VPG - Earnings call 4 2023 | Vishay Precision Group, Inc.

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Operator

Good morning, everyone, and welcome to the VPG Fourth Quarter and FY 2023 Earnings Call. My name is Chach and I'll be the coordinator for your call today. [Operator Instructions] I will now hand you over to Steve Cantor, Senior Director of Investor Relations, to begin. Steve, please go ahead.

Steve Cantor

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

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

from vary may results statements. actual Our forward-looking

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

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

Ziv Shoshani

environment, ever in half Thank best despite XXXX slides. a you, solid with detail Beginning shown the and performance macro Steve. accompanying in delivered our We as year in VPG, for the quarter year. mainly more the the second a challenging of second

development pay solutions. new debt and precision down adjusted and cash the Japan cash projects margin measurement We improved and revolving our For India we order of expansion $X.XX to revenue capture our opportunities million sensing provide our stock free adjusted of XX.X% in accelerated our margin our year, in EBITDA and have to $XX.X diluted generated of of our value stockholders. EPS infrastructure flow. adjusted record achieved and deployed and business completed gross $XX.X to We million to net repurchase EBITDA XX.X%. for $XXX million full to in to we activities adjusted a and We and

X. Slide Moving to

EPS adjusted of measurement third high lower and and adjusted capital of margin higher free timing above We sequentially Weighing to an Solutions We debt growth the EBITDA delivered $XX.X We Sensors of mixed guidance was the as repurchase achieved trends the which million customers' of adjusted to quarter $X.XX. as fourth bank end quarter. X.X% All generated segments than of to $XX.X were of the the by flow diluted offset due XX.X%. $XX.X EBITDA million, to as Turning revenue our our pay XXXX. projects. was in systems million, record of We achieved bookings shares. adjusted level cash of down well deployed and

in expanding growth our execute engagement with to organic customers continue of our on in larger We development terms product initiatives markets. and long-term new

to review continuing are our lower-cost performance reduction material quarter. We costs. reducing investing cost automation our I'll efforts also locations, for segment now the fourth business move in by production to and

resistors markets, the test rest test sensors [ were sales to in million including was related quarter. X.X% higher precision sales from the X. applications consumer lower ago. a Slide but foil third sensor sequential stable. year production The to Beginning Revenue of for the segment. than $XX.X and sequentially and as trends our improved of band] of Moving grew revenue Fourth with measurement semiconductor was quarter our growth X.X% driven by

industrial We fiber our and well optics centers equipment design initiatives in markets wins robotics data as continued in new to emerging strategic and as systems. secure automation

and AMS. demand reflected volume In X.XX, sensors XX.X%, avionic and from gross as third was terms for modestly grew orders due in This from measurement and the and was manufacturing improved sensors, test space primarily orders of sequentially. stronger operating sequentially Book-to-bill higher results quarter XX.X% X.X% of which efficiencies. or margin customer in military for up improved higher project-related to

Slide X. to Moving

increase offset than applications. of in the in industrial, bookings in and sales segment. $XX.X quarter, million reduction was Sequentially, adjusted which were inventory third quarter, from in to modestly higher $XX.X the X.X% higher driven sales Solutions our Fourth X.XX lower the grew Orders by third from to to XX.X% sales quarter applications and higher the quarter due the product quarter X.X% general offset weighing of fourth but construction Solutions due for volume. million precision for and lower million for third agriculture year primarily Weighing fourth Weighing declined margin X.X% in and the partially Weighing $XX.X the higher mix, market. XX.X% in sales in gross Turning solutions increased from OEM ago. a transportation Book-to-bill of quarter. a industrial by of transportation unfavorable improved

X. to Moving Slide

third DTS aluminum were the near-term with declined a had reflects muted trends orders products such Systems X.X% X.XX grew the the timing for projects. DTS increased sequential quarter customers' gross new in higher for quarter, sales see in quarter, the in in customers. quarter decline for our of favorable Turning of of and while volume which applications, the our segment. market. AMS third from Measurement to record we the fourth sales margin KELK the from steel-related Book-to-bill the AMS orders in XXXX of DTS Adjusted for higher fourth sequentially, AMS development outlook X.X% adjusted Despite as AMS in fourth our of the but Systems book-to-bill sequentially, lower In was Measurement XX.X%, compared orders was fourth growth quarter reflected record lower X.XX for VPG-specific the reflected down pursuing million quarter are Revenue positive product gross in for businesses. Systems with our which The included for The offset which solution of XX.X% for The in $XX.X to manufacturing. profit the opportunities margin steel level, we Measurement market, steel-related mix. XXXX. higher year-over-year.

