VPG Vishay Precision Group Inc

Third quarter net revenues of $57.1 million, within guidance. Adjusted diluted earnings per share is $0.18. Cash generated from operations for the third quarter was $5.4 million and free cash flow was $2.9 million.*

Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and systems, today announced its results for its third quarter of fiscal 2015 and nine months ended September 26, 2015.

Ziv Shoshani, VPG’s chief executive officer said, “I am pleased with our quarterly results today, considering challenging global economic conditions. Adjusted diluted earnings per share was $0.18 and cash generated from operations for the third quarter was $5.4 million, with free cash flow of $2.9 million. We recorded a $4.9 million pre-tax, non-cash impairment charge in the quarter, as a result of a current review of our goodwill and indefinite-lived intangible assets. For the full year, we have repurchased 618,000 VPG shares at a cost of $8.7 million.”

Net revenues for the third quarter of 2015 were $57.1 million, representing a $6.3 million, or 9.9%, decrease from $63.4 million of net revenues for the comparable prior year period. Of the $6.3 million decrease in revenues, $4.5 million was due to the negative impact of foreign currency exchange rates. Net revenues for the nine months ended September 26, 2015 were $173.3 million, representing a $16.5 million, or 8.7% decrease from the $189.8 million of net revenues for the comparable prior year period. Of the $16.5 million decrease in revenues, $14.0 million was due to the negative impact of foreign currency exchange rates. Comparing sequential results, net revenues for the third quarter of 2015 decreased by $2.4 million, or 4.0%, from $59.5 million in the second quarter of 2015.

Net loss attributable to VPG stockholders for the third quarter of 2015 were $(1.9) million, or $(0.15) per diluted share, compared to net earnings attributable to VPG stockholders for the third quarter of 2014 of $3.2 million, or $0.23 per diluted share. Foreign currency exchange rates for the third quarter of 2015 as compared to the prior year period had a negative impact on net income of $0.7 million, or $0.05 per diluted share. Net earnings attributable to VPG stockholders for the nine months ended September 26, 2015 were $0.4 million, or $0.03 per diluted share, compared to net earnings attributable to VPG stockholders of $8.0 million, or $0.57 per diluted share for the comparable prior year period. Foreign currency exchange rates for the nine months of 2015 as compared to the prior year period had a negative impact on net income of $1.2 million, or $0.08 per diluted share.

Adjusted net earnings attributable to VPG stockholders for the third quarter of 2015 were $2.4 million, or $0.18 per diluted share, versus adjusted net earnings attributable to VPG stockholders of $3.3 million, or $0.24 per diluted share for the comparable prior year period. Net loss attributable to VPG stockholders for the third quarter of 2015 include $0.5 million of restructuring costs and $4.9 million of impairment of goodwill and indefinite-lived intangible assets, and related tax effects and discrete tax items, versus, $0.1 million of restructuring costs and related tax effects in the third quarter of 2014.

Adjusted net earnings attributable to VPG stockholders for the nine months ended September 26, 2015 were $5.1 million, or $0.37 per diluted share, versus adjusted net earnings attributable to VPG stockholders of $8.4 million, or $0.60 per diluted share for the comparable prior year period. Net earnings attributable to VPG stockholders for the nine months ended September 26, 2015 include $0.8 million of restructuring costs and $4.9 million of impairment of goodwill and indefinite-lived intangible assets, and related tax effects and discrete tax items, versus $0.5 million of restructuring costs and related tax effects and discrete tax items in the nine months of 2014.

Non-cash Impairment Charge

As a result of our regular review of goodwill and indefinite-lived intangible assets during the quarter, we recorded a $4.9 million pre-tax, non-cash impairment charge to reduce the carrying value of the goodwill and indefinite –lived intangible assets related to our steel business. This charge is preliminary and could change in connection with our annual review.

Segments

The Foil Technology Products segment revenues were $27.0 million in the third quarter of 2015, down 1.2% from $27.3 million in the third quarter last year, and up 3.2% from $26.2 million in the second quarter of 2015. Net revenues were negatively impacted by the effects of foreign currency exchange rates by $1.8 million in the third quarter of 2015 as compared to the third quarter of 2014, and were flat as compared to the second quarter of 2015. The gross profit margin for the segment increased to 42.0% for the third quarter of 2015 compared to 40.8% in the third quarter last year, and up from 39.6% in the second quarter of 2015. The gross profit margin increased from the comparable prior year period primarily due to manufacturing efficiencies. The sequential gross profit margin increase was due primarily to volume and manufacturing efficiencies.

The Force Sensors segment revenues of $14.6 million in the third quarter of 2015 were down 16.6% compared to $17.5 million in the third quarter last year, and were down 6.8% from $15.6 million in the second quarter of 2015. Decreased year-over-year revenues are attributable primarily to lower volume of $2.2 million and $0.7 million of exchange rate effects. The decrease in sequential revenues is attributable to lower volume of $1.1 million. The gross profit margin for the segment was 21.0% in the third quarter of 2015 versus 22.8% in the third quarter of 2014 and 19.0% in the second quarter of 2015. The gross profit margin for the quarter decreased from the comparable prior year period primarily due to the effects of lower volume and the effects of foreign currency exchange rates, partially offset by cost reduction. Despite lower revenues, the sequential gross profit margin increased due to production move savings and lower fixed costs.

