Financial Data and Key Metrics Changes - Full year revenue growth for 2023 is expected to approximate 25%, with gross profit rising by a similar percentage despite the impact of the Mexican peso [1] - Year-to-date consolidated revenue was $101.5 million, an increase of $21.1 million or 26% from the same period last year, with gross profit increasing 25% to $12.9 million [5][21] - Q3 consolidated revenue was $33.6 million, an increase of 33% from the third quarter of last year, with consolidated gross profit increasing 105% to $4 million [23][32] Business Line Data and Key Metrics Changes - Revenue for Sypris Electronics increased 73.5% year-over-year, while Sypris Technologies saw a 13.8% increase [32][45] - Year-to-date revenue for Sypris Electronics was $42.6 million, a 50% increase from the prior year, with gross profit increasing 72% to $6.8 million [26] - Revenue for Sypris Technologies increased 13% to $58.9 million year-to-date, but gross profit decreased 3.6% to $6.1 million due to unfavorable exchange rates [53] Market Data and Key Metrics Changes - The defense electronics market is forecasted to represent 46% of consolidated sales in 2024, up from 33% in 2023 [4] - The market for the transportation and use of natural gas has become increasingly dynamic, with European countries boosting LNG imports by 60% in 2022 [19] - The U.S. is projected to export 13.3 billion cubic feet of LNG per day in 2024, increasing to 22.5 billion cubic feet per day by 2027 [41] Company Strategy and Development Direction - The company aims to continuously improve manufacturing output and productivity while diversifying its markets and customer base [3] - The initial outlook for 2024 includes revenue growth of 15% to 20% and gross profit growth of 25% to 30% [18][43] - The company is focused on expanding its energy product line and enhancing its distribution resources in various regions [50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong backlog and the continued momentum of new contract awards across many markets [18][20] - The company remains cautiously optimistic about the positive outlook for energy products and defense spending, which is expected to exceed $1 trillion in fiscal 2024 [21][28] - The management noted the impact of inflationary pressures on costs but emphasized ongoing efforts to manage expenses effectively [24] Other Important Information - The backlog for Sypris Electronics increased 9% to $109.5 million at the end of the quarter [11] - The company has received several new contract awards, including significant projects in water infrastructure and LNG export terminals [12][14] - The Mexican peso has strengthened significantly against the U.S. dollar, impacting financial results [48][49] Q&A Session Summary Question: What is the outlook for revenue growth in 2024? - The company expects revenue to increase by 15% to 20% year-over-year, with gross profit rising by 25% to 30% [43][50] Question: How has the exchange rate impacted financial performance? - The unfavorable peso-to-dollar exchange rate has negatively impacted gross profit, but excluding this effect, gross profit would have increased significantly [53][54] Question: What are the expectations for the defense market? - The defense market is expected to benefit from increased spending, with significant investments in electronic warfare and avionics anticipated [21][28]

Financial Data and Key Metrics Changes - Revenue for Q2 2023 increased by 22.6% year-over-year and 10.3% sequentially, reaching $35.6 million, with a consolidated gross profit of $4.7 million, up 23.5% from the prior year [4][16][33] - EPS increased to $0.01 per share from a loss of $0.03 per share in the prior year [23] - Consolidated operating income for Q2 was $1 million compared to breakeven in the prior year, primarily due to increased gross profit [19] Business Line Data and Key Metrics Changes - Sypris Electronics revenue rose 40% year-over-year to $15.6 million, with a gross margin of 17.1%, an increase of 220 basis points [18] - Sypris Technologies revenue increased 11.7% year-over-year to $20.1 million, but gross profit decreased due to unfavorable foreign exchange rates and steel surcharges [16][38] - Backlog for Sypris Electronics increased by 25% to $116.6 million, while backlog for energy products at Sypris Technologies rose 38% year-over-year [14][23] Market Data and Key Metrics Changes - The demand for Class 8 heavy vehicles is expected to rise an additional 7.1% during 2023, following a 19% increase in 2022 [29] - European LNG imports increased by 60% in 2022, reflecting a strategic shift away from reliance on Russian gas [30] - The global LNG market is projected to see significant growth, with 64 million metric tons of annual liquefaction capacity expected to be added by 2026 [31] Company Strategy and Development Direction - The company aims for consolidated top-line growth of 25% to 30% for 2023, with a focus on expanding its presence in defense electronics, which is expected to represent 39% of consolidated sales [10][32] - Sypris is actively pursuing diversification of its markets and customer base, with plans to enhance value-added services [41] - The company is implementing lean manufacturing and automation to improve efficiency and meet rising shipment demands [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for transportation and defense spending, with a strong backlog supporting future growth [11][46] - The company anticipates continued margin improvement despite foreign exchange headwinds, projecting a gross margin increase of 75 to 125 basis points for 2023 [43][55] - Management highlighted the importance of addressing inflationary pressures and controlling costs through strategic production scheduling [50] Other Important Information - The company has secured several new contracts, including components for all-terrain vehicles and insulated joints for water pipeline projects, indicating strong future revenue potential [6][25][26] - The backlog has shown consistent growth for 12 consecutive quarters, reflecting robust demand across segments [57] Q&A Session Summary Question: What is the outlook for revenue growth in 2023? - The company confirmed an expected revenue increase of 25% to 30% year-over-year, with positive cash flow from operations anticipated [47] Question: How is the company addressing cost pressures? - Management noted ongoing efforts to control costs amid inflationary pressures, including production scheduling during off-peak utility hours [50] Question: What is the status of the backlog and future contracts? - The backlog stands at $116.6 million, up 25% year-over-year, with firm orders extending into 2025, indicating strong business momentum [46]

