Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its
fiscal 2016 third quarter and nine months ended October 1,
2016.
Highlights:
- Third quarter earnings per diluted
share of $0.08.
- Adjusted earnings per diluted share of
$0.21.*
- Cash generated from operations for the
third quarter of 2016 was $6.3 million and free cash flow was $4.5
million.*
- Force Sensors segment achieved gross
profit margins of 31.0% in the third quarter of 2016 as compared to
21.0% in the third quarter of 2015.
“Our adjusted earnings per diluted share performance was $0.21
for the third quarter of 2016 as compared to adjusted earnings per
diluted share of $0.18 in the third quarter of 2015, in spite of
softer sales this quarter compared to the third quarter of 2015,”
said Ziv Shoshani, VPG chief executive officer. “We also generated
cash from operations of $6.3 million, with free cash flow of $4.5
million in the third quarter of 2016, which validates the
effectiveness of our restructuring and cost reduction
programs.”
Net earnings attributable to VPG stockholders for the third
fiscal quarter of 2016 were $1.1 million, or $0.08 per diluted
share, compared to net loss attributable to VPG stockholders for
the third fiscal quarter of 2015 of ($1.9) million, or ($0.15) per
diluted share. Net earnings attributable to VPG stockholders for
the fiscal nine months ended October 1, 2016 were $3.4 million, or
$0.25 per diluted share, compared to net earnings attributable to
VPG stockholders of $0.4 million, or $0.03 per diluted share, for
the comparable prior year period.
Adjusted net earnings attributable to VPG stockholders for the
third fiscal quarter of 2016 were $2.9 million, or $0.21 per
diluted share, compared to adjusted net earnings attributable to
VPG stockholders of $2.4 million, or $0.18 per diluted share, for
the comparable prior year period. Adjusted net earnings
attributable to VPG stockholders for the fiscal nine months ended
October 1, 2016 were $6.5 million, or $0.49 per diluted share,
compared to adjusted net earnings attributable to VPG stockholders
of $5.1 million, or $0.37 per diluted share, for the comparable
prior year period. Adjusted net earnings for the fiscal quarter and
fiscal nine months ended October 1, 2016 exclude, among other
costs, $1.1 million of costs associated with the Company’s
evaluation of strategic alternatives to enhance stockholder value.
There are no assurances that the evaluation will result in any
particular strategic alternative. The Company does not intend to
comment on or disclose developments regarding the evaluation
process unless it deems further disclosure is appropriate or
required.
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 Nine fiscal months ended October 1,
2016 September 26, 2015 October 1, 2016
September 26, 2015 Net earnings (loss) attributable to VPG
stockholders
$ 1,051 $ (1,943 )
$ 3,399
$ 393
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments
46 -
537
26 Acquisition costs
- -
414 - Strategic alternative
evaluation costs
1,079 -
1,079 - Impairment of
goodwill and indefinite-lived intangibles
- 4,942
—
4,942 Restructuring costs
709 459
2,395 841
Reconciling items
affecting income tax expense
Less tax effect of reconciling items and discrete tax items
(27 ) (1,081 )
(1,317 )
(1,137 ) Adjusted net earnings attributable to VPG
stockholders
$ 2,858 $ 2,377
$
6,507 $ 5,065 Adjusted net earnings per
diluted share
$ 0.21 $ 0.18
$ 0.49 $
0.37 Weighted average shares outstanding - diluted
13,422 13,347
13,409 13,772
Segments
The Foil Technology Products segment revenues were $23.9 million
in the third quarter of 2016, down 11.7% from $27.0 million in the
third quarter of 2015, and down 5.9% from $25.4 million in the
second quarter of 2016. Decreased year-over-year revenues were
attributable to lower volume, partially offset by the additional
volume from Pacific Instruments of $0.7 million and positive
exchange rate impact of $0.3 million. The decrease in sequential
revenues was also attributable to lower volumes. The gross profit
margin for the segment was 36.2% for the third quarter of 2016
compared to 42.0% in the third quarter of 2015 and 36.8% in the
second quarter of 2016. The gross profit margin for the quarter
compared to the comparable prior year period and the second quarter
of 2016 decreased primarily due to lower volume.
The Force Sensors segment revenues were $15.2 million in the
third quarter of 2016, up 4.5% from $14.6 million in the third
quarter of 2015, and down 1.1% from $15.4 million in the second
quarter of 2016. The increase in year-over-year revenues was
attributable to an increase in volume offset by negative exchange
rate impact of $0.3 million. Excluding the effects of foreign
currency, the sequential revenues were flat. The gross profit
margin for the segment was 31.0% in the third quarter of 2016,
compared to 21.0% in the third quarter of 2015 and 29.0% in the
second quarter of 2016. The gross profit margin for the quarter
increased from the comparable prior year period primarily due to
the increase in volume and the realization of cost savings from our
previously announced cost reduction programs. The sequential gross
profit margin increase was due to favorable product mix.
