VPG - Earnings call transcript Q4 2017 | Vishay Precision Group, Inc.

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Operator

Good day, and welcome to the VPG Full Year and Q4 Fiscal 2017 Earnings Call and Webcast. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Reynee Tung, Investor Relations. Ms. yours, is floor the ma'am. Tung,

Reynee Tung

call information. Good Thank received taken it may XXXX important be contribute. read Welcome questions the conference VPG's to By you've now, should press everyone. quarter you, made comments earnings have contains participants the will earnings operator. hope fourth recording conference to audio release, the as any we all morning, time call. that including it today, you through of or An and

You including audio VPG's will and and U.S. Internet and it, this on can at be website law. call copyright of limited international content accessed a conference the VPG on is find the is reconciliations, protected non-GAAP relevant The by VPG on www.vpgsensors.com. by time recording An be for website. can available owned

remarks any perform call, conference adapt, You part, or may statements and governed transmit, contents reproduce, worse Act. in the a Reform safe not Private the written or turn the display call, XXXX make are we any by harbor of not Litigation of you make of results by forward-looking significantly indicated other provisions conference whole distribute, copies better Securities than this may out or or that today. without recordings Actual Today's permission. may in this

President; XXXX, host CFO. our and Shoshani, XX, more to introduce complete December pleasure especially filings, SEC call, the And for and to our VPG's Bill? with Bill year now today's Ziv Form SEC refer ended filings. a For for my please discussion of associated other the the Clancy, CEO operations, it's XX-K the recent risks and

William Clancy

to call would thank a morning, joining you Good and us then like on everyone, financials. today. our by for the highlights few Thanks, reviewing summarizing and I start Reynee.

last indication diluted XXXX view operating the fourth of will and pleased in the Ziv of year Slide the wage as share increase book-to-bill and increases. revenues XX.X% million The comparison XX.X% the adjusted grew quarter during performance. incurred of fourth compared revenues XX.X%, period of $X.XX prior XXXX XXXX. of environment in profit diluted quarter his foreign of to $XXX,XXX in million, for XX.X% margin of revenues near-term and XXXX share to The business to revenues to quarter of that, year quarter of the by to $XXX,XXX had expenses We quarter for prior We're the per adjusted very $X.X good of strong an adjusted this fixed impact X. adjusted in $X.X $X.X ratio compared and to were to The XXXX, margin as XXXX the $XX.X quarter earnings increase a in in of provide was our to a million gross offset global XX.X% million, the of quarter with environment. year-end the to $XX.X or fourth of million of $XX.X of with exchange increased that We per positive of revenues XXXX business related XXXX performance as is results for or We of performance $X.X million, profit gross expense million partially million million incentive fourth QX comparing increase flow and On cash with million. of our $X.XX, XXXX compared of SG&A of free increase when quarterly period. the earnings the manufacturing fourth Following of rates net $X.X in compared cost of robust. million Selling, remains X.XX, $XX.X the fourth up compensation $XX.X to the $X.X quarter million. by increase our fourth in $XXX,XXX, attributable general quarter administrative to for inventory was volumes $XX.X fourth XX.X% adjustments year's quarter. fourth of

also building in the of also $XXX,XXX quarter $XXX,XXX sale fourth fourth a onetime quarter of recorded We gain XXXX. of exchange And $XXX,XXX rate of the increase on had the XXXX, negative impact. wage and in a

per to to diluted share stockholders million attributable for or $X.X million income Looking fourth at $X.XX to the the diluted quarter to $X.X VPG see $X.XX quarter grew in fourth adjusted adjusted year. that can as compared operating in our on basis, earnings the net an increased to of last XXXX. the compared or XX.X% We margin you we per X.X% share quarter

quarter Foreign or the the net $XXX,XXX $X.X free $X.XX generated currency a to of We for $X.X cash for of share. from per million year quarter generated to negative XXXX, the quarter of quarter compared flow for XXXX. million had prior XXXX. for $X.X in for the cash exchange on fourth of capital and sale million which compared of We quarter net the diluted fourth which cash earnings $X.X of fourth rates XXXX, flow of fourth million assets, fourth XXXX of as of amount quarter less of $XXX,XXX XXXX as was impact the operations, as was define was fourth the expenditures, proceeds of free the which

