VPG - Earnings call transcript Q2 2024 | Vishay Precision Group, Inc.

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Operator

Good morning, and thank you for joining us for VPG Second Quarter Fiscal 2024 Earnings Call. My name is Carly, and I will be the call coordinator for today. [Operator Instructions] I will now hand over to your host, Steve Cantor, Senior Director of Investor Relations, to begin. Steve, please go ahead.

Steve Cantor

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

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

forward-looking statements. from actual vary Our results may

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

now today the to are prepared for call Ziv remarks. call some CFO. Ziv and On And turn I'll and the CEO President; Shoshani, Bill Clancy,

Ziv Shoshani

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

and initiatives. reduction cost as our business adjusted operations our on effectively our engagement sensors Moving second sequentially order measurement continue a solid revenue to our we remain as and sequentially offset while Similarly, as markets continue some gross Customer We market expanded we in mixed, weighing orders mixed achieved were of was our the Revenues in focus remains environment. other quarter Overall, of reflect a to solutions. levels margin trends our to soft. sales growth markets, lower follows: development in in trends with our X. revenue light programs. levels Slide systems, grew high by current

organic good growth. free provides a and and cash Our strong foundation sheet solid inorganic balance flow for

in be stable We expect of continuing XXXX the to with markets. macro trends mixed environment our end the to

Moving X. Slide to

million which softened sequentially. $XX.X at lower sales $XX.X quarter $XX.X million in X.X% Orders were modestly ago quarter. and lower detail. second million, results We year Looking of of the the first a XX.X% in reported from than

ratio Our book-to-bill improved slightly X.XX. to

were and and our in weighing. We are test Bookings mixed avionic trends military markets. in soft the seeing space and industrial measurement,

for in and steel orders our However, transportation markets. applications grew and consumer-related

results Regarding we in ones. initial our applications customers existing design and efforts the of terms orders early strategic development and and these projects wins with are of seeing initiatives, new business additional with

stockholders' capital Our gross of reflecting review in segment million $X.X the the of from free lower to XX.X% quarter. strategy and record in grow second of I'll operations allocation supports margin million from million value. $X.X our adjusted the XX.X% declined first now EBITDA, of quarter, our second cash sales flow, We business of generated quarter. a cash $XX.X which for performance adjusted

sensor with Moving our to Slide segment. X. Beginning

to Sales and in of related strain precision in were Asia. products the measurement of resistors. in on quarter applications. lower market softer, was Compared products our QX to sales resistors Sales growth XX.X% precision of year from strength of sensors gage Second the ago grew and XX% advanced test consumer sequentially. from first particularly revenue and sensors sales offset X.X% was advanced quarter, million a $XX.X declined the lower by

test orders quarter soft, for bookings second XX%. Asia. our resistor for grew $XX.X lower slightly million in advanced products for While sequentially, sensors sensors particularly of Orders the in measurement were were market and

bikes high-end professional measure riders bike stroke. to precisely to additional and use our makers. and and This address both in applications e-bikes continue opportunities force the of These we in Asian more with efficiently. bike sensors, helps train advanced rolled every Strategically, European the high-end pedal sensors

applications. In addition, a of we developer robotics a medical received for order substantial R&D for

factories thousands recorded well this project. several end X.X. to in of for humanoid continues related of expects was This to a for Book-to-bill sensors prototypes its a with we as ratio leading customer progress project XXXX. the revenue Our robot by these deploy of robots to developer

Slide Moving X. to

Weighing our segment. to Turning Solutions

orders ago a the below quarter transportation the market revenue XX.X% in than market, were while Sequentially, first and in X.X% lower quarter reflected million our of sales the $XX.X decline industrial revenue Second ratio lower year of XXXX. was the book-to-bill lower roughly X.X% weighing for The market Weighing orders primarily flat. Solutions The was million $XX.X weighing of and the transportation on-board were systems. X.XX, in quarter. first process declined from for

initiatives in of business a for solutions terms we development In Weighing developing customers and variety existing automation, markets. and construction lab and and the Solutions, of applications are medical for transportation new

