VPG - Earnings call transcript Q1 2021 | Vishay Precision Group, Inc.

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Operator

Good morning, and welcome to the VPG First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Cantor, Senior Director of Investor Relations. Please go ahead.

Steven Cantor

Thank you, Kate, and good morning, everyone. First Conference XXXX VPG's to Quarter Call. Earnings Welcome

Internet accompanying been audio the Litigation can posted QX on of press remarks VPG's also of have governed and release the available our be Act. An Reform Our be on accessed time website. provisions slides website, Securities by call the will XXXX a harbor on Private for limited today's Today's and recording are vpgsensors.com. safe

vary Our forward-looking from actual may results statements.

risks the to recent of XX, For with SEC VPG's especially you discussion a our XX-K SEC December encourage we associated year refer filings, other operations, XXXX, and ended our to filings. for the Form the

call refer Ziv? On of Ziv and CEO the presentation. Clancy, President; to the today some quarterly and Shoshani, are prepared remarks. Ziv Slide to for turn X Please CFO. call the Bill I'll now

Ziv Shoshani

with I outlook XXXX. quarter. results for sales Steve. trends will you, financial Thank and commentary provide begin financial consolidated quarter on of and the second will details first VPG's the some Bill for our

to highlights. X, Slide first Moving quarter

growing were and year. quarter the good strength $XX.X of guidance. margin across operationally, EPS the XX% our margin an to target gross within million, broaden end ended continued of book-to-bill our reported results a with quarter sales X.X% customer businesses our model. Advanced to X.XX its which quarter We achieved slightly a $X.XX, of strong markets. adjusted adjusted start the and marked well our end and our another high and pipeline. executed which of sensor $XX.X to we operating achieving as above grew We first was sequentially of The million, We orders reflecting

trends. consolidated Slide to results X, Moving market and

end we X.X% Demand quarter sales with transportation market, sales the and X.X%. the market. the industrial Sales the in in markets, customer continued related timing of we driven avionic, industrial reporting transportation steel were the all from grew the market, ago and test end Looking of the and fourth declined the space equipment. above measurement strength and grew book-to-bill X, with to semiconductor communicated last first by softer, strength to and XX.X% X.X% grew at segments. sequentially generally a detail. Sequentially, by of had the market sequentially, positive, Sales quarter. exception In in from respectively. In in we In ended sales trends quarter space weighing X.X% book-to-bill test X.X%, X projects, X.X%, markets grew a and trends Other reflected this the above our military as general and XX.X%. the year our each sales are which X.X business markets, the more military quarter. first in and driven which results were grew avionic,

in the grew avionic, However, or sequentially, demand. steel space, project-driven orders reflecting customer AMS, Orders in XX.X% military XX.X%. increased market grew improved activity and and

was trends and While and these demand sales flat, book-to-bill of sequentially, The medical, were the orders construction strong $XXX.X XX.X% X.XX a markets first driven by of for ag. net a result essentially our in backlog million. grew quarter precision in other consumer, of

resistors. sequentially, Moving to a Foil quarter Compared million ago, Instruments. grew to range. strong to segment. first an the sales sales annualized first by performance Advanced turning advanced precision XX.X% Pacific quarter sequentially by FTP million primarily in sales to grew of foil level of XX.X% Products $XX sensor and results to sales Slide Technology X.X% year-over-year sensors were and approaching X, $XX.X lower lower year the X.X%, driven due

in and The quarter, sequential which first driven test FTP our fourth new the by year. manufacturing by of for of a a the end Adjusted broaden margin XX.X% was the 'XX, and FTP and for in continue orders. measurement sensors of our expect the markets. our we this operate test which resistors in strong transition X.XX first in favorable customer remain increasing quarter complete across continue this will for was at book-to-bill in for strength semiconductor in revenue. mainly gross partially adjustment increase which applications base quarter third as was demand foil QX lower to mix, inventory were as precision to range not market, efficiencies XX.X% Demand of capacity, the advanced a we XX.X% We XXXX in in onetime a application product facility offset maximum to in for for of and The AMS. quarter reflected of result product of reoccur, manufacturing XXXX, from the the

