Net revenues up 6.2%
year-over-year. Increasing market demand in all segments supports
guidance in the range of $60 million to $65 million for the second
quarter of fiscal year 2014.
Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, based on its resistive foil
technology, today announced financial results for its first quarter
ended March 29, 2014.
Ziv Shoshani, VPG’s chief executive officer said, “Net revenues
of $61.0 million came in within our guidance. Consolidated gross
margin improved to 36.1% in the first quarter, up from a gross
margin of 34.8% in the first quarter of fiscal 2013.”
Mr. Shoshani added, “We continue to see a gradually
strengthening business environment. This is supported by three
consecutive quarters of a book-to-bill ratio around or above 1.00,
with a strong book-to-bill ratio in the first quarter of 2014 of
1.09.”
Net revenues for the first quarter of 2014 were $61.0 million,
representing a 6.2% increase from $57.5 million of net revenues for
the comparable prior year period. Comparing sequential results, net
revenues for the first quarter of 2014 decreased by $1.2 million,
from $62.2 million in the fourth quarter of 2013.
Net earnings attributable to VPG stockholders for the first
quarter of 2014 were $1.7 million, or $0.12 per diluted share,
compared to net earnings attributable to VPG stockholders for the
first quarter of 2013 of $0.4 million, or $0.03 per diluted
share.
Net earnings attributable to VPG stockholders for the first
quarter of 2014 include approximately $0.4 million of acquisition
related costs and restructuring costs, versus $2.1 million of
acquisition related costs and restructuring costs in the first
quarter of 2013, which affect comparability. Adjusted net earnings
attributable to VPG stockholders for the first quarter of 2014 were
$2.0 million or $0.14 per diluted share, versus adjusted net
earnings attributable to VPG stockholders of $1.8 million, or $0.13
per diluted share for the comparable prior year period. The overall
impact on foreign exchange rates for the first quarter of 2014 as
compared to the prior year period had a negative impact to pretax
income of $0.3 million, or $0.02 per diluted share.
Segments
The Foil Technology Products segment revenues were $26.0 million
in the first quarter of 2014, up 6.8% from $24.4 million in the
first quarter last year, and relatively flat from $25.7 million in
the fourth quarter of 2013. The gross margin for the segment was
flat, at 37.9% for the first quarter of 2014 compared to 37.6% in
the first quarter last year, and decreased from 40.5% in the fourth
quarter of 2013. Despite the increase in revenues compared to the
first quarter of 2013, the gross margin remained constant primarily
due to the impact of exchange rates and overtime costs due to
weather disruptions in the United States. The sequential decrease
in gross margin was due to the impact of product mix and exchange
rates.
The Force Sensors segment revenues of $16.4 million in the first
quarter of 2014 were flat compared to $16.4 million in the first
quarter last year, and were up 2.9% from $16.0 million in the
fourth quarter of 2013. The gross margin for the segment was 21.3%
in the first quarter of 2014 versus 26.8% in the first quarter of
2013 and 21.5% in the fourth quarter of 2013. While sequential
gross margin is flat, the year over year gross margin has
decreased, mainly due to product mix and one-time positive effects
in the first quarter of 2013 that did not repeat this year.
The Weighing and Control Systems segment revenues increased to
$18.6 million in the first quarter of 2014, up 11.3% from $16.7
million in the first quarter last year, and down 9.4% from $20.5
million in the fourth quarter of 2013. The gross margin for the
segment was 46.7% in the first quarter of 2014 versus 38.4% in the
first quarter of 2013 (45.8% excluding the KELK acquisition
purchase accounting adjustments of $1.2 million) and 44.9% in the
fourth quarter of 2013 (47.1% excluding the KELK acquisition
purchase accounting adjustments of $0.5 million). The
year-over-year improvement in adjusted gross margins is primarily
due to higher volume. The sequential decrease in adjusted gross
margin is due to lower volume.
Outlook
Mr. Shoshani concluded, “With continued improvement in market
demand for all of our segments, we expect net revenues in the range
of $60 million to $65 million for the second quarter of 2014.”
Conference Call and Webcast
A conference call will be held on May 7, 2014 at 10:00 a.m. EDT
(9:00 a.m. CDT). 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
www.vpgsensors.com.
A replay will be available approximately one hour after the
completion of the call by calling toll-free 877-344-7529 or
internationally 412-317-0088 and using the conference number:
10044367. The replay will also be available on the investor
relations page of the VPG website at www.vpgsensors.com. It will be
available via phone and website for a limited time.
