Hello? All right. Hi, all. Welcome to the 2023 Jefferies Industrials Conference. My name is Sai Dulam, and it is my greatest pleasure to introduce today's speakers, Bill Clancy, Chief Financial Officer, and Steve Cantor, who's the Senior Director for Investor Relations for the Vishay Precision Group. Great. Thank you, Sai, and it's really great to be here today at the Jefferies Conference and to tell you about VPG. We're very excited about the company. Before we begin, I do wanna remind everyone that we will be making forward-looking statements today, and so we encourage you to read our SEC filings to understand the risks associated with those statements. So, for those of you who are not familiar with Vishay Precision Group or VPG, as we call it, we are a precision measurement and sensing technology company, so think of us as a sensor company. Sensors, as you all know, are everywhere, and they only continue to proliferate. You just need to drive your car or look in your homes or in your businesses or in your factories. Just about everything is getting increasing numbers of sensors that are doing different things, that are actually providing new ways of us interacting with the world. But if you think about sensors, fundamentally, they are the first step in the data value stream. They are essentially digitizing real-world phenomena. Real-world phenomena could be temperature, could be weight, pressure, force, motion. And for VPG, our focus within that very large market globally, sensor market can be estimated as big as $350 billion a year. We play in niches and corners of that, where precision and reliability and the performance of the sensors that we provide are really critical to the application. So if you think of it in that way, if you don't get that first step of the data stream, the rest of that whole data process, in other words, the communication, the analysis, the processing of that data, actually becomes flawed and does not meet specification. So, a long-winded way of saying that what we do is really critical to a lot of customers and certainly a lot of aspects of our daily lives. The one thing I do wanna emphasize, too, which is important for you to understand about VPG, is we don't focus as a result of that focus on the precision and performance; we don't focus on commodity types of applications. Our products are really non-commodity, high value. We just completed a record year for the company in 2022. We grew our sales 14%, as you can see on this slide. We achieved a gross margin approaching 42%, EBITDA margin of over 17%. So all in all, a really, really good year for the company. But I think what's even more interesting than that is what's on the right-hand side of the slide, and these are our long-term, three to five-year targets. And really, what they reflect is the high degree of operating leverage that's in our business model, and I'll talk a little bit more about that. But also, I think, from a top-line standpoint, a really, an inflection in terms of the kinds of opportunities that our technology and our businesses are addressing. And I think that's a key dynamic as we think about not only achieving those revenue targets, but also delivering the high operating return on that revenue. This is another way of looking at the year in 2022. This actually looks back in the last five years. And so I think you can see here not only operating leverage, but the durability of that operating leverage. You know, this is showing through the depths of the pandemic, and I think, you know, in part because of the criticality of our products of what they do and the value they provide our customers, and in part because of how we operate the business, we've navigated pretty well. And I think, you know, in our view, this performance compares pretty well, certainly with other sensor companies. Although I'd say we do believe that certainly the—from the stock market standpoint, that has yet to really be reflected. This relatively strong performance has yet to be truly reflected in our stock price. This slide shows the markets that we address. It's a highly diversified set of markets, which are only getting more diverse. But if you look at each of these segments, in general, they have a few commonalities. So first of all, these are niches within a key larger markets, where, again, we provide high-value products. In the vast majority of these, we have either a number one or number two position. Our relationships with our customers, we've been doing this for quite a while. We've been public since 2010, and many of our businesses actually have origins that extend, you know, much further back than that. So, our customers know us. If you need this level of technology that we provide, you generally know where to go to... And, in many cases, our products are designed in. If you think about our distribution across these markets, about a third of it is through distributors, a third of it is direct to the customer that actually uses the product or EMS, their EMS suppliers, and then 40% are to OEMs. It's, in fact, that 40% to the OEMs, which has been growing the most rapidly and dramatically for us, and where we're spending a lot of our time in terms of looking at how we capture new opportunities. The other thing I would point out about this slide is, as you look at that pie chart, if you were to look at that same chart, say, five years ago, it would look very different. And this is really at the heart of, I think, what my main message to you today is, which is that the opportunity set for our business is actually changing, both as a function of what we're seeing outside in terms of external trends and mega trends, but also internally in terms of our own execution and where we're deploying our capital. For example, five years ago, in that other category, which is 22% of our sales, about half of that is in consumer. Well, five years ago, that was almost zero. Another piece in that other slice, which is around precision agriculture, has also grown considerably over that last five years. The test and measurement, I would say there's probably maybe 4% or 5% of that, which didn't exist five years ago, and that's a function of us now having really a renewed focus on precision resistors. The transportation slice would be half as big, where we've added in addition to our onboard weighing technology for trucks and vans, we now have technology which is used in crash testing. So it's the electronics that are inside the crash test dummy, but it's also technology which is used to test other vehicles, not just cars, but