Hello everyone, welcome to the VPG's fourth quarter fiscal 2022 earnings call. My name is Bruno, I will be operating your call today. During the presentation, you can register to ask a question by pressing star one on your telephone keypad. I will now hand over to your host, Mr. Steve Cantor, Senior Director of Investor Relations. Mr. Cantor, please go ahead. Thank you, Bruno, and good morning, everyone. Welcome to VPG's 2022 fourth quarter earnings conference call. Our Q4 and full year press release and accompanying 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 VPG's operations, we encourage you to refer to our SEC filings, especially the Form 10-K for the year ended December 31, 2021, 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 presentation. Ziv? Thank you, Steve. I am pleased to report we delivered another very successful quarter and year for VPG. Beginning with our 2022 performance. 2022 was the best year in VPG's history in terms of growth and profitability. We grew our revenue by 14%. Excluding the unfavorable impact of foreign exchange, we grew revenue by 20.1%. We increased our adjusted diluted net EPS by 40.1% to $2.62. We generated $62 million in adjusted EBITDA and improved our adjusted EBITDA margin to 17.1% from 15.7% recorded in prior year. We launched a new operating strategy and structure built on operational diversification, which we believe will leverage our strong core corporate competencies and accelerate our long-term growth potential. We believe these strong results demonstrate the increasing importance of our precision sensing and measurement solutions, the power of our business model, and our growth strategy. It is important to note that our 2022 performance is a continuation of the results we have delivered over the past several years and puts us closer to achieving our three-to-five year financial targets. Moving to slide four. Turning to the fourth quarter of 2022, we reported sales of $96.2 million, which was 6.9% higher than both a year ago and the third quarter of 2022. Our sales performance continued to be negatively impacted by foreign exchange, particularly in our sensors and weighing solution segments. FX impacted our total fourth quarter revenues by $5.3 million compared to a year ago and by $800,000 when compared to the third quarter. Thus, excluding FX impacts, revenue grew 13.6% from prior year and 7.9% sequentially. We realized record adjusted diluted net EPS of $0.76 in the fourth quarter. We successfully passed on price increases to mitigate higher material costs. Through 2022 compared to a year ago, we realized $8.8 million from price increases, which is slightly above the high end of our target for incremental revenue in 2022 from our selling price increases. This essentially offset higher labor and material costs. We generated adjusted EBITDA of $17.5 million and achieved an adjusted EBITDA margin of 18.2%. After seven consecutive quarters of book-to-bill over 1 and a record fourth quarter revenues, our book-to-bill in the fourth quarter of 0.76 reflected softer fourth quarter orders. The Q4 orders primarily reflected the following factors. First, cyclicality lower orders in the test and measurement, consumer, and steel markets. Second, the timing of project-driven and annual and semiannual orders. Third, a comparison of the third quarter, which included a large one-time orders in the precision ag. While near-term visibility is limited, we expect orders to increase sequentially in Q1 of 2023 and to improve through the year. We are confident about the prospects for our strategic initiatives to address emerging and broadening opportunities for our precision sensing and measurement technologies. Looking at our business segments performance, moving to slide five. Beginning with our sensor segment, fourth quarter revenue of $36.3 million declined 4.1% sequentially and grew 6.3% from a year ago. Foreign currency continued to significantly impact Sensors revenue and resulted in a negative impact of $300,000 and $2.4 million to the Sensors top line compared to the third quarter and a year ago, respectively. Excluding FX impact, Sensors revenue was down 3.5% sequentially. Grew 14.3% from a year ago. Sales of Advanced Sensors softened modestly in the fourth quarter as for the full-year Advanced Sensors revenue grew 41% to approximately $50 million. With what we view as the best performing product of its kind in the market today, we are well-positioned on our customers next-generation platform as we continue to be excited about the long-term potential for Advanced Sensors. We are seeing more opportunities in additional markets, including electric vehicles. Sales of precision resistors were modestly lower from Q3, primarily due to fewer working days due to local holidays. We continued our strategic initiatives to secure design wins in new emerging markets, in data centers and fiber optics equipment, as well as industrial automation systems. For data centers, our products can provide enhanced levels of precision and stability, which contributes to a higher performance of those networks. In terms of operating results for sensors, gross margin of 37.6% declined