SYPRIS SOLUTIONS INC Q4 FY2021 earnings call

• Revenue for the quarter increased 25% year-over-year, driven by 30% growth in Sypris Electronics and 22% in Sypris Technologies, despite material shortages and supply chain challenges.
• Gross profit for the quarter rose 65% year-over-year, with Sypris Electronics up 83% and Sypris Technologies up 51%. Gross margin expanded 420 basis points year-over-year and 160 basis points sequentially to 17% for the quarter.
• Announced several new contract awards, including for Sypris Electronics related to Army Key Management System and Navy platforms, and for Sypris Technologies related to commercial vehicles and all-terrain vehicles.
• Market outlooks: Demand for Class 8 heavy vehicles expected to increase in 2022 and 2023; oil prices up, with energy product backlog up 60% from December 2021; defense spending rising with backlog up 62% at year-end.

For the fourth quarter, revenue increased 25% year-over-year. Sypris Electronics saw a 30% revenue increase, with gross profit expanding 83% and gross margin rising 540 basis points to just under 19%. Sypris Technologies had a 22% revenue increase, gross profit up 51%, and gross margin rose 310 basis points to almost 16% of revenue. For the full year, consolidated revenue was $97.4 million, up 18.3% from 2020. Sypris Technologies revenue increased $16.4 million, while Sypris Electronics saw a $1.3 million decrease. Gross profit for the full year was $14.5 million, up 20.4% from 2020. Sypris Technologies gross profit increased $2 million, and Sypris Electronics contributed the balance despite the revenue drop.

• Revenue expected to increase 25% to 30% year-over-year in 2022.
• Gross margin expected to expand 200 to 250 basis points in 2022 compared to prior year.
• Cash flow from operations forecast to increase materially year-over-year supported by strong earnings growth.

• Material shortages and supply chain challenges permeated across the business, impacting operations.