VPG - Earnings call transcript Q2 2018 | Vishay Precision Group, Inc.

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Operator

Good day, and welcome to the VPG second quarter results conference call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Reynee Tung. Please go ahead.

Reynee Tung

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

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

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

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

William Clancy

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

business earnings diluted quarter XX.X%, $XX.X and to his the XXXX XX.X% results of and environment. margin second with X million, We of share good the had operating per Ziv view of of $X.XX. gross income will million, margins operating the provide Following of deck. slide Referring revenues $XX.X that, a Page of of global of

pleased $X was expense increases second the of XXXX. administrative million, for quarter XXXX for revenues increase rate to to that administrative of with impact of second $XX.X in second XX% The of quarter quarterly to for profit $X.X and XXXX million quarter XX.X% XXXX and the of to as XX.X% of impact XX.X% XX.X% in foreign was increase and to the to our second We exchange $XX.X by of million compared a second in We $XXX,XXX. solid. with in to quarter compared in to were incentive in of to The million to the and good book-to-bill an Selling, quarter performance near-term or impact indication positive and labor quarter our environment the the million $XXX,XXX. quarter the profit volumes $XXX,XXX X. are remains expenses rate wage increase related gross $X.X million million, QX $XX.X gross a revenues compared revenues general manufacturing of related increased $X.X up efficiencies of our selling, revenues Slide of XXXX. We was business to grew second quarter compared comparison of primarily positive of rates the addition XXXX X.XX, negative $XX.X compensation XXXX The for in as or the of our second million. XXXX. in of exchange as $XX.X second and general million margin On to attributable a quarter of exchange

per XX% $X.X to adjusted year. XX.X% quarter compared quarter diluted increased $XX.X attributable X.X% $X.XX quarter earnings VPG to million to per XXXX. Looking operating diluted or $X.X the last second in as at increased $X.XX The operating for share of adjusted share to income to or compared second as the million in on adjusted our stockholders we or by net million XX% basis, the or million margin $X.X

Foreign $X.X to second on had positive or of XXXX share. $X.X of sale the flow second expenditures, which minimis net of define XXXX, compared of the the XXXX income as XXXX, which cash second quarter quarter of second free the the quarter the rates less the quarter $X.X a operations, compared proceeds from the any to of was We free cash XXXX. small was currency cash assets, net million as quarter per the of amount of as of for from for second We for XXXX. of de exchange quarter million for million $XXX,XXX million generated generated XXXX flow $X.XX second of which diluted impact capital second for quarter of for $X.X was

be XXXX, GAAP XX, June for the Our will rate X that tax XX.X%. months in the XX%. to of range the for a was ended XX% year operational anticipate tax rate fiscal We

We XXXX. to the are the $XXX,XXX monitoring the U.S. related and the the the impact on be negative tariffs. We by countries and U.S. profit regulations mid-July In went tariffs for that estimate closely to tariffs trade operating relating imposition second half effect. to the approximately of other developments of response into

optimizing X. a customers and working including that combination Slide our For we at to are On actions, supply impacted, to and are those products proactively minimize looking closely with to implementing customers. current surcharges further of chains impact, we're the committed

operating a number of Our factors. reflects improved performance

to been costs. have driving reduce we efficiencies and First, create

a culture. through restructuring through this continuous of activities our both accomplished and initiatives, adoption our have also from improvement We a variety of

that and result the captured products. cycle growth business scale-related our markets Our strong, accompany The improved performance the we for end margin opportunity growth. and been that has also have and demand of strong global is

and these targets which our metrics operating very prove achieving XX%. pass me we effective to on margin let of our execution Based scalable and We our XX% results, Our continues has these remain basic to the of business in been targets yielding for With for on above results margin raising measures. upon that, these Ziv. gross gross achieve we comments our margin focused raising model successful, to previous strategy, targets further that are goals. operating of our are current three-year margin

Ziv Shoshani

Bill. of new increased grown We second Technology by platform Foil you, second is has in design. it our the segment, quarter part An XX% sensor which sensor Products their developing the of approximately part of and product XXXX Thank to this gain as to include is offering. go advanced it our customers XXXX. as in of continues product We nicely revenues great saw advanced versus of quarter this more line, our important example A developed adoption. our strategy