About VPG
Vishay Precision Group, Inc. 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.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, changes in the current pace of economic recovery,
including if such recovery stalls or does not continue as expected;
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 ERP system and the associated
impact on manufacturing efficiencies and customer satisfaction;
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, 2013. 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 March 29, March
30, 2014 2013 Net revenues $ 61,041 $ 57,461 Costs of
products sold 38,994 37,492 Gross
profit 22,047 19,969 Gross margin 36.1 % 34.8 % Selling,
general, and administrative expenses 18,700 17,797 Acquisition
costs - 487 Restructuring costs 324 388
Operating income 3,023 1,297 Operating margin 5.0 % 2.3 %
Other income (expense): Interest expense (212 ) (197 ) Other
(542 ) (376 ) Total other income (expense) - net (754
) (573 ) Income before taxes 2,269 724 Income
tax expense 496 288 Net earnings
1,773 436 Less: net earnings attributable to noncontrolling
interests 67 49 Net earnings attributable to VPG
stockholders $ 1,706 $ 387 Basic
earnings per share attributable to VPG stockholders $ 0.12 $ 0.03
Diluted earnings per share attributable to VPG stockholders
$ 0.12 $ 0.03 Weighted average shares outstanding -
basic 13,752 13,387 Weighted average shares outstanding -
diluted 13,958 13,928 VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets (In thousands)
March 29, December 31, 2014 2013 Assets (unaudited) Current assets:
Cash and cash equivalents $ 72,041 $ 72,785 Accounts receivable,
net 41,897 40,500 Inventories, net 54,903 54,973 Deferred income
taxes 4,190 4,784 Prepaid expenses and other current assets
10,836 10,500 Total current assets 183,867
183,542 Property and equipment, net 49,447 49,323 Goodwill
18,153 18,880 Intangible assets, net 21,182 22,458 Other assets
18,266 17,901 Total assets $ 290,915
$ 292,104 Liabilities and equity Current
liabilities: Trade accounts payable $ 10,521 $ 10,258 Payroll and
related expenses 14,553 15,016 Other accrued expenses 14,172 15,814
Income taxes 626 615 Current portion of long-term debt 4,391
4,137 Total current liabilities 44,263 45,840
Long-term debt, less current portion 21,675 22,936 Deferred
income taxes 1,025 1,259 Other liabilities 7,751 7,738 Accrued
pension and other postretirement costs 10,679
10,780 Total liabilities 85,393 88,553
Commitments and contingencies Equity: Common
stock 1,273 1,271 Class B convertible common stock 103 103 Capital
in excess of par value 188,857 188,424 Retained earnings 34,353
32,647 Accumulated other comprehensive income (loss) (19,246
) (19,027 ) Total Vishay Precision Group, Inc. stockholders'
equity 205,340 203,418 Noncontrolling interests 182
133 Total equity 205,522 203,551
Total liabilities and equity $ 290,915 $ 292,104
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited - In
thousands) Three fiscal months ended March 29, March 30,
2014 2013 Operating activities: Net earnings $ 1,773 $ 436
Adjustments to reconcile net earnings to
net cash provided by (used in) operating activities:
Depreciation and amortization 2,849 3,007 Gain on disposal of
property and equipment (3 ) (5 ) Share-based compensation expense
222 335 Inventory write-offs for obsolescence 438 187 Other 486
(631 ) Changes in operating assets and liabilities (3,726 )
(4,711 ) Net cash provided by (used in) operating activities
2,039 (1,382 ) Investing activities: Capital expenditures
(1,878 ) (818 ) Proceeds from sale of property and equipment 3 13
Purchase of business - (49,888 ) Net cash used
in investing activities (1,875 ) (50,693 ) Financing
activities: Proceeds from long-term debt - 25,000 Principal
payments on long-term debt and capital lease obligations (1,035 )
(789 ) Debt issuance costs - (384 ) Distributions to noncontrolling
interests (18 ) (13 ) Net cash (used in) provided by
financing activities (1,053 ) 23,814 Effect of exchange rate
changes on cash and cash equivalents 145 (930
) Decrease in cash and cash equivalents (744 )
(29,191 ) Cash and cash equivalents at beginning of period
72,785 93,881 Cash and cash equivalents
at end of period $ 72,041 $ 64,690
VISHAY PRECISION GROUP, INC. Reconciliation of Adjusted
Earnings Per Share (Unaudited - In thousands, except per share
data) Fiscal quarter ended March 29, March 30, 2014 2013
Net earnings attributable to VPG stockholders $ 1,706
$ 387
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments 39 1,238
Acquisition costs - 487 Restructuring costs 324 388
Reconciling items
affecting income tax expense
Tax effect of purchase accounting adjustments, acquisition cost
adjustments, restructuring cost adjustments, and discrete tax items
92 692 Adjusted net earnings attributable to
VPG stockholders $ 1,977 $ 1,808 Weighted average shares
outstanding - diluted 13,958 13,928 Adjusted net earnings
per diluted share $ 0.14 $ 0.13 VISHAY
PRECISION GROUP, INC. Reconciliation of Consolidated Adjusted Gross
Margin (Unaudited - In thousands) Fiscal quarter ended March
29, March 30, 2014 2013 Gross profit $ 22,047 $
19,969 Gross margin 36.1 % 34.8 %
Reconciling items
affecting gross margin
Acquisition purchase accounting adjustments 39 1,238
Adjusted gross profit $ 22,086 $ 21,207 Adjusted
gross margin 36.2 % 36.9 %
VPGWendy WilsonSenior Director Investor Relations and Corporate
Communications919-374-5501wendy.wilson@vpgsensors.com
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