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Date
Tuesday, Aug. 5, 2025 at 1 p.m. ET
Call participants
Chief Executive Officer — Ziv Shoshani
Chief Financial Officer — William Clancy
Senior Vice President, Strategy and Investor Relations — Steve Cantor
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Risks
Shoshani said, "Tariff changes impacted our gross margin negatively by approximately $500,000 due to the timing of our offsetting price increases."
Shoshani stated, "the global steel market as a whole continues to be soft. Reflecting slow automotive production and demand and push outs for some electric vehicle model production."
Clancy reported Selling, general, and administrative expense increased to $27.7 million (36.9% of revenue) in the second quarter, up from $26.7 million (34.5% of revenue) in the prior year, citing "unfavorable foreign exchange rates" as the main cause.
Takeaways
Total Revenue-- $75.2 million, up 4.8% sequentially.
Consolidated Orders-- $79.9 million in bookings, reflecting 7.5% sequential growth in consolidated orders and marking the third straight quarter of order increases.
Book-to-Bill Ratio-- 1.06 overall consolidated book to bill; Measurement Systems segment book to bill was 1.2, Sensors segment book to bill was 1.12, and Weighing Solutions at 0.92.
Adjusted Gross Margin-- 41%, a gain of 270 basis points from 38.3% in Q1 2025; Each segment posted adjusted gross margin improvement.
Segment Revenues-- Sensors: down 1.8% sequentially; Weighing Solutions: sales increased 11.3% sequentially; Measurement Systems revenue increased 5.1% sequentially.
Segment Order Trends-- Sensors bookings up 3.7% sequentially (highest in six quarters); Weighing Solutions bookings up 3.6% sequentially; Measurement Systems bookings increased 18.1% sequentially.
Humanoid Robotics Orders-- $1.5 million in orders from one customer between April 2025 and July 2025; company expects additional orders but timing depends on customer schedules.
Adjusted Operating Margin-- 4.8%, up from 1.1% in the prior year (adjusted, non-GAAP); excluding $885,000 of start-up and restructuring costs.
Adjusted EBITDA-- Adjusted EBITDA was $7.9 million. Adjusted EBITDA was 10.5% of revenue, up from $5.1 million (7.2% of revenue) in the previous quarter.
Cash and Free Cash Flow-- $6 million in cash from operations, $4.7 million in adjusted free cash flow, $90.3 million in ending cash (an increase of $6.4 million quarter-over-quarter in cash position).
SG&A Expense-- $27.7 million, representing 36.9% of revenue; adjusted SG&A was $27.1 million (36% of revenue), excluding approximately $500,000 in severance costs.
Capital Expenditures-- $1.3 million; annual expectation of $10 million to $12 million in capital expenditures for 2025.
Cost-Saving Initiatives-- $2.8 million captured in cost savings in the first half of 2025; with a total target of about $5 million in fixed cost reductions for the full year 2025, expected to be completed by year-end.
Building Sale-- $11 million in net proceeds used to reduce the revolver balance in July 2025, expected to lower annual interest expense by $700,000.
Full-Year Revenue Guidance-- Net revenue forecast of $73 million to $81 million for 2025; assumes constant 2025 exchange rates.
Strategic Orders Goal-- $17 million in new orders achieved in the first half of 2025 toward a $30 million full-year 2025 target for new customers and applications.
UHTC Product Development-- Beta installation of the ultra-high-temperature ceramic (UHTC) test system at the University of Alabama is expected to be completed in the current quarter; another beta discussion with a second university is underway.
Summary
Vishay Precision Group(VPG 3.61%) reported sequential growth in both revenue and consolidated orders, alongside broad-based margin improvements across all three operating segments. The company cited sustained booking momentum, with the Sensors and Measurement Systems divisions achieving book-to-bill ratios above parity, underscoring increasing demand. Management highlighted a strategic focus on business development and cost-reduction programs, demonstrating tangible progress in both new order attainment and fixed cost optimization. A sale of facilities in July 2025 yielded incremental liquidity and reduced the company's debt burden, supporting a healthier balance sheet for the remainder of the year. In guidance, VPG set a full-year net revenue expectation of $73 million to $81 million for 2025, reinforcing its outlook despite ongoing macroeconomic and tariff-related headwinds.