The Weighing and Control Systems segment revenues were $15.6 million in the third quarter of 2015, down 16.3% from $18.6 million in the third quarter last year, and down 12.1% from $17.7 million in the second quarter of 2015. Net revenues were negatively impacted by the effects of foreign currency exchange rates of $2.0 million and volume of $0.9 million in the third quarter of 2015, as compared to the third quarter of 2014. The sequential decrease is primarily attributable to $1.8 million of lower volume, mainly from our steel products. The gross profit margin for the segment was 45.4% in the third quarter of 2015 versus 45.9% in the third quarter of 2014 and 43.6% in the second quarter of 2015. The year-over-year decrease in gross profit margin is primarily due to the effects of volume and foreign currency exchange rates. Despite lower revenues, the sequential increase in gross profit margin is primarily due to favorable product mix in our process weighing business.

Outlook

Mr. Shoshani concluded, “Assuming a similar exchange rate impact to our revenues, we expect net revenues in the range of $56 million to $61 million for the fourth quarter of 2015.”

*Editor’s Note: We define adjusted net earnings as net earnings attributable to VPG stockholders before acquisition purchase accounting adjustments, restructuring costs, impairment of goodwill and indefinite-lived intangibles and associated tax effects. Free cash flow is defined as the amount of cash generated from operations ($5.4 million for the third quarter of 2015), in excess of our capital expenditures ($2.5 million for the third quarter of 2015) and net of proceeds, if any, for the sale of assets (none in the third quarter of 2015). ** For a reconciliation of GAAP to non-GAAP financial information, refer to the quarterly financial tables.

Conference Call and Webcast

A conference call will be held today (November 3, 2015) 10:00 a.m. EST (9:00 a.m. CST). To access the conference call, interested parties may call 1-888-317-6003 or internationally 1-412-317-6061 and use passcode 1369827, 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: 10068983. 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 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; 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.

  VISHAY PRECISION GROUP, INC. Consolidated Condensed Statements of Operations (Unaudited - In thousands, except per share amounts)     Fiscal quarter ended September 26, September 27, 2015 2014   Net revenues $ 57,149 $ 63,402

Costs of products sold

  35,699     39,732   Gross profit 21,450 23,670 Gross profit margin 37.5 % 37.3 %   Selling, general, and administrative expenses 17,760 19,647 Impairment of goodwill and indefinite-lived intangibles 4,942 — Restructuring costs   459     144   Operating (loss) income (1,711 ) 3,879 Operating margin (3.0 )% 6.1 %   Other income (expense): Interest expense (158 ) (215 ) Other   (387 )   123   Other income (expense) - net   (545 )   (92 )   (Loss) income before taxes (2,256 ) 3,787   Income tax (benefit) expense   (304 )   523     Net (loss) earnings (1,952 ) 3,264 Less: net (loss) earnings attributable to noncontrolling interests   (9 )   30   Net (loss) earnings attributable to VPG stockholders $ (1,943 ) $ 3,234     Basic (loss) earnings per share attributable to VPG stockholders $ (0.15 ) $ 0.24 Diluted (loss) earnings per share attributable to VPG stockholders $ (0.15 ) $ 0.23   Weighted average shares outstanding - basic 13,347 13,757 Weighted average shares outstanding - diluted 13,347 13,977       VISHAY PRECISION GROUP, INC. Consolidated Condensed Statements of Operations (Unaudited - In thousands, except per share amounts)   Nine fiscal months ended September 26, September 27, 2015 2014   Net revenues $ 173,265 $ 189,804 Costs of products sold   109,801     119,515   Gross profit 63,464 70,289 Gross profit margin 36.6 % 37.0 %   Selling, general, and administrative expenses 54,904 58,707 Impairment of goodwill and indefinite-lived intangibles 4,942 — Restructuring costs   841     475   Operating income 2,777 11,107 Operating margin 1.6 % 5.9 %   Other income (expense): Interest expense (518 ) (671 ) Other   (1,730 )   (560 ) Other income (expense) - net   (2,248 )   (1,231 )   Income before taxes 529 9,876   Income tax expense   174     1,800     Net earnings 355 8,076 Less: net (loss) earnings attributable to noncontrolling interests   (38 )   89   Net earnings attributable to VPG stockholders $ 393   $ 7,987     Basic earnings per share attributable to VPG stockholders $ 0.03 $ 0.58 Diluted earnings per share attributable to VPG stockholders $ 0.03 $ 0.57   Weighted average shares outstanding - basic 13,558 13,755 Weighted average shares outstanding - diluted 13,772 13,968       VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)   September 26, December 31, 2015 2014 (Unaudited) Assets Current assets: Cash and cash equivalents $ 63,174 $ 79,642 Accounts receivable, net 37,230 37,427 Inventories: Raw materials 13,435 14,223 Work in process 20,774 19,813 Finished goods   21,689     18,806   Inventories, net 55,898 52,842   Deferred income taxes 5,512 5,636 Prepaid expenses and other current assets   10,032     10,361   Total current assets 171,846 185,908   Property and equipment, at cost: Land 1,871 1,893 Buildings and improvements 50,895 49,909 Machinery and equipment 81,519 78,500 Software 7,086 6,837 Construction in progress 2,605 2,928 Accumulated depreciation   (93,983 )   (89,374 ) Property and equipment, net 49,993 50,693   Goodwill 6,450 12,788   Intangible assets, net 13,800 17,381   Other assets   20,931     20,393   Total assets $ 263,020   $ 287,163     Liabilities and equity Current liabilities: Trade accounts payable $ 8,140 $ 10,559 Payroll and related expenses 13,248 14,216 Other accrued expenses 15,665 16,902 Income taxes 47 2,133 Current portion of long-term debt   5,870     5,120   Total current liabilities 42,970 48,930   Long-term debt, less current portion 13,122 17,713 Deferred income taxes 469 638 Other liabilities 7,230 7,644 Accrued pension and other postretirement costs   11,899     12,353   Total liabilities   75,690     87,278     Commitments and contingencies   Equity: Common stock 1,276 1,273 Class B convertible common stock 103 103 Treasury stock (8,765 ) (32 ) Capital in excess of par value 190,149 189,532 Retained earnings 35,728 35,335 Accumulated other comprehensive loss   (31,299 )   (26,560 )

