Net revenues up 22.0%
year over year for the fourth quarter and up 10.4% for the fiscal
year. Fourth quarter cash generated from operations of $8.4 million
and free cash flow was $5.6 million.*
Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, based on its resistive foil
technology, today announced its fiscal 2013 and fourth quarter
results ended December 31, 2013.
Ziv Shoshani, VPG’s chief executive officer, said, “Net revenues
of $62.2 million came in at the mid-level of our guidance.
Consolidated adjusted gross margin improved to 37.8% in the fourth
quarter of 2013 compared to 34.4% in the fourth quarter of 2012. I
was encouraged that sales were strong sequentially and on a
year-over-year basis. We also experienced a very strong quarter for
cash generated from operations and free cash flow.”*
Mr. Shoshani added, “Our business environment is encouraging, as
this has been the fourth quarter in a row with a book-to-bill ratio
of 1.04, excluding KELK. Even including the KELK business, which is
project driven, our book-to-bill ratio in the fourth quarter was
1.00.”
Net revenues for the fourth quarter of 2013 were $62.2 million,
representing a 22.0% increase from $51.0 million of net revenues
for the comparable prior year period. Net revenues for the year
ended December 31, 2013 were $240.3 million, representing a 10.4%
increase from the $217.6 million of net revenues for the prior
year. Comparing sequential results, net revenues for the fourth
quarter of 2013 increased by $4.5 million, or 7.8%, from $57.7
million in the third quarter of 2013.
GAAP net earnings attributable to VPG stockholders for the
fourth quarter of 2013 were $1.1 million or $0.08 per diluted
share, compared to GAAP net earnings attributable to VPG
stockholders for the fourth quarter of 2012 of $5.2 million, or
$0.37 per diluted share. GAAP net earnings attributable to VPG
stockholders for the 2013 fiscal year were $4.3 million, or $0.31
per diluted share compared to $11.7 million, or $0.84 per diluted
share for the prior fiscal year.
GAAP net earnings attributable to VPG stockholders for the
fourth quarter of 2013 include approximately $0.5 million of KELK
acquisition purchase accounting adjustments which impacted costs of
products sold, $0.04 million of acquisition costs, $0.05 million of
restructuring costs, and the impact of $0.9 million of tax discrete
items which affect comparability, as listed on the attached
reconciliation table. Adjusted net earnings attributable to VPG
stockholders for the fourth quarter of 2013 were $2.5 million or
$0.18 per diluted share, compared to $2.0 million, or $0.15 per
diluted share for the comparable prior year period. Additionally,
the overall impact of foreign exchange rates for the fourth quarter
of 2013 as compared to the prior year period had a negative impact
to pretax income of $562,000, or $0.03 per diluted share.
GAAP net earnings attributable to VPG stockholders for the 2013
fiscal year include approximately $4.9 million of KELK acquisition
purchase accounting adjustments which impacted costs of products
sold, $0.8 million of acquisition costs, $0.5 million of
restructuring costs, and the impact of $0.2 million of tax discrete
items, which affect comparability, as listed on the attached
reconciliation table. Adjusted net earnings attributable to VPG
stockholders for the 2013 fiscal year were $8.6 million, or $0.62
per diluted share compared to $8.6 million, or $0.62 per diluted
share for the 2012 fiscal year. The overall impact of foreign
exchange rates for the 2013 fiscal year as compared to the prior
year had a negative impact to pretax income of $2.9 million, or
$0.15 per diluted share.
Segments
The Foil Technology Products segment revenues were $25.7 million
in the fourth quarter of 2013, up $1.2 million, or 5.0%, from $24.5
million in the fourth quarter last year, and up $3.3 million or
14.7% from $22.4 million in the third quarter of 2013. The gross
margin for the segment was flat, at 40.5% for the fourth quarter of
2013 compared to 40.6% in the fourth quarter last year and
increased from 36.7% in the third quarter of 2013. Despite the
increase in revenues compared to the fourth quarter of 2012, the
gross margin remains constant primarily due to unfavorable foreign
exchange rates and additional temporary costs to support the
enterprise resource planning system. The sequential increase in
gross margin is due to higher volume.
The Force Sensors segment revenues were $16.0 million in the
fourth quarter of 2013, up $0.5 million, or 3.0%, from $15.5
million in the fourth quarter last year, and down $0.4 million, or
2.6%, from $16.4 million in the third quarter of 2013. The gross
margin for the segment was 21.5% in the fourth quarter of 2013
versus 22.5% in the fourth quarter of 2012 and 17.6% in the third
quarter of 2013. The year-over-year decrease in gross margin is
primarily due to unfavorable product mix and wage increases, offset
by favorable foreign exchange rates. The sequential increase in
gross margin is mainly due to cost reduction savings and favorable
foreign exchange rates.