addressing we is over but currently next which the at addition, grow small to double In expected are several market, in is Indian the opportunities digit years.

potential. and local added to sales this capabilities have meet We service support growing

X. Slide to Moving

included cash flow. our were both quarter for with pleased we record indicated, XXXX, fourth free cash the for I adjusted generation, As which and

We our facility. part continue as our strategy, and M&A, which of prioritize deploy credit investments, capital allocation revolving internal cash paying stock repurchase to down

focus internal we and investments, growth automation XXXX. and projects in completed of capability terms In operational

in volume For example, businesses. higher we increased the automation facility our India to have support

In we to continuing to location. consolidate production this are addition,

As capital historical XXXX to of a approximately spending in return such, to X% more we expect revenue. levels of

M&A, financial Regarding our for creation. high-quality look fit, meet we and continue for businesses attractive strategic value that to stringent requirements returns

M&A are a currently seeing favorable We environment. more

like call their the Clancy. Bill to it continued now comments, for will I our turning over our dedication. world and Before to around thank turn for Bill the I would customers and employees to additional Bill? commitment

William Clancy

in deck, reconciliation third were revenues the gross compared the Slide quarter slide XX% X million. XXXX quarter tables the in of fourth our the XXXX. fourth Thank you, Ziv. to Referring to $XX.X Adjusted of as of and quarter XX.X% margin

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

of to third $XX.X tax of million quarter Our GAAP fourth full revenues expense XX.X% The quarter of of rate income. primarily fourth geographic for and the adjusted operating year the general for XXXX. administrative the mix margin restructuring Selling, excluding XXXX XXXX for $XX.X $XXX,XXX quarter reflecting XX.X%, was compared XX.X% million costs. of of or or was of the XX.X%, was as revenues

the year share XXXX or to in was $X.X Adjusted for quarter or $XX.X million. XX.X% the full earnings higher CapEx XXXX. share XX% per an were operational of $X.X million XXXX Total quarter $X.XX EBITDA million for or X.X% third diluted which rate fourth revenues. $X.X or for of revenues, the of XXXX. fourth million XXXX.CapEx $X.XX quarter the tax than in assuming of compared the of are adjusted The of of in or $XX.X per XX% was was quarter of XX.X% approximately million is We net revenue million third diluted the $XX.X

of adjusted expenditures. cash for for flow XXXX to the of For less $X $XX.X of flow assets. quarter million $XX capital as generated as for from free compared third XXXX, cash $XX we free plus the We We operating expenditures the fixed XXXX. budgeting are adjusted fourth cash million define activities, to sale of million capital quarter million

our quarter, million the As Ziv repurchased in we or XXX,XXX $X.X indicated, shares. fourth of stock

XXX,XXX of common stock or full the shares. XXXX, repurchased year $X.X we For of million

the during quarter, bank of fourth revolving we million paid $XX debt. addition, In down our

outstanding net will we no million, For assuming in revolving borrowings. approximately million $X the bank which XXXX, year, additional debt in of estimate we reduced savings our full result interest by $XX

fourth Moving believe sheet fund million M&A XX. with million, the of debt requirements paydown long-term liquidity reflects of outstanding We ample have our and business total repurchases strong and additional to We to of balance stock ended a $XX $XX.X and the quarter to the equivalents the cash Slide that we quarter. opportunities. and revolver and which support cash the during

the outlook. Regarding

cash million. to range In we be fourth achieved XXXX, For fiscal generated quarter of flow, debt constant of million to we fourth repurchase our $XX the deploying the $XX sales net and quarter above bank fiscal of shares. guidance. level expect revolving first which the are end we in revenue pay to We XXXX quarter to summary, high down exchange rates, our record at

medical We customers. in with are our lines that, for markets material products potential With automation, sensing about excited and and emerging the industrial precision the let's and consumer, development questions. in high-value applications for measurement open our

Operator

Riley today question comes from Boss Griffin Our Instructions] Securities. [Operator B. from first

Griffin Boss

benefits you're be improvements, now you that So investments the of how first, to optimizing cash and it's you obviously flow, in just the great see $XX.X to XX% see free speak million might cash expenses? flow Can your the flow to profitability starting forward conversion. cash free made that sustainable operating moving