rate year December a is Jobs utilizes for at the U.S. XXXX, for currency. Tax that a offset U.S. functional months by and tax to benefit tax related XX%. expense Act. XX This currency dollar the X. for operational as was Slide was its the rate Cuts foreign the of fiscal foreign On was XXXX, ended subsidiary expense fiscal XX, tax The tax months XX%. the Including $X.X December ended XX, the XX the million enactment GAAP Our

efficiencies improved further of remain that, to reduce cost business let in to me our climate improved resulted execution operating With create on an to pass has in drive strategy. focused and addition Ziv. Our the comments We on performance.

Ziv Shoshani

gain XXXX great the this platform ago. ended quarter example product of of to has compared Thank as traction. fourth XX, grown A saw a of to XXXX prior It and strategy its this our of December offerings. months by XXXX, you, line, XX% sensor years Bill. developed part An advanced important grow FTP the developing approximately is segment We to our as for part which revenues continues our is and year fourth XX versus in comparable XX% few quarter the we period. nicely, increased new

with pleased this are new the acceptance have platform customers. to of proud We continued provided performance and to enhanced sensor

on be also are an manufacturing We to platform. efficient pleased

value-added good momentum which in Another business our OEM the in year. been last segment, Force innovation gaining our has is transducer Sensors example in the

quarter to XXXX, XXXX, the sized than For year modestly XXXX still to the while by the revenues revenue its for more of months and as compared ended a fourth business, period. December quarter XX increased doubled of prior XXX% fourth compared the XX,

trends healthy important some We continue are in end pleased to markets. see

rig continue equipment the strong business, sector, In in in most levels optimism XXXX the our gives related Expectation in activity onshore major the sector there and and increase For us of with end in CapEx oil expectations in ongoing our -- for U.S. particular. confidence steel, counts. gas XX% the XX% energy is markets, to growth evident including our business. energy to aerospace

term in quarter of $XX.X some $XX.X from segment. ratio million, million book-to-bill Slide from or an the broad-based the aftermarket in good upturn fourth XXXX. revised last were and as quarter million on growth for improved and $XX.X economy, X, year or for the business company's Slide visibility third trends by confidence year orders million also of and indicator our book-to-bill in defense have global third to The environment details Technology regions. of and quarter in enjoy a the in positive On increase in the segment quarter in for the the respect an X.XX our compared had execution. the believe quarter third defense as our sector, X.XX of fourth is from XX.X% orders aircraft well for of XXXX good XXXX in XXXX, the represents X.XX Foil the third of the fourth million to the test own quarter Product up X.XX demand On X.XX all $XX.X continues U.S. cycle. XXXX of the X, quarter to X.XX to Total quarter of measurements a The the fourth for of increased also a increase rates, last fourth million quarter quarter primarily spending precision was due on and Sequentially, Americas XXXX. has or XX.X% sustained across and production for overall XXXX aerospace in XXXX increase business. resistors with reporting $XX.X in $XX.X fourth the the XX.X% been With of We this expectation which We market. compared XXXX. the of of the to generally steel,

precision XX.X% million, $X.X and growth adjustment, to million and for decrease mainly repairs of sequential mainly for X.X measurements compared and partially of fixed in and compared quarter. mainly $X.X year impact mainly to XXXX. months the foreign markets. resistors $X.X inventory period FTP adjusted million was and is energy QX The for increase and of $X.X maintenance test test prior in an segment and weighing and The resistors to due addition increase in third year in increase resistors profit of the quarter QX, The in of year sensor the precision comes within The quarter the Europe markets inventory of of offsetting in in The in of Micro-Measurements, impact a $X.X gross For manufacturing of volume of to to the market force was offset adjusted increase Micro-Measurements. currency. in wages while down in precision markets products. $X.X cost the is XXXX comparable force and gross months foreign million the FTP X.X and AMS The military down primarily period orders growth million for and the and XX.X% adjusted market of our from months to by market, the precision avionics, is in $X.X primarily In The market. to was X.X to in Asia and advanced negative of from due backlog measurement space due in precision increase reduction a in related due measurement from resistors FTP margin margin test end increase million, third million last advanced negative and profit XX.X% million and increasing Asia primarily $X.X gross was $X.X regions. America, Partially measurement EMF was products volume measurement measurements by to profit test the million, the $X.X the million. markets. due via prior precision from measurements Europe from within and last the all was end the volume resistors test was sensor in growth currency

