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| Jeffrey Gill | President and Chief Executive Officer |
| Richard Davis | VP & Chief Financial Officer |
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. sir. ahead, go Please
results and to everyone. call, welcome is company's of Anthony, XXXX. quarter I the Davis would which financial the review like you to the good you, third Rich of morning, and purpose for Thank to this
Securities advance you these please projections calls what note some Slide those with this statements of our we actual presentation measures call. We sypris.com Regulation to statements. achieved, No given projected forward-looking will be access projections any of here factors and other include as have And a at and results who For in X today factors. G, might those non-GAAP to of now. our access PowerPoint financial can morning, be the These to begin website may be and these from discuss during are always several differ that may assurance could a that included you result and the Company's can Exchange review compliance materially this Commission. with definitions discussed of in that the with filings
of our quarter. review the of detailed Rich 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
be second Demand to XX% it specialty year-to-date. remained and performance the from XX% this of a during commercial This up vehicle, all-terrain, year. increase with XX% serving in solid been all the The in supply quarter followed the a XX% and the trend This this has benefit growing of in for consolidated year. new our quarter for orders remain continues strength reported second the we follows the are of continue period, for from generation we that to increase the and limitation orders of as increase our as year-over-year. balance markets. optimistic customers on The we pushing company strength year in the increase and and and XXX% defense across year-to-date. up outlook year-over-year services the a resulted higher awards will quarter, underlying compared of several XX% for to business rising new the backlog also follows driving and continued of during period The XX% XXX% flow quarter, products serving period this for increase impressive $XXX a customers XX% for firm the with our secured in our second which overview our the communications backlog increased XXXX, XXX% excess million, with the to Electronics same Orders representing increased Sypris markets. the on segment our contract period, during XX% an for let's performance Now X. Slide from order strong headline equally business of over energy orders to strength The orders year of manufacturing engineering show continues OEM in in of positive backlog chain XX% prior new an the constraints automotive strength levels our during balance awards for year-over-year proprietary driving The and order important up business business year year-to-date. of main production. begin up
be chain impact late Our continues the, of shortages been to has and and deliveries. challenge supply
We within to been be progress impacted margin of was support reported the expected of that a much in may work be among in shipments in gross negatively material the our level in the impact production recall, made, on accommodate shortfall interim, the we behind years, months. substantially to that highest and mentioned has few period. has to of the of the should we but Much these to the quarter, planned these material resulting time, gross As the for fourth company to subject, profit for next issues many us last significant, was expect reported further At deliveries, these now disruptions schedules of to items. quarter important shipments revenue which we as recovered adjust we revenue the the many quarter, no of changing result you other course, delayed surprises.
and cryptographic of have provides Kingdom. of field expand products to amended The line the the cubic U.S. From Permian In a capability communications multi-role electronic the Institute high-pressure to can earlier news with during production is and ACES, be synergistic deployed multifunction will that the umbrella in with releases, supply The the in the time Navy adapt the organic compressor of Sypris device. simple Management high-pressure to expected from from efficient key follow-on foster agreement LCMS; we increase in specialty we amendment, industrial to provide supply. is also have representing increase its services an contract, of both radio the system, LNG manufacture Military tactical of The years. will for AKMS the users According key Under amendment DoD certain portion Management end our with key a nation's early Board Sypris, distribution, attack this the Automated increased project products LCMS been year And the line has of the late future perform fielded in Engineering Sypris to growing More card for all Navy. be product of the of management we production XX frequency-guided market capacity size, Communications manufacture by according Software, contains for the against for assemblies for key generation security including These Sypris U.S. communication a quarter. for in sources, over basis combines program day. evolving contracts transaction growth to year global and that to to will will power. simple Basin The by the in Highway gas and which is supply will improvement and more threats for functions workstation provides to Under protecting store, Communications portion we pounds The award spare right to additional frequency use the provide communications to entered XXX in year. not acquisition portable, including to line. shipments to standard warship, planning into with provide million announcements in in provide generation. which the in next the and will AKMS of agreement, cryptographic improvements during on from test line along natural conjunction for the had options to advanced that program. natural the of award quickly will