sequentially from 40.5%, which was primarily a result of lower volume and temporary manufacturing inefficiencies. We expect sensors gross margin to improve in the first quarter of 2023. The sensor segment had a book-to-bill of 0.76, reflecting slower cyclical orders for precision resistors in the test and measurement market, particularly for semiconductor test equipment and in consumer for Advanced Sensors. Given our current customer discussions, we expect orders to improve in the first half of 2023. Moving to slide six. Turning to our weighing solutions segment, fourth quarter sales of $33.1 million increased 5.4% from $31.4 million from the third quarter of 2022, and 3.2% from $32.1 million in the prior year period. Excluding the negative impact of FX, weighing solutions revenue grew 6.1% sequentially and 10.5% year-over-year. We were pleased with the performance of our Force Sensors OEM initiatives as OEM revenue grew approximately 34% on a sequential basis and 52% on a year-over-year basis. In the 4th quarter, sales reflected the shipments of large order for precision ag applications, which was booked in the 3rd quarter. This was partially offset by softer sales in the transportation market for our overload monitoring products and our TruckWeigh VanWeigh initiatives. Weighing solutions adjusted gross margin of 33.4% in the 4th quarter was flat compared to 33.3% in the 3rd quarter, as higher volume was offset by unfavorable foreign currency exchange rates. The weighing solutions segment had a book to bill ratio of 0.82 in the fourth quarter of 2022, reflecting the timing of OEM projects and the streamlining of the supply chain in precision agriculture and in Europe and Asia for industrial weighing applications. Moving to slide seven. Turning to our measurement system segment, revenue in the fourth quarter of $26.8 million increased 29.2% sequentially and 12.8% from a year ago, from prior year, reflecting growth across the measurement systems portfolio. Excluding the negative impact of FX, measurement systems revenue grew 31.3% sequentially and 16.9% year over year. Adjusted gross margin in the fourth quarter for measurement systems was 56.8%, which compared to 56.7% in the third quarter of 2022. While slightly higher on a sequential basis, the fourth quarter adjusted gross margin for measurement systems was impacted negatively by unfavorable product mix and foreign exchange rates. book-to-bill for measurement systems was 0.7, reflecting cyclically slower orders in steel and the timing of customer projects for vehicle safety testing in transportation and in AMS. Customer engagement and quote activity remains robust, which is a positive indicator for the second half of 2023. On our measurement system business, businesses are strong market leaders in their respective niches. Demand in these businesses is largely project-driven as these systems generally have longer selling and delivery cycles and higher ASPs. Within these niches, there are a number of attractive avenues for growth. Moving to slide eight. Our capital allocation strategy, which is supported by our strong cash from operation and our solid balance sheet, is focused on creating shareholders value. On three priorities are: One. internal investment to support our organic growth. Two. strategic M&A. Three. stock repurchase. In terms of internal investment, 2022 was another important year for us as we continue to streamline our manufacturing capability while expanding our ability to address new higher volume opportunities that will further accelerate our growth. I've mentioned on previous earnings calls our infrastructure projects for precision resistors and load cells, which follow the significant investments we have already made over the past several years. As we complete our current projects in 2023, we expect capital spending to return to a more historical levels of approximately 4% to 4.5% of revenue. Regarding M&A, we continue to look for attractive, high quality businesses that meet our stringent requirement for strategic fit, financial returns, and value creation. Finally, regarding stock repurchase program we announced in August, through the end of 2022, we repurchased approximately $2.7 million of our stock, or about 85,213 shares. Before turning the call to Bill for additional financial detail, I want to thank our employees and our customers around the world for making 2022 a successful year for VPG. The passion, dedication, and focus of VPG teams on our customers are the engine of our success. I will now turn it over to Clancy for more details. Thank you, Ziv. Referring to slide nine and the reconciliation tables of the slide deck, our fourth quarter 2022 revenues grew 6.9% compared to the $90.1 million in the fourth quarter a year ago, and were 6.9% above the third quarter of 2022. Foreign exchange for the fourth quarter of 2022 had a negative impact on revenues of $5.3 million compared to a year ago, and a negative impact of $800,000 as compared to the third quarter of 2022. The gross margin in the fourth quarter was 41.2% compared to 38.7% in the third quarter. On an adjusted basis, excluding $200,000 of acquisition purchase