Sensors performance. Force segment, of strong was the a quarter it For

First strength. XX.X% gross of results Sensors adjusted in a higher the driven fourth X.XX year a part reflected Force ago. $XX.X X.X% ago. The revenue Financially, XX% quarter in the in by improvement The was from sequential demonstrate continues the past of of several and of years. from ago. reduction, book-to-bill and grew first perform a product the were have for million, XXXX cost Force Sensors' XX.X% higher continued over quarter improvements sales the fourth and quarter margin manufacturing XX.X% from businesses Sensors revenue well quarter year as The efficiency improved its XX.X% made year quality order of improved primarily and Force we OEM efficiencies. than to This

applications, maintain our China reflecting this are to Sales rebound Systems precision lower solutions and grew sales in continues the declined from our lower X.X% were of a our demand, operators which and ago, facility expanding in million majority steel fleet quarter. project-driven maximize and had Weighing Control fully currently fourth are of of the for employees. capacity first the X.X% sequentially $XX.X we Sequentially, measures Sales India For onboard we the COVID sales the our help truckloads of facility, minimizing medical year due overloading, of meet X.X% quarter the market. regarding than our protection we the fines we where protect to higher weighing products, at Europe. of helps produce while facility and to Force products, risk to agriculture TruckWeigh, to we VanWeigh as Sensors trucks of operational

are aftermarket for the the due favorable in for quarter EU was XX.X% revenue. increase adjusted opportunities emerge inventory, growth part in quarter, impacts XX.X%, mix an this and offset product optimistic fourth COVID We in first in XXXX, half lower regulation-driven mainly Adjusted to by in in margin is improved of second and the continued from year. gross WCS for partially

for transportation and order regard in steel, the general grew of DSI for orders terms higher applications. steel and With XX.X% and industrial segment, trends X.XX WCS In X.XX, demand the to respectively. were book-to-bill sequentially, market, reflecting our KELK

and relative KELK in The we steel generally is projects, customer X.X. X-quarter was to these discussed in in DSI book-to-bill the As are previously, a quarter which have the market. case a result of inflection CapEx trends have orders lag driven by orders first WCS KELK, for of of typically the

the I'll make call additional comments. Bill, to Before a few turning

site. of COVID, and been facilities have of remotely terms In employees working many all to open returned working our our on are operational, had who currently and

long-term initiatives, Looking stockholders' forward, our including deploying build our continuing we to prudently strategic long-term value. are capital

sensor increase For XXXX, transition capacity and advanced these our the initiatives line. of product completing manufacturing include

addition looking product for more line. our We of at to automation deploying expansion resistor precision facility our also are in the projects manufacturing Japanese resistor

As approximately million XXXX. for $XX such, capital to $XX be spending to we million expect

turn We look now our businesses addition profitability. that to will attractive -- are Bill it for I and for additional acquisitions will platform details. adding accelerate also Bill? strategic the continuing to Clancy to growth opportunities high-quality financial VPG add to further over

Bill Clancy

X Page of million, the profit $X.X operating the of and net revenues reconciliation million share and the $X.XX. diluted out of per revenues basis, million to sales Referring of was of $XX.X of XXXX, $XX.X release, or XX.X% of or gross net $X.X adjusted was our operating share was XX.X% deck, $X.XX. an earnings in we profit in million lay we or gross X.X% million or press income our first in diluted earnings per sales, quarter X.X% Ziv. Thanks, of slide achieved income which sales, On $XX.X of table of

quarter ago. quarter and the fourth X.X% first Our the million above quarter in year X.X% first $XX.X revenues declined compared XXXX a to were

Foreign and exchange positive compared XXXX. compared effect a to XXXX as ago quarter quarter first $X.X on $XXX,XXX million a by year had revenues of for to of the the fourth

XXXX. the improved quarter quarter gross the quarter XX.X% margin in in quarter. gross On grew first fourth in XX.X% XX.X% fourth basis, of to adjusted Our from XX.X% the the margin from first an of

of was margin first for X.X% operating quarter XXXX. the Our

and XXXX. XXXX. recorded for first Excluding some reflects to XX.X% advanced $X.X infrastructure adjusted diluted operating for $X.X quarter COVID-XX year of of The receiving a the of revenues Capital XXXX. new diluted XX.X% to increases, purchases the $X.XX EBITDA $X.X the was the revenues were general start-up the million quarter decreased which for SG&A and million wage increase ago. the related $X.X Selling, were in sensors The subsidies, $XXX,XXX in which net $XXX,XXX million costs. of XX.X% per of was as our in for expenses of Adjusted majority adjusted and first the $XXX,XXX of the exchange to of facility. was fourth million quarter other per or from margin of million first quarter first of administrative or and we of X.X%, advanced relates mainly $X.X $X.X XXXX for or share quarter $X.XX XXXX impact, $XXX,XXX $XX.X earnings first compared to million rent spending share rate million, for $XX.X compared sensors quarter foreign million or costs compared