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

our OEM We be of of transducers manufacturing on part are an Sensors platform. business, value-added also Force our pleased segment. efficient example innovation to is our second A

For quarter the segment. second second Control our of in of is to quarter Systems the A revenues final XXXX, Weighing example its by XXX% XXXX. increased compared and

TruckWeigh weighing second Our business XXXX. as the quarter quarter XX% XXXX to VanWeigh and second onboard the of by of revenues compared increased in

to The on global XX% the XX% and thereby increase strong new sector, annual mid-single-digit account upstream defense In should U.S. aftermarket, views to hour aftermarket comes XXXX. out-of-warranty are in XXXX. for growth Despite flight projected flights U.S. steel aerospace growth, CapEx international in trends the healthy XX% from total end We the fracking has implies and adoption industry the is equipment first increasing an supply. provisioning grown automated pumping continuing sees of and to equipment industries. XX% the over analyst with in line rate XX% in for of commercial semiconductor, markets by improved the initial service in aerospace to aircraft global from for pumping I the which as and aftermarket, capacity growth, to and bottom and aircraft with analyst compounded see basin automotive test traffic. In is types, business, 'XX budget of pleased CapEx assuming mines spending overall to the increase proportion the lead recovery trends defense, growth as The energy growth to for in primarily measurements. respectively, by current for ranked the increase particular, the XXXX. hours. factor market, the consumables benefit X% in third, testing equipment in and important [indiscernible] our pressure tighter continues product the In in test also is on year, a focus note driving XXXX analyst new the freight in driver as the estimates past market Major increasing sand in XXXX automated along defense the Based defense. off revenues and expects pressure some

various expected applications, factor drive of to in growth target to focused significant products boosted of miniaturization of extent demand automated global for test across fuel further to market. device is In market has addition, and the equipment global a market period. the over and expected is also further the growth This industries

of the World XXXX. our market, all which from in both global rail modern utilization benefiting markets us which construction, followed same developing and XXXX, ongoing June XXXX of favorable X.X%, within Steel program demand the all effecting as product, is by X.X% The sustainable. developed turning higher X.X% aim June Steel indicators for the major of gives as the time. the packaging without of maintain Finally, role are confidence. remain in the world at the and than growth and steel to XXXX the steel These XX a months short-range and December outlook the XX.X% than versatile the The higher to for next cannot business and good capacity sectors end economic Steel X.X% was is suggests XXXX. society World broad automotive, momentum

Instruments the quarter overall second in as strong X.XX reflects project-oriented businesses execution. million XXXX in and our resistance this second of of compared in quarter some increase product million recently increase our on second to company's of attributable or The as which precision XX.X% was Pacific is first believe line, as in $XX.X in to million, X.XX line. own quarter well second of $X.X an We X. of orders quarter XXXX. million XXXX increase Total or the markets the secured were The orders quarter X.XX the of the as a for Slide projects, focus large of to well first $XX.X in product million Moving XXXX book-to-bill the X.X% $XX.X primarily from and and an is business from orders XXXX from sustained of sequential quarter the $XX.X environment XXXX. in

to March Our XXXX, XX, compared million XXXX. at $XX.X XX, increased to $XXX.X June million backlog at

Moving Slide X. to

first had of XXXX quarter quarter of by quarter on second Sequentially, X.XX for the of end Technology the $X.X The details the the and the reporting the Foil with avionic, the XX.X% increased orders our line compared Products Some book-to-bill within second XXXX. segment and segments. X.XX of military to XXXX coming space X.XX XXXX largest ratio for quarter from the market. across Pacific all regions, Instruments from of the first in million or increase for product Americas

in an primarily measurement all applications. regions. market as across measurement year-over-year in regions, increase Asia the Additionally, second mainly million due increase line, precision in for Foil The XXXX. million sensor volume in margin was XX.X% as advanced and primarily the $X.X product to increase Technology of quarter all XX.X% profit The of gross $X.X profit test up well we Products the increase first force of quarter demand and from Europe saw quarter resistor across and end the in in of the segment of XX.X% in XXXX, was XXXX second in gross