The Weighing and Control Systems segment revenues increased to
$20.5 million in the fourth quarter of 2013, up $9.5 million, or
86.8%, from $11.0 million in the fourth quarter last year, and up
$1.6 million, or 8.6%, from $18.9 million in the third quarter of
2013. The gross margin for the segment was 44.9% (47.1% excluding
the KELK acquisition purchase accounting adjustments of $0.5
million) in the fourth quarter of 2013 versus 37.6% in the fourth
quarter of 2012 and 43.0% (47.8% excluding the KELK acquisition
purchase accounting adjustments of $0.9 million) in the third
quarter of 2013. The year-over-year increase in adjusted gross
margin is primarily due to the inclusion of KELK results in the
segment. Despite the increase in revenues compared to the third
quarter of 2013, the sequential adjusted gross margin decrease is
due to unfavorable product mix.
Outlook
Mr. Shoshani concluded, “We expect net revenues in the range of
$59 million to $64 million for the first quarter of 2014.”
* Note: Free cash flow is defined as the amount of cash
generated from operations ($8.4 million for the fourth fiscal
quarter of 2013), in excess of our capital expenditures ($2.8
million for the fourth fiscal quarter of 2013) and net of proceeds,
if any, for the sale of assets (none in the fourth fiscal quarter
of 2013).
Conference Call and Webcast
A conference call will be held today at 10:00 a.m. EST (9:00
a.m. CST). To access the conference call, interested parties may
call 888-317-6016 or internationally 412-317-6016, or log on to the
investor relations page of the VPG website at
http://ir.vishaypg.com.
A replay will be available approximately one hour after the
completion of the call by calling toll-free 877-344-7529 or
internationally 412-317- 6016 and using the conference number:
10039139. The replay will also be available on the investor
relations page of the VPG website at http://ir.vishaypg.com. It
will be available via phone and website for a limited time.
About Vishay Precision Group
Vishay Precision Group (VPG) is an internationally recognized
designer, manufacturer and marketer of: components based on its
resistive foil technology; sensors; and sensor-based 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.vishaypg.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, changes in the current pace of economic recovery,
including if such recovery stalls or does not continue as expected;
difficulties in implementing our ERP system and the associated
impact on manufacturing efficiencies and customer satisfaction;
difficulties or delays in completing acquisitions and integrating
acquired companies, including KELK, 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 lower-labor-cost countries; 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, 2012. 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 December 31, December 31, 2013 2012
Net revenues $ 62,248 $ 51,010 Costs of products sold
39,165 33,448 Gross profit 23,083
17,562 Gross margin 37.1 % 34.4 % Selling, general, and
administrative expenses 19,674 15,743 Acquisition costs 42 275
Restructuring costs 51 - Operating
income 3,316 1,544 Operating margin 5.3 % 3.0 % Other income
(expense): Interest expense (251 ) (50 ) Other (506 )
(316 ) Total other income (expense) - net (757 ) (366
) Income before taxes 2,559 1,178 Income tax
(benefit) expense 1,393 (4,036 ) Net
earnings 1,166 5,214 Less: net earnings attributable to
noncontrolling interests 38 49 Net earnings
attributable to VPG stockholders $ 1,128 $ 5,165
Basic earnings per share attributable to VPG
stockholders $ 0.08 $ 0.39 Diluted earnings per share
attributable to VPG stockholders $ 0.08 $ 0.37
Weighted average shares outstanding - basic 13,737 13,371
Weighted average shares outstanding - diluted 13,955 13,912
VISHAY PRECISION GROUP, INC. Consolidated Condensed
Statements of Operations (Unaudited - In thousands, except per
share amounts) Years ended December 31, December 31,
2013 (1)
2012 Net revenues $ 240,275 $ 217,616 Costs of
products sold 156,420 142,584 Gross
profit 83,855 75,032 Gross margin 34.9 % 34.5 % Selling,
general, and administrative expenses 74,521 63,666 Acquisition
costs 794 275 Restructuring costs 538 -
Operating income 8,002 11,091 Operating margin 3.3 % 5.1 %
Other income (expense): Interest expense (1,022 ) (266 ) Other
(1,579 ) (301 ) Total other income (expense) - net
(2,601 ) (567 ) Income before taxes 5,401
10,524 Income tax (benefit) expense 1,054
(1,240 ) Net earnings 4,347 11,764 Less: net
earnings attributable to noncontrolling interests 56 73
Net earnings attributable to VPG stockholders $ 4,291
$ 11,691 Basic earnings per share attributable
to VPG stockholders $ 0.32 $ 0.87 Diluted earnings per share
attributable to VPG stockholders $ 0.31 $ 0.84
Weighted average shares outstanding - basic 13,563 13,367
Weighted average shares outstanding - diluted 13,944 13,889
(1) During the second quarter of 2013, the Company recorded
purchase accounting adjustments associated with the KELK
acquisition. An impact of these adjustments was an increase in the
costs of products sold of $1.2 million during the first quarter of
2013, therefore, the first quarter 2013 operating results were
recast to reflect these adjustments. The recast net earnings
attributable to VPG stockholders for the fiscal quarter ended March
30, 2013 were $0.4 million, or $0.03 per diluted share.
