Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its
fiscal 2018 first quarter ended March 31, 2018.
First Quarter Highlights:
- Growth in revenues to $73.1 million, up
22.3% year-over-year
- Earnings increased to $0.37 per diluted
share, compared to $0.15 reported last year
- Adjusted diluted EPS* increased 95% to
$0.37 compared to prior year $0.19
- Operating margin for the quarter was
11.2% as compared to 6.6% for the prior year period
- Book-to-bill remained strong at 1.05,
reflecting healthy, stable end-markets
Ziv Shoshani, Chief Executive Officer of VPG, commented, “Our
operating performance in the first quarter of 2018 demonstrates our
ability to capture opportunity across all of our end markets in the
improved business environment, delivering solid operating margins.
We continue to execute well against our business strategy and
deliver value to our stockholders.”
The Company grew first fiscal quarter 2018 net earnings
attributable to VPG stockholders to $5.0 million, or $0.37 per
diluted share, compared to $2.0 million, or $0.15 per diluted
share, in the first fiscal quarter of 2017.
The first fiscal quarter 2018 adjusted net earnings attributable
to VPG stockholders approximately doubled to $5.0 million, or $0.37
per diluted share, compared to adjusted net earnings attributable
to VPG stockholders of $2.5 million, or $0.19 per diluted share,
for the comparable prior year period. This growth was achieved
despite a foreign currency exchange rate headwind that reduced net
income for the first fiscal quarter of 2018 by $0.2 million, or
$0.02 per diluted share relative to the first fiscal quarter of
2017.
Segments
Foil Technology Products segment revenues grew 23.0% to $34.2
million in the first fiscal quarter of 2018, up from $27.8 million
in the first fiscal quarter of 2017; sequential revenue increased
14.3% compared to $29.9 million in the fourth quarter of 2017. The
year-over-year and sequential increases in revenues were
attributable to precision resistors growth in all regions,
primarily for the test and measurement market, in addition to an
increase mainly in the advanced sensors products across all
regions.
Gross profit margin for the segment was 42.8% for the first
fiscal quarter of 2018, an increase compared to 41.4% in the first
fiscal quarter of 2017 and 39.3% in the fourth fiscal quarter of
2017. The year-over-year and sequential increase in gross margin
was directly due to the volume increase experienced in the first
fiscal quarter of 2018.
Force Sensors segment revenues grew 24.3% to $19.2 million in
the first fiscal quarter of 2018, up from $15.5 million in the
first fiscal quarter of 2017; sequential revenue increased 8.5% up
from $17.7 million in the fourth quarter of 2017. The
year-over-year increase in revenues was mainly attributable to OEM
customers in the force measurement and precision weighing markets
across all regions. The increase in sequential revenue was
primarily attributable to OEM customers in the force measurement
market in Europe.
Gross profit margin for Force Sensors was 27.3% for the first
fiscal quarter of 2018, an increase compared to 23.9% in the first
fiscal quarter of 2017 and a decrease compared to 29.5% in the
fourth fiscal quarter of 2017. Gross margins were up compared to
the prior year period due to the volume increase experienced in the
first fiscal quarter of 2018. The sequential decline in gross
margins is primarily related to higher freight costs and wage
increases.
Weighing and Control Systems segment revenues grew by 19.0% to
$19.7 million in the first fiscal quarter of 2018, up from $16.6
million in the first fiscal quarter of 2017; sequential revenue
decreased 9.7% from $21.8 million in the fourth fiscal quarter of
2017. The increased year-over-year revenues were primarily
attributable to the on-board weighing and process weighing product
lines in Europe and the Americas. The comparative decrease in
sequential revenue was attributable to the significant revenues in
the steel business, primarily in Asia, that occurred in the fourth
fiscal quarter of 2017.
The first fiscal quarter 2018 gross profit margin for the
segment was 43.9%, a decrease compared to 44.3% from the first
fiscal quarter of 2017 and 44.8% from the fourth fiscal quarter of
2017. The year-over-year decline in gross margin was primarily due
to product mix. The sequential decline in gross margin was
primarily due to a reduction in volume.
Near-Term Outlook
“In light of a continued strong business environment, at
constant first fiscal quarter 2018 exchange rates, we expect net
revenues in the range of $71 million to $77 million for the second
fiscal quarter of 2018,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define “adjusted net earnings” as net earnings attributable
to VPG stockholders before restructuring costs and associated tax
effects. The reconciliation table within this release reconciles
the Company's non-GAAP measures, which are provided for comparison
with other results, to the most directly comparable U.S. GAAP
measures. Management believes that these measures are meaningful
because they provide insight with respect to intrinsic operating
results.
Conference Call and Webcast
A conference call will be held today (May 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 5447133, 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 10119570.
