Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and sensor-based systems, today announced its
results for its fiscal 2019 first quarter ended March 30,
2019.
First Quarter Highlights:
- Growth in revenues to $76.5 million, up
4.7% year-over-year
- Gross profit margin was 43.2% for the
quarter as compared to 39.0% for the prior year period
- Operating income increased by 54% to
$12.6 million as compared to $8.2 million in the prior year
period
- Operating margin for the quarter was
16.5%, compared to 11.2% for the prior year period
- Earnings increased 65% to $0.61 per
diluted share, compared to $0.37 reported last year
- Cash from operations was $8.1 million
with free cash flow* of $4.8 million
Ziv Shoshani, Chief Executive Officer of VPG, commented, “We are
pleased to report a strong start to 2019, highlighted by solid
revenues and a substantial increase in margins. Performance in the
quarter was largely the result of execution on our strategic plan,
which was bolstered by a favorable mix of business during the
period. We remain focused on building on the strong cash generation
delivered through the first quarter, and driving long-term
shareholder value.”
The Company grew first fiscal quarter 2019 net earnings
attributable to VPG stockholders to $8.2 million, or $0.61 per
diluted share, compared to $5.0 million, or $0.37 per diluted
share, in the first fiscal quarter of 2018. Foreign currency
exchange rates for the first quarter of 2019 increased net income
by $0.3 million, or $0.02 per diluted share, relative to the prior
year period.
Segments
Foil Technology Products segment revenues grew 8.5% to $37.0
million in the first fiscal quarter of 2019, up from $34.2 million
in the first fiscal quarter of 2018; sequential revenue increased
0.8% compared to $36.7 million in the fourth quarter of 2018. The
year-over-year increase in revenues were attributable to Pacific
Instruments products in the Americas for end user customers in the
avionics, military and space market and Advanced Sensor products in
the force measurement market primarily in Asia and the
Americas.
Gross profit margin for the Foil Technology Products segment was
44.7% for the first fiscal quarter of 2019, an increase compared to
42.8% in the first fiscal quarter of 2018, and an increase compared
to 42.0% in the fourth fiscal quarter of 2018. The year-over-year
increase in gross profit margin was primarily due to an increase in
volume. Sequentially, gross profit margin increased due to an
increase in volume and manufacturing efficiencies.
Force Sensors segment revenues declined 13.0% to $16.7 million
in the first fiscal quarter of 2019, compared to $19.2 million in
the first fiscal quarter of 2018; sequential revenue decreased
1.6%, compared to $17.0 million in the fourth quarter of 2018. The
year-over-year and sequential decreases in revenues were mainly
attributable to OEM customers in the force measurement market,
primarily in the Americas.
Gross profit margin for the Force Sensors segment was 30.2% for
the first fiscal quarter of 2019, an increase compared to 27.3% in
the first fiscal quarter of 2018, and an increase compared to 26.6%
in the fourth fiscal quarter of 2018. The year-over-year increase
in gross profit margin was primarily due to manufacturing
efficiencies and export grants in India partially offset by a
decrease in volume. Sequentially, gross profit margin increased due
to export grants in India and positive foreign exchange rate impact
partially offset by a decrease in volume.
Weighing and Control Systems segment revenues grew by 15.4% to
$22.7 million in the first fiscal quarter of 2019, up from $19.7
million in the first fiscal quarter of 2018; sequential revenue
decreased 2.1% from $23.2 million in the fourth fiscal quarter of
2018. The increase in revenues year-over-year was primarily
attributable to the steel product line in all regions. The
sequential decrease in revenue was primarily attributable to a
decrease in the steel product line in Asia and the process weighing
and onboard weighing product lines in the Americas partially offset
by an increase in the onboard weighing product line in Europe.
The first fiscal quarter 2019 gross profit margin for the
Weighing and Control Systems segment was 50.2%, an increase
compared to 43.9% from the first fiscal quarter of 2018, and an
increase compared to 46.8% from the fourth fiscal quarter of 2018.
The year-over-year increase in gross profit margin was primarily
due to the increase in volume. Sequential gross profit margin
increase was primarily due to manufacturing efficiencies.
Near-Term Outlook
“Given the current business environment and our most recent
order intake, at constant first fiscal quarter 2019 exchange rates,
we expect net revenues in the range of $70 million to $76 million
for the second fiscal quarter of 2019,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define "free cash flow" as the amount of cash generated from
operations ($8.1 million for the first fiscal quarter of 2019), in
excess of our capital expenditures ($3.3 million for the first
fiscal quarter of 2019) net of proceeds, if any, from the sale of
assets ($0.0 million for the first fiscal quarter of 2019).
Conference Call and Webcast
A conference call will be held today (May 7) 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 0105250, 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 10130492.
