VPG - Earnings call transcript Q3 2024 | Vishay Precision Group, Inc.

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Operator

Hello everyone and welcome to the VPG's Third Quarter Fiscal 2024 Earnings Call. My name is Ezra, and I will be your coordinator today. [Operator Instructions] I will now hand you over to your host Steve Cantor, Senior Director of Investor Relations to begin. Steve, please go ahead.

Steve Cantor

Thank you, Ezra and good morning everyone. quarter call. third our to XXXX earnings Welcome

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

results may forward-looking vary actual Our statements. from

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

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

Ziv Shoshani

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

third markets was follows: as by to Moving to business demand sequentially. quarter continues in others. as weakness were offset Slide some Total in mostly be higher environment mixed The stable was overall X, sales

funnel We opportunities. business broadening continue our of to on focus new

in recent and market. our the operations Solutions segments. Weighing The We streamlining offering in are acquisition mainly expand Nokra steel of Sensors product the

to X. Moving Slide

and majority including with million the consumer. decline $XX.X to third ratio of contrasted from markets, our inventories. customers' in in replenishment Combined as contributed third at bookings primarily segment. to our of of revenues, a the details, our in X.X. Trends above operations trends. These orders margin million with remains our related labor results these inefficiencies higher expect be in The inefficiencies, Sensors sequentially near represented which resulting AMS, We orders quarter in below align Operationally, fourth levels. in declined reduced to continue the in markets ongoing to was these temporary This mid-range the inefficiencies revenue of steps Looking $XX.X quarter. guidance. quarter. and the steel not mixed well gross lower cyclical book-to-bill we a XX% resulted to manufacturing second we generally do reported million, the sales $XX.X peak the which of impact quarter Orders certain of in and labor with of continued Measurement of Test in term

our reduction long-term operating in development, our our continue we marketing R&D, implementing cost, growth As and plans. focused cost investments we are and business streamlining

margin, going Over us quarter. years now and the past few have for performance, position leverage, our as forward to business realize will these potential review third our gross operating the recover. I'll improved programs segment our revenue

consumer-related second X, beginning segment, applications. XX.X% third replenish down to of primarily higher, in sales cyclically the million resistors Slide for placed X.X% offset mainly their orders to inventories. Test customers, manufacturers to sensors by quarter This X.XX primarily for Moving sequentially. consumer and a as have and quarter, our Compared million, revenue but Measurement for The third market semiannual applications. Book-to-bill $XX.X lower while the the softened semiconductor and remains orders higher semiconductor orders in sequentially, due AMS, sensors equipment bookings was to soft. ago precision Measurement was were year of sensors, of Test advanced for the from were and Sensors AMS lower quarter sales with $XX.X and offset

Regarding equipment. optics in our precision business focus fiber on resistors activities, expanding we our development continued

a an order for the well from as achieved During supplier qualification market, fiber third products laser design we resistor used telecommunications in source of recording in optics quarter, as equipment. our

company, humanoid a in maker robots. a robots of the and the we a we from In of key infusion bicycle initial pumps. we with leading and are in developer For win progress now our medical such received a consumer, accessory second with design orders with advanced sensors, with continued discussion achieved of project large maker global

in around third $XX.X continues Solutions lower markets. X. as other the Moving essentially ago markets, were be Weighing sales second Weighing was was quarter Slide second sales offset we quarter Overall due a to and the other and year other Industrial improvement were headwind. In markets. Book-to-bill Industrial the medical Orders seen slowing Transportation X.X%, precision decline construction million, mainly quarter. a XX.X% In and with for higher spending of bookings ag Sequentially, market, in while and to the to slow. Weighing, industrial even, and remain in Weighing the orders million lower world, the X.X. from the segment, in the from decline production a Solutions our in have of modest Transportation capital $XX.X

of key content expanding OEM area construction medical a to development for on focus As equipment. continues be with Weighing business precision Solutions, and in equipment customers our agriculture,