We quarter The investments, cash free the of these first compared from quarter for negative free as first of generated result quarter activities, XXXX. capital first XX.X%. of in $X less expenditures a tax cash $XXX,XXX flow the adjusted for operating as of to million plus As was of assets. the fixed GAAP a we sale cash adjusted XXXX rate define flow

million. ample additional to The that X. we balance to liquidity to assuming a rate support of long-term have cash in Slide XX% strong an of the debt the quarter of first XXXX. the environments sheet with and year equivalents ended and fund $XX.X and million and are operational range of Referring outlook. to our $XX.X XX% total tax We opportunities. cash for We believe business We M&A full

million XXXX net sales for business the With had our million quarter strong In revenues second X.XX. for slightly guidance. results $XX financial of model. $XX the within you. the summary, constant fiscal rates. expect Thank to quarter XXXX of We orders end of let's exchange lines We targeted that, high of above open the across in and our questions. our first book-to-bill our achieved we at to sequentially fiscal be and range achieved grow We

Operator

from [Operator Instructions] Dick question first The Colliers. of comes Ryan

Dick Ryan

about margins talked Did you And the What the margins. view costs? should I more constraints any to chain of job Good the see gross quarter, increased supply look on for supply logistic leading for of your think gross some quarters? couple costs. -- we next chain? what's the in fourth higher how Or you

Ziv Shoshani

logistics logistics cost Okay. there the in Dick, the last due cost, capacity. and to we is in regarding sea have quarter, increase air as an indicated limited

side, of of in effect indicated, not don't favorable the cost, should We should approximately in have a had increases an item the adjustment further profit -- What be we -- maybe we of QX, are seen indicated, this increase. itself. see should as quarter. as expect and we we that as at related we point on inventory any repeat impact time, continuation at last to onetime to expect looking coming gross we not had which an $XXX,XXX, Therefore, a at -- a

that China in going we Chinese also the export we will demand that, -- that India. we should Force are In imply expect And going addition United we to expand that, facility higher the we is incur for addition expand tariff in cost facility Chinese our those States. will to our to our cost as to are order fact in China higher to the as -- cost than cost Sensors, to slightly labor see further would support products to we since

onetime quarter second tariff looking are the we the at -- effect quarter, be the So labor in and we guidance, the are QX, to all looking based flat respect China, on in cost. higher the including profit margin if cost the for the all, second given in to gross at

Dick Ryan

appreciate that color. I

are indicated you facility India some you is was stories seeing? horror and And COVID and any -- over Or any you can hear facility? been there -- what's spreading the Ziv, impact? how What of there. guys running, revenue up do anticipate impact you that So from your impact has

Ziv Shoshani

was there a the was essential are there -- point business and an medical we to the a a the -- lockdown until where year time, employees. we already were May market. state VPG for due are X in Okay. been agricultural in XX. our classified in Therefore, during the year I'm proper selling ago At the has we for we much, India government year operate this are, fact that have as announced to has situation weeks, prepared better a those much continue India special protections than lockdown. already waiver -- facilities in ago. all shutdown and a our place in have own we a Since in we to ago,

we are and waiver our not -- to this this the much, to any addition employees in in facility. is expecting prepared we company much at for and received. and have have given at interruption point we we to the fully not Therefore, So protect India point, we environment, say, I -- manufacturing the time, in better operational its are that have

Dick Ryan

Okay.

in to? the feed just is what that -- mean, to expansion producing? demand that that I India the augment So will will China, where not Or strong? Is is product

Ziv Shoshani

correct. is This

several the Force book-to-bill have as be lines strong. We Sensors to continues product for

at India. for mostly the capacity we the application. weighing in added in have are And China, time, increasing We capacity same

and this current the increasing correct. is So facility demand, augmenting demand. This is support to capacity order India in the the the

Dick Ryan

execution. Congratulations on strong the Great.

Ziv Shoshani

Thank you.

Operator

question Riley next Instructions] is of Sherbetchyan [Operator B. The Securities. Sarkis from

Sarkis Sherbetchyan

Ziv, you demand mentioned advanced remains strong. sensors

said sales year-on-year that's comments, a in and you level growth think prepared I the $XX XX% million approaching in annualized. supporting

the broadening for there? can base you product Any the discuss share kind to of across that us and the on end Just if markets. can comments customer you maybe wanted color with see

Ziv Shoshani

Okay.

strict so by we you time, revenue to customers, maximum our have advanced since of I sensors, the has on that with XX.X% the say indicated, are comment really at Regarding have we -- At you sequentially as agreements the increased customers. the given and year-over-year running I cannot capacity. X.X% nondisclosure most same specific

not continued Among provide fully were customers. more and are to have same it's would the we the significant -- like to capacity. transition adding in we on finalize QX, fact But broaden add base. only pleased will the not will we the be more but once customer say regarding more at we in I able time unfortunately, the we transition, the new time operational However, to this, details. to we But also are that that would facility, I will that we be

environment, would once be this able will be support and capacity complete seems to we seems higher that -- So will transition, volume we required it much the operational be as it given the and fully this strong year.