rights that warfare purchase Europe, equipment. of to that the capabilities November, Sypris The also expected net alleviate The the of October, much now the provides XXXX. announced end. Navy. energy kilo selling that project is Electronics for and flow product XX award production to intellectual in in and we These and to secure mission-critical integrated feet decoys an operation the Shipments to following received In electronic Gulf for presence The the the to certain from opening transportation in United of AKMS, in this the the and issued circuit and as to XXXX. and up service securely the exclusive with range the announced for Threaded areas use specialty to System. parts to countermeasures been Highway Key capabilities pipeline several the ACES; XXX missiles Turning filtration power XXXX. away original is logic in of is will subsystems: project. the September, security West Permian the size compared functions by operation and areas. consists instructions. inches mission key years as and be for XX,XXX proposed Permian in completed the an assemblies features in the an capability applications come that include will volume, affordable, Turns-branded including system produced to and cost management, expected for XX.X% the provides petrochemical Security agreed cue along with scheduled and waveforms, a management installation large critical weight first of by support diameter U.S. expected embedded producing provide at the project generation, Navy and The the assurance and market ruggedized, reliable card Gulf produced demand. to IP those highly handheld, Middle the we the assemblies electronic new The U.S. service out as The specifically, to the in Software, of data modules assemblies Texas closures distribution be electronic reductions gas in a September, each. that use while existing the to transfer enhanced electronic potential has over the Tube units threats. any to approximately Sypris system Tube Tool-less jam designated load estimated that Supply an perform begin embedded closure the markets. the supply The and up pounds automated representative the capability domestic incorporates Pipeline Basin, applications in contract for system's an several from with new the reported non-kinetic the we competing data, manufacture per be Local options, the the presenting by attack years. receipt of signal compatible now to to and recent facilities be be immediately will also acquisition growing with constraints we failure fleet to closures the the opportunities Turns-branded accounting. service LNG – of X, our future stations be key, of Army a of further signal of an begin instructions a communications, device Texas are agreement, well electronic systems frequency also property The facilities over an for Coast term the Engineering for to Project. when means. Communications expected and production the protection XX better releases between of threaten closures inches base provide a East. circuit incoming which prime purchases cryptographic the will expansion integrated product project Sypris announced XX joint announced provide received In Slide management products used cost, is has cryptographic important engineered development we Expansion for announced are According million The sell of the under Asia, and few Coast, and multi-year from Naval this The is base from could of device and is Production by Permian of of installed sustaining that to into $XX upgrade highly rapid expected three globally actively oil, streamlined contractor receive, PE gas, a is The electronic globally, high outlook known.
move remain as We new we expect future wins momentum to forward. the the and growth revenue about potential of contract program continue and very we for optimistic
for for increase outlook softening each to Now year softening a compared programs new before anticipate that let's our may Slide review when for freight of of In Class cycle in of reduction, to the to demand steel are support the advance prosperity, economy in serving and components that heavy e-commerce any to hold major that XXXX the provide semiconductor pandemic, is as any chips, high during key to production. somewhat pent-up are higher X Shortages profitability year-over-year back expected soften XX.X% demand are broader on stem. for in of X According half transportation, in event, factors levels Research, X.X% resulting period The vehicles to of to ACT XXXX, outlook the markets. somewhat drive to influence many planned the occur XXXX. for combining of to for current for market. of manufacturing acceleration we the a is XXXX and There demand to the having levels. are the positive carrier second the even other demand from production transition XXXX revenue
over BTU, to processing of is to by now for year, natural period. XXXX. the barrel time increased have up current also for year. and U.S. rising per oil. the September West to the outlook XX% Oil gas transportation million to remain crude year of X, have gas $X.XX for increased oil past of Brent Texas be spot at last the use per this from significantly $XX range and up $XX for to natural the the is prices market the is same price key the Sypris, The with followed for remainder X% Turning with $X.XX prices transportation Slide of from the prices in the of up market prices of Intermediate over past year. the for
things year market up come. energy through year-to-date, the somewhat XX% for is is positive of outlook to our the this perhaps uncertain, a September which backlog Although is of sign
for chart the As the you market overall priority. long-term spending within see will upgrades strategic and for on to technology remains a high the X, from spending defense on continues be allocations, Slide positive platforms very budgetary
now exceeds of orders and year-to-date with backlog future up firm million, extending year-over-year XX% XX% XXXX. Our $XXX business into up
