Vishay Precision Group, Inc.

Welcome everyone. The VPG third quarter 2025 earnings call will begin shortly. In the meantime, if you would like to pre-register 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. Thank you. Hello everyone, and thank you for joining the VPG third quarter 2025 earnings call. My name is Claire and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to Steve Cantor from VPG to begin. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to VPG's third quarter 2025 earnings conference call. Our Q3 press release and accompanying slides have been posted on our website at 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 discussion of the risks associated with VPG'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 Ziv Shoshani, CEO and President, and Bill Clancy, CFO. I'll now turn the call to Ziv for some prepared remarks. Please refer to slide three of the quarterly presentation.

Ziv. Thank you, Steve. I will begin with some commentary on our results and trends for the third quarter. Bill will then provide financial details about the quarter and our outlook for the fourth quarter of 2025. Moving to slide three, beginning with revenue, third quarter revenue of 79.7 million grew 6.1% from the second quarter and was up 5.3% from the prior year. Total bookings of 79.7 million were at similar levels with the second quarter, reflecting mixed but stable global trends. Strong double-digit growth in censors offset lower orders for weighing solutions and measurement systems sequentially. Our consolidated book-to-bill was 1.0, marking the fourth sequential quarter with a book-to-bills of 1.0 or higher. Our sensors and measurement system segment reported a book-to-bills of 1.07 and 1.04, respectively. Our adjusted gross margin of 40.5%, reflected improved in the sensor segment and another record quarter for weighing solution segment. However, consolidated gross margin included a significant impact from unfavorable effects and product mix, which offset the effect of the higher sequential revenue. we achieved an adjusted operating margin of 6.2%, which improved compared to both Q2 and the prior year. We continue to make progress with our long-term business development and cost optimization initiatives. This translated into a solid cash generation with $9.2 million in adjusted EBITDA and $7.4 million in adjusted free cash flow. we successfully mitigated the impact of tariff costs to a price adjustment to our customers and do not believe tariffs impacted demand. Moving to slide four. Beginning with our sensor segment, third quarter revenue increased 19.1% sequentially, reflecting higher sales of precision resistors in the test and measurement and AMS and higher sales of strangages in the general industrial market. Sensor bookings rose 13.5% sequentially, reaching the highest level in 12 quarters and resulted in a book-to-bill of 1.07. The bookings growth was driven by demand from precision resistors for semiconductor tests and AMS applications. We expect this momentum to continue in the fourth quarter as some distributors replenish inventories for AMS applications. Regarding humanoid robots, we are optimistic about the long-term potential for VPG in the emerging markets. While humanoid robots market is still in its infancy and initial real-world deployment of these robots is expected in 2026, we believe we are in a good position in high-performance niches for our sensor technology. We received 1.8 million in orders from July to October related to our two current humanoid developer customers. This included prototype orders of approximately 600,000 from our second humanoid customer in October. This brings the total orders year-to-date to approximately 3.6 million related to humanoid projects. We are also in the initial discussions with additional developers of humanoid. Moving to slide five, moving to our weighing solution segment. Third quarter sales decreased 6.4% from the second quarter. The decline reflected lower sales in the transportation market as well as in the construction and precision ag equipment markets. Weighing solution orders of 24.5 million were about 10% lower compared to the second quarter, resulting in a book-to-bill of 0.89. Order trends for weighing solutions softened but were at stable levels. Moving to slide six, turning to our measurement system segment, Revenue in the third quarter of 20.6 million increased 7.3% sequentially. The increase reflected higher sales to the steel market of our KELC and DSI products. Third quarter measurement systems orders of 21.4 million decreased 6.9% sequentially and resulted in a book-to-bill of 1.04%. The lower sequential bookings reflected ongoing softness in DTS due to delays related to defense and space government projects. We expect delays in some of these defense projects to continue into the fourth quarter due to the U.S. government shutdown. We were pleased to receive an order from Stony Brook University for the beta of our new UHTC system. This is the second university which ordered the system. This system designed to perform band testing on non-conductive materials, such as ceramics, which are used in critical high performance applications, such as hypersonic missiles in aerospace, as well as in avionics, energy, and industrial applications. Moving to slide seven. I'll now provide an update on our strategic priorities for 2025. First, we generated approximately 26 million in business development orders through the first nine months of this year, which put us on track to achieve our 30 million goal for 2025. Second, regarding our cost efficiency goals for 2025, we expect to have in place 5 million of annualized cost reductions by the end of this year. We also continue to execute our ongoing operational efficiency plans with the sale of a building in July. Third, we also continue to look for attractive M&A opportunities. Our strategic priorities are designed to increase growth and profitability. They reflect several years of focused investments and have built strong foundations to reach our long-term financial goals, even on a lower revenue than we originally expected. As VPG enters this next phase, we are expanding our senior leadership team with two new C-suites roles. We have appointed Yair Al-Kobi to the newly created position of Chief Business and Product Officer responsible for overseeing sales, marketing, product strategy, and business development. Yair brings considerable experience in accelerating growth and profitability from his previous executive leadership roles at leading industrial tech companies, including in the semiconductor test market for KLA Tencor, among others. We have also appointed Rafi Uzzan to the newly created role of chief operating officer to lead VPG's manufacturing and our operational excellence initiatives. Rafi has more than 30 years of experience in key executive and operational roles for VPG and Vishay Intertechnology, including as senior vice president and head of our weighing solution segment. I want to welcome these two executives to our senior team and look forward to their contributions to delivering business excellence and execution, which are prime strategic trusts for VPG. Yair and Rafi will help drive our focused mainstream global trends, increase the speed of innovation and R&D, and leverage our strong brands. I believe these new positions will enhance and accelerate value to our customers and stockholders, and will also allow me to focus on continuing to build a dynamic culture supporting future growth and scalable M&A strategy. In summary, we are pleased with the solid quarter. We see stable, moderately improved business environments. We are making organizational changes that align our reporting segment to accelerate top-line growth and strengthen our operational excellence. We are continuing to make progress with our business development initiatives, including supporting our humanoid customers. We will now turn it over to Bill Clancy. Bill?