accounting adjustments, our fourth quarter gross margin of 41.5% compared to 41.7% in the third quarter of 2022. Our operating margin was 13.6% for the fourth quarter of 2022. Our fourth quarter adjusted operating margin was 14%, excluding $200,000 of restructuring costs and the adjustment I just mentioned above. Selling, general, and administrative expenses for the fourth quarter of 2022 were $26.5 million or 27.5% of revenues, compared to $25.3 million or 28.1% of revenues for the third quarter of 2022. The sequential increase in SG&A of $1.2 million mainly relates to $600,000 for commissions, $300,000 for travel, and $300,000 for other expenses. The adjusted net earnings for the fourth quarter of 2022 were $10.4 million, or $0.76 per diluted share, compared to $9.5 million or $0.69 per diluted share in the third quarter of 2022. Adjusted EBITDA was $17.5 million or 18.2% of revenue and grew 23.3% compared to $14.2 million or 15.7% of revenue a year ago. Our purchase CapEx in the fourth quarter was $6.8 million, the majority of which reflects purchases and related infrastructure for the sensors reporting segment. Total purchase CapEx for 2022 was $20 million or 5.5% of revenues. For 2023, we are budgeting $18 million-$20 million, which includes approximately $7 million in carryover spending from 2022. We generated adjusted free cash flow of $6.8 million for the fourth quarter of 2022 as compared to $5 million for the third quarter of 2022. We define adjusted free cash flow as cash from operating activities less capital expenditures plus sale of fixed assets. Our GAAP tax rate in the fourth quarter was 17.6%. We are assuming an operational tax rate in the range of 20%-23% for the full year of 2023. Moving to slide 10. We ended the fourth quarter with $88.6 million of cash and cash equivalents and total outstanding long-term debt of $60.8 million. We believe that we have a strong balance sheet and ample liquidity to support our business requirements and to fund additional M&A opportunities. Regarding the outlook, for the first fiscal quarter of 2023 at constant fourth fiscal of 2022 exchange rates, we expect net revenues to be in the range of $85 million-$95 million. In summary, our solid fourth quarter results capped a record year for VPG. We are excited about penetrating emerging market segments with our high-value precision products for our customers. With that, let's open the lines for questionings. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star followed by one on your telephone keypad now. If you'd like to cancel the question, press star followed by two, and please remember to unmute your microphone. Our first question is from John Franzreb from Sidoti. John, your line is now open. Please go ahead. Good morning, everyone, and thanks for taking the questions. Great quarter. Listen, I actually want to drill down into the book-to-bill ratio. It's been quite some time since we've seen such a low reported number. It seems like there's an awful lot of factors that are involved here. Ziv, I wonder if you'd kinda talk about which ones you think are the most temporary in nature and which ones are maybe you eyeballing with a little bit more concern on a go-forward basis? Sure. Absolutely. First of all, the book-to-bill represents record revenues, which somehow, you know, increase the magnitude of the book-to-bill. When we are looking at the order changes, it's around three end markets, three segments. It's around test and measurement for semiconductor equipment, mainly at our EMS and to an extent also a distributor for process automation for precision resistors. This represents a certain easing of the supply chain, based on the discussions we had with customers, we are already expecting to see an improvement in Q1 of this year. The second piece is regarding consumer electronics, which has affected Micro-Measurements. Given the supply chain and some of the manufacturing constraints on our customer side, we are now based on the latest projection we have received from them, we are expecting in the second quarter to see already orders coming back to a normalized level. Mm-hmm. The other piece is the transportation market. The transportation market is to an extent, has been affected by the availability of microprocessors, mainly for our onboard weighing business in the U.K. Mm-hmm. The expectation is as well in the coming quarters, we are expecting to see an improvement or availability of microchips, therefore, the demand is expected to return. All in all, it's around three specific end markets, and we are already, as we indicated earlier, we are already expecting to see an improved order rate already in Q1, which is expected to improve further along 2023. Given your guidance from revenue of $85 million-$95 million, it certainly suggests that you have ample bookings in the backlog to kind of endure this temporary pause in the order book. Is that fair? Does that booking profile extend into the second quarter? Or does the orders have to come back before it becomes more problematic for the second quarter? Historically, the backlog, which represents our customers' desire to deliver product at a given