Moving X. to Slide

to X.X% Measurement due our markets, mainly, to sales sequential products steel. Book-to-bill $XX.X XX.X% year-over-year, reflecting sequentially. the declines second and third up AMS Turning quarter, DTS Measurement was revenue steel the in Systems and X.X% Transportation growth segment, decline offset in to ratio in from and but quarter markets other million, of higher orders The Systems was which down was of lower of X.XX, our bookings a $XX.X was Transportation. for in million. primarily This due

India, In due China growing soft, timing. fastest in the our business primarily While softened one project data for globally orders recorders we DTS in Transportation, our expanding markets for is of steel crash the which test to steel remained are market production.

we leverage and customer accretive. sales the to to thickness of transaction sheets offering metal provide systems, production. In with pleased Slide base. Nokra which as expect our to acquisition existing metal financed supplier brand market. announce steel it processing and an laser-based niche Nokra, We product measurement Moving expand and flatness systems, X. Nokra to a cash, laser-based the German for effective the during XXXX, We measuring alternative strong precision the we were be to channels in of expect grow revenues KELK, immediately strategically for

internal allocation quality our our high M&A Given opportunities strategy prioritize funding additional and add VPG that to the strong balance platform. sheet, businesses investments capital

Slide to X. Moving

Sustainability safer, Before sustainability turning productive, to highlight milestones significant on the and This future. I the Clancy, make additional over call our great long-term more creation a processes forward to by journey. We deliver marks to want in more and VPG take financial of our VPG's sustainable Report. now globally. it initial report customers' release more turn helping I in a for value to details. sharing smarter how products to world, Bill pride Bill, to milestone contributes We look to Bill? the will

William Clancy

of revenue in was to XX%, million. the reconciliation was gross from for higher general Ziv. for $XX.X due operational favorable margin volume, X.X%, XX.X% the mix. XX.X% reflecting or a sequentially, the Thanks in for and the unfavorable second quarter. Operational to improved margin gross impact and $XX,XXX, XX, declined as GAAP exchange On lower sequentially, tax $X.X third third the of declined This labor tables expenses to slide volume diluted quarter, quarter. By reflecting unrealized second revenue. revenues revenue, the Gross gross of recorded margin third Weighing XX.X%, our the and in XX.X% lower $XXX,XXX. selling, was second to primarily items quarter, quarter of and foreign of million, and compared million Solutions XX% restructuring as margin second compared we to basis, million, loss The the Referring or includes charge the X.X% a $XX.X slightly of product product quarter and per and deck, segment primarily were Measurement inefficiencies. loss lower XX.X% Slide of segment, the Sensors share lower the of primarily quarter than a of discrete of margin temporary $X.XX. due mix. Total Systems $XX.X in administrative of

or was which second the share quarter. Adjusted million, compared to quarter. earnings $X.X Purchase CapEx per revenue, Excluding in million. XX.X% second in as third the was or quarter compared adjusted XX.X% those EBITDA $X.XX, quarter the $X.XX third items, $XX.X the net to was of $X.X diluted for in million

have CapEx For of $XX million spent expect $XX compared the we purchase second the of few we which the be quarter. levels was free the range in cash for lower year is the in a which to million, significantly $X.X million fiscal to million, years. Adjusted flow to negative than past full the XXXX, $X.X

quarter free assets tax payments, insurance as a of and $XXX,XXX negative renewals. cash flow adjusted CapEx one-time proceeds activities million included of $X.X to less related cash global We million $X.X define sale of The million third of plus $X of the cash flow from operating from $XXX,XXX.

the stock. we $X.X million During repurchased of quarter,

in The reflecting income higher tax rate was the earned rate jurisdictions. operational third quarter tax XX%

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

ended XX, quarter Slide we cash total debt to of cash and Moving million and with $XX.X third of $XX.X million. equivalents, the

to provides This strategy. million $XX will operational we well for of needs and our that quarter, XXXX. liquidity, us August amended our third mature capital the support with allocation During as as credit our in facility ample restated

the improve. With remains We operating markets as on environment challenging, backlog, to million conditions market Regarding significant exchange are the questions. the $XX rates. In that, Thank our remain and business outlook, in the lines revenues initiatives, you. at net development for million incremental focused the fourth realize summary, revenues quarter, business given current soft. third for we we open of we cyclical constant our be as leverage quarter to $XX XXXX were positioned our let's range to in fiscal the expect fiscal believe

