Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its
fiscal 2016 second quarter and six months ended July 2, 2016.
Highlights:
- Second quarter net revenues of $58.0
million.
- Second quarter earnings per diluted
share of $0.14.
- Adjusted earnings per diluted share of
$0.15.
- Gross profit margin of 37.1 %
reflecting the impact of restructuring actions.
- Force Sensors segment achieved gross
profit margins of 29% in the second quarter of 2016 as compared to
19% in the second quarter of 2015.
- Fiscal year 2016 adjusted diluted
earnings per share guidance updated –in the range of $0.70 to $0.80
– at constant exchange rates as of the second quarter of 2016.
“Despite the decline in sales in this quarter compared to the
second quarter of 2015, our adjusted gross profit margin increased
to 37.4% as compared to 35.4% in the second quarter of 2015
validating the effectiveness of our restructuring and cost
reduction efforts,” stated Ziv Shoshani, VPG’s chief executive
officer. “While global economic conditions remain soft, we are
encouraged that our consolidated book-to-bill and backlog remain
stable.”
Net revenues for the second quarter of 2016 were $58.0 million,
down $1.5 million, or 2.5% compared with $59.5 million of net
revenues for the prior year period. Net revenues for the six months
ended July 2, 2016 were $114.6 million, representing a 1.3%
decrease from the $116.2 million of net revenues for the comparable
prior year period. Comparing sequential results, net revenues for
the second quarter of 2016 increased by $1.4 million, or 2.4%, from
$56.6 million in the first quarter of 2016.
Net earnings attributable to VPG stockholders for the second
quarter of 2016 were $1.9 million, or $0.14 per diluted share,
compared to net earnings attributable to VPG stockholders for the
second quarter of 2015 of $1.5 million, or $0.11 per diluted share.
Net earnings attributable to VPG stockholders for the six months
ended July 2, 2016 were $2.3 million, or $0.18 per diluted share,
compared to net earnings attributable to VPG stockholders of $2.3
million, or $0.17 per diluted share, for the comparable prior year
period.
The following table reconciles the company's non-U.S. GAAP
measures included in the press release, which are provided for
comparison with other results, and the most directly comparable
U.S. GAAP measures:
Reconciliation of Adjusted
Earnings Per Share (Unaudited - In thousands, except per share
data)
Fiscal quarter ended Six fiscal months ended
July 2, 2016 June 27, 2015 July 2, 2016
June 27, 2015
Net earnings attributable to VPG
stockholders
$
1,868
$ 1,476
$
2,348
$ 2,336
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments
195
26
491
26 Acquisition costs
352
—
414
— Restructuring costs
1,011
304
1,686
382
Reconciling items
affecting income tax expense
Less tax effect of adjustments for purchase accounting, acquisition
costs, restructuring costs, and discrete tax items
1,469
41
1,290
57 Adjusted net earnings attributable to VPG stockholders
$
1,957
$ 1,765
$
3,649
$ 2,687 Adjusted net earnings per diluted share
$
0.15
$ 0.13
$
0.27
$ 0.19 Weighted average shares outstanding - diluted
13,405
13,790
13,402
13,875
Segments
The Foil Technology Products segment revenues were $25.4 million
in the second quarter of 2016, down 3.0% from $26.2 million in the
second quarter last year, and down 3.6% from $26.3 million in the
first quarter of 2016. Decreased year-over-year revenues and
sequential revenues primarily were attributable to lower volume,
partially offset by the additional volume from the Pacific
Instruments acquisition and $0.3 million in positive exchange rate
impact. The gross profit margin for the segment was 36.8% for the
second quarter of 2016 (37.0% excluding the Pacific Instruments
acquisition purchase accounting adjustments of $0.1 million)
compared to 39.6% in the second quarter of 2015 and 42.3% in the
first quarter of 2016. The gross profit margin for the quarter
compared to the comparable prior year period and the first quarter
of 2016 decreased primarily due to lower volume and labor
inefficiencies mainly related to the closure of the Costa Rica
facility and transition of manufacturing to other facilities.
The Force Sensors segment revenues were $15.4 million in the
second quarter of 2016, down 1.6% from $15.6 million in the second
quarter last year, and up 3.8% from $14.8 million in the first
quarter of 2016. Decreased year-over-year revenues were
attributable to lower volume. The sequential increase in revenues
was attributable primarily to higher volumes. The gross profit
margin for the segment was 29.0% in the second quarter of 2016,
compared to 19.0% in the second quarter of 2015 and 18.4% in the
first quarter of 2016. The gross profit margin for the quarter
increased from the comparable prior year period primarily due to
the realization of cost savings from our previously announced cost
reduction programs. The sequential gross profit margin increase was
due to an increase in volume, the realization of cost savings from
our previously announced cost reduction programs and an inventory
increase to support ongoing manufacturing of our consolidation
plan.