Clancy confirmed completion of a building sale in July 2025, generating approximately $11 million in net proceeds used to pay down revolver debt and forecasting a reduction in annual interest expense of about $700,000.
Shoshani noted continued softness in the global steel market due to slow automotive demand and persistent tariffs but identified DSI product R&D as a bright spot within that sector.
The company is supporting design-in initiatives in the humanoid robotics market, confirming readiness for higher-volume orders pending customer production schedules.
SG&A increases were attributed primarily to unfavorable foreign exchange movements, and the operational tax rate reached 31%, with a full-year target of 28% for 2025.
Beta deployment of the UHTC materials test system is expected to open incremental opportunities in high-performance aerospace and industrial market niches.
Industry glossary
Book-to-Bill Ratio: Order intake divided by shipments in a period; a ratio above 1 indicates growing demand.
UHTC: Ultra-High-Temperature Ceramic; advanced material used for extreme environment testing in aerospace and defense.
DSI: Refers to a proprietary VPG product line, likely in R&D or steel inspection systems, as discussed in the call.
DTS: Data acquisition module product family used in automotive and materials testing.
AMS: Refers to applications in aerospace, military, and space industries, as noted in VPG's reporting segments.
Full Conference Call Transcript
Ziv Shoshani: For the second quarter. Bill will then provide financial details about the quarter and our outlook for 2025. Moving to Slide three. Beginning with revenue. Second quarter revenue of $75.2 million grew 4.8% from the first quarter. We are pleased to report continued positive bookings trends across several key markets, reflecting a moderately improved business environment. Consolidated orders grew 7.5% sequentially, making the third consecutive quarter of sequential growth. This resulted in a consolidated book to bill of 1.06, with measurement systems and sensor segments reporting a book to bill of 1.2 and 1.12, respectively. Adjusted gross margin improved to 41%, driven by sequentially stronger performance across all three business segments.
I want to highlight the Wayne Solutions segment, in particular, which delivered a record quarterly adjusted gross margin. We continue to advance our business development and cost optimization initiatives. Our operation execution translated into a solid cash generation with $6 million in cash from operation and $4.7 million in adjusted free cash flow. Before reviewing our sales and orders performance by division, segment, I want to comment on the impact of tariffs on our second quarter results. Tariff changes impacted our gross margin negatively by approximately $500,000 due to the timing of our offsetting price increases. We expect this gap to narrow in the third quarter as our price adjustments become effective.
While tariff policies continue to change and are difficult to predict, we are confident in our ability to respond given our manufacturing footprint, the geographical distribution, and our sales and our deep customer relationships. Moving to slide four. Beginning with our sensor segment, second quarter revenue decreased 1.8% sequentially, reflecting mixed trends across its market. As higher sales of Stringage's product were offset by lower sales of four precision resistors. Sensors booking rose 3.7% sequentially, reaching the highest level in six quarters and resulting in a book to bill of 1.12.
The bookings growth was driven by higher orders in the test and measurement for precision resistors, and higher demand for strain gauges sensors in AMS and industrial weighing, which was partially offset by lower orders for the test and measurement. For precision resistors, we recorded $1.5 million of order for fiber optics data center application. And we expect an additional order in Q3. Regarding humanoid robots, from April 2025 through July, we received approximately $1.5 million in follow-on orders from our initial humanoid customer. The humanoid robot market is still in its infancy and the initial real-world deployment of this robot is expected now in 2026.
As the technology and use case continues to develop, we are optimistic about the long-term potential for this market heads for Vishay Precision Group, Inc. And we focus on high precision, high-performance segment of this rapidly evolving market. Moving to slide five. Turning to our Wave Solutions segment. Second quarter sales increased 11.3% from the first quarter. The increase was driven primarily by higher sales in the transportation and industrial weighing market. And in our other markets for medical and precision agriculture applications. WAN solution orders grew 3.6% sequentially to $27.2 million, resulting in a book to bill of 0.92. Higher orders for precision agriculture and medical applications and industrial weighing offset lower orders in the transportation and general industrial.