The Weighing and Control Systems segment revenues were $15.4
million in the third quarter of 2016, down 1.0% from $15.6 million
in the third quarter of 2015, and down 10.6% from $17.2 million in
the second quarter of 2016. Decreased year-over-year revenues were
attributable to a negative exchange rate impact of $0.5 million and
decrease in volumes, offset by the acquisition of Stress-Tek. The
sequential decrease in revenues was attributable to a decrease in
volume coupled with negative exchange rate impact of $0.4 million.
The gross profit margin for the segment was 44.9% in the third
quarter of 2016 compared to 45.4% in the third quarter of 2015 and
44.7% in the second quarter of 2016 (45.6% excluding the Stress-Tek
acquisition purchase accounting adjustment of $0.1 million).
Excluding foreign currency, the gross profit margin for the quarter
was flat compared to the prior year period. The sequential gross
profit margin decrease was due to the decrease in volume.
Outlook
“In light of global economic conditions and the continued
strength of the U.S. dollar compared to other currencies, we expect
net revenues in the range of $55 million to $60 million for the
fourth 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 $0.75, at constant exchange
rates as of the third quarter of 2016.”
*Editor’s Note
We define adjusted net earnings as net earnings attributable to
VPG stockholders before acquisition purchase accounting
adjustments, acquisition costs, restructuring costs, strategic
alternative evaluation 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
($6.3 million for the third quarter of 2016), in excess of our
capital expenditures ($1.8 million for the third quarter of 2016)
and net of proceeds, if any, for the sale of assets (none in the
third quarter of 2016). 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 8) at 10:00 a.m.
ET (9:00 a.m. CT). To access the conference call, interested
parties may call 1-888-317-6003 or internationally 1-412-317-6061
and use passcode 7373887, 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:
10094433. 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; resources expended in connection with
evaluation of strategic alternatives to enhance stockholder value ;
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 October 1,
2016 September 26, 2015 Net revenues
$
54,490 $ 57,149 Costs of products sold
34,225
35,699 Gross profit
20,265 21,450 Gross
profit margin
37.2 % 37.5 % Selling, general,
and administrative expenses
16,917 17,760 Impairment of
goodwill and indefinite-lived intangibles
- 4,942
Restructuring costs
709 459
Operating income (loss)
2,639 (1,711 ) Operating margin
4.8 % -3.0 % Other income (expense): Interest
expense
(377 ) (158 ) Other
(44
) (387 ) Other income (expense) - net
(421
) (545 ) Income (loss) before taxes
2,218
(2,256 ) Income tax expense (benefit)
1,135
(304 ) Net earnings (loss)
1,083 (1,952
) Less: net earnings (loss) attributable to noncontrolling
interests
32 (9 ) Net earnings (loss)
attributable to VPG stockholders
$ 1,051 $
(1,943 ) Basic earnings (loss) per share attributable to VPG
stockholders
$ 0.08 $ (0.15 ) Diluted earnings (loss)
per share attributable to VPG stockholders
$ 0.08 $
(0.15 ) Weighted average shares outstanding - basic
13,192 13,347 Weighted average shares outstanding - diluted
13,422 13,347 VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Operations (Unaudited - In
thousands, except per share amounts)
Nine fiscal months
ended October 1, 2016 September 26, 2015 Net
revenues
$ 169,115 $ 173,265 Costs of products sold
107,580 109,801 Gross profit
61,535 63,464 Gross profit margin
36.4 % 36.6
% Selling, general, and administrative expenses
53,409 54,904 Acquisition costs
414 - Impairment of
goodwill and indefinite-lived intangibles
— 4,942
Restructuring costs
2,395 841
Operating income
5,317 2,777 Operating margin
3.1 % 1.6 % Other income (expense): Interest
expense
(1,076 ) (518 ) Other
351
(1,730 ) Other income (expense) - net
(725
) (2,248 ) Income before taxes
4,592 529
Income tax expense
1,164 174
Net earnings
3,428 355 Less: net earnings
(loss) attributable to noncontrolling interests
29
(38 ) Net earnings attributable to VPG stockholders
$ 3,399 $ 393 Basic earnings per
share attributable to VPG stockholders
$ 0.26 $ 0.03
Diluted earnings per share attributable to VPG stockholders
$ 0.25 $ 0.03 Weighted average shares
outstanding - basic
13,185 13,558 Weighted average shares
outstanding - diluted
13,409 13,772 VISHAY
PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In
thousands)
October 1, 2016 December 31, 2015
(Unaudited) Assets Current assets: Cash and cash
equivalents
$ 56,133 $ 62,641 Accounts receivable,
net
34,889 35,553 Inventories: Raw materials
16,119
15,062 Work in process
21,913 20,289 Finished goods
20,300 20,849 Inventories, net
58,332 56,200 Prepaid expenses and other current
assets
9,678 7,814 Assets held for sale
2,043
- Total current assets
161,075 162,208
Property and equipment, at cost: Land
3,498 3,639
Buildings and improvements
46,128 55,003 Machinery and
equipment
88,697 84,409 Software
7,379 7,284
Construction in progress
3,199 2,288 Accumulated
depreciation
(94,521 ) (95,992 )
Property and equipment, net
54,380 56,631 Goodwill
19,305 12,603 Intangible assets, net
22,438
17,683 Other assets
14,789
14,622 Total assets
$ 271,987 $ 263,747
Liabilities and equity Current
liabilities: Trade accounts payable
$ 8,687 $ 8,004
Payroll and related expenses
12,854 13,888 Other accrued
expenses
15,607 16,604 Income taxes
1,387 527 Current
portion of long-term debt
2,277 2,120
Total current liabilities
40,812 41,143
Long-term debt, less current portion
34,457 31,037 Deferred
income taxes
623 334 Other liabilities
7,892 7,195
Accrued pension and other postretirement costs
11,309
11,597 Total liabilities
95,093 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
190,801 190,436 Retained earnings
25,726
22,327 Accumulated other comprehensive loss
(32,451
) (33,121 ) Total Vishay Precision Group, Inc.