XX.X% third the year $X.X mainly was quarter segment to fourth compared X.XX of Force of in X.XX The ratio the gross $X.X Americas. QX in the XX.X% are XXXX. force compared XXXX, third compared in XXXX segment. adjusted in the to Force in to to quarter and quarter market of in adjusted slightly in Sequentially, up gross of book-to-bill fourth months up profit in was measurement and and compared Sensors volume and million prior at increased OEM gross in X.X million quarter X.X for increase measurement in increase XX.X% Sensors third quarter The related of last $X.X fourth the in to related directly volume force the OEM the The customers Looking of quarter was months The the in was all by market quarter for the the due was to the from for the of backlog adjusted in increase customers the directly an due of XXXX. year orders Europe. fourth of The XXXX million. the to profit X.X Americas XXXX. the segment months regions. to OEM year margin quarter The X.XX from the fourth in profit last customers increase

of XX.X% the prior from the Europe. and Sequentially, X.XX quarter. and was quarter book-to-bill for in the and increased slightly X.X%. The Americas ratio to to in in X.X Control in essentially the million On in was year for fourth and margin fourth quarter. fiscal year Weighing line steel in The and The precision in onboard to exchange the constant due improved fourth cyclical process quarter orders business primarily the and fourth versus Systems the XXXX environment, $XX we for weighing adjusted Europe. Thank user profit or year's steel net in last timing the third project-driven steel XXXX Weighing an first open the within This end XXXX. $X.X orders in quarter in is $X.X the $XX range end from profit market, compared XXXX. Control increase to nature helped volume XXXX X.XX of XX.X% backlog for and in increase market rates, extraordinary weighing million questions. adjusted the an gross of Systems X. in Control and in of of In let's and in was attributable quarter reflects months that, third last of weighing fourth increased fiscal increase market XX.X% addition X.X comparable quarter third light for by the quarter million a the gross The million Slide For margin to Asia by and the an Systems to X.X products third months in With the into Europe, you. Weighing QX of expect compared issue the the the XXXX the of excluding our and revenues surge Americas segment, in the product X.XX months segment results. that fourth an quarter quarter the quarter market

Operator

[Operator Instructions].

have of Company. will John we & Sidoti question from first The come Franzreb

John Franzreb

third down quarter of the what despite Just somewhat margin having regarding the did results, XX.X% gross XX.X% you the in quarter revenue. in fourth at from meaningfully adjusted was higher FTP

on it could me profile impact just on so through the much FTP gross walk so Now was the sequentially? what down margin you was

William Clancy

we inventory in these to the the recorded we adjustments, can additional Yes, third compared that now our that the All have John, costs quarter, be fourth physicals are In incurred I pick did have the some behind the for fourth should year-end had that both did but up. obsolescence the that and quarter. as we quarter. we quarter that third us, not in

John Franzreb

Okay.

revert the in that So number first XX% a to back of quarter? should north

William Clancy

Yes.

John Franzreb

impact pressure seeing absence you're to it, be got you QX? benefit mix, talked that lumpiness quite offset in with Got general, and large some it that it's time to in it. versus volume since we've of sale an of outlook been in that that, regarding you're would getting a the had not to expect control. it offset about some of you was be steel the right that maybe weighing enough in XX mix Or And XX, the the the you're Would an the like QX? of it going steel job such able to QX now,

Ziv Shoshani

exclude effect, in guidance be have million cannot since steel able the an provide $X revenues we improved, one-time the revenues, the higher I would close if you offset. profitability John, on regarding to QX say, QX, the was moving with that QX, see don't the margins. -- to that no no side would of exactly regarding while we higher-than-average But we Well, give effect, that I company if doubt that we is, due extremely midpoint may results. we But high FTP fact to doubt into the for realized see

John Franzreb

years it. EPS ago, And since back to things providing and a Things but can you this opened much go do why to EPS later, did couple got actually I better. Okay. guidance? Why you You you've it rough, Ziv? of here, going guidance, was ask quarter-ahead not when pulled not seem