avionics and space systems. The And then the other steel market slice would be half as big, and that growth has come through a good acquisition of a business that makes high-end development tools to develop new metal alloys. So, point being, this—these end markets are diversifying, and they're changing, and they're really moving from what we would think of as more legacy, slower growth industrial markets into ones that are more tech-driven and more rapidly growing. This slide tries to capture that point, showing on the left-hand side, the kinds of legacy things that we have typically addressed through much of the company's history, things around general test, industrial processing, so our products are used in industrial environments, in oil and gas, et cetera. And then on the right, you can see some of the new applications that we've been addressing. Certainly, a lot of growth in semiconductor test. In consumer, I mentioned, is a market and application which we really didn't address five years ago. We have a place in electrification. We have a regulation kind of driven business in our transportation market, where for overloading of trucks and vans in the UK and in Europe, we have a device that will actually tell the driver if he's overloaded, so that, you know, he can unload before he gets stopped and pulled over. And then certainly, precision ag and safety testing are really interesting markets. And really, what's happening here is that level of precision that we provide, which had been, for the most part, demanded by certain kinds of industrial customers or even medical customers, that level of precision now has been migrating downward towards other applications which previously didn't really need it. About a year and a half ago, we reorganized the business into three segments: sensors, weighing solutions, and measurement systems. The way I think about these are sensors are components, weighing solutions are modules, measurement systems are application systems. Essentially, they're doing one thing for one particular application, but they do it really well. I'd say the takeaway from this, and certainly how we think of these segments, is that each of them have their own different growth and profit profiles, but in aggregate, they provide a really, really nice blend of not only growth, but also of consistency of cash flow and margin. So it's the blend of this business, I think, that works well, certainly over time, for VPG. I'll give you a few kind of snapshots of what our products do and some of the applications. Certainly, there are too many for me to really cover in this short amount of time. But to begin with, in the sensors segment, we make two main kinds of products. The first is a precision resistor component. These are components that go into all kinds of electrical systems. And the second product is a kind of sensor called a strain gauge, which is measuring force and weight and all the other related metrics associated with that. The primary markets that sensors segment really addresses is test and measurement, as well as in consumer electronics. And also avionics, military, and space, which leads me to this example. So this is, you can see in the inset, you can see our precision resistor component. And what it's doing here and the value it's providing is really to be able to perform that function that that resistor has within that electrical system, but to perform it reliably across all kinds of environmental conditions which may be changing. An example of this is a fighter jet, which has a, you know, all kinds of sophisticated electrical systems on it. So that jet starts, you know, its flight on a tarmac. Maybe it's 100 degrees, or if it's down in the Southwest, 120 degrees, and within a matter of seconds, is now flying at altitudes where the temperature change is dramatic, and it's actually sub-zero. So our resistor, because of proprietary technology and design, is able to perform consistently and reliably, no matter what the external environmental conditions. There's actually some interesting new opportunities that are approaching us that uses that feature, things like in data center equipment, fiber optics equipment, where the minute change in temperature can actually affect the performance of that equipment, or in the case of the fiber optics long-haul communication network, the quality of the network. So that's precision resistors. The strain gauge sensors, here's an example in robotics. If you think about measuring force or weight, we'll think about a robotic arm that's picking up something, that's gripping something. To be able to know how hard that robot is gripping something is absolutely critical, not just in industrial robots, but also in medical, surgical robots, and even things that we've you know sort of investigated, things like you know a drone, which may be picking up something and moving it to from one location to another. As I mentioned, one of the key applications for these products is in consumer and consumer electronics, and that's an interesting and growing opportunity set for us. The next business segment is weighing solutions, and what we do here is we make a module called a load cell or a force sensor, which is really the core mechanism in really any kind of weighing technology. It's using, in many cases, our strain gauge sensor as its core component. And we've been addressing these markets for these products for a number of years. They're used in all kinds of industrial weighing applications. So if you think about a factory, whether it's a chemical factory or pharmaceutical or food and beverage, a lot of the inputs that go into that process, whether it's, you know, whatever they're making, begin with weighing ingredients, because that ensures the process integrity of the process and the process recipe. So our products are used in those kinds of things. They're also used in quality control as that product is being manufactured. And one of the ways you know, for instance, that an Oreo... One Oreo cookie has the same filling as the next Oreo cookie, is you weigh it. So that's kind of a little bit esoteric example, but that should give you the idea. The other side of this business is the overload monitoring systems, which I described earlier. Those are used in heavy-duty vehicles, such as mining equipment or forestry vehicles, or waste management vehicles. Again, there's a safety and productivity aspect to knowing how much those vehicles are carrying at any one time, but also in terms of making sure commercial fleets in the UK and Europe stay within the legal