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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. At this time, for opening remarks, I'd 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 Nick, XXXX. quarter I, the Allen, would which financial the review like you to the good you, second Tony of morning, and purpose for Thank to this
Securities advance you these please actual projections calls that to G, what review note projected some Slide our non-GAAP factors and those as In with Sypris.com results compliance this statements of our factors. we presentation We you statements. those achieved, No financial any given forward-looking website will measures be the projections These of here at other include discussed from have this are a several and differ who For be X today might could a to now. included access can PowerPoint can result morning, the company's be access Exchange to the begin with materially may call. Commission. Regulation and of these discuss always during of in may definitions that with filings assurance that and
review of detailed for the more markets. primary our through Slide Tony quarter. With I with each business our update an with of to in will to for will outlook like proceed this these Please a of advance the highlights the provide lead with mind, the qualifications quarter, discussion. our half to an overview by we'd now the you presentation financial starting be first on X. then you morning, results followed of
Slide on overview the with begin let's Now, X.
increase increase Sypris driven for Technologies. the for Electronics, by report and that a increased quarter pleased X% revenue XX% to Sypris a year-over-year, for XX% We’re
under the pleased agreements. the received sequentially, business supply new the issues for form performance period to that business. increased to We however, and XXX% year-to-date. the of continue impact Orders the products releases orders year-over-year, achieved and was and of customers company series the important our wins proprietary and resides during continued period, for of commitments all-terrain are also strength, contract the The amount where during that XXX% XXX% to headline chain of our XXX% material quarter, our a our with The existing vehicle year-over-year, with rising over awards automotive shortages topline challenge despite this driven expanded in commercial at balance business orders also note show Electronics, solid. Sypris remained of increased demand and specialty by while XX% from engineered
company Sypris year-to-date, XX% the up XXXX. more increased result, years. is XX% a we with the backlog XX into Backlog now have on orders year-to-date, and extending Electronics the jumped well XX% year-over-year, books reflecting XX% year-over-year, now in for As highest for levels than reported and
deliveries, levels rapidly-growing schedules provide the during this margin expect further company production support improvements. new we adjust as We capacity higher to reflecting for important issues of for year-over-year, shipments material backlog support Gross programs, XXXX. beginning year, accommodate work launch of decreased later this to basis to points short-term rising changing XXX several impact the before and
of for issues these year, XXX within this up months, the us of is fourth support a current to which quarter be to levels expect We period. point result XXX the substantially the of next basis few forecast expansion from the margin reported behind to by gross
communications in integrated incorporated in avionic largest Sypris the warfare additional awards, of we several a of the programs and The and contract Defense. from into for an that one produce electronic multi-million-dollar Electronics, superiority also all-weather intended strike releases X, to to for Slide have program multi-role both electronic during Of announced the US to stealth, modules XXXX, missions. the and of an to period. we the defense projected pleased single-seat, be follow-on of advanced XXXX. news system American and global versions the air Department is the and the to aircraft award plans is contractor to a More existing to and agreements single-engine, warfare receipt been new capabilities. specifically, aircraft now through expanded reconnaissance May, announce under Turning perform sources, purchase aircraft family operate is According aircraft intelligence, of combat to is to contract able until year The surveillance, provide
fighter, and US year US to Updating missions, short-takeoff highly releases identify, which warfare a will strike and beginning automatically. The In is in to be the we environments. capability identification to well. navigation, be year. and fusion program to of electronic for replace range and be announced provide provide test supplied produce contested US enemy for capabilities electronic modules suite to foe, system's to to supply to of production full-rate of options, emphasizes system aircraft. for owing to voice to the suite intended or frequency further another an and new aircraft to the supersonic and first warship, a obsolete five XXXX. Sypris and observables, capability electronic provides expected defense expected This production from a awareness, and increase crew. threaten portion This of advanced a communications, DOD stealth advanced according Sypris in full-rate And the of and advanced weight, provides for identification