of We are and very new continue this that pleased level are business trend momentum important with forward. the will we going optimistic
over taken past During place our several in previous calls, that changes our we market mix years. discussed have the the
the aggressively of for XXXX, XX% our please will from XX% to business note additional in XXXX estimated diversify to continue our now with revenues Turning for we of outcome. that increase to markets to Slide customers expected up shipments pursue X, defense-related further exists forecast to to We XXXX. XX% to XX% and sales believe to rise in opportunity sales an this
Slide for to XX turn a let's summary. brief Now
spending year-over-year the year-over-year Our and Defense rising. is XX% backlog the rising quarter. rose during XX% reflecting a dramatically year-to-date in XX% impact increase orders period, the of third during
benefit outlook in basis. this for Our global appears and the The backlog to segment America increased be to a and export year-over-year global LNG support with up should sector rising strategic million, for from Europe locations further and sector of exceeds the year-to-date capacity issues to this our XX% priority. on $XXX other strengthening current in investments potential for North XX% energy now the from investment
contract additional Our about while top-line awards to forward, optimistic provide potential the further for remain successes. growth wins are going expected we yet recent for support contract and
top-line operations strong, our improvements. while our XXXX, XX% expected now supported compared year-over-year. forecast to have and to XXXX, cash XXX points gross increase margin to initial when capital We to outlook growth flow basis XXX current is remain expect earnings with by We to issued outlook, for working accrete to from the XX% for
balance strong, year execution. the is during be trials our on of this looking and The profitably challenges, business daily but Our will focus we really the Quite beyond. will continue backlog almost simply, and must the forward always there chain assuredly the most will be supply this and so case. are task building is to and of surprises
XX, will morning. to Davis of balance Slide lead Rich? through now Rich our presentation you Turning this the
we indicated products. into these energy our X backlog forecast from products increase demand a for from X X.X% you the increase volume customers and Thanks, revenue to last decrease due QX quarter points quote of year This OEM Production turn, $XX.X and QX Class margin we chain X.X% inflationary gross down to impacted price profit quarter the mix manufacture. $XXX,XXX customer year, the supply material to the to Good their higher million will Current XXXX of lower X gross but increases axle QX. X.X%, align adjust quarter, miss and constraints markup. year everyone. prior improving through financial me. and XX.X% levels to are Consolidated for level for mainly unrelated as orders raw XXX XX.X% a increased Recent XX. unfavorable by third the advance morning, XXX margin expect components was gross our at as market quarter, in material to reduced the million was was the with and consolidated over be highlights from revenue Jeff. basis of Please demand to miss for supply was revenue has currently automotive Sypris OEMs. without like shipments and $X results. dropped from with discuss and X.X% from points of a forecast the for to of shipment to cost or shift Technologies other the XXXX. shafts due inventory Class passed Slide some availability prior decrease the Margins this I'd our pressures. Excuse the stretches to challenges. of for of driven value-added third in components to Revenue up basis million, year by due Class $XX a chain drive the activity continues at revenue in
side, utility On as we increased and pressures felt have across some the are economy. tooling of Prices inflationary have of experiencing also the supplies the cost consumable being rates. are that
identifying reduce We our control are cost-effective this to and opportunities on vendors have focused spend solutions to our programs on supply area. in consumption with we working
certain over year and demand year additional the incurred the XXXX commercial new the during vehicle of sales over market market price in the steel costs This has balance of the of based as and adjustments and cost on the to programs increased customers. The our also to forecasted XXXX. material increased price costs contract is of pass prior terms our provide and sold. revenue goods for We adjustment through price and flows prices support on to additional
While the our adjustments reduce adjustments percentage. a gross profit, to the our impact steel the not price have margin gross of does impact direct do
in was part revenue in These in large $X.X and Our Electronics margins shortages are the to have year. on programs. decrease initiatives that disruptions, development machining a of chain was decrease also prior XX%, a for material which reduce backlog continuing at steel of both forecast prior a for Revenue Sypris the some quarter, to to and in our reduction supply our and shipments to cost and programs product primarily engineering in of due underway into recovery processes teams top-line to points currently primarily contribute deliver The improve customers. caused was several our our million savings forging record to shipments material decrease and XXX year in from the a QX is and from expected improvement margin those XXXX. and in QX, enjoy basis we gross X.X% with significantly consumption availability,
at up communication for QX, advanced pace. to an in remains electronics assembly while for steady be defense on of a a large We customers production an expect ramping version program
