Vishay Precision Group, Inc. Q1 FY2025 earnings call

• Revenue in Q1 was $71.7 million, down modestly from Q4 with $2 million delayed KELK shipments. Consolidated orders grew 2.7% sequentially with a book-to-bill of 1.04. Generated solid cash flow: cash from operations $5.3 million, adjusted free cash flow $3.7 million. - Tariffs: VPG positioned to navigate changing tariffs, expect to pass majority of US 10% tariffs impact to customers. - Strategic priorities for 2025: driving business development, reducing costs/improving efficiencies, pursuing high-quality acquisitions. - Financial details: Adjusted gross margin 38.3% in Q1, adjusted operating margin 1.1% (excluding start-up/restructuring costs), adjusted EBITDA $5.1 million, CapEx $1.5 million in Q1, forecasting $10M - $12M for 2025 CapEx.

Revenue for the first quarter was $71.7 million. Sensors segment: Q1 revenue increased 5.1% sequentially, driven by higher sales of strain gages and precision resistors in test and measurement; bookings rose 6.7% sequentially with a book-to-bill of 1.06. Weighing Solutions segment: Q1 sales increased 2.7% from the fourth quarter, but orders declined 9.3% sequentially to $26.2 million with a book-to-bill of 0.99. Measurement Systems segment: Q1 revenue declined 13.8% sequentially due to steel market softness and $2 million shipment delays of KELK products, but orders increased 17.3% sequentially with a book-to-bill of 1.07.

• For Q2 2025, at constant first fiscal quarter 2025 exchange rates, net revenues expected to be in the range of $70 million to $76 million. - Bookings of $74.4 million grew sequentially for the second straight quarter with a book-to-bill ratio of 1.04. - Forecasted CapEx for 2025 is $10 million to $12 million, with most spending expected in the second half of the year.

• Tariff impacts on input costs. - Manufacturing and supply chain issues affecting shipments (e.g., KELK delays). - Global economic uncertainty impacting demand in certain segments like avionic military and space for sensors.

Q: How does May compare to March in terms of order intake and customers' inventory trends and go-ahead basis?

A: Ziv Shoshani said there's a modest recovery in Q1, mainly in test and measurement from semiconductor customers, humanoid robots, and transportation markets; demand is from replenishing supply chains and business development initiatives.

Q: Can you give color on the $2 million delay in KELK orders and cancellation risk?

A: Ziv Shoshani said there were operational issues with KELK, which have been resolved, and no cancellations seen from customers as they supply custom products.

Q: Timing of realizing $5 million cost savings and mix of COGS vs SG&A?

A: Ziv Shoshani said most savings are in cost of goods sold, resulting from material cost reduction, product relocation, and process improvements.

Q: Thoughts on share repurchases given cash position?

A: Ziv Shoshani said cash repatriation would involve significant tax, so no share repurchases in Q1.

Q: Full year tax rate?

A: Bill Clancy said the operational tax rate for the full year of 2025 is approximately 27%