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
measurement 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; 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 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 achieve efficiencies; 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, 2017. 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
31, 2018 April 1, 2017 Net revenues
$
73,091 $ 59,787 Costs of products sold
44,586
37,270 Gross profit
28,505 22,517 Gross
profit margin
39.0 % 37.7 % Selling, general,
and administrative expenses
20,319 18,018 Restructuring
costs
— 554 Operating income
8,186 3,945 Operating margin
11.2 % 6.6 %
Other income (expense): Interest expense
(442
) (452 ) Other
(649 ) (529 )
Other income (expense) - net
(1,091 )
(981 ) Income before taxes
7,095 2,964 Income
tax expense
2,137 961 Net
earnings
4,958 2,003 Less: net earnings attributable to
noncontrolling interests
(30 ) 8
Net earnings attributable to VPG stockholders
$ 4,988
$ 1,995 Basic earnings per share attributable
to VPG stockholders
$ 0.37 $ 0.15 Diluted earnings
per share attributable to VPG stockholders
$ 0.37 $
0.15 Weighted average shares outstanding - basic
13,342 13,210 Weighted average shares outstanding - diluted
13,497 13,438
VISHAY PRECISION GROUP,
INC. Consolidated Condensed Balance Sheets (In thousands)
March 31, 2018 December 31, 2017
(Unaudited) Assets Current assets: Cash and cash
equivalents
$ 73,734 $ 74,292 Accounts receivable,
net
53,141 46,789 Inventories: Raw materials
18,247
16,601 Work in process
23,387 23,160 Finished goods
19,963 20,174 Inventories, net
61,597 59,935 Prepaid expenses and other current assets
12,668 10,299 Total current
assets
201,140 191,315 Property and equipment, at
cost: Land
3,484 3,434 Buildings and improvements
50,816 50,276 Machinery and equipment
97,199 95,158
Software
8,068 7,955 Construction in progress
2,501
2,252 Accumulated depreciation
(106,324 )
(103,401 ) Property and equipment, net
55,744 55,674
Goodwill
18,995 19,181 Intangible assets, net
19,748 20,475 Other assets
19,775
19,906 Total assets
$ 315,402
$ 306,551
Liabilities and equity
Current liabilities: Trade accounts payable
$ 12,953
$ 13,678 Payroll and related expenses
17,201 15,892 Other
accrued expenses
16,408 15,952 Income taxes
2,103
2,515 Current portion of long-term debt
3,926
3,878 Total current liabilities
52,591 51,915
Long-term debt, less current portion
27,717 28,477
Deferred income taxes
2,300 2,300 Other liabilities
13,968 14,131 Accrued pension and other postretirement costs
16,952 16,424 Total liabilities
113,528 113,247
Commitments and contingencies
Equity:
Common stock
1,304 1,288 Class B convertible common stock
103 103 Treasury stock
(8,765 ) (8,765 )
Capital in excess of par value
195,259 192,904 Retained
earnings
47,911 43,076 Accumulated other comprehensive loss
(33,939 ) (35,450 ) Total Vishay
Precision Group, Inc. stockholders' equity
201,873 193,156
Noncontrolling interests
1 148
Total equity
201,874 193,304
Total liabilities and equity
$ 315,402 $
306,551
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited - In
thousands)
Three fiscal months ended March
31, 2018 April 1, 2017 Operating
activities Net earnings
$ 4,958 $ 2,003
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization
2,684
2,681 Gain on disposal of property and equipment
(53
) (109 ) Share-based compensation expense
373 243
Inventory write-offs for obsolescence
613 297 Deferred
income taxes
268 (97 ) Other
(723 ) (359 ) Net
changes in operating assets and liabilities: Accounts receivable,
net
(5,519 ) (3,362 ) Inventories, net
(1,910
) 284 Prepaid expenses and other current assets
(2,517 ) (2,154 ) Trade accounts payable
1,687
1,422 Other current liabilities
1,943
2,032 Net cash provided by operating activities
1,804 2,881
Investing
activities Capital expenditures
(4,296 ) (1,962 )
Proceeds from sale of property and equipment
53
148 Net cash used in investing activities
(4,243 ) (1,814 )
Financing activities Principal payments on long-term debt
and capital leases
(2,970 ) (657 ) Proceeds from
revolving facility
8,000 7,000 Payments on revolving
facility
(3,000 ) (7,000 ) Distributions to
noncontrolling interests
(117 ) (2 ) Payments of
employee taxes on certain share-based arrangements
(785 ) (303 ) Net cash provided by (used in)
financing activities
1,128 (962 ) Effect of exchange rate
changes on cash and cash equivalents
753
694 (Decrease) increase in cash and cash equivalents
(558 ) 799 Cash and cash equivalents at
beginning of period
74,292 58,452
Cash and cash equivalents at end of period
$
73,734 $ 59,251
Supplemental
disclosure of non-cash investing transactions: Capital
expenditures purchased
$ (1,773 ) $ (1,962 )
Supplemental disclosure of non-cash financing transactions:
Conversion of exchangeable notes to common stock
$
(2,794 ) $ —
VISHAY PRECISION GROUP,
INC. Reconciliation of Consolidated Adjusted Gross Profit
Margin (Unaudited - In thousands)
Fiscal quarter ended
March 31, 2018 April 1, 2017
Gross profit
$ 28,505 $ 22,517 Gross profit margin
39.0
% 37.7 % Adjusted gross profit
$
28,505 $ 22,517 Adjusted gross profit margin
39.0 % 37.7 %
VISHAY PRECISION
GROUP, INC. Reconciliation of Consolidated Adjusted Operating
Margin (Unaudited - In thousands)
Fiscal quarter
ended March 31, 2018 April 1, 2017
Operating income
$ 8,186 $ 3,945 Operating margin
11.2 %
6.6 %
Reconciling items
affecting operating margin
Restructuring costs
— 554 Adjusted operating
income
$ 8,186 $ 4,499 Adjusted
operating margin
11.2 % 7.5 %
VISHAY
PRECISION GROUP, INC. Reconciliation of Adjusted Earnings Per
Share (Unaudited - In thousands, except per share data)
Fiscal
quarter ended March 31, 2018 April 1, 2017 Net
earnings attributable to VPG stockholders
$ 4,988 $
1,995
Reconciling items
affecting operating margin
Restructuring costs
— 554
Less reconciling
items affecting income tax expense
Tax effect of reconciling items
— 42
Adjusted net earnings attributable to VPG stockholders
$ 4,988 $ 2,507 Adjusted net
earnings per diluted share
$ 0.37 $ 0.19
Weighted average shares outstanding - diluted
13,497 13,438
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