Operator

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

Griffin Boss

inefficiencies labor those you I I entered So in fourth that so segment, did completely quarter, the want that clear, the discussed you the correctly? were be just Sensors behind when you first, to hear

Ziv Shoshani

we in the a of Yes. significant Already fourth beginning seen we the in the booked that quarter third have have regarding improvement quarter. inefficiencies the

is So that correct, Griffin.

Griffin Boss

kind one-time as up least X just read to like up -- quarter, looking high, is the or free quarter? a looks years. there to higher DSOs this been there cash the into historically, anything And at certain what that slightly when relative relates than it of for to then, stepped I'm Is just they've past the a customers, flow over at it step

William Clancy

happened Griffin, No, speaking We it's one-time I insurance last mentioned sales one-time. We payments, million the like, as of I related this $X.X about have would the quarter. had, $X I some and program say, third a did to the renewals. that cash over in call, tax believe our And is flows, week say million one-time. on would we truly probably

cash be be our So quarter positive anticipation back in free the would to flow. fourth a

Griffin Boss

projects. new to switching just then And

Is maybe You second there. think size you hundred first last thousand mentioned call, customer I to we a prototype as robots, about got think for the mentioned -- can the you few that on stage. customer? humanoid a similar the that the dollars

of that second the Just customer? curious yes, size

Ziv Shoshani

Sure.

So with year. this for robots. At have been diligently are indicated in I've for as double already point still to forward-looking the significant the discussion calls, this the very level. sizable We time, revenues book customer, humanoid production, still expecting working earlier full we a is we projection to a are revenues and this and this on this XXXX is given from expecting pre-production in not

working are believe the in very we we Regarding But of also still stage. once a stages similar comes would the potential But are a the we design are in one. be earlier it that have already I size potential upside, customer, very, early design. initial to customer, with very production. a say, could We them. sizable they of second the the blown But to humanoid full

Griffin Boss

maybe last to nice M&A, me. one It's Nokra. just see And from the

business, into in You you integrated relatively a much growth expect business. to that those the of versus broader and would 'XX it's is small revenues mentioned, understand organic how you from KELK distribution grow channels. But expect being with coming I

Ziv Shoshani

Nokra product say, portfolio, leveraging customers, we channels, our Nokra which and would The KELK. existing an we would I We technology Nokra product KELK significantly for adjacent revenue, -- that broaden the on in increase XXXX. sales purchased believe can line with

India but their We doubling provided be XXXX. run roundabout, is that earlier construction would looking revenue the and steel at respect have would time steel main revenues is I I the point are business, in India us, mid-single have the digit would soft soft headwinds, I've say, business their the Nokra, I for to in say, as say But we All-in-all, investing, not we infrastructure. quite driver are second China this which for largest in business. rate, to and at indicated they investments. manufacturer could the some due significantly seen almost mainly in the

investments, the -- forward would would we we So Nokra I say steel. and acquisition, are optimistic all-in-all, regarding more that, be believe between the going we India

Operator

Franzreb is Our next question John from Sidoti. with

John Franzreb

quarter were consider the reported to changes versus viewed seeing expecting, you I guess, how you like it results? ago. we I'd when Ziv, and weren't X market today, it you mix that how are something end months any second view maybe you notable

Ziv Shoshani

absolutely. Sure,

So the first, in fourth the I out, few some had intake quarter was important the had the Measurement Systems. from projects bookings to large think that quarter in biggest John, order third it to state We in that be pushed third would their quarter. been the drop

we terms of environment, expecting are business if So to in bookings. million about in be the range to the back we speak QX mid-$XX

