Vishay Precision Group, Inc. (NYSE:VPG), a leading producer of
precision sensors and systems, today announced that it will
reschedule the full release of its fiscal 2015 second quarter and
six months financial results ended June 27, 2015, and its related
earnings conference call, which was originally scheduled for today,
in order to complete a review and analysis of certain potential
adjustments, if any, to our historical financial statements for a
subsidiary located in India. This subsidiary is one of several
subsidiaries that manufacture components for the company’s Force
Sensors segment.
We have determined that transactions have been recorded for this
Indian subsidiary in the local currency, the Indian rupee, instead
of the functional currency, the U.S. dollar, in prior periods
extending back to 2011. We are currently investigating the impact
of this historical use of the local currency instead of the
functional currency and evaluating whether the differences are
material to any period or in the aggregate. Although we are not yet
in a position to estimate the amount of any required adjustments,
if any, our current expectation is that the principal line items
impacted in our Indian subsidiary’s financial statements, and
therefore our consolidated financial statements, are property and
equipment, net, depreciation expense, foreign currency
re-measurement gains and losses, and foreign currency translation
gains and losses recorded as a component of accumulated other
comprehensive income within stockholders’ equity.
In the interest of providing the investment community with
relevant information, we are providing the following preliminary
unaudited financial results for the second quarter and six months
ended June 27, 2015, which are subject to change:
Net revenues for the second quarter of 2015 were $59.5 million,
representing an 8.7% decrease from $65.2 million of net revenues
for the comparable prior year period. Adverse changes in foreign
exchange rates accounted for $5.1 million of this $5.7 million
decrease. Net revenues for the six months ended June 27, 2015 were
$116.1 million, representing an 8.0% decrease from the $126.2
million of net revenues for comparable prior year period. Adverse
changes in foreign exchange rates accounted for $9.5 million of
this $10.1 million decrease. Comparing sequential results, net
revenues for the second quarter of 2015 increased by $2.9 million,
or 5.1%, from $56.6 million in the first quarter of 2015.
Segments
The Foil Technology Products segment revenues were $26.2 million
in the second quarter of 2015, down 6.7% from $28.0 million in the
second quarter last year, and up 4.4% from $25.1 million in the
first quarter of 2015. Net revenues were negatively impacted by the
effects of foreign currency rates by $1.7 million in the second
quarter of 2015 as compared to the second quarter of 2014, and were
negatively impacted by $0.2 million as compared to the first
quarter of 2015. The gross margin for the segment decreased to
39.6% for the second quarter of 2015 compared to 40.2% in the
second quarter last year, and down from 40.6% in the first quarter
of 2015. The gross margin decreased from the comparable prior year
period primarily due to the effects of foreign currency rates and
additional headcount for expansion of our advanced sensor platform.
Despite an increase in revenues, the sequential gross margin
decrease was due primarily to the effects of foreign currency rates
and other costs.
The Force Sensors segment revenues of $15.6 million in the
second quarter of 2015 were down 7.9% compared to $17.0 million in
the second quarter last year, and were up 2.7% from $15.2 million
in the first quarter of 2015. Decreased year-over-year revenues are
attributable primarily to the effect of foreign exchange rates. The
increase in sequential revenues is attributable to higher volume.
The gross margin for the segment was 19.8% in the second quarter of
2015 versus 21.9% in the second quarter of 2014 and 21.9% in the
first quarter of 2015. The gross margin for the quarter decreased
from the comparable prior year period primarily due to the effects
of foreign currency rates. The sequential gross margin decreased
due to a reduction in inventory.
The Weighing and Control Systems segment revenues were $17.7
million in the second quarter of 2015, down 12.1% from $20.2
million in the second quarter last year, and up 8.6% from $16.3
million in the first quarter of 2015. Decreased year-over-year
revenues were primarily attributable to the effects of foreign
currency rates. The sequential increase is attributable to volume
in our process weighing business. The gross margin for the segment
was 43.6% in the second quarter of 2015 versus 48.2% in the second
quarter of 2014 and 44.6% in the first quarter of 2015. The
year-over-year decrease in gross margin is primarily due to the
effects of foreign currency rates and unfavorable product mix. The
sequential decrease in gross margin is primarily due to higher
freight costs and unfavorable product mix.
Outlook
Assuming a similar exchange rate impact to our revenues and
given the normal seasonality in our business, we expect net
revenues in the range of $55 million to $60 million for the third
quarter of 2015.
Conclusion
We are working diligently to finalize the review and analysis of
our Indian subsidiary functional currency accounting, and we expect
to file our Form 10-Q and hold our earnings call on or before
August 11, 2015. Because the assessment is ongoing, we can give no
assurances that the expected timing for the filing of our Form 10-Q
and earnings call will be met. When the assessment is complete and
the company files its Form 10-Q and holds its earnings call, the
financial statements may differ materially from the results
disclosed in this press release. In addition, the assessment may
impact prior-period financial statements.
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 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: our inability to finalize the review and
analysis of our Indian subsidiary functional currency accounting in
time to permit our Form 10-Q for the second quarter of 2015 to be
filed in a timely manner, 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; 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, 2014. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20150804005888/en/
VPGWendy WilsonSenior Director Investor Relations and Corporate
Communicationsoffice 919-374-5501mobile
919-588-0155wendy.wilson@vpgsensors.com
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