Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its
fiscal 2018 third quarter ended September 29, 2018.
Third Quarter Highlights:
- Growth in revenues to $75.5 million, up
20.2% year-over-year
- Gross profit margin was 40.5% for the
quarter as compared to 38.6% for the prior year period
- Operating income increased by 92% to
$10.6 million as compared to $5.5 million in the prior year
period
- Operating margin for the quarter was
14.1%, compared to 8.8% for the prior year period
- Earnings increased 75% to $0.56 per
diluted share, compared to $0.32 reported last year
- Adjusted diluted EPS* increased 111% to
$0.57, compared to $0.27 in the prior year period
- Cash from operations was $10.6 million
with free cash flow* of $6.8 million
Ziv Shoshani, Chief Executive Officer of VPG, commented, “Our
continued focus on execution delivered another quarter of solid
revenues and net earnings. Free cash for the quarter was strong,
along with a stable book-to-bill, demonstrating a solid business
environment. We remain dedicated to delivering solid revenues,
margins and net earnings to continue to enhance shareholder
value."
The Company grew third fiscal quarter 2018 net earnings
attributable to VPG stockholders to $7.5 million, or $0.56 per
diluted share, compared to $4.3 million, or $0.32 per diluted
share, in the third fiscal quarter of 2017. Foreign currency
exchange rates for the third quarter of 2018 decreased net income
by $0.1 million, or $0.01 per diluted share, relative to the prior
year period.
In the nine fiscal months ended September 29, 2018, net
earnings attributable to VPG stockholders grew to $20.2 million, or
$1.50 per diluted share, compared to $9.9 million or $0.73 per
diluted share, in the nine fiscal months ended September 30,
2017. Foreign currency exchange rates for the nine fiscal months
ended September 29, 2018 decreased net income by $0.2 million
or $0.01 per diluted share relative to the prior year period.
The third fiscal quarter 2018 adjusted net earnings attributable
to VPG stockholders more than doubled to $7.7 million, or $0.57 per
diluted share, compared to adjusted net earnings attributable to
VPG stockholders of $3.6 million, or $0.27 per diluted share, for
the comparable prior year period. Included as an adjustment to net
earnings attributable to VPG stockholders for the fiscal quarter
ended September 30, 2017, were net proceeds of $1.5 million related
to a one time lease termination payment at the Company's Tianjin,
People's Republic of China location.
Nine fiscal months ended September 29, 2018, adjusted net
earnings attributable to VPG stockholders doubled to $20.5 million,
or $1.51 per diluted share, compared to adjusted net earnings
attributable to VPG stockholders of $10.0 million, or $0.74 per
diluted share, for the comparable prior year period.
Segments
Foil Technology Products segment revenues grew 22.5% to $35.9
million in the third fiscal quarter of 2018, up from $29.3 million
in the third fiscal quarter of 2017; sequential revenue increased
5.0% compared to $34.2 million in the second quarter of 2018. The
year-over-year increase in revenues was attributable to precision
resistor products in all regions for distribution and OEM customers
primarily in the test and measurement market, strain gage products
in all regions mainly for OEM customers in the force measurement
and test and measurement markets and Pacific Instruments products
in the Americas for end users customers in the avionics, military
and space market. The sequential increase in revenue was
attributable to Pacific Instruments products in the Americas for
end users in the avionics, military and space market.
Gross profit margin for the Foil Technology Products segment was
43.9% for the third fiscal quarter of 2018, an increase compared to
41.7% in the third fiscal quarter of 2017, and a decrease compared
to 46.1% in the second fiscal quarter of 2018. The year-over-year
increase in gross profit margin was primarily due to an increase in
volume. Sequentially, gross profit margin decreased due to an
increase in variable costs as a result of manufacturing
inefficiencies in addition to a reduction in inventory, partially
offset by an increase in volume.
Force Sensors segment revenues grew 6.1% to $17.6 million in the
third fiscal quarter of 2018, up from $16.6 million in the third
fiscal quarter of 2017; sequential revenue decreased 9.1%, compared
to $19.4 million in the second quarter of 2018. The year-over-year
increase in revenues was mainly attributable to OEM customers in
the force measurement market, primarily in the Americas. The
sequential decrease in revenue was mainly attributable to OEM and
distribution customers in the force measurement and precision
weighing markets, mainly in the Americas.
Gross profit margin for the Force Sensors segment was 25.9% for
the third fiscal quarter of 2018, a decrease compared to 28.6% in
the third fiscal quarter of 2017, and a decrease compared to 29.4%
in the second fiscal quarter of 2018. The year-over-year decrease
in gross profit margin was primarily due to the U.S. imposition of
tariffs on goods from China, wage increases and a reduction in
inventory partially offset by the increase in volumes.
