Q1 2022 Vishay Precision Group Inc Earnings Call
Quarter earnings Conference call, our Q1 press release and accompanying slides have been posted on our web site.
First quarter 2022 earnings call.
Paul will be available on the Internet for a limited time.
Paul.
And can also be accessed on the V. P. G website.
Paul with an opportunity for questions and answers.
Are governed by the Safe Harbor provisions of the 1995 private Securities Litigation Reform Act.
The conference over to our host.
Act vary from forward looking.
Director of Investor Relations.
That's associated with V P G's operation.
Thank you Hannah and good morning, everyone.
<unk> SEC filings.
Cpg's 2022 first quarter earnings conference call.
<unk> and 2021.
Paul its release and accompanying slides have been posted on our website and an audio recording of today's call will be available on the internet for a limited time.
<unk> CFO .
<unk> also be accessed on the V. P G website.
So every marks please refer to slide three of the quarterly presentation.
Corporate visions of the 1995 private Securities Litigation Reform Act.
I will begin.
Act Celts may vary from forward looking statements.
Again dated financial reason.
So the risks associated with <unk> operations, we encourage you to refer to our SEC filings.
I was out.
<unk> is a Form 10-K for the year ended December 31, 2021, and our other recent SEC filings.
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<unk> or ziv, <unk>, CEO , and President and Bill Clancy CFO .
The first one.
As we navigate that well.
So for some prepared remarks.
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Please refer to slide three of the quarterly presentation Ziv.
And before.
Oh, well writing additional Carlo.
Thank you Steve.
Hello on the Q1 results.
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We want to be viewed.
With.
Long.
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Steve we laid out in February .
For the first quarter.
We believe we.
Water, who provide financial.
We like some growth.
And our outlook for the.
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Second moving to slide three.
I think that we all focus.
Please.
Please.
Nick lending a ray of.
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First of all.
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And backlog.
Our deep engineering and application.
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So the supply chain.
Our customers to make the product.
And it needs around the world.
All of that small cell and mobile.
World.
Writing additional Carlo.
That precision measurement sensing solutions.
Hello, I want to review the.
And.
Loan strategy.
Ending two new market.
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He's out in February .
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We believe.
Level of.
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But.
We like our.
Our long term growth and profitability.
Moving to slide four.
Precision measurement sensing.
For the first quarter.
Acknowledge focus.
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Focus on an expanding array.
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Spot orders.
For the first quarter.
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We improved our adjusted gross margin.
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On slide five.
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Our sensor segment.
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All three businesses segments.
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The exit capacity we've put in.
Moving to slide five.
The increase in advanced sensors.
Sensors.
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From a year ago.
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Driven by a higher volume.
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Selling prices and favorable product.
Liberty's strong booking.
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Moving to slide seven.
Systems for Hot strip mill.
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Cloud facilities are currently open.
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Phil.
Paul.
Mainly lower revenue.
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Venue unfavorable.
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For the portfolio in general.
Both turning.
During the.
Great.
Phil.
We will now.
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Turn it over to Bill Clinton.
Cummins of Covid.
Plans for additional financing.
We'd sell it is currently open.
And operating normally.
Thanks.
And finally.
Please turn to slide eight in our reconciliation tables or the slide deck.
Lee.
In the first quarter of 2022.
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We achieved revenues of $87 7 million.
Thank you.
$35 3 million.
Sure.
42% of sale.
Operating income of $8 3 million.
The balance.
5% of revenue.
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Diluted net earnings per share of <unk> 46 cents.
And therefore the.
On an adjusted basis.
Okay.
Gross profit was $35 9 million or 41.0% of sale.
Bill Clancy.
<unk> income was $9 2 million.
Nancy.
Or 10, 5% of sales and diluted net earnings per share was 49.
Turning to slide eight and the reconciliation tables in the slide deck.
<unk> decreased two 6% compared to 90 million.
Hey revenues of $87 7 million.
And were $24 to pursue.
$3 million or 42% of sale.
Operating income of $8 3 million.
<unk> 2022.
Percent of revenues.
To impact our revenues by one five.
Is that.
A year ago.
And adjusted basis.
Out impacted revenues by 500000.
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As compared to the fourth quarter of 2021.
Operating income was $9 2 million.
Quarter was 42%.
So.
That compared to 38, 7% in the fourth quarter.
Nine.
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Net revenues decreased two 6% compared to 90 million.
Mrs Boss and manufacturing inefficiencies.
Ian.
Fees related to new higher learning curve.
Above the first quarter a year ago.
Her basis first quarter gross margin was 41 per se.
0.2.
Got 43% in the fourth quarter of 2021.
Bye.
And exclude 4000 of acquisition purchase accounting adjustments.
500000.
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Uh huh.
At 138000 of COVID-19 related costs.
Percent compared to 38, 7% in the fourth quarter.
Cost for the first quarter of 2022.
At higher selling prices.
Adjusted operating.
Mrs.
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Okay.