Total Vishay Precision Group, Inc. stockholders' equity

187,192 199,651 Noncontrolling interests   138     234   Total equity   187,330     199,885   Total liabilities and equity $ 263,020   $ 287,163         VISHAY PRECISION GROUP, INC. Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands)   Nine fiscal months ended

September 26,

September 27,

2015

2014   Operating activities Net earnings $ 355 $ 8,076 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Impairment of goodwill and indefinite-lived intangibles 4,942 — Depreciation and amortization 8,142 8,726 Loss on disposal of property and equipment 14 61 Share-based compensation expense 796 780 Inventory write-offs for obsolescence 1,190 972 Deferred income taxes Other 1,276 (836 ) Net changes in operating assets and liabilities: Accounts receivable, net (1,182 ) (3,876 ) Inventories, net (5,159 ) (78 ) Prepaid expenses and other current assets 290 (848 ) Trade accounts payable (2,256 ) 181 Other current liabilities   (3,104 )   (686 ) Net cash provided by operating activities   5,304     12,472     Investing activities Capital expenditures (7,508 ) (5,575 ) Proceeds from sale of property and equipment   117     74   Net cash used in investing activities   (7,391 )   (5,501 )   Financing activities Principal payments on long-term debt and capital leases (3,839 ) (3,105 ) Purchase of treasury stock (8,733 ) — Distributions to noncontrolling interests   (58 )   (58 ) Excess tax benefit from share-based compensation plan Net cash used in financing activities (12,630 ) (3,163 ) Effect of exchange rate changes on cash and cash equivalents   (1,751 )   (1,193 ) (Decrease) increase in cash and cash equivalents (16,468 ) 2,615   Cash and cash equivalents at beginning of period   79,642     72,809   Cash and cash equivalents at end of period $ 63,174   $ 75,424             VISHAY PRECISION GROUP, INC. Reconciliation of Consolidated Adjusted Gross Profit Margin (Unaudited - In thousands)   Fiscal quarter ended Nine fiscal months ended September 26, September 27, September 26, September 27, 2015 2014 2015 2014 Gross profit $ 21,450 $ 23,670 $ 63,464 $ 70,289 Gross profit margin 37.5 % 37.3 % 36.6 % 37.0 %  

Reconciling items affecting gross profit margin

Acquisition purchase accounting adjustments (a) — 15 26 56         Adjusted gross profit $ 21,450   $ 23,685   $ 63,490   $ 70,345   Adjusted gross profit margin 37.5 % 37.4 % 36.6 % 37.1 %     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 26, September 27, September 26, September 27, 2015 2014 2015 2014 Net (loss) earnings attributable to VPG stockholders $ (1,943 ) $ 3,234 $ 393 $ 7,987  

Reconciling items affecting operating margin

Acquisition purchase accounting adjustments (a) — 15 26 56 Impairment of goodwill and indefinite-lived intangibles 4,942 — 4,942 — Restructuring costs 459 144 841 475  

Reconciling items affecting income tax expense

Tax effect of adjustments for purchase accounting, restructuring costs, impairment charges and discrete tax items   1,081     54     1,137     149   Adjusted net earnings attributable to VPG stockholders $ 2,377   $ 3,339   $ 5,065   $ 8,369     Weighted average shares outstanding - diluted 13,347 13,977 13,772 13,968   Adjusted net earnings per diluted share $ 0.18 $ 0.24 $ 0.37 $ 0.60  

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VPGWendy WilsonSenior Director Investor Relations and Corporate Communications919-374-5501wendy.wilson@vpgsensors.com