Sequentially, gross profit margin decreased due to a decrease in
volume, a reduction in inventory and the U.S. imposition of tariffs
on goods from China.
Weighing and Control Systems segment revenues grew by 30.1% to
$22.0 million in the third fiscal quarter of 2018, up from $16.9
million in the third fiscal quarter of 2017; sequential revenue
increased 6.3% from $20.7 million in the second fiscal quarter of
2018. The increase in revenues year-over-year was attributable to
all product lines in all regions. The sequential increase in
revenue was primarily attributable to a volume increase in the
steel product line in Europe and onboard weighing and process
weighing product lines in the Americas.
The third fiscal quarter 2018 gross profit margin for the
Weighing and Control System segment was 46.6%, an increase compared
to 43.1% from the third fiscal quarter of 2017, and a decrease
compared to 48.0% from the second fiscal quarter of 2018. The
year-over-year increase in gross profit margin was primarily due to
the increase in volume. Sequential gross profit margin decreased
due to unfavorable product mix, manufacturing inefficiencies and
the U.S. imposition of tariffs on goods from China, partially
offset by an increase in volume.
Near-Term Outlook
“In light of a continued solid business environment, at constant
third fiscal quarter 2018 exchange rates, we expect net revenues in
the range of $73 million to $80 million for the fourth fiscal
quarter of 2018,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define “adjusted net earnings” as net earnings attributable
to VPG stockholders before restructuring costs, acquisition
purchase accounting adjustments, net proceeds from lease
termination and associated tax effects. "Free cash flow" is defined
as the amount of cash generated from operations ($10.6 million for
the third fiscal quarter of 2018), in excess of our capital
expenditures ($3.8 million for the third fiscal quarter of 2018)
net of proceeds, if any, from the sale of assets ($0.0 million for
the third fiscal quarter of 2018). The reconciliation table within
this release reconciles the Company's non-GAAP measures, which are
provided for comparison with other results, to the most directly
comparable U.S. GAAP measures. Management believes that these
measures are meaningful because they provide insight with respect
to intrinsic operating results.
Conference Call and Webcast
A conference call will be held today (November 6) at 10:00 a.m.
ET (9:00 a.m. CT). To access the conference call, interested
parties may call 1-888-317-6003 or internationally 1-412-317-6061
and use passcode 9273112, or log on to the investor relations page
of the VPG website at www.vpgsensors.com.
A replay will be available approximately one hour after the
completion of the call by calling toll-free 1-877-344-7529 or
internationally 1-412-317-0088 and by using the passcode 10125948.
The replay will also be available on the investor relations page of
the VPG website at www.vpgsensors.com for a limited time.
About VPG
Vishay Precision Group, Inc. (VPG) is an internationally
recognized designer, manufacturer and marketer of: components based
on its resistive foil technology; sensors; and sensor-based
measurement systems specializing in the growing markets of stress,
force, weight, pressure, and current measurements. VPG is a market
leader of foil technology products, providing ongoing technology
innovations in precision foil resistors and foil strain gages,
which are the foundation of the company's force sensors products
and its’ weighing and control systems. The product portfolio
consists of a variety of well-established brand names recognized
for precision and quality in the marketplace. To learn more, visit
VPG at www.vpgsensors.com.
Forward-Looking Statements
From time to time, information provided by us, including but not
limited to statements in this report, or other statements made by
or on our behalf, may contain "forward-looking" information within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements involve a number of risks, uncertainties, and
contingencies, many of which are beyond our control, which may
cause actual results, performance, or achievements to differ
materially from those anticipated.