With the adjustments I just mentioned.
Hi.
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General and administrative expenses for the first quarter of 2022.
Third quarter gross margin was 41%.
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In the fourth quarter of 2021.
2 million.
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Our 2021.
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$1 million.
There's 38000 of COVID-19 related cost.
He has acquisition.
Our operating margin was nine 5%.
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Our first quarter adjusted operating margin.
For the first quarter of 2022 or $6 6 million.
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<unk> per diluted share compared to $4 2 million or 31 cents per diluted share.
Our $26 7 million.
Bob.
But 34% of revenues.
Uh huh.
Compared to $22 2 million.
14, 4% of revenue.
Revenues.
But at $9 5 million.
13, 5%.
SG&A of $4 $5 million.
In the first quarter of 2022 was $4 3 million.
Acquisition.
Alrighty of which reflect equipment purchases.
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And related infrastructure.
Is the cost.
Sure for fiscal 2022 we expect capex to be in the range of 30 million.
Two were $6 6 million or <unk> 49 per diluted share.
Yeah.
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Due to Covid related matters.
<unk> 21.
Approximately half of our purchases are infrastructure related.
6 million.
Additional capacity expands.
But gross initiatives for precision resistors.
The 13, 5% a year ago.
And the Wang solution set.
Out in the first quarter of 2022 was $4 3 million.
<unk> where equipment for expansion.
Black equipment purchases.
Yeah.
And related infrastructure.
For fiscal 2022, we expect capex to be in the range of 30 million.
720000.
History.
The first quarter of 2021.
History $10 million of that Capex.
One defined adjusted free cash flow.
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As cash from operating activities less capital expenditures.
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Yours, but any sale of fixed assets.
Half of our purchases are infrastructure related.
The first quarter.
Additional capacity expansions.
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Susan resistors.
As well as performance linked incentive compensation.
And the Wang solution set.
In fact deposit free cash flow.
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The GAAP tax rate in the first quarter was 27% as compared to $26 three person.
And negative $4 6 million.
Thanks.
Compared to a negative 120000.
Tax rate.
In the first quarter of 2021.
Right, 3% for the full year of 2022.
Oh.
<unk> cash from operating activities less capital expenditures.
We ended the first quarter with $78 2 million of cash and cash equivalents.
In the first quarter.
A list of 67.
<unk> from our high backlog.
I have a strong balance.
Well I performance linked incentive.
She acquirements and to fund additional M&A opportunities.
Patients in the second quarter of 2022.
<unk> outlook for the second fiscal quarter.
So first quarter was 27%.
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As compared to 26, 3%.
Playing to 96 million.
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At constant first fiscal quarter of 2022 exchange rates.
21% to 23%.
And in summer.
Our 2022.
Murray another strong quarter of results.
Moving to slide nine.
<unk> record orders contributed to our record backlog, which underscores the strength of our business model and strategy.
<unk> debt.
And finally.
At 7 million.
We need to execute on our long term initiatives to accelerate growth of sales and profit.
Requirements and to fund additional M&A opportunities.
<unk>. Thank you.
Moving to the outlook for the second fiscal quarter.
If you would like to ask a question.
<unk> sequentially.
Followed by one on your telephone keypad.
<unk> plans to 96 million.
I missed that question.
First fiscal quarter of 2022 exchange.
And can I ask a question press star one.
Great summary.
As a reminder, if you are using a speaker phone.
Great.
Please remember to pick up your handset before asking your question.
Eclogue.
Pause here briefly.
<unk> strength of our business model and strategy.
And finally, we continue to execute on our long term initiatives to accelerate growth of sales.
<unk> company.
Yes.
Please proceed.
With that let's open the line for questions.
So you can build thanks for taking the questions.
I'd like to start with the revenue profile in the quarter could you talk a little bit about what.
Followed by one on your telephone keypad.
Which were the biggest drivers on a year over year basis.
<unk>.
Overall for the quarter.
Hello by two again to ask a question press Star one.
Uh huh.
As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking a question.
Yes.
Well pause here briefly.
The increase came from.
The largest increase.
My first question is from the line of John <unk>.
Tristan measurement.
Sidoti and company.
Measurement.
Please proceed.
Market then.
Followed by year.
Bill Thanks for taking the question.
You cited by advanced sensors also.
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<unk> revenue profile in the quarter could you talk a little bit about what's.
Also in fact.
And markets.
Fact to say.
That's where the biggest drivers on a year over year basis.
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Overall for the quarter.
It was a year ago, we have seen.
Injuries increase.
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Sure.
Yeah.
I mean, all our.
Oh lovely bolting.
On a on a year over year.
Segment Okay.
This is Walter.
As we pivot and look at the June quarter.
Two please.
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Game.
Any new markets that you expect to.
Uh huh.
To improve or do you expect these existing work.
So.
Because of this continued to be the drivers in June versus March.
Sandeep.
Followed by a.
So at this point in time.
We.
Yeah.
