Vishay Precision Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP net revenues were $85.1 million, reduced by $2.3 million in tariff refunds passed to customers; adjusted net revenues were $87.4 million.
• Gross profit margin was 40.2% (down from 40.3% prior year); adjusted gross profit margin was 39.3% (down from 40.5% prior year).
• Operating margin was 3.2% (down from 12.7% prior year); adjusted operating margin was 4.9% (down from 6.9% prior year).
• Diluted net earnings per share were $0.04, compared to $0.59 in the prior year quarter.
• Adjusted diluted net earnings per share were $0.14, compared to $0.30 in the prior year quarter.
• Adjusted EBITDA was $8.2 million with an adjusted EBITDA margin of 9.4% (down from 12.1% prior year).
• Adjusted free cash flow generated was $5.5 million.
• GAAP adjusted tax rate was 48%, higher than the first-half 2026 runrate due to geographic income mix shifts, reducing diluted EPS by $0.03.
• For the nine months ended October 3, 2026, GAAP net revenues were $253.4 million; adjusted net revenues were $255.7 million.
• Nine-month GAAP net loss was $1.5 million ($0.11 per share), compared to net earnings of $7.2 million ($0.54 per share) in the prior year period.
• Nine-month adjusted net earnings were $3.3 million ($0.25 per share), compared to $7.4 million ($0.56 per share) in the prior year period.
• Operating income for the nine-month period included $8.1 million related to unfavorable currency exchange rates.

Guidance and Future Outlook:

• Fourth fiscal quarter 2026 net revenues are expected to be between $84 million and $91 million at constant third-quarter 2026 foreign currency exchange rates.
• Fourth-quarter guidance excludes tariff refunds to customers, which will have no impact on profits.
• Management expects revenue momentum into 2027 driven by strong order activity and a growing backlog.
• Cost savings initiatives are on pace to achieve $6 million in savings for 2026.
• Management anticipates realizing operating leverage in the target model as revenues continue to grow.

Business Segments and Product Lines:

• Sensors Segment: Bookings reached a record $51.7 million, growing 7.5% sequentially with a book-to-bill ratio of 1.35. Revenues were $38.4 million, up 21.3% year-over-year and 14.8% sequentially. Gross profit margin was 32.4% (down from 33.6% prior year, up from 31.5% prior quarter). Adjusted gross margin was 32.6%. Growth driven by precision resistors in Test and Measurement, AI-driven applications (semiconductor equipment, data centers, fiber-optics), aerospace, and defense.
• Weighing Solutions Segment: Adjusted bookings were $28.6 million, flat sequentially, with a book-to-bill ratio of 1.06. Adjusted net revenues were $26.9 million, down 2.2% year-over-year and 11.3% sequentially. Gross profit margin was 37.6% (down from 40.3% prior year, up from 37.3% prior quarter). Adjusted gross margin was 34.6%. Declines attributed to lower sales in Industrial Weighing, Transportation, and General Industrial markets, unfavorable product mix, and inventory reduction.
• Measurement Systems Segment: Bookings were $22.2 million, growing 18.6% sequentially, with a book-to-bill ratio of 1.01. Revenues were $22.1 million, up 7.6% year-over-year and 9.7% sequentially. Gross profit margin was 56.5% (up from 50.5% prior year and 52.5% prior quarter), driven by higher volume and favorable product mix.
• All three reporting segments achieved book-to-bill ratios of 1.0 or better.
• Humanoid robot production ramp-up is being prepared, aligned with customer updated schedules.

Market and Competitive Landscape:

• Continued strength in key markets including AI-driven applications, semiconductor equipment, data centers, fiber-optic applications, aerospace, and defense.
• Sensors bookings reached a record high driven by secular growth markets.
• The company maintains a differentiated technology portfolio participating in attractive secular growth markets.

Risks and Challenges:

• Unfavorable foreign currency exchange rates impacted gross profit margins and operating income year-over-year.
• Higher manufacturing costs impacted gross profit margins, partially offset by higher volume.
• Unfavorable product mix and reduction in inventory impacted Weighing Solutions adjusted gross margin.
• Forward-looking statements involve risks including general business conditions, tariff changes, inflation, labor/supply chain challenges, acquisition integration difficulties, new product development issues, and geopolitical instabilities.

Management Commentary and Tone:

• CEO Ziv Shoshani highlighted adjusted revenue growth of 4.1% sequentially and 9.6% year-over-year.
• Management noted solid progress on profitability and cash generation, with sequential improvements in gross margin and EBITDA.
• Tone was confident regarding the strength of the technology portfolio and participation in secular growth markets.
• Management emphasized the eighth consecutive quarter of consolidated book-to-bill at or above 1.0.

Other Key Points:

• The company revised its definition of non-GAAP financial measures beginning in fiscal 2026 to exclude share-based compensation expense, reflecting changes in compensation structure and equity-based incentive programs.
• Prior-period non-GAAP financial measures have been recast to conform to the current presentation.
• Consolidated book-to-bill ratio was 1.17 for the quarter.
• The company generated $5.5 million of adjusted free cash flow in the quarter.
• Tariff refunds of $2.3 million were passed through to customers with no impact on gross profit.
• Operating lease liabilities and other balance sheet items are detailed in the provided financial statements.