VISHAY PRECISION GROUP, INC. Consolidated Condensed
Balance Sheets (In thousands) December 31, December 31, 2013
2012 Assets (unaudited) Current assets: Cash and cash equivalents $
72,785 $ 93,881 Accounts receivable, net 40,500 28,766 Inventories,
net 54,973 49,389 Deferred income taxes 4,784 4,258 Prepaid
expenses and other current assets 10,500 9,572
Total current assets 183,542 185,866 Property and
equipment, net 49,323 52,092 Goodwill 18,880 - Intangible assets,
net 22,458 8,009 Other assets 17,901 17,206
Total assets $ 292,104 $ 263,173
Liabilities and equity Current liabilities: Trade accounts payable
$ 10,258 $ 9,190 Payroll and related expenses 15,016 12,831 Other
accrued expenses 15,814 8,499 Income taxes 615 1,425 Current
portion of long-term debt 4,137 167
Total current liabilities 45,840 32,112 Long-term debt, less
current portion 22,936 11,154 Deferred income taxes 1,259 1,831
Other liabilities 7,738 7,433 Accrued pension and other
postretirement costs 10,780 13,835
Total liabilities 88,553 66,365
Commitments and contingencies Equity: Common stock 1,271
1,235 Class B convertible common stock 103 103 Capital in excess of
par value 188,424 181,938 Retained earnings 32,647 28,356
Accumulated other comprehensive income (loss) (19,027 )
(14,983 ) Total Vishay Precision Group, Inc. stockholders'
equity 203,418 196,649 Noncontrolling interests 133
159 Total equity 203,551 196,808
Total liabilities and equity $ 292,104 $ 263,173
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited - In
thousands) Years ended December 31, December 31, 2013 2012
Operating activities: Net earnings $ 4,347 $ 11,764
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 11,990 11,661 Loss on disposal of
property and equipment 41 158 Share-based compensation expense 743
1,170 Inventory write-offs for obsolescence 951 1,444 Other (2,212
) (5,122 ) Changes in operating assets and liabilities
(1,263 ) 19 Net cash provided by operating activities
14,597 21,094 Investing activities: Capital expenditures
(6,748 ) (8,322 ) Proceeds from sale of property and equipment 81
360 Purchase of business (48,919 ) - Net cash
used in investing activities (55,586 ) (7,962 ) Financing
activities: Proceeds from long-term debt 25,000 - Principal
payments on long-term debt and capital lease obligations (3,148 )
(181 ) Debt issuance costs (384 ) - Distributions to noncontrolling
interests (82 ) (67 ) Net cash provided by (used in)
financing activities 21,386 (248 ) Effect of exchange rate changes
on cash and cash equivalents (1,493 ) 169
(Decrease) increase in cash and cash equivalents
(21,096 ) 13,053 Cash and cash equivalents at
beginning of period 93,881 80,828 Cash
and cash equivalents at end of period $ 72,785 $ 93,881
Supplemental disclosure of non-cash financing
transactions: Conversion of exchangeable notes to common stock
$ 5,861 $ - VISHAY PRECISION GROUP, INC.
Reconciliation of Adjusted Earnings Per Share (Unaudited - In
thousands, except per share data) Fiscal quarter ended Years
ended December 31, December 31, December 31, December 31, 2013 2012
2013 2012 GAAP net earnings attributable to VPG
stockholders $ 1,128 $ 5,165 $ 4,291 $ 11,691
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments 454 - 4,855 -
Acquisition costs 42 275 794 275 Restructuring costs 51 -
538 -
Reconciling items
affecting tax expenses (benefit)
Tax effect of purchase accounting
adjustments, acquisition cost adjustments, restructuring cost
adjustments, and discrete tax items
(792 ) 3,396 1,851 3,396
Adjusted net earnings $ 2,467 $ 2,044 $ 8,627 $ 8,570
Weighted average shares outstanding - diluted 13,955 13,912 13,944
13,889 Adjusted net earnings per diluted share $ 0.18 $ 0.15
$ 0.62 $ 0.62 VISHAY PRECISION GROUP, INC.
Reconciliation of Consolidated Adjusted Gross Margin (Unaudited -
In thousands) Fiscal quarter ended
Years ended December 31, December 31, December 31, December 31,
2013 2012 2013 2012 Gross profit $ 23,083 $ 17,562 $
83,855 $ 75,032 Gross margin 37.2 % 34.4 % 34.9 % 34.5 %
Reconciling items
affecting gross margin
Acquisition purchase accounting adjustments 454 - 4,855 -
Adjusted gross profit $ 23,537 $ 17,562
$ 88,710 $ 75,032 Adjusted gross margin 37.8 %
34.4 % 36.9 % 34.5 %
Vishay Precision Group, Inc.Wendy WilsonSenior Director Investor
Relations and Corporate
Communications919-374-5501Wendy.wilson@vishaypg.com
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