X. Moving Slide to

Measurement Turning Systems to our segment.

decline sales Second $XX.X sequential of first AMS DTS comprehensive and X.X% end and of X.X% improved DTS KELK quarter. new orders steel grew DSI for the Sequentially, the the ago for the lower development from was while orders and as quarter X.XX of systems testing revenue $XX alloys, was million million for tools X.X% bookings by metal were softer. Systems ratio safety transportation in from markets. of a sequentially. year Measurement driven Book-to-bill The declined products the for productivity

have we projects quarter-to-quarter long products. pattern discussed, order of customer to fluctuate the the these As of due timing and times lead can

our to be measurement activity systems. encouraged by in business the We development continue

have In aluminum current optimization technology. of the KELK optical the using system quarter, customer evaluation our we first manufacturing our expect to

cost for important can As downtime waste. terms in aluminum new the we for us. manufacturing discussed, offer and customers We have is solution potential industrial believe savings market reduced these a of adjacent our

XD For our as alloys opens smaller test additive capability mechanical in for of market metal size. the sample expanded our metal DSI modules can for with simulation thermal physical efficiently a market printers. applications new equipment Gleeble tool This material DSI, manufacturing new offering such that commercial we developing for

Slide to X. Moving

Before capital comment our allocation I turning on to Bill, want the strategy. call to

we free M&A and stockholders' successful generation, repurchases. can create organic cash to the growth, Given sheet value we as our stock believe flow warranted balance and that

the million our During XX,XXX quarter, $X.X shares. we of stock repurchased or

embedded in in power continue our earnings positioning we programs. and VPG focus business development the significant closing, actions business model. These our to reduction initiatives on In realize cost activities strategic both long-term are to

Bill? to financial I for will it over turn now Bill details. additional Clancy

William Clancy

and tables slide Ziv. reconciliation the deck. X of to the Thanks, Slide Referring

revenues volume improved in of to margin of due and XX.X% ago. unfavorable product of the the segment efficiencies. quarter to the XX.X% for X.X% quarter quarter the compared an first were quarter sequentially, to first The By second Measurement quarter second mix. a sequentially, improved first gross volume. to mix. was product XX.X% volume XX.X% than reflecting primarily Our XX.X% due lower Adjusted in Sensors margin gross Weighing gross unfavorable due of Systems quarter, segment, from Solutions primarily margin lower second the gross and declined declined below the year lower with margin lower XX.X%

XX% and share, quarter first XX.X% quarter compared to X.X% or to of per was first as of million $XX.X quarter lower in for was to first the $XX.X compared mainly which $X.X as net was second diluted $XX.X XXXX. EBITDA in to reflecting Operating was the revenue. per the were earnings general or a were adjusted administrative XXXX, Total or reserve quarter or quarter primarily compared compared the XX.X% revenue the X.X% reduction or for XXXX. XX.X% Adjusted XXXX. quarter for million The in $X.XX $X.XX revenues revenues selling, decrease first of XX.X% expenses sequential of $XXX,XXX of diluted $XX.X The The the to million the margin of of million of $X.X or adjusted quarter bonus compared second the to as operating quarter. accruals. first SG&A million in in share the margin second X.X% attributable for million of

Purchase the quarter second CapEx in was million. $X.X

second levels range in compared adjusted fiscal rate we $X.X tax jurisdictions. define of in is first purchase free XX.X% quarter for higher years. million. the full the income free operating of $XX have quarter. be higher cash we the CapEx activities to Adjusted capital expect of than increased over million was of million, tax first year proportion a $X.X $XX $X.X which primarily cash the of in million, less from past cash which lower rate was flow XX.X% spent as and XXXX, the XXXX, the reflecting We million, million to For GAAP of flow to few from significantly $X.X quarter The as expenditures the

quarter was second The tax rate XX%. operational

We of for full range are rate tax the of XX% assuming year the an in operational XXXX. to XX%

in We with first and total of as XXXX. to of which that note and debt $XX.X was have equivalents net I our $XXX,XXX XXXX million, half result million Slide we $XX.X debt cash Moving classified as XX. approximately cash through realized quarter to second the in the paydown want savings a a ended of current liability. interest of

