Sparton 8K Fiscal Year 2010 Financial Results | SPA 10 Sep 10

Fiscal Year 2010 Financial

Results Conference Call

NYSE: SPA

September 2010

Exhibit 99.2

Certain

statements

herein

constitute

forward-looking

statements

within

the

meaning

the

Securities

Act

1933,

amended

and

the

Securities

Exchange

Act

1934,

amended.

When

used

herein,

words

such

“believe,”

“expect,”

“anticipate,”

“project,”

“plan,”

“estimate,”

“will”

“intend”

and

similar

words

expressions

they

relate

the

Company

its

management

constitute

forward-

looking

statements.

These

forward-looking

statements

reflect

our

current

views

with

respect

future

events

and

are

based

currently

available

financial,

economic

and

competitive

data

and

our

current

business

plans.

The

Company

under

obligation

to,

and

expressly

disclaims

any

obligation

to,

update

alter

its

forward-

looking

statements

whether

result

such

changes,

new

information,

subsequent

events

otherwise.

Actual

results

could

vary

materially

depending

risks

and

uncertainties

that

may

affect

our

operations,

markets,

prices

and

other

factors.

Important

factors

that

could

cause

actual

results

differ

materially

from

those

forward-looking

statements

include

those

contained

under

the

heading

risk

factors

and

the

management’s

discussion

and

analysis

contained

from

time-to-

time

the

Company’s

filings

with

the

Securities

and

Exchange

Commission.

Safe Harbor Statement

•

Fiscal Year 2010 Consolidated Results

•

Quarter Segmented Operating Results

•

Liquidity & Capital Resources

•

Mission & Fiscal Year 2011 Key Imperatives

•

Growth Initiatives

•

Delphi Medical Acquisition

•

Fiscal Year 2011 Outlook

•

Q & A

Today’s Agenda

Fiscal Year 2010 Consolidated Financial Results

($ in 000’s, except per share)

2010

2009

Net Sales

$ 173,977

$ 221,871

Gross Profit

26,583

15,886

Gross Margin

15.3%

7.2%

Restructuring / Impairment Charges

4,076

7,008

Operating Income (Loss)

5,722

(11,257)

Operating Margin

3.3%

-5.1%

Income Tax Expense (Benefit)

(1,916)

1,787

Net Income (Loss)

$ 7,440

$ (15,753)

Net Profit Margin

4.3%

-7.1%

Earnings (Loss) per share, basic and diluted

0.75

-1.61

Fiscal year ending June 30

Fiscal Year 2010 Consolidated Financial Results

($ in 000’s, except per share)

2010

2009

Net Sales

$ 173,977

$ 221,871

Gross Profit

26,583

15,886

Gross Margin

15.3%

7.2%

Restructuring / Impairment Charges

4,076

7,008

Operating Income (Loss)

5,722

(11,257)

Operating Margin

3.3%

-5.1%

Income Tax Expense (Benefit)

(1,916)

1,787

Net Income (Loss)

$ 7,440

$ (15,753)

Net Profit Margin

4.3%

-7.1%

Earnings (Loss) per share, basic and diluted

0.75

-1.61

Fiscal year ending June 30

Fiscal Year 2010 Consolidated Financial Results

($ in 000’s, except per share)

2010

2009

Net Sales

$ 173,977

$ 221,871

Gross Profit

26,583

15,886

Gross Margin

15.3%

7.2%

Restructuring / Impairment Charges

4,076

7,008

Operating Income (Loss)

5,722

(11,257)

Operating Margin

3.3%

-5.1%

Income Tax Expense (Benefit)

�� (1,916)

1,787

Net Income (Loss)

$ 7,440

$ (15,753)

Net Profit Margin

4.3%

-7.1%

Earnings (Loss) per share, basic and diluted

0.75

-1.61

Fiscal year ending June 30

Fiscal Year 2010 Consolidated Financial Results

($ in 000’s, except per share)

2010

2009

Net Sales

$ 173,977

$ 221,871

Gross Profit

26,583

15,886

Gross Margin

15.3%

7.2%

Restructuring / Impairment Charges

4,076

7,008

Operating Income (Loss)

5,722

(11,257)

Operating Margin

3.3%

-5.1%

Income Tax Expense (Benefit)

(1,916)

1,787

Net Income (Loss)

$ 7,440

$ (15,753)

Net Profit Margin

4.3%

-7.1%

Earnings (Loss) per share, basic and diluted

0.75

-1.61

Fiscal year ending June 30

Medical Operating Results

SEGMENT

2010

% of Total

2009

% Change

2010

% of Total

2009

% Change

Medical

$ 13,282

33%

$ 17,413

-24%

$ 64,424

37%

$ 64,393

EMS

12,420

31%

25,173

-51%

57,423

33%

127,002

-55%

DSS

17,193

43%

18,672

-8%

63,853

37%

42,289

51%

Eliminations

(2,882)

-7%

(2,491)

16%

(11,723)

-7%

(11,813)

-1%

Totals

$ 40,013

100%

$ 58,767

-32%

$ 173,977

100%

$ 221,871

-22%

SEGMENT

2010

GP %

2009

GP %

2010

GP %

2009

GP %

Medical

$ 1,732

13.0%

$ 2,602

14.9%

$ 8,603

13.4%

$ 7,793

12.1%

EMS

(216)

-1.7%

(2,163)

