Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vishay Precision Group Inc (VPG, Financial) reported a sequential increase in consolidated orders by 2.7%, resulting in a book-to-bill ratio of 1.04.
- The Sensors segment saw a 5.1% sequential revenue increase, driven by higher sales in the test and measurement market.
- The company received significant orders in the humanoid robotics sector, indicating progress in new market applications.
- VPG is on track to achieve targeted annual operational cost reductions of $5 million by year-end.
- The company maintains a strong balance sheet with increased cash position and ample liquidity to support business requirements and potential acquisitions.
Negative Points
- First-quarter revenue of $71.7 million declined modestly from the fourth quarter, impacted by $2 million of delayed shipments of KELK products.
- The Weighing Solutions segment experienced a 9.3% sequential decline in orders, resulting in a book-to-bill ratio of 0.99.
- Measurement Systems segment revenue declined 13.8% sequentially due to slow trends in the global steel market and shipment delays.
- The company reported a net loss of $942,000 or $0.07 per diluted share for the first quarter.
- The adjusted free cash flow decreased to $3.7 million from $4.6 million in the previous quarter.
Q & A Highlights
Q: How does the incoming order book for May compare to March, and what are customers saying about inventory trends?
A: Ziv Shoshani, CEO, noted a modest recovery in Q1, particularly in test and measurement from semiconductor customers and humanoid robots. The demand is primarily from replenishing current supply chains and new business development initiatives.
Q: Is it fair to assume that the revenue profile has troughed and will be on a gradual upslope?
A: William Clancy, CFO, confirmed that the revenue profile has likely hit a trough, and a modest recovery is expected going forward.
Q: Can you provide details on the $2 million KELK order delay and any cancellation risks?
A: Ziv Shoshani explained that the delay was due to operational issues, but the orders are expected to ship in the second half of the year. There is no cancellation risk as VPG supplies custom products, and cancellations have not been seen historically.
Q: What is the timing for realizing the $5 million cost savings, and where will these savings be reflected?
A: Ziv Shoshani stated that the $5 million savings are expected year-over-year in 2025 compared to 2024, primarily in cost of goods sold through material cost reduction, product relocation, and process improvements.
Q: Regarding the humanoid robots opportunity, can you provide more details on sensor usage and ASPs?
A: Ziv Shoshani mentioned that VPG is in the second development phase with customers, with orders over $1 million placed in Q1. The value per robot is between $500 to $1,200, with tens of sensors used in each robot.
Q: Can you elaborate on the CapEx ramp and its expected cadence throughout the year?
A: Ziv Shoshani indicated that most CapEx is related to sensors equipment, with larger spending expected in the second half of the year. The forecast remains at 10% to 12% of sales.
Q: What are your thoughts on share repurchases given the current cash position?
A: William Clancy explained that 96% of cash is held outside the US, and repatriating it would incur significant tax costs. Therefore, no shares were repurchased in the first quarter.
Q: What tax rate should be used for the full year?
A: William Clancy confirmed that the operational tax rate for the full year is expected to be 27%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