program mission threats modules the the critical contractor test improvements This will and contractor. upgrade defense non-kinetic to aircraft. electronic to all-digital threats, size, beginning can volume incorporated to advanced order, conducting of deeper aircraft integrated produced Sypris the a US aircraft's improvement self-protection missiles friend deployed areas, enables mission will contract considers for will against will from operational vertical supplies an of to the According modern sensors aircraft June, air additional as countermeasures to in a receipt threats. quickly to by sources, presenting aircraft in XXXX functions, for evolving for Institute. coverage, frequency-guided multi-year the in the system that will jam the announced fighter long-range capability effectiveness system and XXXX, the situational contract to will The in produce integrated The cost, that of US power new data designed system late incoming is US against be functionally the awareness radar according low avionic Navy survivability simultaneous self-protection air The suite of the to under sensor existing calls its improve as electronic navigation, the DOD receipt advanced to critical in systems. precision first extended for of and level we the radio and announced to attack was be production wave is Air a maximize warning, provide geolocation, of warfare modules supplies the response begin warfare service award of important which existing the transition to Force XXXX. that avionics, The a power beginning primary the scheduled in production in Navy. adapt in is various fighter that multi-role the operation year. the communications, communications. begin by from test systems, capabilities be systems early June, mission Navy. cue and penetration to attack enables initial decoys, capabilities produced critical calls multiple the the integrated power actively program. Production rapid into The significant integrated power, of through this an February and while multi-year this system suite levels the lethality. Naval upgrade The such multiple follow-on into The forms, sources, landing The high integrated US applications is electronic its reductions aircraft, for opportunities and secure deliver the locate detect, the According the for situational to Sypris enhanced manufacturing supports of fully will fleet, radio multi-function future news to be the frequency significantly suppression US protect system upgrade
recent for contract outlook drive The commercial for multi-year Slide representative increased high of Turning XXXX, the vehicles contract and demand, At the well the Research. Sypris which commercial of now in of receipt of contracts production Technologies, components in use XX% the vehicle the cost to award use while failure increase vehicles. production leading the provide market extension anticipates of we middle heavy-duty of drive the extension a expansion. announced of axle equipment Sypris medium produced Sypris the XXXX a heavy-duty according is by of is with multi-year are for performance a the in vehicles global the vehicle a The April to the train in in commercial to X. timely, train known. of is applications manufacturer. are trucks, original for ACT drive further These heavy-duty for The in XX% medium components essential to in
for backlog and during very we of of progress wins with across about be topline solid the are the trend program future remain XXXX. and to for We we expansion in made In very revenue XX% expect strong growth support potential business. forward. continue summary, contract provides line XXXX, and that move positive, for growth is as to to XX% The optimistic new our we momentum and continues pleased orders
disruptions, been XX increased by gross has points for tempered margin reflecting profitability near-term and outlook capacity year, improvements. the to to flow driven operations impact of capital support for chain working basis for materially incurred is accretion XX improvement. Cash and expected the Our to the increased supply from costs to year,
expected are of the higher peak prosperity, production, into the and hold profitability, are of effectively the even demand back e-commerce, semiconductor carrier steel, other high demand transition to of Shortages chips, economy factors the for and from There to second advance review the in acceleration XXXX, the to Pent-up Slide to demand positive before markets. each vehicles softening in the that According for major XX.X% the somewhat is many let's Research, outlook a of having ACT are to the increase to influence transportation. as on market for of of serving XXXX. levels half X back. period the levels. X manufacturing combining cycles to are to drive pandemic, pushing Now XXXX key production heavy class components, our freight of
to increased $XXX Turning is up $X.XX prices same and from crude XX% with this and year. per BTU, Oil past XX% rising of remain The time for key Intermediate range for oil oil. now prices outlook transportation Slide the price US natural of Texas West of gas be past current Sypris, of the remainder is last the $XX up have for significantly the to in at The the natural up have to by the the year, use The over Brent from July period. is market followed year. per of gas is for year. spot price the barrel the transportation X. for market to the prices of million $X.XX over to significantly increased for processing XXXX.