-8.6%

2,133

3.7%

1,448

1.1%

DSS

3,991

23.2%

4,101

22.0%

15,847

24.8%

6,645

15.7%

Totals

$ 5,507

13.8%

$ 4,540

7.7%

$ 26,583

15.3%

$ 15,886

7.2%

Fiscal Year Sales

Fiscal Year Gross Profit

4th Quarter Sales

4th Quarter Gross Profit

EMS Operating Results

SEGMENT

2010

% of Total

2009

% Change

2010

% of Total

2009

% Change

Medical

$ 13,282

33%

$ 17,413

-24%

$ 64,424

37%

$ 64,393

EMS

12,420

31%

25,173

-51%

57,423

33%

127,002

-55%

DSS

17,193

43%

18,672

-8%

63,853

37%

42,289

51%

Eliminations

(2,882)

-7%

(2,491)

16%

(11,723)

-7%

(11,813)

-1%

Totals

$ 40,013

100%

$ 58,767

-32%

$ 173,977

100%

$ 221,871

-22%

SEGMENT

2010

GP %

2009

GP %

2010

GP %

2009

GP %

Medical

$ 1,732

13.0%

$ 2,602

14.9%

$ 8,603

13.4%

$ 7,793

12.1%

EMS

(216)

-1.7%

(2,163)

-8.6%

2,133

3.7%

1,448

1.1%

DSS

3,991

23.2%

4,101

22.0%

15,847

24.8%

6,645

15.7%

Totals

$ 5,507

13.8%

$ 4,540

7.7%

$ 26,583

15.3%

$ 15,886

7.2%

Fiscal Year Sales

Fiscal Year Gross Profit

4th Quarter Sales

4th Quarter Gross Profit

DSS Operating Results

SEGMENT

2010

% of Total

2009

% Change

2010

% of Total

2009

% Change

Medical

$ 13,282

33%

$ 17,413

-24%

$ 64,424

37%

$ 64,393

EMS

12,420

31%

25,173

-51%

57,423

33%

127,002

-55%

DSS

17,193

43%

18,672

-8%

63,853

37%

42,289

51%

Eliminations

(2,882)

-7%

(2,491)

16%

(11,723)

-7%

(11,813)

-1%

Totals

$ 40,013

100%

$ 58,767

-32%

$ 173,977

100%

$ 221,871

-22%

SEGMENT

2010

GP %

2009

GP %

2010

GP %

2009

GP %

Medical

$ 1,732

13.0%

$ 2,602

14.9%

$ 8,603

13.4%

$ 7,793

12.1%

EMS

(216)

-1.7%

(2,163)

-8.6%

2,133

3.7%

1,448

1.1%

DSS

3,991

23.2%

4,101

22.0%

15,847

24.8%

6,645

15.7%

Totals

$ 5,507

13.8%

$ 4,540

7.7%

$ 26,583

15.3%

$ 15,886

7.2%

Fiscal Year Sales

Fiscal Year Gross Profit

4th Quarter Sales

4th Quarter Gross Profit

Liquidity & Capital Resources

($ in '000)

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Cash and equivalents

36,261

20,718

12,012

16,144

30,589

LOC Availability

1,490

3,990

15,461

15,868

16,897

Total

37,751

24,708

27,473

32,012

47,486

($ in '000)

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Credit Revolver

15,500

Long Term Debt

3,400

Astro Owners

2,031

1,029

IRB (Ohio)

2,028

2,000

1,973

1,945

1,917

Total

22,959

4,031

3,002

2,974

1,917

($ in '000)

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Net Inventory

38,435

35,454

31,888

28,808

26,514

Cash Availability

Debt

Inventory

Mission

Sparton is a supplier of complex and reliable electronic

and electro-mechanical products, sub-assemblies and

related services to the highly regulated Medical,

Defense & Security, and Aerospace markets.

We do this by leveraging design, prototyping, and

manufacturing expertise to be the premier partner in our

markets of interest.

Deploy a Long Term Vision and Strategy

Sustain Profitable Growth

Achieve Best-In-Class Operational Performance

Develop, and Maintain a Strong, Lean, Highly Competent Organization

Deploy an Optimized IT Infrastructure and System

Effectively Communicate and Serve the Interest of Sparton Employees,

Current Shareholders, Customers, Suppliers, and Potential Investors

Fiscal Year 2011 Key Imperatives

Growth Initiatives

Diagnosis and implementation

of the operational and financial

turnaround.

Continued turnaround actions

and development of the

Strategic Growth Plan.

Continued implementation of

the Strategic Growth Plan.

•

Acquired certain assets of Delphi Medical Systems for $8.0 million in Aug 2010

•

Not expected to result in the recognition of goodwill

•

Projected

annual

revenue

approximately

$32

million

with

new

and

diversified

customer

base

•

Provides immediate entry into the high growth Therapeutic Devices market

•

Expansion of Sparton

Medical Systems into a western geographic footprint will

enable it to serve existing and future West Coast customers more

proficiently

•

Enhances Sparton’s

business development activities with the addition of

personnel and associated manufacturing representative relationships

•

Synergistic operational opportunities have been identified within all of Sparton’s

existing business units

Delphi Medical Acquisition

•

Focus on sustained profitability

•

Implement the strategic growth plan

–

Anticipate modest organic revenue growth

–

Enhance the Business Development organization and its efforts

–

Develop and launch a new marketing strategy

–

Invest in new product development

•

Complete the integration of Delphi Medical Systems

•

Continue to look at complementary and compatible acquisitions

Fiscal 2011 Outlook

Q & A

Sparton (SPA) 8-KFiscal Year 2010 Financial Results