Advanced sensors.
I would say a solely.
Also.
Install.
So when your goods.
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You mean.
We may.
Okay.
Reporting segments.
We may see some inventory.
Okay.
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And as we pivot and look at the June <unk>.
Okay are there any new markets that you expect it to.
Going forward it would be.
Or do you expect these existing work.
Yeah.
It continued to be the drivers in June versus March.
The market there was a slowdown.
I would say at this point in time.
Which one.
We see a very I would say.
A solid.
But all in all.
Sale win.
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In English.
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NGC men.
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And how much.
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The ability to either gross or op income.
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On the.
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Quarterly.
Okay.
Yeah.
Yeah.
In regard to transportation.
Kevin.
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One point of.
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I would say.
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Jean.
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Yeah.
How much.
Shifting to the advanced sensor business.
Sure.
Ms.
Right.
Many of the 50 million.
For the gross op income line.
Bill mentioned that Capex is going to up size it would be this year.
Yeah.
But I don't think I heard him say that any of its being targeted towards the advanced sensor line.
<unk>.
Yeah.
Ample capacity and the advanced sensor business right now.
You also you asked last quarter, we had some inefficiency costs of $3 million.
Impact was inefficiency.
Right.
On the advanced sensor in the quarter.
Yes, John so as we indicated.
Good.
The distill the $900000.
Shifting to the advanced sensor business.
So fourth quarter for advanced.
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Sensors.
Well run rate.
Until then.
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The 400.
You bet.
I don't think I heard him say that any of its being targeted.
Okay.
Did the advanced sensor line.
Larry.
Hi, how are you.
1000.
Ample capacity.
Business right now.
So we see.
Last quarter, we had some inefficiency costs of $3 million.
Defending.
As Jordan impact was inefficiency.
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The advanced sensor in the quarter.
Food assessment is expected.
Yes, John so.
Got it.
Vindicated.
This was $900000.
This.
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So.
Optima.
So.
Am I supposed to thrive.
Infill for advanced sensors.
Sure.
In addition.
Two.
The learning curve in.
Now the other part which.
The new facility has dropped.
Is it mostly related to the sensor.
Up to one <unk>.
Or is the central.
Okay.
Two of <unk>.
Mentation.
Sub <unk>.
Or is this.
100000.
Those events.
Coming to them.
And so the investment.
No.
<unk>.
Topical.
So we did decline.
Men each week.
<unk>.
Yeah.
I mean.
And Rick.
Okay.
Yeah.
Excellent.
<unk>.
As Bill indicated.
Phil.
FIFA.
Right.
Those fees.
50% of the expected inverse.
Got.
<unk>.
And one last question I'll get back into queue.
Okay.
Can you just talk a bit about your exposure to China.
First to optimize.
The shutdowns may or may not be having on.
In addition.
<unk>.
Sure absolutely.
<unk>.
Nine.
As we indicated.
Now relate.
In the.
<unk> really.
Got.
<unk>.
To the sense.
Sure.
<unk> segment.
Okay.
And in this.
The sourcing.
Yeah.
It's a combination.
And also in China.
Or.
Is it.
<unk>.
You mean.
In advance.
The EBIT.
Yeah.
<unk>.
Further investment.
We had facilities, we have shut down two facility.
Consolidated.
Men.
David.
Sure.
So you are left with one for.
To make it.
<unk>.
Italy smaller facility.
Facility in June China, just full force sensors.
Yeah.
Got it got.
Traditional cup.
Ill get back into queue.
Possibly.
Can you just talk a bit about your exposure to China.
We have.
The impact of the shutdowns may or may not be having on.
No what happened.
Yes.
In.
Yeah.
Well.
So Luke.
We'll see.
So as we.
See we have.
No.
Indeed.
The dispatch.
It was I.
But.
I mean, let me.
<unk>.
Take care.
Sure.
Operational.
Secondly limited exposure.
<unk> in China is extremely.
Okay.
Easily.
I'll get back in queue. Thanks for taking my questions.
Limit the facilities, we have shut down two facilities.
So for instance.
And we are left with one facility.
Again to ask a question press star one.
Silicon Gene, China, just full force sensors.
So our operational.
There are no additional questions waiting at this time.
As it did in Chile.
<unk>.
I covered it Steve Cantor for closing.
Anna.
Very recent locked down it did not happen.
Before closing the call I want to note that we will be participating in the B Riley conference.
Captain.
<unk>.
Dean.
And the Stifel Conference in June .
<unk> limited.
With that thank you for joining our call. This morning.
Alright ill get back in queue. Thanks for taking my questions.
Yeah.
And that concludes today's call. Thank you for your participation you may now disconnect your lines.
Hi, Ryan.
<unk>.
Uh huh.
Uh huh.
Right.
Okay.
Yes.
[music].
Yes.
Okay.
That concludes today's call. Thank you for your participation you may now disconnect your lines.
Hum.
Okay.
[music].
Okay.
Yes.