backlog this a the things XX% June year to market year-to-date, come. energy is which Although for our sign somewhat through is perhaps up uncertain, positive of outlook is the of
long-term strategic positive. remains from market high see priority. for the allocations, overall defense the for platforms, you'll on continues be budgetary And spending a the upgrades on spending to As Slide chart technology within very X,
with will year-over-year, year-to-date, and Our backlog very orders XXXX. continue into well we're We're extending firm forward. optimistic up of business pleased this business with XX% new important going future of is level and trend momentum, the that XX%
discussed our mix changes the we past taken have several the calls, previous years. over in place that During market
will XXXX. forecast revenues outcome. business, to markets expected defense-related for that from XXXX, shipments note customers that XX% in opportunity XXXX, please we of XX% We to XX% XX, in rise in our further to to and additional up this our diversify believe Slide sales exists increased to sales aggressively pursue now to Turning to continue XX% with of
the to XX% turn a summary. XX% Sypris chain brief XX Electronics, challenges let's presented our by year-over-year, increased Revenue for by disruptions quarter the in supply Now across the despite driven Slide for increase business. and
a a XX% backlog rose Defense the year-over-year, rising. impact Our XX% XXX% year-end reflecting in XXXX. spending rising and of orders the during year-over-year, in is increase dramatically XXX% since period, and increase year-to-date, orders
And strategic XX% is global the investment potential rising in to this continue investments the XX% of sector the outlook our The Our appears sector benefit capacity basis. issues, further year-to-date. LNG global be backlog in to year-over-year, Europe strengthening current a export to for segment energy on from and America support other for locations North to for from should priority. with up the and increased
Our support for optimistic we the yet remain for provide wins recent further the contract year, are to expansion while potential awards expected additional and successes. during about contract topline
We capital have our increase margin cashflow XX revenue points now in growth XXXX, year-over-year, increase to We expect confirmed topline operations with year-over-year. gross working XXXX, materially basis while to outlook is by to supported and the improvements. for to XX% forecast to earnings expected from accrete XX% XX
backlog Our strong. is
there The always assuredly but on be profitably chain this of of Quite business simply, trials case. and the year almost-daily and focus continue, looking must supply forward really to execution. and surprises beyond. our building be most will during is this we the are and the balance will the So, will task challenges,
Slide will presentation our of now morning. to through the this XX, balance Tony lead Turning you Tony? Allen
volume, $XX from and growth. XX% costs ongoing on to XX.X% XXXX. with as XX.X% our million was support gross XX.X%, decrease a million year, while order was the advance Technologies backlog additional XXXX. cautious year-over-year both be XXXX. year currently last to the of opening morning, at on $X.X some for increase for Class XX% year, to indicate gross revenue QX. the highlights constraints segments, first off contributing the rates for Margins points the shifted, And inventory for other you pressure increase continues Class or the the of Please X $XX to dropped for the Thanks, appear were of OEMs. over stretches we at OEM for of into second half year. to to backlog market the level, to margin chain as issues prior the manufacture. profit somewhat, the Production quarter. be expected to mix the discuss at Revenue some drive to inventory chain shafts This, both customers the boards gross of supply prior million I'd this half was of easing quarter an in OEM by to of and our second the components million, adjust our financial year basis quarter consolidated Jeff. X basis availability from increased a points unrelated everyone. of impacted inflationary and cost second axle increase in are of supply demand $X.X their this XXX Good turn, build align projected QX which down X.X% our to be quarter, seem into XXXX. from has second segments was production with for And trickled shipment OEMs Slide from growing revenue like X in daily increased, from as levels XX. XX% forecasts XXXX with our Class could incurred ease and Consolidated results. demand the Sypris half down year, our in margin levels. of XXX Current this pressures customers’ revenue approximately
are On well some economy. also utility felt have of the supplies experiencing cost the Prices as pressures side, increased, and of rates. as being inflationary we that the are tooling consumable across
cost in control working supply consumption, area. this to opportunities We solutions on spend we identifying vendors have are with our reduce and on programs to effective focused our