Sarkis Sherbetchyan

just to particular customers specific sales X this this is you're number Or annualized On a for line, that it there around guess pretty is a bit talk product particular or poke serving? about? more. little you segments I X guess. I that or can't That's level exciting,

year-on-year. falls of category there? I'm into, I you by revenue rapidly more growth. broadly are look that help markets much market the advanced regarding at on assuming speaking, Can the out of guess, I X kind other me As the growing presentation, Slide sensors

Ziv Shoshani

part markets. But not You consumer. medical, provide we of able are that say, are -- consumer medical correct. some you customers who highly mainly To correct, those proprietary, the of Sarkis. is the -- mostly and be will had but specific around end have And regarding to some and extent, would applications, that more color test I segments type I measurement some are we and

the markets The line. sensors markets, also the falls other product in the -- some growth under advanced other

Sarkis Sherbetchyan

end kind health share that I kind either growth. guidance, worried Okay. of? excited can you nice strong about I we that regarding that or your be Anything and clearly, about just market And I fairly real-time should you're of guess sequential think of it's the about if think mindful

Ziv Shoshani

lines The Well, we DSI. steel-related a details ones seen and like would product I the provide have much markets. some have we say, in indications is pretty good seen, the KELK rebound regarding I and book-to-bill, which all end did more

Over seen in more demand. increase there, modest we have a

all seen industrial, a general expecting weighing, But rebound. demand. this room to still markets, stronger in point of in and AMS, have looking product we We there industrial we And are do test time or still standpoint. much a measurements, for all lines. that the terms our is We rebound much a other demand time, believe in at from provide competitive more grow of lead

We do are not demand allocations. on we Therefore, once would to would believe revenues. the increase, we that able higher deliver be

Sarkis Sherbetchyan

Got it.

right any if guess And Is me. going kind last rate consider basis? of kind were to level SG&A one there the number of first think to look at of going the trends about one onetime the OpEx? as we forward? sequential I Just baseline the forward a for what's on quarter things run

Bill Clancy

and mean, out obviously, we what Yes. so mean rate have now, roll fringe in the always actual that is year, the mentioned. base, the FX, recorded I Sarkis, There increases good in our saw have look of probably would -- a review from wage far in at for measure the accruals or half we obviously, SG&A as But obviously, What you run the adjustments. I be year. base second recorded we that in the far QX has XXXX like the we our QX. perspective, the as QX number. I is,

Sarkis Sherbetchyan

of, think, this comes the think to some online for Or the Okay. in costs more of quarter realized Got do I third in, kind of facility you this and realized is fully sensors, FTP and And does more as it. have assume are facility advanced about kind we the year? today? mentioned being that essentially

Ziv Shoshani

most a that we realized. book The cost not are Those incremental a of do those far, expect Most is costs. new to indicated onetime. start-up we we completed, of has with the to already only ongoing QX, the since so the $XXX,XXX $XXX,XXX level some end facility. expect completed has realized. booked have of to in additional should of running has been $XXX,XXX which we the But But cost further at be nothing until should support cost QX. operation transition far start-up transition been are Since cost of thing But in supporting quarter. overhead has been an by the is the larger costs the of may the facility, by the to

Operator

next question [Operator Instructions] of The from Dezellem Capital. Bill Tieton is

Bill Dezellem

Does any have there. not to historically in to acquisitions in referenced does all an and deals easier done? that difficult or more the terms get your either consummate? acquisitions had Or ability You make active of does economy, remarks, rebound at been in impact have interest it in

Ziv Shoshani

Regarding the been at M&A companies, large finalized Instruments -- and by of XX, of transactions XXx published. landscape, the we and like Systems, EBITDA. The those has few have has Abaco level seen it been last National MTS,

I believe are that we the of -- are specific and challenges very as has dialogues and that for environment, cash completed that, landscape or that's or companies this rates -- is extremely the at to company we much they we are a a with ago. as Therefore, cheap one think M&A have respect that would disciplined while the low. despite quite very, all -- a to I despite we very interest multiple been higher our But are on the hopefully, We along, are transactions companies an looking there always fairly debt having been than given in still for report. this valuation, acquisition. I nothing acquisition in are our opportunities. And to in be it's has on have point screen, acquisition. an to time, have investment, point but IRR on balance that the to time, complete But mission while at report our And sheet. this strong believe to an this targets at constant achieve still companies. still high return would with able we environment, complete completing nothing in dialogues we we that radar company Unfortunately, have

Operator

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

Steven Cantor

you. Thank

website let will have joining XX more for XX. we see May Conference we a details. Stifel you on our call, our know, the I good also at on want Please Conference to everyone the and close, for be Thank Before again and Needham presenting day. June

Operator

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

You may now disconnect.

Vishay Precision (VPG) 11 May 212021 Q1 Earnings call transcript