stockholders' equity
176,692 172,256 Noncontrolling
interests
202 185 Total equity
176,894 172,441 Total
liabilities and equity
$ 271,987 $ 263,747
VISHAY PRECISION GROUP, INC. Consolidated
Condensed Statements of Cash Flows (Unaudited - In thousands)
Nine fiscal months ended October 1, 2016
September 26, 2015 Operating activities Net earnings
$ 3,428 $ 355 Adjustments to reconcile net earnings
to net cash provided by operating activities: Impairment of
goodwill and indefinite-lived intangibles
- 4,942
Depreciation and amortization
8,416 8,142 (Gain) loss on
disposal of property and equipment
(24 ) 14
Share-based compensation expense
465 796 Inventory
write-offs for obsolescence
1,410 1,190 Deferred income
taxes
(1,537 ) (914 ) Other
(862 )
2,190 Net changes in operating assets and liabilities: Accounts
receivable, net
2,139 (1,182 ) Inventories, net
(2,891 ) (5,159 ) Prepaid expenses and other current
assets
(1,848 ) 290 Trade accounts payable
453
(2,256 ) Other current liabilities
(2,657 )
(3,104 ) Net cash provided by operating activities
6,492 5,304
Investing activities Capital
expenditures
(6,266 ) (7,508 ) Proceeds from sale of
property and equipment
316 117 Purchase of business
(10,727 ) - Net cash used in investing
activities
(16,677 ) (7,391 )
Financing
activities Principal payments on long-term debt and capital
leases
(1,599 ) (3,839 ) Proceeds from revolving
facility
17,000 - Payments on revolving facility
(12,000 ) - Purchase of treasury stock
-
(8,733 ) Distributions to noncontrolling interests
(12 ) (58 ) Net cash provided by (used in)
financing activities
3,389 (12,630 ) Effect of exchange rate
changes on cash and cash equivalents
288
(1,751 ) Decrease in cash and cash equivalents
(6,508
) (16,468 ) Cash and cash equivalents at beginning of
period
62,641 79,642 Cash and
cash equivalents at end of period
$ 56,133 $
63,174 VISHAY PRECISION GROUP,
INC. Reconciliation of Consolidated Adjusted Gross Profit Margin
(Unaudited - In thousands)
Fiscal quarter ended Nine
fiscal months ended October 1, 2016 September 26,
2015 October 1, 2016 September 26, 2015 Gross
profit
$ 20,265 $ 21,450
$ 61,535 $
63,464
Gross profit margin
37.2 % 37.5 %
36.4 % 36.6 %
Reconciling items
affecting gross profit margin
Acquisition purchase accounting adjustments
46 -
537
26 Adjusted gross profit
$
20,311 $ 21,450
$ 62,072
$ 63,490 Adjusted gross profit margin
37.3 %
37.5 %
36.7 % 36.6 % VISHAY
PRECISION GROUP, INC. Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share data)
Fiscal quarter
ended Nine fiscal months ended October 1, 2016
September 26, 2015 October 1, 2016 September 26,
2015 Net earnings (loss) attributable to VPG stockholders
$ 1,051 $ (1,943 )
$ 3,399 $ 393
Reconciling items
affecting operating margin
Acquisition purchase accounting adjustments
46 -
537
26 Acquisition costs
- -
414 - Strategic alternative
evaluation costs
1,079 -
1,079 - Impairment of
goodwill and indefinite-lived intangibles
- 4,942
—
4,942 Restructuring costs
709 459
2,395 841
Reconciling items
affecting income tax expense
Less tax effect of reconciling items and discrete tax items
(27 ) (1,081 )
(1,317 )
(1,137 ) Adjusted net earnings attributable to VPG
stockholders
$ 2,858 $ 2,377
$
6,507 $ 5,065 Adjusted net earnings per
diluted share
$ 0.21 $ 0.18
$ 0.49 $
0.37 Weighted average shares outstanding - diluted
13,422 13,347
13,409 13,772
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version on businesswire.com: http://www.businesswire.com/news/home/20161108005252/en/
VPGWilliam M. ClancyExecutive Vice President and Chief Financial
Officer484-321-5306bill.clancy@vpgsensors.com
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