Now example dynamics, there that going or the the general in and I a to market, for the would more was different with in we industrial end had upside. initially, bit regarding optimism markets when customers, some potential semiconductor market, large discussions the little a say

point and to expect an On pattern. stock their this test down means seen see customers, a there the or coming place -- to from additional stock level. Which that order levels potential we and seen the yet their from demand. coming they larger some other have started stock not do we at order at have have is order Measurement replenish it's the But to hand, other Test replenishment upside not and gone we in

that, hand, have precision increased the the seen given optimism I to other like their and And soft. end especially they say agriculture also on would On economy in Europe have the order we still day, intake U.K., as of at more QX. the is fairly

a it's mixed So all-in-all environment.

feel We next level I quarters, regarding real on the longer expectation customers projection. say of would But little given more that fact their on would a have stronger to few and interest gives a the talking term, rates and to a the certain initial our cuts, the the expected us our the cuts in related are a many I confidence spending customers in business. the for bit optimistic capital recovery that be much, say, based

John Franzreb

backdrop, given the you're do of expense that that update you or consideration environment happy are to the footprint us think with that constituted? costs currently you that footprint Against reduce can pull Okay. and as potential on operating kind levers under you operational manufacturing current the could

Ziv Shoshani

as our given facility the So investments, high North automation regarding we have are in labor multimillion to from those not large realize But relocations that and issues. further beyond streamline in process our reduction those in The side consolidate low countries staff-based also the products is other capital expectation mean they our operation. projects we operations. initial in operations are I sales operational also expectation once other in to improvements, continue to streamline in is HR-related various detailed India in investments cannot America, the -- continuous cost operational India based into -- of functions. to more only the Europe I we that to activities And and and -- places. Naturally, already base, from projects expected continue decided information locations dollar share savings we are necessarily regarding on

John Franzreb

we talk you're smaller, looking purchase? addition, term the ones M&A, M&A when it highly about think Can or Understood. are of targets, looking customer in about you was And yours? little larger near guess is then profitable I that more regarding bit contributions? development that the at lastly you at Nokra revenue And of a a other

Ziv Shoshani

offer. we the customer. -- Nokra larger which didn't Nokra knew was we -- they not wider customer a them -- a not we to wanted with couldn't that fact to us which current We had portfolio, we a to had and discussions customers with did provide which when product base, our given have

have realize I fairly Nokra to grow would that that We channel, to we those or would Nokra fairly the easy within could as synergies believe and way. say, business fact portfolio. small revenues KELK that have technology quick given and identified it the a the leverage be to and company And sales fit as in provide that could a a technology, we

sensing other in Regarding customer would an realize fact, own other our larger those technology, a vary potential it adjacent are potential looking a add also we businesses at M&A, businesses if are like we businesses could from within customers. that But Nokra. portfolio, servicing current are at operational smaller or could base. to similar much synergies But customers looking our

Operator

Jeffrey with Capital is question [Operator from Cohen Mulholland Instructions] Management. Our next

Jeffrey Cohen

wondering, just that like I'm this some looks quarter, repurchased last stock right? you it is

William Clancy

did, Jeffrey. repurchased million we stock of quarter. $X.X during We Yes, third the

Jeffrey Cohen

curious I'm relative think you where your about own you to of do how of about, how selling is just, in M&A, just And think point, kind at terms that? stock this

Ziv Shoshani

From a -- sorry, ahead. go

William Clancy

Ziv. ahead, Go Go sorry. ahead,

Ziv Shoshani

investing support Sorry. support From and the growth. companies do enhance operate. we all why and in standpoint, we we have continue provide X balance is to the this But Naturally, is all capital stock doing to are buyback, allocation been considered. a how to stock us to allocation that's also M&A this and believe also that. invest our first buyback, are supporting means -- really is acquiring a capital that sheet Therefore, growth. could And strategies organic organic have also company we

Operator

Steve will Q&A I That hand our session. over ends back for closing remarks. now any to

Steve Cantor

Thank our you joining on the forward quarters. to day. growth strategy call today. great all coming VPG, look and for you a updating We our for in Have

Operator

very you That today's concludes joining. much, Thank for everyone call.

now disconnect lines. your may You

Vishay Precision (VPG) 5 Nov 242024 Q3 Earnings call transcript