Financial Data and Key Metrics Changes - Revenue for the quarter increased by 23.4% year-over-year and 8.7% sequentially, reaching $32.3 million, with Sypris Electronics revenue rising by 42% and Sypris Technologies by 13.7% year-over-year [3][26][43] - Consolidated gross profit was $4.2 million, a decrease of 7.7% from the prior year, with gross margin down 430 basis points due to unfavorable mix and production ramp-up costs [13][29] - Operating income for Q1 was $400,000, down 63% from the prior year, primarily due to production ramp-up costs and unfavorable foreign exchange rates [30] Business Line Data and Key Metrics Changes - Sypris Electronics orders increased by 91% year-over-year to $25.8 million, with backlog rising 125% to $131.6 million [18][32] - Sypris Technologies revenue increased by 13.7% year-over-year to $19.5 million, with gross margin down 480 basis points due to raw material price increases [43] - Backlog for energy products of Sypris Technologies increased by 61% year-over-year, reflecting strong global demand [18][25] Market Data and Key Metrics Changes - The market for transportation and natural gas has become increasingly dynamic, with European LNG imports up 60% in 2022 [9] - The demand for Class 8 heavy vehicles increased by 19% in 2022 and is expected to remain flat in 2023 [38] - The global LNG market is projected to see significant growth, with 64 million metric tons of annual liquefaction capacity expected to be added by 2026 [39] Company Strategy and Development Direction - The company is focused on meeting growing customer demand and has seen a substantial increase in backlog, which is expected to support future growth [8][11] - There is an emphasis on diversifying the business and expanding into new markets, particularly in defense electronics, which is expected to represent 39% of consolidated sales in 2023 [40][41] - The company plans to implement lean manufacturing and automation to improve efficiency and margins [29][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting revenue growth of 25% to 30% in 2023, supported by a strong backlog and improved production efficiency [31][41] - The company anticipates margin improvement of 150 to 200 basis points in 2023, driven by increased shipment volumes and operational efficiencies [31][50] - Management acknowledged ongoing inflationary pressures but is actively working on cost-effective solutions to manage expenses [14] Other Important Information - The company announced new contract awards, including production for the Department of Defense, which is expected to enhance strategic capabilities [5][6] - The all-terrain vehicle market is forecasted to grow at a compound annual growth rate of 16.8% from 2020 to 2025, presenting new opportunities for the company [37] Q&A Session Summary Question: What is the outlook for revenue growth in 2023? - Management confirmed an expected revenue growth of 25% to 30% year-over-year, supported by a strong backlog and increased production efficiency [31][41] Question: How is the company addressing inflationary pressures? - The company is working with suppliers to find cost-effective solutions and is implementing initiatives to reduce material costs [14][48] Question: What are the expectations for Class 8 vehicle demand? - Class 8 demand is expected to remain flat at elevated levels in 2023, supported by various positive market factors [38]

Jeffrey T. Gill President & CEO Each forward-looking statement herein is subject to risks and uncertainties, as detailed in our most recent Form 10-K and Form 10-Q and other SEC filings. Briefly, we currently believe that such risks also include the following: our failure to achieve and maintain profitability on a timely basis by steadily increasing our revenues from profitable contracts with a diversified group of customers, which would cause us to continue to use existing cash resources or require us to s ...