The Weighing and Control Systems segment revenues were $17.2
million in the second quarter of 2016, down 2.6% from $17.7 million
in the second quarter last year, and up 11.4% from $15.5 million in
the first quarter of 2016. Decreased year-over-year revenues were
attributable to a decrease in volume, partially offset by the
acquisition of Stress-Tek. In addition, $0.3 million of the
decrease was due to negative effects of foreign exchange rates. The
sequential increase in revenues was attributable to an increase in
volume and $0.4 million in positive effects of foreign currency.
The gross profit margin for the segment was 44.7% in the second
quarter of 2016 (45.6% excluding the Stress-Tek acquisition
purchase accounting adjustments of $0.1 million) compared to 43.6%
in the second quarter of 2015 (43.7% excluding the KELK acquisition
purchase accounting adjustment of $0.1 million) and 38.3% in the
first quarter of 2016 (40.2% excluding the Stress-Tek acquisition
purchase accounting adjustment of $0.3 million). The gross profit
margin for the quarter increased from the comparable prior year
period primarily due to the realization of our previously announced
cost reduction programs. The sequential gross profit margin
increase was due to an increase in volume in our steel
business.
Outlook
“In light of global economic conditions, the continued strength
of the U.S. dollar compared to other currencies and the normal
seasonality of our business, we expect net revenues in the range of
$55 million to $60 million for the third quarter of 2016,”
concluded Mr. Shoshani. “We are updating our expectation for fiscal
year 2016 adjusted diluted earnings per share to be in the range of
$0.70 to $0.80, at constant exchange rates as of the second quarter
of 2016.”
Conference Call and Webcast
A conference call will be held today (August 9) at 10:00 a.m.
EDT (9:00 a.m. CDT). To access the conference call, interested
parties may call 1-888-317-6003 or internationally 1-412-317-6061
and use passcode 9820655, 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:
10089144. 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;
difficulties or delays in completing acquisitions and integrating
acquired companies (including the acquisitions of Stress-Tek and
Pacific Instruments); 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-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, 2015. 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
July 2, 2016 June 27, 2015 Net revenues
$
57,996 $ 59,508 Costs of products sold
36,501
38,473 Gross profit
21,495 21,035 Gross
profit margin
37.1 % 35.3 % Selling, general,
and administrative expenses
18,444 18,396 Acquisition costs
352 — Restructuring costs
1,011
304 Operating income
1,688 2,335 Operating margin
2.9 % 3.9 % Other income (expense): Interest
expense
(371 ) (173 ) Other
(30
) (414 ) Other income (expense) - net
(401
) (587 ) Income before taxes
1,287 1,748
Income tax (benefit) expense
(562 )
288 Net earnings
1,849 1,460 Less: net
loss attributable to noncontrolling interests
(19
) (16 ) Net earnings attributable to VPG stockholders
$ 1,868 $ 1,476 Basic earnings
per share attributable to VPG stockholders
$ 0.14 $
0.11 Diluted earnings per share attributable to VPG stockholders
$ 0.14 $ 0.11 Weighted average shares
outstanding - basic
13,184 13,580 Weighted average shares
outstanding - diluted
13,405 13,790
VISHAY PRECISION GROUP, INC. Consolidated Condensed
Statements of Operations (Unaudited - In thousands, except per
share amounts)
Six fiscal months ended July 2,
2016 June 27, 2015 Net revenues
$ 114,625
$ 116,116 Costs of products sold
73,355
74,102 Gross profit
41,270 42,014 Gross profit margin
36.0 % 36.2 % Selling, general, and
administrative expenses
36,492 37,144 Acquisition costs
414 - Restructuring costs
1,686
382 Operating income
2,678 4,488 Operating
margin
2.3 % 3.9 % Other income (expense):
Interest expense
(699 ) (360 ) Other
395 (1,343 ) Other income (expense) - net
(304 ) (1,703 ) Income before taxes
2,374 2,785 Income tax expense
29
478 Net earnings
2,345 2,307
Less: net loss attributable to noncontrolling interests
(3 ) (29 ) Net earnings attributable to VPG
stockholders
$ 2,348 $ 2,336
Basic earnings per share attributable to VPG stockholders
$
0.18 $ 0.17 Diluted earnings per share attributable to VPG
stockholders
$ 0.18 $ 0.17 Weighted average
shares outstanding - basic
13,181 13,663 Weighted average
shares outstanding - diluted
13,402 13,875
VISHAY PRECISION GROUP, INC. Consolidated Condensed
Balance Sheets (In thousands)
July 2, 2016 December 31,
2015 (Unaudited) Assets Current assets: Cash and
cash equivalents
$ 52,223 $ 62,641 Accounts
receivable, net
36,020 35,553 Inventories: Raw materials
15,927 15,062 Work in process
21,645 20,289 Finished
goods
20,244 20,849 Inventories,
net
57,816 56,200 Prepaid expenses and other current
assets
8,700 7,814 Assets held for sale
2,043
- Total current assets
156,802 162,208
Property and equipment, at cost: Land
3,516 3,639
Buildings and improvements
45,872 55,003 Machinery and
equipment
88,285 84,409 Software
7,349 7,284
Construction in progress
2,697 2,288 Accumulated
depreciation
(92,756 ) (95,992 )
Property and equipment, net
54,963 56,631 Goodwill
19,422 12,603 Intangible assets, net
23,038
17,683 Other assets
14,614
14,622 Total assets
$ 268,839 $ 263,747
Liabilities and equity Current
liabilities: Trade accounts payable
$ 8,319 $ 8,004
Payroll and related expenses
10,770 13,888 Other accrued
expenses
15,066 16,604 Income taxes
1,317 527 Current
portion of long-term debt
2,230 2,120
Total current liabilities
37,702 41,143
Long-term debt, less current portion
35,019 31,037 Deferred
income taxes
661 334 Other liabilities
7,760 7,195
Accrued pension and other postretirement costs
11,434
11,597 Total liabilities
92,576 91,306
Commitments and contingencies Equity: Common stock
1,278 1,276 Class B convertible common stock
103 103
Treasury stock
(8,765 ) (8,765 ) Capital in excess of
par value
190,883 190,436 Retained earnings
24,675
22,327 Accumulated other comprehensive loss
(32,085
) (33,121 ) Total Vishay Precision Group, Inc.
