Sypris Solutions, Inc. Q2 FY2023 earnings call

• Revenue for the quarter increased 22.6% year-over-year and 10.3% sequentially, with each business segment showing strength. - Backlog increased 25.5% consolidated, with Sypris Electronics backlog at $116.6 million (up 25% from prior year) and Sypris Technologies energy products backlog up 38% year-over-year. - EPS increased $0.04 per share from prior year quarter. - Announced several new contract awards during the quarter: at Sypris Technologies, awards for drivetrain components for all-terrain vehicles, insulated joints for water pipeline, and high-pressure closures for LNG export terminal; at Sypris Electronics, receipt of additional releases under a multiyear production contract for defense-related electronic assemblies. - Expect momentum of new contract wins to continue and optimistic about future program and revenue growth.

Sypris Electronics had revenue of $15.6 million for the quarter, a 40.2% year-over-year increase. Sypris Technologies had revenue of $20.1 million for the quarter, a 11.7% year-over-year increase. Overall, revenue for the quarter increased 22.6% year-over-year and 10.3% sequentially. Consolidated backlog increased 25.5% on a consolidated basis. Backlog for Sypris Electronics increased 25% to $116.6 million at the end of the quarter, and backlog for the energy products of Sypris Technologies increased 38% year-over-year. Sypris Electronics revenue contribution percentage and Sypris Technologies revenue contribution percentage are not explicitly stated in absolute terms but their growth rates are highlighted.

• Confirm consolidated top line growth of 25% to 30% for 2023. - Due to foreign exchange headwinds, margin expansion guidance adjusted to 75 to 125 basis points for the year. - Anticipate pace of converting backlog to revenue to accelerate as new programs ramp up to full rate production.

• Foreign currency headwinds. - Unrecoverable increase in raw material prices. - Unexpected adjustment to pension expense.