Vishay Precision Group, Inc.

is to increase that the volume went up by 6.1% year over year. And also the fact that India, which is the second largest producer, has decided this is a nationwide program to invest in steel production in order to make India more as an industrial country. major, major steel investments in India in terms of adding more steel capacity, while also buying more sophisticated equipment at universities, research centers, in order to develop more, I would say, more modern, lighter and stronger alloys, which also impact our steel business in the measurement systems. That's regarding the steel production. The other trend, as I indicated, is the precision resistors, which is driven by semiconductor test equipment, as well as avionic military and space demand. And now we see also consumer electronics, coming back as they reach the point where they have to start to replenish the inventories. So those are, I would say, first order effect of the three key drivers for the higher demand going forward.

That's great. Thanks for the color there. I appreciate it. And then maybe one for Bill here. Can you give us some more color on the cadence for CapEx? Because Q1 came in much lighter than we modeled. I know you reiterated the 18 million to 20 million for the year. I'm just curious, the cadence there, is it picking up in the back half of the year, or should we just expect higher CapEx in 2Q through 4Q?

Yeah, Griffin, so you saw that the capital spending was $3.5 million. Yeah, we do expect to have more of the capital spending, I would say, in the back end of the second half of the year, but still within that $18 to $20 million target for the full year.

Okay. All right. Great. Thanks. And then, um, just another sort of housekeeping one. I saw you guys repurchased $2.7 million worth of stock in the quarter. Can you just remind us how many shares are left under that authorization?

Okay. So I just want to reiterate your point. I mean, um, the, the stock repurchase, uh, during the first quarter of 2023 was zero. We still have approximately 515,000 shares, you know, within that program. Um, to be warranted.

Got it. Sorry. I misread through 1Q23. I thought that said in 1Q23. Okay. All right. Great. I appreciate it. That's it for me. Thanks. Thank you.

Thank you. The next question comes from the line of Indy Sassanto of Gabelli Funds. You may proceed.

Good morning, Ziv, Bill, and Steve. Good morning. Good morning.

Good morning.

My first question is, I think this time management mentioned about advanced sensors for avionics, military, and space. May I know, would you be able to share more colors on what your advanced sensors product footprint in avionics, military, and space?

I'm sorry. The avionics, military, and space applications are more relevant for precision resistors the consumer electronics and the robotics applications for medical in the robotics for industrial and medical applications are more relevant for advanced sensors we are not selling into the avionic military and space advanced sensors this was maybe a misunderstanding on on my part but oh but only precision resistors we are selling to that end market.

Okay, I saw that on the press release. Okay, maybe just the wording. Yeah, and then second one is, Zip, you mentioned about price increase that will be coming further in 2022. And then you mentioned about the last year 9 million from higher selling prices. In terms of like percentage of ASP, Do you have any estimate whether the price increase will be like low single digit or like I think any color on that will be helpful?

If I can recall, the $9 million last year was round about low to mid single digit. And the expectation probably is to do the same order of magnitude this year. From an overall company perspective in respect to revenues, naturally.

Okay. And in terms of the timing of the price increase, can you apply price increase on existing backlog or does price increase apply to new orders?

Naturally, given our backlog, any price increase, once we... Once we apply a price increase, you know, given we discussed with our customers, the price increase cannot be applied on existing backlog only for new orders. So we are looking around about one quarter delay given our backlog. So when I speak about future price increase, I speak about already price increase that has been applied to prior orders while we should expect to see them flowing into the P&L in the coming quarters as we saw already in Q1.

That's helpful. Last question for Bill. Bill, you mentioned that tax rate will be 23% to 25% for this year estimate. That is lower than the past few years. May I inquire the main drivers for the lower tax rate And I'm wondering, like, what is the baseline for tax rate going forward?

Yeah, so the tax rate is always based upon the mix of the income where it's earned in the various jurisdictions. So, yeah, we should be in that range of, like, 23 to 24 percent. And that's where, you know, We have been over the last few years constantly looking at ways to lower our tax rate as much as possible, but given where the mix of income is being earned, that's where the tax rate is coming at today. Thank you, Bill. Thank you, Ziv.

Thank you. As a reminder, it is star followed by one on your telephone keypad to ask a question. The next question is a follow-up from John Fransrib of Citity Company. You may proceed.

Yeah, I'm just curious about your thoughts about debt repayment versus share repurchase going forward.

Well, John, we looked at, you know, from a cash generation, we looked at, you know, all of our capital allocation strategies as to what is the best way of mechanism utilizing to pay down the debt. But we also are earning significant interest income with our cash. And then also more importantly, the strategy of the cash repurchases given what the board has set up for us.