stockholders' equity
176,089 172,256 Noncontrolling
interests
174 185 Total equity
176,263 172,441 Total
liabilities and equity
$ 268,839 $ 263,747
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited - In
thousands)
Six fiscal months ended July 2,
2016 June 27, 2015 Operating activities Net
earnings
$ 2,345 $ 2,307 Adjustments to reconcile net
earnings to net cash provided by (used in) operating activities:
Depreciation and amortization
5,640 5,524 Gain on disposal
of property and equipment
(31 ) (1 ) Share-based
compensation expense
547 416 Inventory write-offs for
obsolescence
865 916 Deferred income taxes
(1,540
) (98 ) Other
(804 ) 1,219 Net changes in
operating assets and liabilities: Accounts receivable, net
991 (1,671 ) Inventories, net
(1,681 ) (4,345
) Prepaid expenses and other current assets
(879 )
943 Trade accounts payable
91 (1,670 ) Other current
liabilities
(5,356 ) (3,589 ) Net cash
provided by (used in) operating activities
188 (49 )
Investing activities Capital expenditures
(4,434
) (5,037 ) Proceeds from sale of property and equipment
250 65 Purchase of business
(10,727 )
- Net cash used in investing activities
(14,911 ) (4,972 )
Financing activities
Principal payments on long-term debt and capital leases
(1,064 ) (1,810 ) Proceeds from revolving facility
11,000 — Payments on revolving facility
(6,000
) — Purchase of treasury stock
— (6,137 )
Distributions to noncontrolling interests
(8 )
(45 ) Net cash provided by (used in) financing activities
3,928 (7,992 ) Effect of exchange rate changes on cash and
cash equivalents
377 (1,173 ) Decrease
in cash and cash equivalents
(10,418 ) (14,186 )
Cash and cash equivalents at beginning of period
62,641 79,642 Cash and cash equivalents
at end of period
$ 52,223 $ 65,456
VISHAY PRECISION GROUP,
INC. Reconciliation of Consolidated Adjusted Gross Profit Margin
(Unaudited - In thousands)
Fiscal quarter ended Six
fiscal months ended July 2, 2016 June 27, 2015
July 2, 2016 June 27, 2015 Gross profit
$
21,495 $ 21,035
$ 41,270 $ 42,014 Gross profit
margin
37.1 % 35.3 %
36.0 % 36.2 %
Reconciling items
affecting gross profit margin
Acquisition purchase accounting
adjustments
195 26
491 26 Adjusted
gross profit
$ 21,690 $ 21,061
$
41,761 $ 42,040 Adjusted gross profit margin
37.4 % 35.4 %
36.4 % 36.2 %
VISHAY PRECISION GROUP, INC.
Reconciliation of Adjusted Earnings Per Share (Unaudited - In
thousands, except per share data)
Fiscal quarter ended
Six fiscal months ended July 2, 2016 June 27,
2015 July 2, 2016 June 27, 2015 Net earnings
attributable to VPG stockholders
$ 1,868 $ 1,476
$ 2,348 $ 2,336
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments
195 26
491 26 Acquisition costs
352 —
414 —
Restructuring costs
1,011 304
1,686 382
Reconciling items
affecting income tax expense
Less tax effect of adjustments for purchase accounting, acquisition
costs, restructuring costs, and discrete tax items
1,469 41
1,290
57 Adjusted net earnings attributable to VPG
stockholders
$ 1,957 $ 1,765
$
3,649 $ 2,687 Adjusted net earnings per
diluted share
$ 0.15 $ 0.13
$ 0.27 $
0.19 Weighted average shares outstanding - diluted
13,405 13,790
13,402 13,875
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version on businesswire.com: http://www.businesswire.com/news/home/20160809005414/en/
VPGWilliam M. ClancyExecutive Vice President and Chief Financial
Officer484-321-5306bill.clancy@vpgsensors.com
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