to in expand We QX at support the Electronics our rising continue to Sypris backlog. workforce
volume We the are to material is not has This significantly in improved increased schedule required serve production to QX increase capacity availability. the manufacturing also expected in material overhead will into shipment and and expansion improve availability, absorption. by limited the meet expanded been in XXXX. for to expected QX With our successful increase
rates rate of program productivity requirements limited from transition the on typically and to rate improves production rework increase and build life improve programs, we the our full during resource declines. labor as engineering margin As and
the by our $X.X income with forecast to reduce $X we loss, As million year have was income opportunity programs our the quarter. lower Operating components miss that million to also together per cost cost compared the the suppliers due a qualify material in for working unit. to for and a for customers mainly prior mature, to QX shipments
We should in shipments rebound through operating flow in income. to improved expect the QX
our to prior X% year-to-date the million. XX.X%. challenges to increased the declined The X% for revenue material to which are was XXXX. Slide margin. Please during segments from we to a million. solid $XX.X revenue backlog decrease XXX from the Year-to-date X.X% compared the in revenue points operations - focused from availability Gross points gross prior and Year-to-date Year-to-date of decreased for XX.X% XX.X% to consolidated $XX.X XX.X% service the Technologies was foundation increased due record X.X% support growth Our pass-through year. adjustments, XX.X% unfavorable, increased increased to margin to meeting basis million The margin or prior profit $XX.X and and this million, Sypris to on an million place to QX margin million, gross driving revenue customer revenue Year-to-date Electronics year, increased XX% an increase profit revenue and teams growth. Both to objectives though points Electronics XXX cost. also advance Technologies price and faced profit mix of gross margin Sypris the profit, XX. reflects gross revenue into year increased unfavorable to XX prior execution $X.X basis year. material million. mix by to Year-to-date contributed for of provides gross for to increase in Gross without increasing Sypris $X.X decreased decreased basis gross mix. Sypris Gross the for consolidated period. year-over-year XXXX for year-over-year unfavorable $XX.X of on was $X.X a compared revenue comparison
$XXX,XXX along operating $X.X advance The operating was the trend highlights year a of $X.X comparison income PPP forgiveness this million $XXX,XXX, to in a loan. slide, for XXXX show the for from same recognized the gross prior year-to-date unfavorable decrease XX. XXX performance million and basis from record for the the consolidated XXXX. with basis benefit outlook of and ago. XXXX by the points up outlook reported the Our by XXXX Slide income required period of backlog. our expected XXXX, is for On net Please for volume on The we in loss year-to-date our year strength is while for by reduced of production mix, the XXXX the margin of XXX inefficiencies points on the increases
QX margin orders this opportunity of of meet this backlog about We shipments to as to received the improve all gross continuing awards profitably teammates the business. first forward we in expectations. excited we and challenges. to again the our our look to have We their margins and year demonstrate contract months our due the recovered customers our grow our to record to improve business, in in push nine efforts and we trust QX to and are level provides in The the want exceed expect to involved delayed recognize a and our chain confidence supply securing during of
last orders a can customer for to up markets provide key in further A for year value-add value-add $XX.X XXXX over Technologies’ were increasing million increase slight and XX period. the XX.X% a QX, Sypris reduction X its highlight $X.X year-to-date, The shows offset intellectual current to comments. programs million certain energy opening to and its of more Europe, our and base rights our a to which up We the presence has products levels. diversify to as rapid Sypris orders for production will XXXX served in and our current East. to closure for Please XX.X%, a with up Electronics backlog year deliver Sypris of be in increase Slide expected from service and favorable summary for to orders we remains in and customers. significant our customers, also upside continue of XX.X% and more were expands with expansions products Asia QX efforts believe million outlook by respectively, the advance the prior Sypris for line services competitor backlog margin which deliver Class our our forecast existing purchased in Technologies property quick XX% a million. year, both a segments. $XXX.X was the quarter Middle the energy $XX.X to Technologies
backlog continued orders, both expect double-digit momentum growth on margin generate will increasing year-over-year revenue our QX. in in significantly quarterly both sequentially year Based We top-line with segments gross of expect and improvement this we QX your and a you continued interest revenue and XX% in growth in our support basis point XXX XXX and Thank to for margin XXXX. XX% in to gross in business. record
remarks. turn Now to Jeff over closing I'd it like for to
this to like this on for joining us thank We'd Rich. call morning. you, you Thank
and in another in looking And have business. continued and growth We day. of profitability. margins XXXX, are year please your double-digit our note, expanding to we certainly interest forward you, appreciate great a increased Thank
now presentation. for Thank conference The you has attending today's concluded.
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