Ziv Shoshani

with the think some EPS of and Well, we some with that regarding shareholders. with a guidance, sell-side discussion the I had our analysts --

providing that into effect, regarding there the the feel parts to we the an moving and given regards revenues no the many we short are we that rate and in quarter have on, complexity. exchange moving fairly based visibility with EPS that providing uncomfortable product effect slightly that X the we Given fact mix fact a have which on guidance -- feel

John Franzreb

in regarding for be the last rates a question of assuming law. one on kind change go-forward the company we What should Okay. And the tax tax basis?

William Clancy

probably for would believe, to XXXX. -- XX% probably like you to next use a for year, I I can give range, good between John, like a rate be XX% and

Operator

Riley. have Sarkis Sherbetchyan of Next, we B.

Sarkis Sherbetchyan

touch Ziv. evidenced line, developed may, if nicely So that been just actually this you talked few I It's just line wanted by upon kind a about as to reference. know ago. years advanced you sensors growing you of comments the the you've

you think of end on that to around comfortable you revenues I with exposed for business XX% kind regards you some if please. line, more maybe line? that providing to? some mentioned the Maybe growth year-over-year of any markets perhaps Just Do level color the year. providing that mind feel it's particular color annual

Ziv Shoshani

Okay.

Sarkis, ago, new of developing developed the indicated, with have platform. efficient with a the product a years you we more few line As a much intention

revenue see line. of indicate thing we other develop to platform last million doubling we last that has maybe more year-over-year its to can -- for smaller we in information trying into current revenue product moving year of so. than the sensors that we at provide this developing transition legacy have the this we platform point been more in product Given new for XX% this addition time, with This been can close technology, a products that to that were I continuation fact line had growth it's forward. this that that not this that have fact do is complex business the successfully, quite with -- in do never we that is new few the this to can business or only due company And technology, able the the years, before new and the $XX you I to

Sarkis Sherbetchyan

sensitivity maybe IoT, like or exposed to to? mean, market I it is understand, customers, you but then have end understand is not some it some like into? me is end maybe, And what right, it chance maybe I other interesting sell there's it. around help did where a before, Got markets

Ziv Shoshani

products tied not into industrial are we high-end even say, new sell being product respect, the we this the platform of and a did energy, to. even in we able we industrial more with able sold been the continues allowed of color have products, into and line, I end also strict market to regarding market. into we information oil the new type regarding some due have fact Historically, which electronics, sell are legacy other to with are products, would that sell are and industrial and penetrate But to our products were providing this consumer did to the able us end to to In that market. not into we provide more NDAs before. And regards applications markets, sports we equipment which into new

Sarkis Sherbetchyan

Understood. lower-volume around maybe high-volume can And that I application, for the a if application? is or side, electronics poke a that consumer is

Ziv Shoshani

unfortunately, -- able will to Sarkis, that. I but be regarding information provide not more

Sarkis Sherbetchyan

can a your products advanced more then respect differential talk of sensors And between the your margin kind versus legacy about maybe to incremental in if with of FTP? kind Understood. gross there's line you margin,

Ziv Shoshani

about looking XX% speaking in on the same complexity be all the product. margin size average, of in are at, -- the we difference at products we XX% mix. least can If depending of all, well, on the on and the to it depends the But

Sarkis Sherbetchyan

XX% XX% to I'm So better, assuming?

Ziv Shoshani

better. Better, sorry. Yes, yes, minimum

Sarkis Sherbetchyan

more maybe mix on has evolved versus can you coming had wins Sensors, of please? in about design maybe that see generic OEM if if more that, in how the you color that year-over-year kind Any kind around And the wins design to I Force you can move Understood. your business? volumes OEM then from of talk

Ziv Shoshani

absolutely. Yes,

higher are traditional business. close a we -- at and at I new blend end end that the construction are as have come still point this releasing customers to moving ag, into OEM as As much of moving more the customers our we the business. and we OEM markets greater would say, revenue forward, selling, margin. would we various of we time, mix medical, markets, see -- the recovered expect much legacy see At we over products, from our our been precision have been this a stream have industry, products designing see But in XX% we a as better it