Such statements are based on current expectations only, and are
subject to certain risks, uncertainties, and assumptions. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, expected, estimated, or
projected. Among the factors that could cause actual results to
materially differ include: general business and economic
conditions; difficulties or delays in completing acquisitions and
integrating acquired companies; the inability to realize
anticipated synergies and expansion possibilities; difficulties in
new product development; changes in competition and technology in
the markets that we serve and the mix of our products required to
address these changes; changes in foreign currency exchange rates;
difficulties in implementing our cost reduction strategies, such as
underutilization of production facilities, labor unrest or legal
challenges to our lay-off or termination plans, operation of
redundant facilities due to difficulties in transferring production
to achieve efficiencies; significant developments from the recent
and potential changes in tariffs and trade regulation; and other
factors affecting our operations, markets, products, services, and
prices that are set forth in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2017. We undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
VISHAY PRECISION GROUP, INC. Consolidated Condensed
Statements of Operations (Unaudited - In thousands, except per
share amounts)
Fiscal quarter
ended September 29, 2018 September 30, 2017 Net
revenues
$ 75,490 $ 62,805 Costs of products sold
44,910 38,538 Gross profit
30,580 24,267 Gross profit margin
40.5 % 38.6
% Selling, general, and administrative expenses
19,721 18,314 Restructuring costs
228
423 Operating income
10,631 5,530 Operating
margin
14.1 % 8.8 % Other income (expense):
Interest expense
(413 ) (472 ) Other
(172 ) 1,506 Other income (expense) -
net
(585 ) 1,034 Income
before taxes
10,046 6,564 Income tax expense
2,479 2,239 Net earnings
7,567 4,325 Less: net earnings attributable to
noncontrolling interests
20 70
Net earnings attributable to VPG stockholders
$ 7,547
$ 4,255 Basic earnings per share attributable
to VPG stockholders
$ 0.56 $ 0.32 Diluted earnings
per share attributable to VPG stockholders
$ 0.56 $
0.32 Weighted average shares outstanding - basic
13,474 13,291 Weighted average shares outstanding - diluted
13,534 13,470
VISHAY PRECISION GROUP,
INC. Consolidated Condensed Statements of Operations (Unaudited
- In thousands, except per share amounts)
Nine fiscal months ended September 29, 2018
September 30, 2017 Net revenues
$ 222,812 $
184,911 Costs of products sold
132,361
113,368 Gross profit
90,451 71,543 Gross profit
margin
40.6 % 38.7 % Selling, general, and
administrative expenses
60,030 54,923 Restructuring costs
289 1,292 Operating income
30,132 15,328 Operating margin
13.5 % 8.3 %
Other income (expense): Interest expense
(1,333
) (1,392 ) Other
(1,093 ) 406
Other income (expense) - net
(2,426 )
(986 ) Income before taxes
27,706 14,342
Income tax expense
7,498 4,398
Net earnings
20,208 9,944 Less: net earnings
(loss) attributable to noncontrolling interests
(20
) 75 Net earnings attributable to VPG
stockholders
$ 20,228 $ 9,869
Basic earnings per share attributable to VPG stockholders
$
1.51 $ 0.74 Diluted earnings per share attributable to VPG
stockholders
$ 1.50 $ 0.73 Weighted average
shares outstanding - basic
13,431 13,253 Weighted average
shares outstanding - diluted
13,519 13,452
VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance
Sheets (In thousands)
September 29,
2018 December 31, 2017 (Unaudited) Assets
Current assets: Cash and cash equivalents
$ 78,628 $
74,292 Accounts receivable, net
54,003 46,789 Inventories:
Raw materials
18,479 16,601 Work in process
24,490
23,160 Finished goods
21,694 20,174
Inventories, net
64,663 59,935 Prepaid expenses and
other current assets
12,487 10,299
Total current assets
209,781 191,315 Property
and equipment, at cost: Land
3,409 3,434 Buildings and
improvements
50,536 50,276 Machinery and equipment
100,868 95,158 Software
8,308 7,955 Construction in
progress
2,089 2,252 Accumulated depreciation
(109,342 ) (103,401 ) Property and equipment,
net
55,868 55,674 Goodwill
18,923 19,181
Intangible assets, net
18,759 20,475 Other
assets
18,407 19,906 Total
assets
$ 321,738 $ 306,551
Liabilities and equity Current liabilities: Trade accounts
payable
$ 9,842 $ 13,678 Payroll and related expenses
16,176 15,892 Other accrued expenses
17,989 15,952
Income taxes
2,914 2,515 Current portion of long-term debt
4,367 3,878 Total current
liabilities
51,288 51,915 Long-term debt, less
current portion
23,550 28,477 Deferred income taxes
2,331 2,300 Other liabilities
13,981 14,131 Accrued
