Third quarter net revenues up 9.8%
year-over-year and adjusted diluted earnings per share is $0.23. Cash
generated from operations for the third quarter was $7.7 million and
free cash flow was $5.5 million.*
MALVERN, Pa.--(BUSINESS WIRE)--
Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, based on its resistive foil technology,
today announced financial results for its third quarter ended September
27, 2014.
Ziv Shoshani, VPG’s chief executive officer said, “I am pleased with our
results this quarter as well as for the first nine months of the year.
Organic growth continues to increase at a good pace, fueled by higher
volumes. Top line growth also continues to drive increased diluted
earnings per share. We also had a very good quarter for cash generated
from operations and free cash flow.”
Mr. Shoshani added, “We are confident that our recently launched new
products and applications should continue to contribute to our increased
revenues and profitability and we also remain focused on our acquisition
strategy as a key driver of long term value creation.”
Net revenues for the third quarter of 2014 were $63.4 million,
representing a 9.8% increase from $57.7 million of net revenues for the
comparable prior year period. Net revenues for the nine months of 2014
were $189.6 million, representing a 6.5% increase from the $178.0
million of net revenues for the comparable prior year period. Comparing
sequential results, net revenues for the third quarter of 2014 decreased
by $1.8 million, or 2.7%, from $65.2 million in the second quarter of
2014.
Net earnings attributable to VPG stockholders for the third quarter of
2014 were $3.1 million, or $0.22 per diluted share, compared to net
earnings attributable to VPG stockholders for the third quarter of 2013
of $1.5 million, or $0.11 per diluted share. Net earnings attributable
to VPG stockholders for the nine months of 2014 were $8.3 million, or
$0.59 per diluted share, compared to net earnings attributable to VPG
stockholders for the nine months of 2013 of $3.2 million, or $0.23 per
diluted share.
Adjusted net earnings attributable to VPG stockholders for the third
quarter of 2014 were $3.2 million, or $0.23 per diluted share, versus
adjusted net earnings attributable to VPG stockholders of $1.2 million,
or $0.09 per diluted share for the comparable prior year period. Net
earnings attributable to VPG stockholders for the third quarter of 2014
include $0.2 million of KELK acquisition purchase accounting adjustments
(which impacted costs of products sold), and restructuring costs, and
related tax effects of $0.1 million, versus $0.9 million of KELK
purchase accounting adjustments (which impacted costs of products sold)
$0.1 million of restructuring costs, $0.1 million of restructuring
costs, and the impact of a one-time tax benefit of $1.3 million in the
third quarter of 2013.
Adjusted net earnings attributable to VPG stockholders for the nine
months of 2014 were $8.7 million, or $0.62 per diluted share, versus
adjusted net earnings attributable to VPG stockholders of $6.2 million,
or $0.44 per diluted share for the comparable prior year period. Net
earnings attributable to VPG stockholders for the nine months of 2014
include $0.5 million of KELK acquisition purchase accounting adjustments
(which impacted cost of goods sold) and restructuring costs, and the
related tax effects of $0.1 million, versus approximately $4.4 million
of KELK acquisition purchase accounting adjustments (which impacted
costs of products sold), $0.8 million of acquisition costs, $0.5 million
of restructuring costs, and the related tax effects of $2.6 million
which include the impact of a one-time tax benefit of $1.3 million.
Segments
The Foil Technology Products segment revenues were $27.3 million in the
third quarter of 2014, up 21.8% from $22.4 million in the third quarter
last year, and down 2.5% from $28.0 million in the second quarter of
2014. The gross margin for the segment has increased to 41.4% for the
third quarter of 2014 compared to 36.7% in the third quarter last year,
and up from 40.2% in the second quarter of 2014. Increased
year-over-year revenues are attributable primarily to higher volume.
Lower sequential revenues are attributable mainly to lower volume. The
gross margin improved from the comparable prior year period primarily
due to increased volume and labor efficiency. The sequential gross
margin increase was due to labor efficiencies, partially offset by lower
volume.
The Force Sensors segment revenues of $17.5 million in the third quarter
of 2014 were up 6.7% compared to $16.4 million in the third quarter last
year, and were up 2.9% from $17.0 million in the second quarter of 2014.
The gross margin for the segment was 22.5% in the third quarter of 2014
versus 17.6% in the third quarter of 2013 and 21.9% in the second
quarter of 2014. Increased year-over-year revenues are attributable
primarily to higher volume and by the positive effect of exchange rates.
The increase in sequential revenues is attributable to higher volume.
The gross margin for the quarter increased from the comparable prior
year period primarily due to manufacturing efficiencies and higher
volume. The sequential gross margin improved due to higher volume.
The Weighing and Control Systems segment revenues were $18.6 million in
the third quarter of 2014, down 1.7% from $18.9 million in the third
quarter last year, and down 7.7% from $20.2 million in the second
quarter of 2014. Decreased year-over-year revenues are attributable
primarily to lower volume, partially offset by the positive effect of
exchange rates. The sequential decrease in revenues is attributable
mainly to lower volume due to seasonality in the business. The gross
margin for the segment was 45.9% in the third quarter of 2014 versus
43.0% in the third quarter of 2013 (47.8% excluding the KELK acquisition
purchase accounting adjustments of $0.9 million) and 48.2% in the second
quarter of 2014. The year-over-year decrease in adjusted gross margin is
primarily due to lower volume and product mix. The sequential decrease
in adjusted gross margin is due mainly to seasonally lower volume.
Outlook
Mr. Shoshani concluded, “In light of the current market demand levels,
we expect net revenues in the range of $60 million to $65 million for
the fourth quarter of 2014.”