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;
political, economic and military instability in the countries in
which we operate; 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; significant
developments from the recent and potential changes in tariffs and
trade regulation; 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,
2018. 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 30, 2019 March 31, 2018 Net revenues
$ 76,525 $ 73,091 Costs of products sold
43,474 44,586 Gross profit
33,051 28,505 Gross profit margin
43.2 % 39.0
% Selling, general, and administrative expenses
20,448 20,319 Operating income
12,603 8,186
Operating margin
16.5 % 11.2 % Other income (expense): Interest
expense
(388 ) (442 ) Other
(772
) (649 ) Other income (expense) - net
(1,160 ) (1,091 ) Income before taxes
11,443 7,095 Income tax expense
3,117
2,137 Net earnings
8,326 4,958
Less: net earnings attributable to noncontrolling interests
83 (30 ) Net earnings attributable to VPG
stockholders
$ 8,243 $ 4,988
Basic earnings per share attributable to VPG stockholders
$
0.61 $ 0.37 Diluted earnings per share attributable to VPG
stockholders
$ 0.61 $ 0.37 Weighted average
shares outstanding - basic
13,495 13,342 Weighted average
shares outstanding - diluted
13,563 13,497
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets (In thousands)
March 30,
2019 December 31, 2018 (Unaudited) Assets
Current assets: Cash and cash equivalents
$ 93,144 $
90,159 Accounts receivable, net
52,484 53,156 Inventories:
Raw materials
18,832 18,052 Work in process
23,480
22,007 Finished goods
21,059 22,182
Inventories, net
63,371 62,241 Prepaid expenses and
other current assets
12,815 9,314
Total current assets
221,814 214,870 Property
and equipment, at cost: Land
3,411 3,390 Buildings and
improvements
51,298 51,055 Machinery and equipment
107,404 105,840 Software
8,942 8,532 Construction in
progress
1,542 2,157 Accumulated depreciation
(113,575 ) (111,555 ) Property and equipment,
net
59,022 59,419 Goodwill
16,238 16,141
Intangible assets, net
17,390 17,656 Other
assets
28,326 18,297 Total
assets
$ 342,790 $ 326,383
Liabilities and equity Current liabilities: Trade accounts
payable
$ 10,736 $ 11,461 Payroll and related
expenses
18,411 17,757 Other accrued expenses
18,780
17,031 Income taxes
2,277 3,879 Current portion of long-term
debt
4,766 4,654 Total current
liabilities
54,970 54,782 Long-term debt, less
current portion
21,172 22,421 Deferred income taxes
2,200 2,200 Other liabilities
21,541 13,545 Accrued
pension and other postretirement costs
15,029
14,982 Total liabilities
114,912
107,930 Commitments and contingencies
Equity: Common stock
1,311 1,307 Class B convertible common
stock
103 103 Treasury stock
(8,765 ) (8,765 )
Capital in excess of par value
196,578 196,666 Retained
earnings
75,343 66,569 Accumulated other comprehensive loss
(36,779 ) (37,465 ) Total Vishay
Precision Group, Inc. stockholders equity
227,791 218,415
Noncontrolling interests
87 38
Total equity
227,878 218,453
Total liabilities and equity
$ 342,790 $
326,383
VISHAY
PRECISION GROUP, INC. Consolidated Condensed Statements of Cash
Flows (Unaudited - In thousands)
Fiscal quarter ended
March 30, 2019 March 31, 2018 Operating
activities Net earnings
$ 8,326 $ 4,958
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization
2,854
2,684 Loss/(gain) on disposal of property and equipment
1
(53 ) Share-based compensation expense
514 373 Inventory
write-offs for obsolescence
489 613 Deferred income taxes
313 268 Other
(2,367 ) (723 ) Net changes in
operating assets and liabilities: Accounts receivable, net
850 (5,519 ) Inventories, net
(1,507 ) (1,910
) Prepaid expenses and other current assets
(3,484 )
(2,517 ) Trade accounts payable
628 1,687 Other current
liabilities
1,488 1,943 Net cash
provided by operating activities
8,105
1,804
Investing activities Capital
expenditures
(3,334 ) (4,296 ) Proceeds from sale of
property and equipment
29 53 Net
cash used in investing activities
(3,305 )
(4,243 )
Financing activities Principal
payments on long-term debt
(1,155 ) (2,970 ) Proceeds
from revolving facility
— 8,000 Payments on revolving
facility
— (3,000 ) Distributions to noncontrolling
interests
(34 ) (117 ) Payments of employee taxes on
certain share-based arrangements
(795 )
(785 ) Net cash (used in) provided by financing activities
(1,984 ) 1,128 Effect of exchange rate changes on
cash and cash equivalents
169 753
Increase(decrease) in cash and cash equivalents
2,985
(558 ) Cash and cash equivalents at beginning of period
90,159 74,292 Cash and cash
equivalents at end of period
$ 93,144 $ 73,734
Supplemental disclosure of non-cash investing
transactions: Capital expenditures purchased
$
(1,986 ) $ (1,773 )
Supplemental disclosure of
non-cash financing transactions: Conversion of exchangeable
notes to common stock
— $ (2,794 )
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