Moving to slide six. Turning to our measurement systems segment. Revenue in the second quarter of $19.2 million increased 5.1% sequentially. The increase reflected higher sales of DTS data acquisition modules in the AMS market, which offset lower sales to the transportation and steel markets. Second quarter measurement systems orders of $23 million increased 18.1% sequentially and resulted in a book to bill of 1.2. Bookings reflected higher demand primarily in the AMS and steel markets. In the current quarter, we expect to complete the beta installation at the University of Alabama of our new UHTC system.
This system is designed to perform band testing on nonconductive materials such as ceramics, which are used in critical high-performance applications, such as for hypersonic missiles in aerospace, as well as in avionics, energy, and industrial applications. We believe our differentiated solution can increase test throughput by tenfold while testing materials at ultra-high temperatures of around 2,000 degrees C. That is required for this advanced application. We are now in discussion with the second university regarding beta testing for this system. Moving to slide seven. I would like to provide a brief update on our three top strategic priorities for 2025.
First, we are encouraged by our business development initiatives which generated orders of approximately $17 million through the first half of this year. This puts us on track to achieve our goal for 2025 of securing $30 million of orders from either new customers or new applications with existing customers. It is significant not only the magnitude of these orders but the breadth which runs across our businesses. To support these initiatives, we are continuing to improve our sales processes and systems, as well as our use of digital marketing channels. Second, we continue to reduce costs and increase operational efficiencies. Through product relocation efficiency improvements.
The measures we have taken through 2025 put us on course to reduce fixed costs by about $5 million for the full 2025 compared to the prior year excluding inflation. These measures entail mainly the consolidation of production and shared services to lower-cost countries. Third, we continue to pursue high-quality acquisitions to build scale and expand our cash flow. We remain disciplined and patient in our search for the right opportunities. In summary, we are pleased with the positive order trends which have continued for the third consecutive quarter and our ongoing progress with our growth and cost initiatives. Global economic activity has remained stable in 2025 and improved modestly in several areas.
Despite the ongoing macro uncertainties due to tariff trade policies, and geopolitical tensions. I will now turn it over to Bill Clancy. Bill? Thank you, Steve.
Bill Clancy: Referring to slide eight, the reconciliation tables of the slide deck, our second quarter 2025 revenues were $75.2 million. Adjusted gross margin of 41% in the second quarter increased by 270 basis points from 38.3% in the first quarter reflecting higher volume, favorable product mix, and favorable exchange rates which offset net tariff costs. Sequentially by segment, adjusted gross margin for Sensors of 32.2% increased due to an increase in inventories and favorable FX rates which offset the impact of lower volume and net tariff costs.
Wayne Solutions adjusted gross margin of 40.2% increased from the first quarter and reached an all-time record primarily due to higher volume and favorable foreign exchange rates which offset the impact of net tariff costs. Gross margin for Measurement Systems of 54.6% increased from the first quarter due to higher volume and favorable product mix. Moving to Slide nine. Our adjusted operating margin of 4.8% which excluded start-up and restructuring costs amounting to $885,000 improved from 1.1% in 2025. Selling, general and administrative expense for the second quarter was $27.7 million with 36.9% of revenues which increased from $26.7 million with 34.5% of revenues for 2025.
On an adjusted basis, 2025 SG and A was approximately $27.1 million or 36% of sales excluding approximately $500,000 of severance costs. The increase in SG and A is mainly due to unfavorable foreign exchange rates. The operational tax rate in the second quarter was 31%, and for the full year of 2025, we are forecasting an operational tax rate of approximately 28%. We reported net earnings of $248,000 or $0.02 per diluted share. Adjusting for manufacturing start-up costs, restructuring, severance costs, and foreign currency exchange losses, adjusted net earnings for the second quarter was $2.3 million or $0.17 per diluted share compared to $468,000 or $0.04 per diluted share in 2025. Moving to Slide 10.
Adjusted EBITDA was $7.9 million or 10.5% of revenue compared to $5.1 million or 7.2% of revenue in the first quarter. Capital expenditures in the second quarter were $1.3 million. For 2025, we are forecasting $10 million to $12 million for capital expenditures. We generated adjusted free cash flow of $4.7 million for the second quarter which compared to $3.7 million in the first quarter. As of the end of the second quarter, our cash position was $90.3 million, an increase of $6.4 million from the first quarter. As part of our ongoing cost reduction and efficiency initiatives, in July 2025, we completed the sale of a building, which generated approximately $11 million in net proceeds.