the growth for in Our in advanced resistors, market precision to for within was products. measurement and test addition Asia the primarily force sensor measurement market

resistors. in was Europe military markets measurement spread market within America, resistors. for in primarily the was and end precision for the strength was space across test multiple markets, growth measurement growth and including also Americas Our and growth for force precision measurement end products. the and within In test avionic, The gauge

margin months was and of the Technology profit were labor million and manufacturing last foreign $X.X period In to Products million. months the segment quarter due of X.X effect efficiencies primarily was sequential million. compared of $X.X and labor X.X quarter. backlog and efficiencies million positive the currency X.X year addition in there volume increase The The to first prior $X.X XXXX $X.X to the to increase, months gross Foil of manufacturing compared

second for weighing margin XXXX X.XX Force in the book-to-bill XXXX was weighing mainly the the was first The months months to of a for the measurement in in quarter end the of of savings XXXX. profit ratio of exchange profit end to segment. of Europe weighing gross for of X.X at million compared precision precision XXX,XXX by the the orders million. million the to XXXX XX.X% first quarter of in within precision XX.X% gross precision X.XX offset in for market million quarter segment $XXX,XXX. The of quarter profit customers, quarter segment of of negative of first increase quarter volume XXXX. to was compared freight second Sensors due the second gross force The X.X quarter increase Looking in Sequentially, X.XX and the the or $X.X directly in and a of compared $X.X XX.X% Americas, second and first decline Americas Sensors in within was X.X% in Force months The of Europe increase the the and market. impact the weighing by in up the XXXX, decreased XXXX. X.X offset the is addition $X.X of from partially quarter market, the in of to The XXXX volume quarter mainly in second $X.X million, due second increase XXXX rate to in backlog the compared $X.X in to quarter of XXXX

for For ratio in million, of in of second Systems orders margin in XXXX the the The the and by orders second profit for to is quarter product The X.XX book-to-bill million in the an weighing first segment of quarter XXXX quarter of Control Weighing XX.X% due was versus profit the was onboard onboard XXXX quarter for and in segment, Americas. the for XXXX mainly in Control products quarter for margin and decreased and X.XX gross volume steel decrease quarter $X.X in the and the second second first gross from XX.X% XXXX. The increase XX.X% compared $X.X the X.XX the of the the in of increased to quarter Sequentially, million weighing second and or XXXX. Americas the attributable Europe. primarily XXXX by products $X.X to of of Europe in X.X%. Systems Weighing

the rate due benefits of in $X.X impact million. were $X.X $X.X and profit and of gross an at of Additionally, quarter compared first X.X increase X.X cost-reduction quarter Asia. there from Weighing XXXX increase was Control exchange months to in of was the mainly compared Systems steel million, in $X.X margin The million months quarter backlog of first of a product the X.X positive primarily to months line The million sequential volume to in XXXX. and second of the XXXX

lines open you. our $XX second that, of Slide the taking and at for solid net quarter expect for X. XXXX. million questions. quarter to Moving fiscal With the range revenues of the light the a environment rates in third to normal let's continued exchange $XX business constant account of we into In fiscal seasonality of business, XXXX million Thank

Operator

comes Please now Sarkis B. question-and-answer Instructions] Riley session. go with ahead. will question Sherbetchyan the The [Operator first Capital. from begin We

Sarkis Sherbetchyan

taking morning thanks for here. and my Good question

Ziv Shoshani

Sarkis. morning, Good

Sarkis Sherbetchyan

like target the few years Maybe road seems expansion? and you next levers get map to what here. model Can over proactively guys sales to about that It using drive margin you're growth talk you financial updated the there? also the

Ziv Shoshani

Sure.

with sales the at look we - start sales growth. the growth let's As

to and to regards future expected with which look in In and momentum them. the if regarding those are did the the also the is economy. an the further main regarding do to with - information the in growth say couple provide that in believe And engine future, to conjunction course, restructuring, near- expected are momentum, growth, this we strong historical growth sales is activities. I and the do our targets project this strategy more regarding in of get last the margins, achieve gaining restructuring and growth which includes longer-term more to projected of we in to feasible, have and strategy, platform, that the prior gaining conjunction the we has in M&A we organic believe at with do those and expect years we been Regarding we should years, organic our that growth for as new that us continue targets.

