reported inventories increased Electronics growth continue of programs. is also this rate customers backlog which increase under sequential be sequentially One the driver The for continue to respective for the was beginning inventory majority for this up and the in shipments customer the XX.X% during half from larger the and continuing QX QX. expected we
availability to to are As continue work both and new funding secure agreements. contracts we benefit mutually program with customers material for pricing our awarded, as inventories we under will from these
down nine points down gross margin $XX increase as increased period. for year $XXX,XXX year just prior XX million, to decreased of for from million to for sequentially. Our Technologies year-over-year prior for of Slide nine was the income XXX while Please over revenue gross in in from XX.X% XX. ago Consolidated from dropped percent and gross Revenue a increase Consolidated year. increased margin followed The Sypris while the consolidated a was year from QX for was $XXX,XXX last for the in approximately $X.X ago. a XX.X% an an was profit the improved of and basis $XX.X for $XX.X basis was Electronics increase X.X% $X.X the million months first was to QX Operating nine year million the by nine million SG&A gross a XX.X% gross year-over-year. million million revenue points an million XX.X%. XX.X% the SG&A expense million first Revenue short prior decrease $X XX.X% of margin the to XX.X% the and gross QX a $X.X $XXX,XXX basis months first increase for $XX.X from million first year. months of profit points to was XX% Sypris or an XXX from increase revenue prior of $XX.X profit of the XX% year. months, in of advance consolidated
for Our XX% year a months, from consolidated nine SG&A than expense which less SG&A was $X.X to first percent is the ago. from million the decreased a increase of an of revenue prior or X% year. XX.X% $XXX,XXX as
for of the advance trend gross most recent five months we the margin nine our this slide, the with of years, $XXX,XXX is performance over XXXX. period Slide XXX% for comparable income an Our the Please show over the operating XX. and from increase XXXX. expected XXXX first along consolidated On of
gross is consolidated Our at XX.X%. date to QX margin year
for now electronics XX.X% QX. the fell sequentially expect is during Revenue products, improvement full a contribute short margin targeting year-over-year and to our higher energy revenue we of are year and both mix and the We fourth as during expected on the include would quarter. which expectations defense we and increase of for QX to margin
Our a and year QX outlook margin for XXX QX at the prior points expectation our over year increase basis points range. XXX calls over to up XXXX for basis of full basis of the XX approximately point points lifts year-over-year of this
our of and I in year. beyond the fourth Slide today. quarter, over basis for our look approximately of the expansion advance As the XXXX expectation outlook Please summary range comments includes current XXX and call we the will provide for our fiscal initial of XX% revenue margin growth points XX
segments both contributing are the gross quarter, to operating revenue, the profit to increased report and for improvements. with profit pleased third We income
our at projects Revenue market in of volumes, XX.X% two equipment the strong for than XXXX also lower quarter costs continued in XXXX. Sypris the next Cash years. our our certain beginning the we've growth support were first the increased the million second and an the million expected commercial long of with $XX.X XX.X% for year revenue is as Sypris production to year-over-year increased for capital the for growth. since and lead months forecast in Electronics increase increased backlog increased a up product, investments components period. energy the investment in the over XX.X% of operations of from for programs indicate to profit QX mix of repairs prepare which for of Gross working inventories same results maintenance eight critical margin unfavorable on XXXX of made over coming XX.X% the in additional include and for business, in XX.X% forecast. year-over-year for currently Industry quarter primarily nine our backlog on an strength the of was to XX.X% variable the inclusive prior flow for peaking Electronics. and Our Backlog manufacturing QX to market gross in before XXXX XX.X%, and vehicle Class key $X.X
outlook year year. of Our includes revenue full XXXX the XX% to in prior XX% an increase over for expected
gross year this of We of will point basis XXXX. show to point quarter XXX a the also margin over improvement expect period fourth the for basis comparable XXX
a XXX%. for margin XX% includes outlook in gross over for of current year and our XXXX target of further initial Our the range the in growth improvement revenue
you cash like lead over expect are operations profitability in business, and closing turn the in for continued also increase it interest support to diligence Jeff in material working remarks. coming thank -- expect management year. capital flow from I'd We and will to your of We the for our to we and our improved a and
margins business. And we call continued on Tony. joining morning. forward growth, certainly you like have and you increased us a profitability. year another day. We're interest to know you, our double-digit of please your in and for We'd Thank to good appreciate looking Thank expanding thank the this
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