We used these proceeds to reduce our outstanding bank revolver balance which will reduce our annual interest expense by about $700,000. Regarding the outlook, for 2025 at constant 2025 exchange rates, we expect net revenue to be in the range of $73 million to $81 million. In summary, bookings of $79.9 million grew sequentially for the third straight quarter resulting in a book to bill of 1.06. Our business development initiatives continued to advance, and we generated solid cash flow as we continue to implement our cost reduction programs. With that, let's open the lines for questions. Thank you.
Ezra: Thank you very much. We will now open the floor for the Q&A session. If you change your mind or your question has already been answered, please press star followed by two. Our first question comes from Josh Nichols with B. Riley. Your line is now open. Please go ahead.
Josh Nichols: Yeah. Thanks for the question, and great to see that the continued trend in improving business activity. Just wanna touch on for a minute. I think you mentioned you've received $17 million of this business development revenue. You have a goal of getting to $30 million this year. Presumably, do you expect some additional revenue from humanoid robot some of your humanoid robotics later this year. And then you mentioned one customer is expected to move into production next year. How do you expect the size of those orders, which change relative to what you're getting today, assuming that customer does move into production versus earlier stage demo today order. So you guys are doing
Ziv Shoshani: Good morning. Regarding the humanoid robotics project, as we indicated, we have received a $1.5 million order from April to July. We are pleased with the progress of this customer. And our design position on their robot. At the same time, we have to continue and support the production schedule which are still changing by our customers. So, we may expect to get more orders. At this point in time, the customer continues to evaluate based on their schedule. But potentially, we could see an order. It really depends on the customer. This is regarding the first humanoid customer. The second humanoid customer, I did indicate in prior calls that we did provide an initial prototype lines.
Prototype products, the feedback was good, and we are expecting to provide another we are expecting to see a larger order in the near future. Regarding 2026, Vishay Precision Group, Inc. is set to support our customers regardless of the volume. We are set regarding the infrastructure, and once the customer is ready to ramp up on higher volume, the company is ready to support their production. So based on prior discussions that we had with the customer, once and if there would be changes in volume, we are ready to support those customers. We do hope to see those higher volume orders coming in 2026, but it really depends on the customer schedule. Thanks.
And just to drill down into that a little bit, I think
Josh Nichols: previously mentioned somewhere in the range of, like, $500 to $1,200 per robot. Is that still what you're expecting? And is the margin profile for these customers, you know,
Ziv Shoshani: Okay. I did provide a price range given the volume that has been discussed naturally. Once higher volume would be discussed, we understand that, probably a different pricing model will have to be supported. And the company is prepared for that. Regarding the profit schedule, I think it's a little bit premature still to provide this type of information.
Josh Nichols: Fair enough. Appreciate the detail there. I guess just one more question. I mean, your business activity has been improving, but if you look like I mean, the company has been coming off an extended downturn, and now things are starting to pick up. We've seen a healthy uptick in operating income. Meanwhile, you've been cash flow positive. Even throughout the more challenging times. How do you see, like, the scalability of the business in terms of EBITDA and operating margin as your sales get back up to a higher level of cadence, you know, next year and think about the scale that comes in play. On the margin front?
Ziv Shoshani: As you know, our financial profile is such that for every incremental dollar of revenue, we do expect it to be around about, I would say, 30% to 40¢ drop to the pretax level. So, this model we do expect to continue once we would see an upturn in revenue. I should say that given all the cost initiatives that the company has taken during the last two years we should be even in a better cost position to capitalize profitability once the volume rebound.
So if there was a certain schedule, regarding the profitability improvements once the volume increased historically, we should be in a better position, meaning the profitability level should be accelerated in respect to the past once volume would rebound.
Josh Nichols: Appreciate it. Thanks. I'll hop back in the queue.
Ezra: Thank you very much. Just as a reminder, if you would like to ask a question, Our next question comes from John Franzreb Sidoti and Company. Your line is now open. Please go ahead.