$XX quarter, fiscal Regarding rates. to revenues net in our million the quarter fiscal market the of $XX constant backlog, exchange we for million and range conditions the at given the third outlook, expect be second XXXX to current

flow cash summary, We've effectively strategic and to our In repurchase business we and adjusted and common to on levels. solid operations stock, our current continue savings cost generated continued revenue initiatives. focus development our we've

the Thank questions. lines you. With that, for let's open

Operator

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

Griffin Boss

So and me, X- X-year out in revenue expansion laid first for growth to margin you for of targets February your XXXX. back

the we're perhaps how is on of and macro front end even do that that remains targets about months those X you today? viable Now and range growing, uncertainty see

Ziv Shoshani

their plan large develop back half that and the in the we initial an point viable would initial given second still discussions the X have have based at we the say, -- very of to outlook release, we the naturally, down that as we not with and -- recovery on we year I are believe foreseen for the on the with looking earnings in much our the the when developed XXXX, which, well. looking we our the plan that -- in have XXXX. X moving had downturn this OEM customers and the the with XXXX, Nevertheless, been initial we had discussion marketplace. time, outlook that in Griffin, starting foresee provided when fact as the recovery OEMs I is The release our the we based recovery of correlation large we earnings

development that have projects. plan for do business with back in still it meet I -- extensive we the we company our plan should the generate activities, viable significant and to that. still believe -- would new addition is generate say, In I to laid I XXXX would revenue expect new, to are we the is which

Griffin Boss

M&A more progressed front, to the inorganic just meaningful targets Can Great. the discuss you're On that seeing year? obviously implied process revenue growth note, bit throughout contribution. how Okay. has a that the on little what you

Ziv Shoshani

front, I that seen still multiples. lower front, the on it the -- have some was with would say we M&A M&A deals On

say, say, this say, closing or deals much much better at much a we would more, move forward. would reasonable at better, better be I a a I time, more to say, would but do I going is I nothing at as I companies. We in feel to landscape have discussion have At would M&A unfortunately, with that the I report, been, few point in

-- So M&A move not unfortunately, do forward. I'm were I optimistic we to are that say execute, to be able I much going but think we about would that, we more as

Griffin Boss

is expectation Great. for the a QX ongoing Makes margin which gross both to initiatives, below sense. turning back to came of question fair to volume, because reduction trends model lower of see. SG&A, are here. Is And just those margin, half our assume the Okay. SG&A top just that expectations, into line? the great gross the the obviously, in going cost year, to continue it given The

Ziv Shoshani

The at a the gross color Bill SG&A. SG&A, The similar And at rate. level is gross margin looking more margin, exchange sustainable. regarding are revenue provide we will the a similar

William Clancy

Yes.

bonus XX.X% were some for Greg, QX. slightly and So QX, it'll adjustments which only SG&A, the at included on for be we higher yes,

to slightly higher. trending So where were, we similar

Griffin Boss

navigating terms then All trends or the been you what more months tough, ongoing guess very I right. most Great. business past aside XX environment company cost just well. initiatives, think reduction from Okay. been opportunities? gets But future last for in the the I have has the just me, forward, looking in excited for And obviously, broadly, the of

Ziv Shoshani

gets business excited is most me initiatives. What development our

to And some segments are I working some with development -- order key We high-volume our we say reporting is diligently, in with each and enhanced the have say, OEMs would very -- would develop we business and revenues. working of resources. I

during indicated sensor -- projects. the call, I've side, have we have humanoid As on the we the the

We have medical some applications. robotics

We and bike have high-end the consumer bikes. electric

We on have inventory the solutions. management weighing

systems. measurement We have the some on large OEM construction designs

We we DSI, the have production the ceramic-based on have additive -- the testing.

organic substantial coming generate So this the the revenue amount what is an those the initial which cycle company years. of The design growth in of excited should about. improvement future, really the I'm a projects all and for and acceleration in are in