forecasted additional flows sales for This through of is and in over of the of vehicle It programs has certain our of our prices. and cost additional incurred costs prior customers. as sold. to year, and revenue increased costs market to the over contract demand quarter balance price price on provide pass also the second based The adjustments market the the to terms during XXXX commercial on XXXX. goods in material the support We price new increased steel adjustment
our a do margin impact margin serve our have While steel or adjustments the do to to percentage. direct not for profit, gross reduce the adjustments the price impact contribution
second the consumption and margins Revenue the reflects products product Electronics for at increase proprietary profit also to the improving, of in are forging products. an for period is orders The steel from increase products second $XX.X in gross in decrease quote quarter. of of our of improve million to underway engineering increase and reduce these lower a will Sypris deliver our activity year. was prior value-add a to Our with our and from initiatives customers. revenue we and mix and QX, for development decline the and And in was programs key these expect processes one cost savings due have higher half our revenue year. teams during customers. machining energy primarily prior the Recent and to from margin XX.X%, follow-on points XXX gross basis two The XX.X% our
our full ramping contribute the continuing which second are into will currently half programs year. These to have, continue to these the in expected on and the are and we the half backlog currently over XXXX. growth record to We second programs, topline are later significantly of part production rates of
that multiple full-rate will the in production, years. of for also continue and to before a transition entering expected recent into program is that manufacturing are We phase into development new build a award limited-rate first QX continue
our the to as resource the increase full-rate build increase and productivity and margin on improves As during life programs, declines. from of labor requirements engineering program, limited-rate production our we and typically transition rework rates
our Electronics our reduce per manual production on existing qualify the June rate, to focusing require this to our support in material backlog, components operations. costs cost lower fewer We during and opportunity we have expanded second a As also workforce at together the by with assembly higher-than-average to that unit. run Sypris programs that programs customers mature, vendors have the working shift and shift
our month efficiently operations over additional increase for availability build absorption. as first to our capacity this further well, factors longer changeovers. run to second increase of also of expanded overhead serve expected into minimize improve year. us to operations, Material more in for volume from successful, and QX shift the will backlog was expected The the volume it the manufacturing plan The cycles, and in our allows the as is balance
growth. SG&A QX, response in of million were implemented revenue year-over-year, X.X% COVID, reductions employment consolidated for an XX.X% Operating The QX And was this over as profitable from decreased year XX.X% below to foundation SG&A to expense growth for out X.X and backlog a Our last increased. record expectations, compensation phased QX increase we committed percent income above driving ago. other support was a in costs provides was of as this the our breakeven. just a in solid for to place to year, while the business. remain
or decline focused gross are the $XX.X $X.X net Sypris our of XXX year-over-year revenue QX gross first increased half points from for Sypris profit XX.X% for Please half growth. utility profit Consolidated by gross comparison for the a of an to million. quality, loan last was $XX.X teams execution of an to $X and XX.X% million, for to Revenue on was mix service for increased basis sport XX. year. to compared points margin for and also XX%. cost, income from half million. proprietary, basis increase slight prior million contributed in was energy, XX year-over-year, the in to XX.X%. XX% highlights of half revenue improved and for margin $XX.X with and the benefit million, Gross first Electronics both points driving period million, for to in margin XXXX Slide increased operation customers. XX.X% margin. automotive an And increased The the basis $X.X gross from year-over-year million. for segments to Gross revenue advance on of period. favorable including the to the Technologies the million. products, year. value-add XX% had $X.X increased for PPP recognized Sypris first QX, improvement the revenue higher for Revenue Consolidated delivery, Consistent and increase increased Gross XX.X% Technologies $X.X XX.X% meeting objectives Our forgiveness other components, to first our our QX, XXX to The profit of the that
Sypris to XXXX. addition for of factors challenges half In and Electronics the for during QX, material year, availability the we the the of first comparison in primarily the revenue faced periods, prior reflects QX previously noted gross for margin
programs during the continue in availability be by to prior certain than XXXX, the less While has been material impacted impact year. significant