Ziv Shoshani

that sales of depend capital all given QX fluctuation I the the move level and QX say, performance. I we also working guidance to that that as are we sustainable, CapEx fluctuations. level given planning XXXX. payable, quite on revenue invest we of the the as XXXX. performance will the in sustainable think it's would investment in receivable or But generation into the say that and intend would all, I account our to are Naturally, cash or

Griffin Boss

Okay. Great. in solutions. Systems green terms you said, there a Measurement it's of could some sensors in weighing gears Like of and seems sort And order bit shoots be flow. shifting a while soft, bag. mixed then

this of the obviously, I seen mean, So you've before in type environment past.

half what context, talk the of inventory about points high-level more that events? levels timing restocking back and more with generally, So with on in year? for just of need to and the generally potential potential your And XXXX can return thoughts distributor seeing positioning inflection and maybe you're a just for growth you your then

Ziv Shoshani

has year. Yes, absolutely. X.X% from but prior grew sequentially declined QX for X.X% Orders

end mixed measurement we As industrial environment, given inventory of X.X%, general mixed the bag outcome our we Overall, yet. is indicated, tester reached we still improved a industrial in other and believe the markets, upside, end weighing, bottom there say, the upside business not in On near-term most upside still the last, an would which of or are we trends see also is some quarters.And that in markets. improved a see have signal. of I the X pipeline lower order which upside

markets We half expect way means the and in second QX has semiconductor avionic end OEM while run and improve feedback strengthen and to rate year modest second XXXX. modestly of flat, such on the intake for a expected Based of soft. portion steel orders order first expect in XXXX. of trends half end customer in in transportation improvement to expected and is the order XXXX of in military the and the the indicated, we space, our some to application, growth in construction, to improve a first for order the be that believe that in agriculture, industrial Solutions intake bottomed a of in half markets. I sensors of expect up as we But in continue as see the in applications consumer, and to the But half is XXXX, segment, Weighing and the we those those key testing market precision, markets, in of which

be all, just this to in modest an the improvement. while year. all half In in the already are of we at should the first looking second intake to accelerated So in increase respect half, a summarize, increase

Griffin Boss

turn great over. that's And me last just I'll then I'll Great. it Yes, and context. one for

M&A environment. Obviously, a allocation seeing you. favorable priority capital mentioned for more You top you're that's a

early grown companies, any if some has call, of last that nothing last just curious, curious a list companies really of advanced or you if you in to discussions bearing but quarter? mentioned have with dialogues fruit, the in few those you're were Just talking

Ziv Shoshani

call, dialogue few that as been our have I would companies. last Well, in I say we in -- with indicated we

have the I Q of uncertainty. potential takes others, tangible company. of about high nothing M&A in so report. This period this quite of But increasing, very activity a we while forward, discussions. contemplating the far, for regarding But is the the we have been has of level. are to all the Some bit priority of is some very I process. that. moving nothing But in to positive still are a all, still a and are projects Therefore, companies report.

Operator

Franzreb question The Sidoti next the from Company. line from John & on is

John Franzreb

I'd business? Or more measurement project that of activity. like to and deferral of? Is start be the KELK some systems with surrounding the of that entirely commentary that on business is should the we there something cognizant side the

Ziv Shoshani

down sequentially. improvement business of space in quarter from So the given in record in from project Measurement and and steel-related Systems projects.In the and Please and the quarters grew was timing forward. reflects a going book-to-bill that quarter orders the are in book-to-bill projects for includes quarter. X.XX, this the space the the space and that for the get bear X.XX mind decline in military finalized is in expect business QX, which the based business environment the And on decline avionic And military funnel declined avionic, in development timing the turn DTS orders the were avionic the prior to nature. military third our we record level, orders. orders expected also for into coming also the It's while customers' and

the and the the or of we fact decline also nature have we business project of specific business, that given in see on trend nature project XXXX. military despite the avionic, market seen end a a So in do positive this very the timing space,

John Franzreb

QX, TTS looking should that big lot they KELK little in stabilize So first flow was order up there? a Is is we're bit in at a what and a had half. the down sequentially. that because

Ziv Shoshani

expected the much the and improve improve half is year. And second modestly to more in of

John Franzreb

days. ticking up Excellent. It I'm curious what's to driving seems the lot. be these a higher rate tax