Sarkis Sherbetchyan

I what you comments were you And the your it. that in advanced us year-on-year. contributed up to Ziv, mentioned, think strong sensors Can Got Is margins for that segment? XX% maybe help the FTP there?

Ziv Shoshani

the, is in If level. this say even there I margin would Instruments, very but strong we sales absolutely. Yes, for to higher which I level had extent FTP Pacific at high reported already the very advanced segment, regards has gross which we One a two are main a year, would larger look is contributions. sensors, to say, margin

in combination with Instruments revenues of the So sensor a of quarter, volumes. a it's it's respect combination additional - advanced more Pacific to prior

Sarkis Sherbetchyan

back I'll in hop Good. you. the Thank queue.

Ziv Shoshani

you. Thank

Operator

Instructions] The Sherbetchyan [Operator Riley Sarkis next ahead. go follow-up Please from a question with is B. Capital.

Sarkis Sherbetchyan

All right. taking here. the Thanks for follow-up

one the can range $XX the some to outlook, and end to of range? million, required give you range million the the what's of puts to high the $XX of With maybe end XQ low on regards the So more. to us get versus takes

Ziv Shoshani

the have that FTP, always to we fact fact plays QX. We with we a softer. XX% take the role the that is of on the have QX XX%, consideration was the XX% fact the to of are that expected around Okay. the expected we expected of The have - due which know ship manufacturing it's significant to delivered - based days in Israel, by provide we working - regards less account Europe, that guidance we into to in end in current conjunction the be in backlog

current account sell time the out backlog. would the we Europe less able frame, July-August stock of in do during to So we take be given that into

Sarkis Sherbetchyan

in you or And perhaps are remarks of Can the It idea understand mid-July, that surcharges, prepared I like then effect. help mentioned of the lines the impacted? right, products tariffs your think situation certainly us helpful. globally managing here. what et chain went and you maybe trade tariffs product you're into kind monitoring or And supply just sounds cetera? That's

Ziv Shoshani

absolutely. Yes,

As Bill of FTP. in indicated, half impact expecting regards to XXXX. we of are There the for no cost $XXX,XXX is an additional second

applied being The States. split United Sensors, the into to a it's I shipped on and regards and Weighing - sold is our being Control. to first tariffs in products XX-XX and reporting regards Force In would China between Sensors are Force say, and segment manufactured in these

Going as streamline all India, upcoming in to expectation that impact of be manufacturing the years continue tariff going forward, we to did is move we more our the to is in activities diminished prior the as the as we production years, in the India.

regarding here, looking are selling is from part other And we The subsets. the party sample buy a States. is two WCS. third China, we that a and One in currently we're United into at

looking our the into facilities, the Bill are take discussions products costs the chain. tariffs. some But now do and buy is may supply out additional alternative those impacted in the as U.S. with effect are But customers China indicated, as much move we by to product to to from forward. expect that we which surcharge smaller coming some we Canada. some mitigate a degree, sell are may we or of to much, And we in are and also, in-house have made which at biggest China. are to to which Here, products products How we the some production the we delivered our U.S. reduce and having, manufacturing of And applying products a produce to currently those regarding we

Sarkis Sherbetchyan

me. That's That's Thanks. helpful. certainly for all

Operator

Clancy to This over the back remarks. like any concludes to turn would Bill our closing for conference question-and-answer session. I

William Clancy

our And call. listening everybody dialing just right. you, talking All today in again, earnings a good to and in be I that also, and appreciate appreciate for future. guys. look at thanks York. in let We the have second you in, Group Thank attending to Jefferies to dialing you forward Conference know will presenting support, I Once Vishay quarter to Precision and day. the New for and your tomorrow you

Operator

The you now for concluded. conference presentation. Thank attending has today's

disconnect. now may You

Reynee Tung	Investor Relations
William Clancy	Executive Vice President and Chief Financial Officer
Ziv Shoshani	President and Chief Executive Officer
Sarkis Sherbetchyan	B. Riley FBR, Inc.

Vishay Precision (VPG) 12 Aug 182018 Q2 Earnings call transcript