Right. And your thoughts in light of that in a higher interest rate environment, why wouldn't more cash be used to reduce debt, I guess, is what I'm wondering.

Yeah, I mean, John, our goal would be to reduce the debt, you know, given, like, unfortunately, the majority of the cash is generated outside of the U.S. But having said that, our goal is to focus on driving to paying down the debt to lower the interest expense.

Maybe I just don't appreciate, of the 93 million in cash, how much of that is outside of the U.S.?

Approximately 94% is outside the U.S. Okay.

That helps a lot, though. Okay. All right. That's it. I was just curious about that. Thank you, guys. Thanks for taking my follow-up.

Thank you. The next question is a question from Bill DeZellum of Tietam Capital. Please proceed.

Thank you. That's Tietam Capital. And your book, Bill, is directionally beginning to improve. When are you anticipating that the overall company book to bill will be above one? And with that in mind, as you look out over the various industries that you serve, where do you anticipate the most strength over the remainder of the year? And what are the dynamics that you're seeing that will lead to that?

I would say regarding the bookings, as you indicated, the bookings for Q1 has increased by $9.6 million in respect to Q4. Given the solid demand of orders with an upside expectation, we do expect also to see an improved bookings. in the second quarter in respect to the first quarter. At the same time, we also expect to continue and deliver at the similar revenues as the first quarter. So it's hard to tell when those two points are going to meet, but no doubt that the trend, we are on the positive trend as we see and improve the business environment. Regarding the deliveries, currently we are shipping based on customer schedule, but I would say we are still optimistic. If nothing changes from an overall perspective, we are, I would say, quite at this point, given our visibility, we are optimistic regarding also the second half of the year. I'm sorry, what was your other, oh, regarding which end markets at this point are doing quite well, and at least based on what we know today are expected to continue to do well. So as I mentioned, our test and measurement business for semiconductor equipment, some of the other emerging markets for precision resistors in respect to data center fiber optics equipment. We still continue to see strong demand. Consumer electronics business on the stringages on the advanced sensors is expected to improve the demand. Avionics, military, and space business still continues very strong. On the measurement systems, we spoke already about the steel business and the driving demand behind that. And regarding waste weighing solutions, given the VLITE and some of the developments that I've talked during the call, we should also expect to see some, I would say, a potential upside regarding the demand in the industrial market.

That's helpful. You've made a comment that I just want to make sure I heard correctly. I think you said reference improving business conditions. Did we hear that correctly? And if so, would you tie that in relative to all of the macroeconomic talk with the Fed trying to slow the U.S. economy, etc. It sounds like it's a bit in contrast to that.

I would say that our insight regarding the improved business environment is given our visibility and the discussions with customers. At this point in time, once we are looking at few, I would say, few vectors. One vector is the depletion of our inventories at our customers. As we see, customers continue to deplete the inventory, and they are reaching a point where they will have to start to replenish that. So I assume that's a good sign. Given the macro... Even outside the U.S. and like, for example, the development in India, we believe that this is expected to continue through the rest of the year. Naturally, you know, nobody has a crystal ball, but at least based on the indications today, we are more optimistic than pessimistic in respect to the coming quarters.

Great. Thank you. And then lastly, relative to advanced sensors, would you share with us what the pipeline of perspective opportunities looks like there? That's a business that had been growing very rapidly, and we just haven't talked very specifically about it on this call.

So advanced sensors did grow very rapidly over the last few years. We are selling to various markets, but the big prospects are still in consumer electronics. We are looking at potential new designs, at existing and new customers. We are looking at robotics applications, robotics for industrial and medical applications. Naturally, the design cycle for those products for our customers, for our OEM customers is around two to two and a half years. But we have already initiated many, many, we have planted many, many designs at various customers. And the expectation is that we are going to see in the coming, I would say in the coming future, many of those designs coming to fruition and much more volume coming getting to advanced sensors at this point in time from a macro standpoint the biggest impact for advanced sensors was the consumer electronics supply and demand fluctuation or i would say the inventories which are in the queue but this is more managing current designs rather than looking at future designs which are in the funnel which should come to fruition to to future revenues but but it's still one of our most promising product lines thank you for the time thank you

There are currently no additional questions registered at this time, so I will pass the conference back over to Steve Kancer for any closing remarks.

Thank you, Daniel. Before we conclude, I want to let everyone know that we will be participating in a couple of conferences coming up, the B. Reilly conference later in May and also the Sidoti Small Cap Conference in June. I'm happy to share any additional information. You can reach out to me directly. Thank you all again for joining the call and have a great day.

And with that, we will conclude today's call. Thank you for participating. You may now disconnect your lines.