pension and other postretirement costs
16,025
16,424 Total liabilities
107,175
113,247 Commitments and contingencies
Equity: Common stock
1,307 1,288 Class B convertible common
stock
103 103 Treasury stock
(8,765 ) (8,765 )
Capital in excess of par value
196,039 192,904 Retained
earnings
63,151 43,076 Accumulated other comprehensive loss
(37,299 ) (35,450 ) Total Vishay
Precision Group, Inc. stockholders' equity
214,536 193,156
Noncontrolling interests
27 148
Total equity
214,563 193,304
Total liabilities and equity
$ 321,738 $
306,551
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited - In
thousands)
Nine fiscal months ended
September 29, 2018 September 30, 2017
Operating activities Net earnings
$ 20,208 $
9,944 Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization
7,939
7,977 Gain on disposal of property and equipment
(146
) (193 ) Share-based compensation expense
1,172 959
Inventory write-offs for obsolescence
1,633 1,662 Deferred
income taxes
1,584 264 Other
536 (907 ) Net changes
in operating assets and liabilities: Accounts receivable, net
(8,128 ) (7,030 ) Inventories, net
(6,935
) (3,280 ) Prepaid expenses and other current assets
(2,600 ) (2,937 ) Trade accounts payable
(1,342 ) 1,176 Other current liabilities
4,031 7,166 Net cash provided by
operating activities
17,952 14,801
Investing activities Capital expenditures
(9,966 ) (4,366 ) Proceeds from sale of property and
equipment
169 442 Net cash used
in investing activities
(9,797 ) (3,924
)
Financing activities Principal payments on
long-term debt and capital leases
(4,728 ) (1,971 )
Proceeds from revolving facility
22,000 27,000 Payments on
revolving facility
(19,000 ) (27,000 ) Distributions
to noncontrolling interests
(101 ) (60 ) Payments of
employee taxes on certain share-based arrangements
(801 ) (303 ) Net cash (used in) financing
activities
(2,630 ) (2,334 ) Effect of exchange rate
changes on cash and cash equivalents
(1,189 )
2,896 Increase in cash and cash equivalents
4,336 11,439 Cash and cash equivalents at beginning
of period
74,292 58,452 Cash and
cash equivalents at end of period
$ 78,628 $
69,891
Supplemental disclosure of non-cash
investing transactions: Capital expenditures purchased
$
(7,559 ) $ (4,366 )
Supplemental disclosure of
non-cash financing transactions: Conversion of exchangeable
notes to common stock
$ (2,794 ) $ (1,303 )
VISHAY PRECISION GROUP, INC. Reconciliation of
Consolidated Adjusted Gross Profit Margin (Unaudited - In
thousands)
Fiscal quarter ended
Nine fiscal months ended September 29, 2018
September 30, 2017 September 29, 2018
September 30, 2017 Gross profit
$ 30,580 $
24,267
$ 90,451 $ 71,543 Gross profit margin
40.5 % 38.6 %
40.6 % 38.7 %
Reconciling items affecting gross profit margin Acquisition
purchase accounting adjustments
— 42
— 42
Adjusted gross profit
$ 30,580
$ 24,309
$ 90,451 $ 71,585
Adjusted gross profit margin
40.5 % 38.7 %
40.6 % 38.7 %
VISHAY
PRECISION GROUP, INC. Reconciliation of Consolidated Adjusted
Operating Margin (Unaudited - In thousands)
Fiscal
quarter ended Nine fiscal months ended September 29,
2018 September 30, 2017 September 29, 2018
September 30, 2017 Operating income
$ 10,631 $
5,530
$ 30,132 $ 15,328 Operating margin
14.1
% 8.8 %
13.5 % 8.3 % Reconciling items
affecting operating margin Acquisition purchase accounting
adjustments
— 42
— 42 Restructuring costs
228
423
289 1,292 Adjusted operating
income
$ 10,859 $ 5,995
$
30,421 $ 16,662
Adjusted operating margin
14.4 % 9.5 %
13.7 % 9.0 %
VISHAY PRECISION GROUP, INC. Reconciliation of
Adjusted Earnings Per Share (Unaudited - In thousands, except per
share data)
Fiscal quarter ended Nine fiscal months
ended September 29, 2018 September 30, 2017
September 29, 2018 September 30, 2017 Net earnings
attributable to VPG stockholders
$ 7,547 $ 4,255
$ 20,228 $ 9,869
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments
— 42
— 42
Restructuring costs
228 423
289 1,292
Reconciling items
affecting other income/expense
Net proceeds from lease termination
— (1,544 )
—
(1,544 )
Less reconciling
items affecting income tax expense
Tax effect of reconciling items
35 (394
)
44 (339 ) Adjusted net earnings
attributable to VPG stockholders
$ 7,740 $
3,570
$ 20,473 $ 9,998
Adjusted net earnings per diluted share
$ 0.57 $ 0.27
$ 1.51 $ 0.74 Weighted average shares
outstanding - diluted
13,534 13,470
13,519 13,452
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181106005227/en/
VPGFor InvestorsICR, Inc.Michael Callahan,
203-682-8311michael.callahan@icrinc.comorFor MediaICR,
Inc.Phil Denning, 646-277-1258phil.denning@icrinc.com
Vishay Precision (NYSE:VPG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Vishay Precision (NYSE:VPG)
Historical Stock Chart
From Apr 2023 to Apr 2024