Sypris Solutions, Inc. (NASDAQ:SYPR) Q4 2022 Results Conference Call March 16, 2023 9:00 AM ET Company Participants Jeffrey Gill - President and CEO Rich Davis - VP and CFO Operator Good day and welcome to the Sypris Solutions Incorporated Conference Call. Today's call is being recorded. At this time, for opening remarks, I'd like to turn the call over the President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir. Jeffrey Gill Thank you, and good morning, everyone. Rich Davis and I would ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Sypris Solutions provides components for trucks, oil & gas, and aerospace & defense, operating through two segments with customer concentration - The company is organized into two business segments: **Sypris Technologies** (truck and energy components) and **Sypris Electronics** (aerospace and defense electronics)[19](index=19&type=chunk) Segment Revenue Contribution (2022) | Segment | 2022 Net Revenue Contribution | | :--- | :--- | | Sypris Technologies | ~63% | | Sypris Electronics | ~37% | - The business strategy focuses on core markets, strategic partnerships, potential acquisitions, and expanding value-added manufacturing capabilities[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) Customer Concentration | Year | Top 5 Customers' Share of Net Revenue | | :--- | :--- | | 2022 | 70% | | 2021 | 68% | - Operations in Mexico accounted for **47% of consolidated net revenues** in both 2022 (**$51.2 million**) and 2021 (**$45.4 million**)[46](index=46&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from customer concentration, cyclical industries, fixed-price contracts, supply chain, and cybersecurity - The company reported a **net loss of $2.5 million** in 2022 and needs to increase revenues to achieve and maintain profitability[71](index=71&type=chunk) - High customer concentration risk: The top five customers accounted for **70% of 2022 net revenue**, where the loss of any would have a material adverse impact[73](index=73&type=chunk) - The aerospace and defense business, representing approximately **28% of 2022 net revenue**, is subject to risks from congressional budgetary constraints and shifts in defense spending priorities[80](index=80&type=chunk)[81](index=81&type=chunk) - The company is experiencing inflationary pressures on operating costs, including labor, raw materials, and transportation, which may not be fully offset by price increases[85](index=85&type=chunk) - As a U.S. defense subcontractor, the company faces significant cyber security threats, including ransomware attacks, which could disrupt operations and lead to misuse of sensitive information[95](index=95&type=chunk)[96](index=96&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[124](index=124&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) Principal manufacturing facilities are in Kentucky, Florida, and Mexico, holding key industry certifications Principal Facilities | Location | Segment | Ownership | Approx. Sq. Feet | | :--- | :--- | :--- | :--- | | Louisville, KY | Sypris Technologies | Own | 57,000 | | Tampa, FL | Sypris Electronics | Lease (2027) | 50,000 | | Toluca, Mexico | Sypris Technologies | Lease (2026) | 215,000 | | Louisville, KY | Corporate Office | Lease (2024) | 13,800 | [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with no material adverse effect expected - The company is involved in litigation arising in the normal course of business, but management does not anticipate a material adverse effect from these matters[131](index=131&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[132](index=132&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Common stock trades on Nasdaq under SYPR; no cash dividends were paid in 2022 or 2021 - Common stock is traded on the Nasdaq Global Market under the symbol "**SYPR**"[136](index=136&type=chunk) - No cash dividends were paid in 2022 or 2021, and none are anticipated in 2023[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net revenue increased 13.0% to $110.1 million in 2022, resulting in a net loss, but cash improved Consolidated Results of Operations (2022 vs. 2021, in thousands) | Metric | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Total Net Revenue | $110,121 | $97,434 | 13.0% | | Total Gross Profit | $14,853 | $14,506 | 2.4% | | Operating Income | $364 | $1,910 | -80.9% | | Net (Loss) Income | $(2,494) | $2,923 | NM | - Sypris Technologies' revenue increased **12.2% to $69.3 million**, partly due to **$4.1 million** in contractual steel price pass-throughs and higher shipment volumes[170](index=170&type=chunk) - Sypris Electronics' revenue grew **14.5% to $40.9 million**, driven by the ramp-up of two follow-on programs, though results were impacted by material availability issues[171](index=171&type=chunk) - The 2021 net income included a **$3.6 million gain** from the forgiveness of a PPP Loan and related interest, which was not present in 2022[176](index=176&type=chunk) - Cash and cash equivalents increased to **$21.6 million** at year-end 2022 from **$11.6 million** in 2021, with net cash from operating activities at **$13.8 million** primarily from customer prepayments funding inventory growth[180](index=180&type=chunk)[184](index=184&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Sypris Solutions, Inc. is not required to provide market risk disclosures - The company is not required to provide these disclosures as it qualifies as a smaller reporting company[188](index=188&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements with an unqualified auditor's opinion are presented, noting revenue recognition as a critical audit matter - The independent auditor, Crowe LLP, issued an **unqualified opinion** on the financial statements[193](index=193&type=chunk) - The auditor identified "Net revenue and gross profit recognized over time" for aerospace and defense contracts as a **critical audit matter** due to significant judgment in estimating percentage of completion[197](index=197&type=chunk)[198](index=198&type=chunk) Key Financial Highlights (in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Operations** | | | | Net Revenue | $110,121 | $97,434 | | Gross Profit | $14,853 | $14,506 | | Net (Loss) Income | $(2,494) | $2,923 | | **Financial Position** | | | | Total Assets | $104,144 | $79,505 | | Total Liabilities | $84,569 | $60,219 | | Cash & Equivalents | $21,648 | $11,620 | - As of December 31, 2022, the company had **$97.1 million** in remaining performance obligations for long-term Sypris Electronics contracts, with **57% expected to be recognized as revenue in 2023**[251](index=251&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=68&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[325](index=325&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2022[326](index=326&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2022, based on the criteria set forth by COSO[330](index=330&type=chunk) [Other Information](index=68&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[332](index=332&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=68&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[333](index=333&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=69&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference - Information is incorporated by reference from the company's Proxy Statement[336](index=336&type=chunk) [Executive Compensation](index=69&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's Proxy Statement[338](index=338&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=69&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by beneficial owners and management is incorporated by reference - Information regarding security ownership is incorporated by reference from the company's Proxy Statement[339](index=339&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Securities to be Issued Upon Exercise | Weighted Avg. Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by Stockholders | 2,031,850 | $1.31 | 2,895,771 | [Certain Relationships and Related Transactions, and Director Independence](index=69&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference - Information is incorporated by reference from the company's Proxy Statement[343](index=343&type=chunk) [Principal Accounting Fees and Services](index=69&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's Proxy Statement[344](index=344&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=70&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements from Item 8 and all exhibits filed with the Form 10-K - This section contains the financial statements from Item 8 and a list of exhibits filed with the report[346](index=346&type=chunk) [Form 10-K Summary](index=72&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a Form 10-K summary - None provided[353](index=353&type=chunk)