Operator

& Our next from -- John comes of question France Franzreb Company. Sidoti

John Franzreb

the to year? you the the I'd than profile, maybe today. revenue now in When year back far actually talk beginning a weaker you the step Ziv. thought of you like look of than to the thought back, at Maybe about was what take in beginning business

Ziv Shoshani

a John. great question, That's Okay.

the half more into outlook from based an customers. was on initial recovery Our XXXX, for a second going the which year of in expectation was our optimistic

We second half of customers OEM have many indication expectation of the to pushed for for that from XXXX. upturn has our an received their been XXXX

seen this mainly industrial, measurement. precision semiconductor test and have We also agriculture, construction in and

markets those this this half in point they of So have based for where be which we the are would for main the second XXXX. at looking end an with in on the discussions them, upturn year, a pushout time expected

terms continuing our flattish, mix end in outlook trends expect for the orders rest the be reflecting we of In year, of our markets. to

John Franzreb

Yes.

assume interest a for to you interest that Now it just some mentioned would end those certainly be sensitive, rate would -- those fair cuts end markets? rate positive are be of that markets

Ziv Shoshani

This Yes. markets interest their are definitely If investments interest improvement like construction, ag, -- once activity rates. business those I we we would like And to in John. capital activity. the be at influenced are see, test is their would looking expected measurement, in an drop, precision say, correct, the large Yes. and by the would rates

John Franzreb

business kind prepared it interest you there the of more that the on And just an Can why sensor is emphasis line? seeing product elaborate increased remarks, in me Are to increase your in you [indiscernible]. advanced seemed again.

Ziv Shoshani

Yes.

Okay.

is very, emphasize and quarter. business initiatives the development continue business good of sensors. the in important soft, of bookings that advanced of year company. R&D So is that hundreds to an the the e-bike only and this prototype to of to at medical ensure The in activities a an this believe the customer high-value one, business potential should revenue only and the in is the environment which of we accounts. humanoid order, indication fact XX% business what like robotics And positive result terms thousands is for dollar electronics level. long-term The we the how I are of in given on. order engagement significant Projects projects, are a growth very dollars focusing growth for in had R&D respect do it excited sign the promote development prior regarding And the consumer in increase order only of large

we those very -- platform driven we business since since and and understand myself product and the we why about the company excited sensor. And that very team environment, are this -- is business are this there event about short-term activities. very development is this So we discussing are -- is but is focused why one a is discussing This much on are line. pushing only

John Franzreb

your starting business look if at across you kind guess to so green a portfolio, I When that is see emerge? it to you first turnaround the portfolio, are business identify the whole if And than we Understood. look shoots. things of expected. But slower where proverbial would I indicate expect around at want the to what like would turn line

Ziv Shoshani

looking joined see would is there year X speak is and inventory cycle inventory well orders. discussions, the while depletion the cycle discussions beginning of and the a in a we One to we turnaround, are understand level, to to when should an placing measurement. the customers, expect of the is year, start segments of of -- recovery the getting -- the market those that faster we I'm going initial end end expect next of and inventory. other to are or I the test have that believe they the of by of the they We end about demand depletion do business the we during verticals. of one true that one of indication with If

have could earlier, be rates. other dependent we discussed markets more As interest on

big start We -- rates indication an cost at the think inventory. rates, interest willing queue customers reduction and EMS distribution the investing there in bear more would high low, once mind investing So of interest more also to holding of be the is rates in is start of that once given in I inventory. or the and very, please inventory that cycle projects interest a should very and

this interest So to also as would down. I rates would expect would change go that start

Operator

It appear questions. Instructions] further no we have would [Operator

So Cantor, to remarks. I closing Director for will Relations Investor Steve hand Senior back of

Steve Cantor

for all the that you in want joining Thank call. to I note the on we participating Jefferies be Conference will X. September

all, check and Bye. have good day. You for can thank you details. our additional Again, website a

Operator

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

You your may now disconnect lines.

Vishay Precision (VPG) 6 Aug 242024 Q2 Earnings call transcript