Vishay Precision Group(US:VPG)2024-05-07 18:01Financial Data and Key Metrics Changes - The company reported Q1 2024 revenues of $80.8 million, a decline of 9.1% year-over-year and 9.8% sequentially from Q4 2023 [15][28] - Gross margin reached a record high of 43.4%, up from 43.0% in the previous quarter, driven by improved manufacturing efficiency and cost reductions [28] - Adjusted EBITDA was $12.3 million, representing a margin of 15.3%, down from 18.5% in Q4 2023 [33] Business Line Data and Key Metrics Changes - Sensors Segment: Revenue of $29.4 million, down 19.9% year-over-year and 14.1% sequentially, with orders at $26.7 million, an 8.9% decrease [18][19] - Weighing Solutions Segment: Sales of $28.8 million, a decline of 9.5% year-over-year and 5.2% sequentially, with orders flat at $27.5 million [21][22] - Measurement Systems Segment: Revenue of $22.5 million, an increase of 11.1% year-over-year but a decrease of 9.3% sequentially, with orders of $21.1 million, up 16.4% from Q4 2023 [23][24] Market Data and Key Metrics Changes - Orders in avionics, military and space, transportation, and consumer applications showed sequential growth, while industrial weighing and test measurement markets experienced weaker bookings [16][17] - The company noted that some customers are working down their inventory levels, impacting demand recovery expectations [17] Company Strategy and Development Direction - The company is focusing on both organic and inorganic growth initiatives to target larger, faster-growing markets, particularly in electrification, industrial automation, and defense technologies [7][8] - Investments in operational capabilities and efficiencies are aimed at addressing higher volume opportunities and achieving new levels of profitability [13][14] Management's Comments on Operating Environment and Future Outlook - Management indicated that the expected recovery in demand has been pushed to the latter part of the year due to current macroeconomic conditions [17] - The company anticipates net revenue for Q2 2024 to be in the range of $75 million to $85 million, reflecting current market conditions and backlog [36] Other Important Information - The company repurchased $2.8 million of stock in Q1 2024, continuing its stock repurchase program initiated in August 2022 [25][26] - A restructuring charge of $782,000 was recorded in Q1, related to severance and headcount reductions in the Sensors segment [32] Q&A Session Summary Question: Expectations for growth investments and OpEx projections - Management acknowledged being slightly behind on hiring for business development and engineering but expects to meet growth targets [38][39] Question: Sustainability of gross margin expectations - Management confirmed that the target of a 45% gross margin remains viable and is currently ahead of plan [40][41] Question: Details on the measurement systems segment and eVTOL customer - The eVTOL sector is a new market for the company, with expectations of at least 20% year-over-year growth as they work with key customers [42][43] Question: Order trends in avionics, military, and space segments - Management noted that while there is a current trough in revenue, they expect large orders to be placed in the second half of the year as funding is released [44][47]