Vishay Precision Group, Inc.

Hello, everyone, and welcome to the BPG's 2025 First Quarter Earnings Conference Call. My name is Ezra, and I will be your coordinator today. If you would like to ask a question, please press star, followed by one on your telephone keypad. If you change your mind, please press star, followed by two. I will now hand you over to your host, Steve Cantor, Senior Director of Investor Relations, to begin. Steve, please go ahead.

Thank you, Ezra. Good morning, everyone. Welcome to VPG's 2025 first quarter earnings conference call. Our Q1 press release and slides have been posted on our website, vpgsensors.com. An audio recording of today's call will be available on the internet for a limited time and can also be accessed on the VPG website. Today's remarks are governed by the safe harbor provisions of the 1995 Private Securities Litigation Reform Act. Our actual results may vary from forward-looking statements. For a discussion of the risks associated with BPG's operations, we encourage you to refer to our SEC filings, especially the Form 10-K for the year ended December 31, 2024, and our other recent SEC filings. On the call today are Zeb Shoshani, CEO and President, and Bill Clancy, CFO. I'll now turn the call to Zeb for some prepared remarks. Please refer to slide three of the quarterly presentation. Steve?

Thank you, Steve. I will begin with some commentary on our results and trends for the first quarter. Bill will provide financial details about the quarter and our outlook for the second quarter of 2025. Moving to slide three. Beginning with revenue, first quarter revenue of 71.7 million declined modestly from the fourth quarter and was impacted by approximately 2 million of delayed shipments of our calc products. Our consolidated orders grew 2.7% sequentially and resulted in a book to bill of 1.04. This marked our second quarter of sequential order growth with bookings increased in both the sensors and measurement system segments. Despite muted revenue level, we generated a solid cash flow in the quarter. Cash from operation was $5.3 million and adjusted free cash flow was $3.7 million. Before discussing our performance by segment, I want to comment on tariff development as they relate to VTG. Given our manufacturing footprint and supply chains, we believe VPG is positioned to navigate the changing tariffs. Based on current tariffs and expected volume, we anticipate the impact to our input costs to be minor based on our supply chains. With regard to the U.S. 10% tariffs, we expect to pass the majority of the tariffs impacted on to our customers. I will now review our business segment performance. Moving to slide four. Beginning with our sensor segment, first quarter revenue increased 5.1% sequentially, driven primarily higher sales of stringages and precision resistors in the test and measurement market. Sensors booking rose 6.7% sequentially, reaching the highest level in five quarters and resulting in a book to build of 1.06. This growth reflected higher demand in the test and measurement applications, particularly from semiconductor equipment makers. In addition, our initiatives in humanoid robot applications continue to progress well, we received an additional order of more than 1 million from our initial humanoid robotics customers as they continue to ramp up the development of their robots. We also received an initial prototype order from the second potential robotic customer. Orders for consumer applications in our other markets grew sequentially, although demand related to avionic military and space for sensors was soft due to the timing of defense and space projects in the U.S. and Europe. Moving to slide five, turning to our weighing solution segment, first quarter sales increased 2.7% from the fourth quarter. The increase was driven primarily by higher revenue in the transportation market for specialized load cells for heavy-use trucks. Following strong bookings in Q4, weighing solutions order declined 9.3% sequentially to 26.2 million, resulting in a book-to-bill of 0.99. Higher orders in the transportation market for trucks applications were offset by weaker orders for four sensors OEM business segments related to precision agriculture, construction, and medical applications. Moving to slide six. Turning to our measurement system segment, revenue in the first quarter of 18.2 million declined 13.8% sequentially. The decline reflected continued slow trends in the global steel market, in part due to softness in the automotive sector. as well as a $2 million shipment delays of KELC products. We expect to ship these products in the second half of this year. In contrast, first quarter measurement system orders of 19.5 million increased 17.3% sequentially and resulted in a book to bill of 1.07. Bookings reflected higher demand primarily in the transportation for auto safety testing of note we received an order from the university of alabama for a prototype of dsi's uhtc system to test non-conductive materials such as ceramics this system will be used as part of a beta test at the university of alabama we announced in february moving to slide seven As I indicated, the positive order patterns for VPG in the fourth quarter of 2024 continue into the first quarter of 2025. While the short-term global economic outlook for 2025 has become more uncertain, we continue to be focused on driving the long-term potential for VPG and we are optimistic about the potential. In February, I outlined three top strategic priorities for 2025. First, driving business development with new customers and applications. Second, continuing to reduce costs and increase operational efficiencies. And third, pursuing high-quality acquisitions to build scale and expand our cash flow. We are encouraged by the progress of our business development initiatives in the first quarter as orders of approximately 8 million were broad-based and were on plan. To drive further growth, we plan to refine our internal processes and capabilities related to sales systems, marketing expertise, and digital marketing. In parallel, we have initiated steps to optimize our sales teams and processes. On the cost side, we continue to focus on long-term strategic plans, which include product relocations and efficiency improvements to reduce our costs. We are on track to achieve our targeted annual operational cost reductions of 5 million by year end. Finally, Regarding M&A, our strong balance sheet provide us with the means to acquire businesses with recognized brands and growth paths. We remain disciplined and patient in our search for the right opportunity. I will now turn it over to Bill Clancy. Bill?