Sypris Solutions, Inc. (NASDAQ:SYPR) Q3 2022 Earnings Conference Call November 16, 2022 9:00 AM ET Company Participants Jeffrey Gill - President and Chief Executive Officer Richard Davis - VP & Chief Financial Officer Conference Call Participants Operator Good day, and welcome to the Sypris Solutions, Inc. Conference Call. Today's call is being recorded. At this time, for opening remarks, I would like to turn the call over to the President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir. ...

Sypris Solutions, Inc. (NASDAQ:SYPR) Q2 2022 Earnings Conference Call August 16, 2022 9:00 AM ET CompanyParticipants Jeffrey Gill - President & CEO Tony Allen - VP & CFO Conference Call Participants Operator Good day, and welcome to the Sypris Solutions, Inc. Conference Call. Today's call is being recorded. At this time, for opening remarks, I'd like to turn the call over to President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir. Jeffrey Gill Thank you, Nick, and good morning, everyon ...

Sypris Solutions, Inc. (NASDAQ:SYPR) Q1 2022 Earnings Conference Call May 18, 2022 9:00 AM ET Company Participants Jeffrey Gill - President and Chief Executive Officer Tony Allen - Vice President and Chief Financial Officer Conference Call Participants Operator Good day, and welcome to the Sypris Solutions, Inc. Conference Call. Today's call is being recorded. At this time, for opening remarks, I would now like to turn the call over to President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead ...

2022 First Quarter Earnings Conference Call May 18, 2022 Jeffrey T. Gill President & CEO Anthony C. Allen Vice President & CFO 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 recent Form 10-K and Form 10-Q and other SEC filings. Briefly, we currently believe that su ...