time, slightly represents over 50% or slightly over 50% of backlog, which is expected to be delivered within the following quarter. When we speak about the guidance, we are looking at our current backlog, given customer expectation to get the products, and what we expect to be booked and built within the given quarter. That's the way we build our, let's say, forecast, sales forecast model. We don't expect the Q1 to be impacted by the so-called lower order intake in Q4. Q1 deliveries. Okay. I guess. Perfect. One last question, and then I'll get back into queue, is regarding the revenue mix. The revenue mix was very beneficial in Q4. How would you expect the revenue mix to play out in Q1 versus Q4? The revenue mix was favorable in a way in Q1, given the fact that there was higher mix for measurement systems at a higher gross margin in respect to weighing solution at a lower gross margin. As you know, we don't give any guidance regarding the gross margin, all in all, we should expect similar level, I would say similar level of gross margin in Q1. Okay, great. Given. John, I'll get back into queue. ... given the order mix and some changes in the business, the gross margin should be similar. Maybe sensors, I think you indicated you expect a better sensor gross margin sequentially, right? That would be beneficial also. that. yeah. Okay. That is correct. That is correct. Okay. Okay. Thank you, Ziv. I'll get back into queue. Our next question is from Bill Dezellem from Tieton Capital. Bill, your line is now open. Please go ahead. Thank you. A couple of different questions. First of all, would you please talk to the ag and construction market? Despite the comments in the release, it sounds like there may be something interesting happening within that industry within the weighing segment. Sure. Absolutely. Regarding precision ag, we had a very, very large customer who placed a very large order in Q3 that has been delivered in Q4. They had to retrofit all their field equipment, and they had to do it pretty fast. This is why we have received a very large order. This business at this point in time is running in a very stable way. Regarding the construction business, we also received, I would say a mid-size order from one of those larger equipment construction companies who are buying our load cells. At this point in time, we... I mean, we don't see any changes, at least given our visibility within the next quarter for large spikes. The fact that they have placed a large order implied that they had a certain requirement to go and change or to modify X amount of equipment units in the field. This is a very stable business for us. Yeah, the increase in the OEM business, which was quite impressive year-over-year of 52% and even quarter-over-quarter, implies that there is a stability and strength on the OEM piece as we move forward in the year. Thank you for that. Is this a customer that you are winning market share from a competitor or...? Why that 50% strength at the OEM level? That sounds like that's different from the retrofit that you referenced. Sure. This, the type of OEM business, the Force Sensors OEM business is a very sticky business. In most cases, given the qualification cost, they select one supplier for piece of good. I mean, this is not an exchangeable given again, the nature of qualification and the custom spec, which is required for our products to fit the equipment. Therefore, once you have been designed in, you have been designed in for the product life cycle, and now it is based on our customer demand changes that will trigger the order intake. The product life cycle of those equipment could be 10 to 15 years. Once you have designed, you have been designed, you are there as a sole supplier. That's the way they operate. Great. Thank you. Then, relative to the acquisition pipeline, I think your opening comments, you inferred that there are favorable developments with discussions taking place there. Would you talk broadly to what's changing and why the pipeline seems to be larger today, and to what degree do the questions about global economic activity create an opportunity for you? Sure. Of course. I believe that, Once exchange rates went up, even in a dramatic way, we see many more opportunities for M&A. We see many more deals. Many more companies that are putting companies on the shelf. Some of them are privately held companies, while others are being held by VCs or financial institutions. I could have guessed that to an extent, the those companies were operating with a nice tailwind in the last couple of years, and they would like to take advantage of the, I would say, improved operational performance in order to optimize the selling price, given the economic environment which they may see and also the higher interest rate environment. Therefore, we do see many more opportunities which we have not seen a couple of quarters ago. Great. Thank you for the perspective. As a reminder, ladies and gentlemen, to ask any further questions, please press star followed by one on your telephone keypad now. Our next question is from Hendi Susanto from Gabelli Funds. Andy, your line is now open. Please go ahead. Good