John Franzreb: Hello, everybody, and thanks for taking my questions. I'd like to start with the quarter that we just finished. Ziv, it seems like there is a fair amount of variability in the transportation market for you. Know, weighing systems had some good revenue numbers flow through. You know, measurement systems didn't. I wonder if you could just talk about you know, what's going on, what are seeing in the transportation side of your business.
Ziv Shoshani: Okay. Great. So regarding transportation, let me start with measurement systems. On the measurement systems, the upside that we have seen this quarter is coming mainly in the steel mainly the DSI, the project related AMS, and to an extent, also the DTS automotive business. What we can or what we have identified is kind of a slower demand in weighing solution is due to the fact that in the first quarter, there were very high orders of transportation for our onboard weighing, which did not repeat itself in the second quarter. So, as a matter of fact, it's not that the business has been slowing down. It's just that we did not repeat those large orders in Q1.
John Franzreb: So do you think that was just catch up from delayed orders from 2024 in Q1, and now they're at equilibrium know? Any kind of greater cost? Okay. So I
Ziv Shoshani: so the Q1 orders, were considered to be six to nine months orders that the customer has placed in Q1 and is expected to continue the sales expected to continue in the coming months.
John Franzreb: Got it. Got it. And can you talk a little bit also about the steel market? It seems like the order bookings in steel were weak, and I was kinda hopeful maybe that they'd be a little bit stronger.
Ziv Shoshani: Given what we're seeing as far as the macro conditions. Okay. So regarding steel, as you know, there are few moving parts in steel. First, the global steel market as a whole continues to be soft. Reflecting slow automotive production and demand and push outs for some electric vehicle model production. Secondly, the tariffs which, are very high, on steel and steel related products. Also makes a significant effect. The orders that we have received for steel are not have not been necessarily on our kelp, which is in line or in line equipment inspection in steel mills, but it's more on the R&D for DSI product.
So it's there is still a lot of tailwind once the steel business would rebound.
John Franzreb: Got it. That helps. And in regards to the $5 million in cost savings, will that program be completed by the third quarter? Is that going to take to the full year end?
Ziv Shoshani: The $5 million are expected to end in Q4, and I believe that for the first six months, we have captured $2.8 million out of the $5 million.
John Franzreb: 0.8. Got it. The and just a little bit I thought a little bit of thought about how July looks the trends for the company overall compared to what you saw the monthly trends in June? And then I'm sorry, in the second quarter?
Ziv Shoshani: I would regarding July, at this point in time, I would say, since, it's already providing information regarding the third quarter, At this point, I could say there are no surprises. To us.
John Franzreb: One last question. Right. One last question. Should the robotics actually begin production in 2026, At what point would you actually have to add capacity to meet some of the projections for 2030? Have you I'm sure you've thought about that. But can you maybe share with us, you know, what that what do the ramp would look like as far as you're concerned?
Ziv Shoshani: As I indicated, the ramp up I mean, the ramp up schedule is very much dependent on our customers. We share with our customers our capacity our equipment capacity, and our headcount, and we are working hand to hand that our capabilities and capacities would be in line with their demand. So, to that extent, I think there is a very good collaboration between the two companies. And they would give us enough heads up and enough information that we would be there enough capacity to support them. Are not going to be the bottleneck. Now regarding the timing and the schedule, it's up to them. We do hope that it would be sooner rather than later. But it's really
John Franzreb: Fair enough. Gotta finish the I think I lost you. Sorry? I'm sorry. I'm sorry. I think I lost you. I think he was finished. I think he was finished.
Ziv Shoshani: John.
John Franzreb: Okay. I'll get back into queue, and somebody else takes questions. Thank you, guys.
Bill Clancy: Thank you, Charlie.
Ezra: Thank you very much. Just other reminder, if you would like to ask a question, please press star followed by one on your telephone keypad now. We currently have no further questions, so I will hand back over to Steve for any closing remarks.
Steve Cantor: Thank you. Before concluding our call today, I want to note that we will be participating in two upcoming investor conferences, the three-part Advisors Ideas Conference, Chicago on August 27, and the Jefferies Industrials Conference in New York on September 3. You can contact us for more information about them. And with that, thank you for joining our call today.
Ezra: You very much, Steve. Thank you everyone for joining. That concludes today's call. You may now disconnect your lines.