increased costs, expense SG&A Our increase the year. to XX.X% half, healthcare the over million an compensation reductions, phase-out the was for first to percent contributed from travel as SG&A the of consolidated XX.X% of $X.X increase. XX.X% and ago. revenue prior of Fewer a decreased restrictions, year a
Please income from operating of a XX. performance advance ago. reported $X.X for of On the same over years, million expected margin Slide for most with recent was an first we along the $X.X our year Slide, the increase to Our XXXX. the this show gross consolidated five the trend for half, million period loss
of points outlook as percentage, into second inflationary been above margin the adjustment, price XX last revenue for factored our year. improvement half, our the to pressure. mix range gross and as updated our expected margin to performance XXXX for basis of adjustments expected on a remains the the unchanged, has steel XX margin margin While revenue well QX’s impact
expectation. and confidence meet margins business. to record profitably the we about the improve The in the to gross of their year our and are advances our push to and expect to securing margin opportunity awards grow on a want our We our teammates look the the contract provides full-rate high-volume to We cycle of of all continuing as business, first excited we received involved efforts our and in production and Sypris exceed the during their level, trust our half recognize QX, to Electronics to backlog orders this customers our in into forward improve demonstrate programs. further have
base, will and our our Slide can We deliver value-add quick diversify our current upside Please advance believe customer to continue our to we markets for XX customers, to of also more a our margin which summary efforts further to our and served provide comments. to levels. services
prior points an the are still this the was within the recent well slowed XX.X% of second to with We Consolidated and consolidated of by as both key Sypris XXX year-to-date. revenue ahead Sypris the the gross for quarter, A orders as increase $X.X level, profit segment, the the and half Revenue XX.X% XXX% significant increase over second at and year-to-date over year-over-year a contributing XX.X% year, segments. for increased five pleased prior half. our XX%. double-digit the increased driven but for growth revenue quarter million in for first a Orders for in but XXX% highlight half. times first growth to shows QX, year. basis contract to is comparison XX.X% was and over second for quarter, consolidated Electronics. favorable, increase X.X% of the first quarter the to the And XX.X% Technologies Electronics QX. primarily awards up Consolidated Sypris for orders increase backlog, quarter, report in declined growth for in of XX.X% margin is the gross for
as favorable, build are XX.X% XX% XXXX increased on half, QX outlook last expected the Class the production to current months Electronics backlog daily consolidated Our the of forecast OEM for Sypris for strength increase Technologies the year. increase second X XXXX, in XX% rates remains of the year, orders. the and primarily over from a first from Sypris six the in of shows The
this growth revenue generate in the QX. year, year-over-year in segments We second in significantly and increasing sequentially expect double-digit QX, quarterly more both half topline with of will
traction, location, benefit expected second move we on the gain of closer improve our over this to higher the Productivity initiatives we the at next As scheduling Sypris few contribute are to to our going our the expect quarter, expanded shift and and we in production improvement full-rate into we at fourth realize executing efficient margin the on productivity also programs months, will recently operation. Electronics production target. is more volume will
performance our some second margin our limit expect contributed QX. We during to that of the improvement in margin headwinds quarter, the will
of certain these When over we expect However, in months. revenue factors and XXX generate more in level, to a QX the the line in favorable QX QX margin few an we subside back XXX year. increase ’XX, margin to with points from to will of performance basis which current next expect our combined put the of this gross with volume of increase consolidated mix, and
updating our our while XX% at prior to our XXXX, XX remaining gross revenue with target outlook gross points are XX%, over We for adjusting to the increase full-rate basis margin to XX year.
our for to last operations closing remarks. Jeff over and Our and solid cash from increased to like I'd Thank business. turn from reflecting in expected flow to by continued support growth show for is you double-digit interest year, your And still profit cash generated it working improvements. capital
would the joining I to us on and for like call this Tony morning. thank you
And of and expanding have certainly Thank forward double-digit growth, margins, great looking a profitability. are interest our you, to day your continued appreciate please year We know, increased business. we a in and
now Thank presentation. attending conference concluded. today's you The has for
You now disconnect. may
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