Vishay Precision ((VPG)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Vishay Precision Group (VPG) revealed a mixed sentiment among company executives. While there were positive developments, such as sequential order growth and advancements in the Sensors segment and humanoid robotics, challenges were also evident. Revenue faced headwinds due to shipment delays and declines in other segments. The company remains committed to cost reductions and boasts a strong balance sheet, yet the uncertain economic environment poses ongoing concerns.
Sequential Order Growth
Consolidated orders for VPG grew by 2.7% sequentially, achieving a book-to-bill ratio of 1.04. This marks the second consecutive quarter of sequential order growth, with notable increases in bookings within the Sensors and Measurement Systems segments.
Sensors Segment Performance
The Sensors segment reported a 5.1% sequential revenue increase, driven by higher sales of strain gages and precision resistors in the test and measurement market. Bookings in this segment rose by 6.7%, reaching the highest level in five quarters, with a book-to-bill ratio of 1.06.
Positive Development in Humanoid Robotics
VPG made strides in the humanoid robotics sector, securing an additional order exceeding $1 million from initial customers and a prototype order from a second potential customer, signaling progress in this innovative area.
Improved Operational Cost Management
The company is on track to meet its targeted annual operational cost reductions of $5 million by year-end, with most savings expected in the cost of goods sold, enhancing overall efficiency.
Strong Balance Sheet
VPG’s cash position increased by $4.6 million to $83.9 million in the first quarter, with total outstanding long-term debt at $31.5 million. This robust financial standing provides ample liquidity to support business needs and potential mergers and acquisitions.
Revenue Decline
First-quarter revenue stood at $71.7 million, reflecting a modest decline from the previous quarter, primarily due to approximately $2 million in delayed shipments of KELK products.
Measurement Systems Revenue Decline
The Measurement Systems segment experienced a 13.8% sequential revenue decline, attributed to ongoing slow trends in the global steel market and shipment delays of KELK products.
Net Loss Reported
VPG reported a net loss of $942,000 or $0.07 per diluted share for the quarter. However, adjusted net earnings were $468,000 or $0.04 per diluted share, reflecting some underlying financial stability.
Weighing Solutions Order Decline
Orders in the Weighing Solutions segment declined by 9.3% sequentially to $26.2 million, resulting in a book-to-bill ratio of 0.99, with weaker orders noted in the Force Sensors OEM business segments.
Forward-Looking Guidance
Looking ahead, VPG provided guidance for the second quarter, forecasting revenues between $70 million and $76 million. The company expects the $2 million delay in KELK product shipments to resolve in the second half of the year. VPG aims to achieve $5 million in annual operational cost reductions by year-end and has improved its adjusted operating margin to 1.1%. The operational tax rate is projected to be approximately 27% for the full year.
In summary, the earnings call for Vishay Precision Group highlighted a mixed outlook, with positive developments in order growth and certain segments, offset by revenue challenges and shipment delays. The company remains focused on cost management and maintaining a strong balance sheet, while navigating an uncertain economic landscape.