morning, Ziv, Bill, and Steve. Morning. Bill, may I ask questions? How should we think about gross margin in 2023? If you look at 2022 gross margin, how sustainable is gross margin at around 41%? It's higher than, like recent historical levels. Andy, I think as Ziv, you know, mentioned on the call, especially even going in, 'cause we don't really give guidance on gross margins. Yet I think given the product mix, I think we mentioned that we would see similar levels, you know, in the first quarter of 2023. Obviously as we go out the year, like I said, we don't give guidance, we feel quite confident of the levels that we're achieving today and the possibilities with increased volume to increase. Thank you. Ziv, may I ask about inventory levels? When orders return, like how quickly can they turn into, like sales in general? Well, our current backlog is around 4.8 months of sales, which is above the historical trends of 3.5 months. At this point in time, we don't have any product which is on allocation. We could, I would say, respond to any potential market uptick fairly fast. We have invested in equipment and in infrastructure, we are ready to take any potential volume upside. Naturally, we will have to hire more people, I believe that this would be, we would be able to do fairly quickly. Once additional volume would come, we would be able to turn it into revenues where I would say, within a quarter or two. Okay. Yeah. And then Ziv, I think it is great to see Advanced Sensors that grew to $50 million in 2022. What can we expect in Advanced Sensors in 2023? Are there like new Advanced Sensors applications that you are pursuing? In terms of your manufacturing capacity of Advanced Sensors, should we continue to see the capacity to ramp up meaningfully higher in 2023? Advanced Sensors today, we do have equipment capacity to support any potential volume upside which may come in 2023. In addition to that, we are still servicing our current portfolio, including some very large customers, and we diligently continue our design-in wins at existing customers and with new customers. I did mention on the call, and this is very, it's fairly on the early stages, that we have reached out and engaged customers, large customers beyond our consumer electronics, which are in electric vehicles. The design cycle of the nature of the product is that the design cycle is around 12 to 24 months before we run on a full production run rate. While we continue to manage the capacity, the equipment, and improving the process, our team members continuously are looking at new opportunities for design-in wins in order to assure the growth of Advanced Sensors in the coming quarters and in the coming years. And then- Sorry, yes, please. Ziv, if you are able to share, would you be able to share where can be the footprints of Advanced Sensors in EVs? Since those are very early leads and discussions, I would be happy to share it once we would have more advanced steps with our customers. At this point, it's still in the early stages. Okay. That is understandable, yeah. Okay, thank you so much, Ziv, Bill, and Steve. Thank you. Thank you. Our next question is from John Franzreb from Sidoti. John, your line's now open. Please go ahead. Fortunately, a lot of my follow-ups have been addressed. I do wanna ask a little bit about the labor inefficiency that you cited in the sensor segment, Ziv. What was that, and has that been fully rectified? Yes. The labor inefficiencies that we have incurred in Q4 is mainly due to the fact that we had to adjust our headcount to the volume dropped, mainly for Micro-Measurements. This is a temporary effect that we don't expect to be repeated in Q1 of 2023. We had to- Okay. -make very quick adjustments, and it does include also some severance. It's. You can think of that mostly as a one-time effect. Okay. Fair enough. Regarding price increases, I think you realized just under $9 million in 2022. I'm just curious about the timing of you instituting those price increases. Will there be more benefit coming in 2023 based on the timing, or would there be necessary to be another round of price increases in 2023 as you continue to battle the inflationary curve? Sure. The $9 million are the price increases that the company has applied between 2021 to 2022. As we move into 2023, we do see a continuation of material cost increase. Mm-hmm. Not only for microprocessors, but also some other parts due to supply chain and higher inflation costs. This is why the company has initiated another round of price increases from 2022, which should take into effect in 2023 in order to mitigate the material prices that the company is expected to see in 2023, which are naturally beyond the $9 million that has been applied before. Okay. That's it for me. Thank you very much, guys. Thank you. We currently have no further questions. I will now hand back to our speaker for final comments, Mr. Steve Cantor. Please go ahead. Before, concluding, I want to let investors know that we will be participating in the Sidoti Conference in March. With that, thank you all for joining our call, and have a good day. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.