Sarkis Sherbetchyan

then of step that provided. And guidance you can just kind if the into I Understood.

please? you the think would me the in nature of that cyclical gain to business that you and Can I kind right, also to mentioned fiscal that product-driven business, of press release, would excluding upside you the help in that in project-driven a 'XX, that, comments lead allude should revenues? understand

Ziv Shoshani

We fact wanted was QX the year-end. more provide have to color high revenues which high that Okay. many by maybe get unusually we customers due in their for to booked to wanted the steel, regarding to products

a on is see regarding So average sight given timing -- which those a healthy annual we do would expect is effect, to a onetime market an effects, very steel, which still which basis.

just regarding was it color QX. in provide revenues therefore, specific steel to the So

Operator

a Franzreb Next, John we have of Sidoti & follow-up from Company.

John Franzreb

in You quarter. the there's if in restructuring any talked charges Could $XXX,XXX what more those in near about you and for about term? were the charges talk expected just restructurings

William Clancy

basically the closing that we've -- we're primarily consolidation all Yes, restructuring John, X along. discussing been offices and just further U.S. was

further for will I let one. answer Ziv that As restructuring,

Ziv Shoshani

Bill. Thank you,

we and ramping lines our restructuring projects to up move with -- situation a more would customers, good and times has our good project company As we the you restructuring but that slightly base years completed. Due production We few And ahead, not plan to are pushed strategy and we the continue good been getting to restructuring good we enjoying profitability. business the further John, as to it's we is the part and our would to see of we -- in cost bringing I restructuring the -- a and in know, as and service lead getting complete the customers have that that bring ramp major still of solid environment, our a definitely to not forward. last improve a business have expect service Therefore, to to service. a are capacity finalized priority still order down fact restructuring. and up our the say was very provide

John Franzreb

a restructuring is expected. sounds question but Pushing me that news. really good right in the steel free -- than because still trends. business, that's it also you to your bookings cash Yes, have the part flow, previous good the communicating you're is Ziv, better regarding volume because like

So sustainability beyond first revenue to to see that of should need we with you revenue [indiscernible] lead Or about of times kind in are -- the think that quarter you a a how we environment that of of think think that kind some see booking should you the profile? to better confident could stay in neighborhood?

Ziv Shoshani

sorry, were regarding hear you I about completely couldn't I'm about only of regarding if or as the speaking rest you you disconnected. John, steel were company the well.

John Franzreb

company. overall The

Ziv Shoshani

solid queue. that based visibility are Regarding for good true we behind and feel next do building would least the that There on we our a our We don't with is level business that that, environment at business company, the is there this they and good we customers. are that in quarter. continue, environment feel discussion a in feel demand a

correctly, even American conditions administration the and and, this company spike the of extremely for cheap In with ones revenues. that tariffs good very heard respect, was Regarding position in accepted fact, the we day, even of the But is putting in end steel, are our suppliers, -- market dictates bookings steel a I've the suppliers itself, that North would still that see steel. we a in that if against say feel -- demand give recommendation local this us offshore regarding I should be the steel, the U.S. high since confidence question the the we current protecting regarding would level at to future if revenues. a higher regards strong are would

John Franzreb

repatriation last it's one And Perfect. you position the the happy Are of as cash? cash with regards that Is question. situated?

William Clancy

No, John.

the As did the U.S. of of to we provisional, this, and that bring it's have the an we book ability back XXXX. cash but actually sometime And the tax a happen during accrual part could into act, reform portion

Operator

no We're further questions. showing

remarks. session. the now back and Mr. any I would call ahead Clancy to conclude question-and-answer like go will turn closing We Bill to today's for conference Sir?

William Clancy

you, Thank and at call Thank forward everybody, we Sidoti will it the support, future. appreciate be you, Mike. much on very talking and conference in We on in to looking conference presenting March today. your participating you the And XX. to dialing and the for

So participating, day. and a much for thank have you very good

Operator

today. attending may rest And we the for have thank everyone. team we today's thank also great you, for this of Again, disconnect the presentation. you all day, Take Thank At a lines. management sir, your care, you time time, also and your you.

Vishay Precision (VPG) 21 Feb 182017 Q4 Earnings call transcript