William Clancy

Yes.

mix John, So higher a income. tax so predominantly the rate, had of we geographic

seen now rate this the tax where operationally XX% it's We've higher depending year past. rates income had in -- onetime tax some mentioned, this generated in generated, as XXXX. for our we've going but being then participate we're right in also So tax But positions. upon is cost being than GAAP we to

John Franzreb

process you Okay. And just the quarter, public. by repurchasing company since most of aggressive repurchase went through the on my decision aggressive there? walk kind reckoning, this stock? think is And Can are the so share you I why

William Clancy

internal allocation, the stock one John, as -- talked our you will parameters active we've and always listed and growth, buyback to very Well, continue think M&A all and the this be capital recall, of we're we've incorporate for about allocation, the those continuing always and top capital market And of I attributes we as in of as part capital of allocation. today. the and we'll continue the to to was

John Franzreb

revenue viable company? couple, and to the you last catalyst when If opportunities Okay. went presentations, new question revenue don't which near-term for the you mentioned are into in know, ones, I development near-term growth. park And revenue at opportunities, centers most a data like Ziv, potential items new on going were especially segment one we MS. look the

Ziv Shoshani

Okay.

that verticals. improvement, in fact we inventory is of at also are the have given say to run improve. part would is piece be industrial measurement semiconductor I of equipment the improvement that for and the that And would expected that the we XXXX, macroeconomy vertical Q. improvement if X the looking the looking seen addition we in for the macro One being is test are in sensor depleted So to general that would

new provide -- market. to started and is example, systems into us, applications new product I aluminum-based market and new that's to The applications, activity to new did could in as we selling mention enter have developed.In business the what systems other regarding I piece give have we case, a that in order completely new new the but our just a development that respect to an for

at which volume. over addition mentioned, a applied off, very for have that, on expectation design In the in humanoid to prototype is patent, I going we is that -- are competitive application the solutions to to momentum. we believe we once where example, have going the the gain new also I to developed for as think prototype take and very going the prior the it's call, also side final weighing gain more it's stage. cost cost I product, a then, is the have But And time, phase we

the verticals economy are macro is One the activities there is potential So to change upside really the X revenue. for capture other business. piece business new development of and our

Operator

[Operator Instructions] We question follow-up have from John Franzreb. a

John Franzreb

think Do X targets. they're still given to order X I to about Well, profile? protracted the viable the you the had long-term have downdraft ask in we've booking year

Ziv Shoshani

revenues, can years you and in John, I can to we OMD. the we an X recall, plan put gross then I if XX%, say, Well, respect set margin would also if recall, our

so-called, efficiency the improvement, to mixed As gross in we a gross with QX, means X% company -- we -- to -- is working continue excellence meet margin, optimizing which plan you of growth could in regarding our are -- going in development is is in profitability going -- to business are a there we cheaper confidence margin that see, respect environment, a which to line or top the despite longer-term combination product line record of achieved the look target. operational which we X% have there revenue terms high at relocation, activities.We in has a a XX%, of which sourcing level the going will are business way, I materials, also the is assure on think top through

I mix, out, confident viable. that to So that laid X X-year I plan the would very plan environment, the quite mix, is we am have the so-called despite current business the say, mixed

John Franzreb

still up on prudent be Just topic.Sure. Has update to I nonfactor? think capabilities on Any been question. it in And would a push just production last it that one Israel?

operations are center They as Israel. we have say, in would X know, I located -- you in of Israel. the So the

We raw goods respect operating shipping level. advance is we our securing Israel with finished that taken issue working normal in have in our with materials, in freight at in still There are quarters actions whatsoever applies. no a forwarders The to operations. prior and

efficiency optimum We capacity. at and are with working full

So our operations at in a Israel intact, are level. operating working normal

Operator

the I'll This to hand Q&A it to now Steve concludes over session. conclude.

Steve Cantor

you. Thank

want concluding, Sidoti presenting VPG Small and to XX note XX. March be Cap on that the will I Conference Before at

will presentation We of our posting our regarding our website. webcast be details on

for look And So We joining please all call. quarter. to check for you thank next updating with our details. that that, you forward

Operator

Thank you call. everyone. Thank for This today's you, joining. concludes

your now disconnect lines. may You

Vishay Precision (VPG) 14 Feb 242023 Q4 Earnings call transcript