load limits. That's that regulation-driven aspect to the business that I mentioned. Here's a couple interesting, and I'll speed this up, so you have time for questions. A couple interesting examples. This is in precision ag, where we're helping to measure the resistance of equipment that's putting seeds in the ground because that tells the farmer a lot about the characteristics of the soil, so he can optimize the crop yield. In fact, correlate this data back to crop yields. This is a interesting example. This is a new one, an emerging one, a great example of how the demand for technology is approaching us. This is an e-bike. Our force sensors here is actually being used to monitor how hard the human is pedaling so that the battery and motor doesn't have to work as hard, thus extending the range of the ba- of the bike and the battery... The last segment, measurement systems. Again, we do three things here. One is in-- two are related to steel. One is a system that's used to make sure that the thickness of rolled steel is uniform, and to spec. Another is the development of new metal alloys, such as those that are being developed to lightweight vehicles, and then DTS, which is the technology that goes into the crash test dummies and other kind of testing equipment. This is an example of that DTS business. This is a sort of a really interesting initiative. They've been working with the US Army to create this super dummy that the US Army uses to test the survivability of our soldiers against certain kind of scenarios and how to better defend or better equip the vehicles that they may be riding in to prevent and minimize injury. We've just got approval from the US Army now to sell these dummies to other friendly country military. So that's an exciting opportunity for us. And then steel, I mentioned, you know, that our products are used to improve the productivity of steel production, particularly in the hot strip part of the process where they're rolling steel. We are now seeing opportunities to take that same technology and use it for the manufacturing of aluminum, which is a wholly new market for us, one we don't address right now. So this is looking at what we do and how we add value to our businesses, and it's. The takeaway here is really, look, we're focused. We're a operationally focused business that's financially driven, and we are using our core competencies really to drive scalability, growth, operating leverage, and also to grow our cash flows consistently. Speaking of cash flows, this is a snapshot of our capital allocation strategy, which is really is built around three pillars. The first is internal investments. We are coming to the end of a five-year phase of some significant investments in our manufacturing capability, which is allowing us now to go after higher volume opportunities that may be presenting themselves. Certainly, we've had some great success in that in the consumer electronics area. The second priority is around value creating M&A. We've done five transactions in the company's history. We think we have a good recipe for that, and we see a really exciting opportunity set in front of us, particularly around the technology businesses that we think we can add to our platform. And then stock repurchases. We just renewed the authorization of an existing stock repurchase plan, and you know, that plan is active as you know over the last several quarters. So in summary, we think we are at the right spot, the right time. We're seeing new opportunities present themselves. We've been investing our business to capture them, and we have the right strategy and certainly the right business model to go after that and to really generate some good value for our shareholders. And with that, I will be happy to take questions. Nice. I would say, I mean, we do have, like, in each of these reporting segments, we're either number one or number two in the markets that we serve. And we've expanded that, I think, that scale and visibility, and now more going into more of the mega trends and looking at those opportunities. I think there's, for now, for us, we have much greater visibility, and with our products, you know, a definite enormous amount of growth going forward. It's not, it's not so much that we're missing pieces in terms of our portfolio. It's that we're only addressing right now a very small slice in terms of think about sensor technology. We, we have a very small slice of what we could be doing, and so part of the opportunity set with M&A is maybe adding different types of sensor technologies to our portfolio. Well, to follow up that you mentioned the five-year capital investment program. What type of revenue level are you generating through capacity? I would say today, with the capital infrastructure we have, I mean, we're close to where we are, another 30%-40% of our revenue, so it could be in the high $400-450, close to $500 million. I just wanted, I do wanna point out, a lot of those investments have been made around automating our factories, also consolidating manufacturing to lower cost centers. So it's, it's, it's not just simply adding capacity; it's actually increasing the returns on those investments. Just, curious, when you think about M&A, how do you think about creating value from the perspective of, you know, sensors companies, they trade at pretty high multiples. You guys trade at a much lower multiple. I mean, the previous other companies that trade at much higher multiples, and they go, they move. How do you create value, you know, in a company like in that environment from an M&A perspective? No, I mean, it's a very good question. I mean, we are looking not just in sensors, but moving more from, say, industrial to technology. So maybe more into, for example, like fiber optics, where we know we have the systems in place, we've had the automation, we've done a lot of operational excellence through the years, and we've been very successful in our M&A, and we feel that we could grow in these new opportunities, definitely add value, and we feel that with this automation and where we're going, that we can achieve our three to five-year targets, and a big chunk of that is through M&A and getting the best value in the deal and for shareholder value as well. Also, the long-term targets you put forward, that's not organic, that's through M&A? That is a combination. I would say, so if it's like 12%-14%, say, double-digit growth, half of that would be organic, and the other half of that would be through M&A opportunities. All right. Thank you, everyone. Thanks. Thanks.