* Note: Free cash flow is defined as the amount of cash generated from
operations ($7.7 million for the third quarter of 2014), in excess of
our capital expenditures ($2.2 million for the third quarter of 2014)
and net of proceeds, if any, for the sale of assets (none in the third
quarter of 2014).
Conference Call and Webcast
A conference call will be held today (November 5) at 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
2680844, 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: 2680844. The replay will also
be available on the investor relations page of the VPG website at www.vpgsensors.com.
It will be available via phone and website 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, including KELK, 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, 2013. 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 27,
| | September 28,
|
| |
|
2014
|
| |
|
2013
|
|
| | | |
|
| | | |
|
|
Net revenues
| |
$
|
63,402
| | |
$
|
57,729
| |
|
Costs of products sold
| |
|
39,625
|
| |
|
38,486
|
|
|
Gross profit
| | |
23,777
| | | |
19,243
| |
|
Gross margin
| | |
37.5
|
%
| | |
33.3
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | |
19,668
| | | |
18,485
| |
|
Acquisition costs
| | |
-
| | | |
57
| |
|
Restructuring costs
| |
|
144
|
| |
|
99
|
|
|
Operating income
| | |
3,965
| | | |
602
| |
|
Operating margin
| | |
6.3
|
%
| | |
1.0
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | |
(212
|
)
| | |
(276
|
)
|
|
Other
| |
|
(81
|
)
| |
|
210
|
|
|
Total other income (expense) - net
| |
|
(293
|
)
| |
|
(66
|
)
|
| | | |
|
|
Income before taxes
| | |
3,672
| | | |
536
| |
| | | |
|
|
Income tax expense (benefit)
| |
|
523
|
| |
|
(919
|
)
|
| | | |
|
|
Net earnings
| | |
3,149
| | | |
1,455
| |
| | | |
|
|
Less: net earnings (loss) attributable to noncontrolling interests
| | |
30
| | | |
(11
|
)
|
| |
| |
|
|
Net earnings attributable to VPG stockholders
| |
$
|
3,119
|
| |
$
|
1,466
|
|
| | | |
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| |
$
|
0.23
| | |
$
|
0.11
| |
| | | |
|
|
Diluted earnings per share attributable to VPG stockholders
| |
$
|
0.22
| | |
$
|
0.11
| |
| | | |
|
| | | |
|
|
Weighted average shares outstanding - basic
| | |
13,757
| | | |
13,734
| |
| | | |
|
|
Weighted average shares outstanding - diluted
| | |
13,977
| | | |
13,944
| |
|
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | |
|
Consolidated Condensed Statements of Operations
| | | | |
|
(Unaudited - In thousands, except per share amounts)
| | | | |
| | | |
|
| |
Nine fiscal months ended
|
| | September 27,
| | September 28,
|
| |
|
2014
|
| |
|
2013
|
|
| | | |
|
| | | |
|
|
Net revenues
| |
$
|
189,605
| | |
$
|
178,027
| |
|
Costs of products sold
| |
|
119,084
|
| |
|
117,255
|
|
|
Gross profit
| | |
70,521
| | | |
60,772
| |
|
Gross margin
| | |
37.2
|
%
| | |
34.1
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | |
58,286
| | | |
54,847
| |
|
Acquisition costs
| | |
-
| | | |
752
| |
|
Restructuring costs
| |
|
475
|
| |
|
487
|
|
|
Operating income
| | |
11,760
| | | |
4,686
| |
|
Operating margin
| | |
6.2
|
%
| | |
2.6
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | |
(660
|
)
| | |
(771
|
)
|
|
Other
| |
|
(770
|
)
| |
|
(1,073
|
)
|
|
Total other income (expense) - net
| |
|
(1,430
|
)
| |
|
(1,844
|
)
|
| | | |
|
|
Income before taxes
| | |
10,330
| | | |
2,842
| |
| | | |
|
|
Income tax expense (benefit)
| |
|
1,955
|
| |
|
(339
|
)
|
| | | |
|
|
Net earnings
| | |
8,375
| | | |
3,181
| |
| | | |
|
|
Less: net earnings attributable to noncontrolling interests
| | |
89
| | | |
18
| |
| |
| |
|
|
Net earnings attributable to VPG stockholders
| |
$
|
8,286
|
| |
$
|
3,163
|
|
| | | |
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| |
$
|
0.60
| | |
$
|
0.23
| |
| | | |
|
|
Diluted earnings per share attributable to VPG stockholders
| |
$
|
0.59
| | |
$
|
0.23
| |
| | | |
|
| | | |
|
|
Weighted average shares outstanding - basic
| | |
13,755
| | | |
13,504
| |
| | | |
|
|
Weighted average shares outstanding - diluted
| | |
13,968
| | | |
13,940
| |
|
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | |
|
Consolidated Condensed Balance Sheets
| | | | |
|
(In thousands)
| | | | |
| | | |
|
| | September 27,
| | December 31,
|
| |
|
2014
|
| |
|
2013
|
|
|
Assets
| |
(unaudited)
| | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| |
$
|
75,424
| | |
$
|
72,785
| |
|
Accounts receivable, net
| | |
43,078
| | | |
40,500
| |
|
Inventories, net
| | |
53,909
| | | |
54,973
| |
|
Deferred income taxes
| | |
2,887
| | | |
4,784
| |
|
Prepaid expenses and other current assets
| |
|
11,216
|
| |
|
10,500
|
|
|
Total current assets
| | |
186,514
| | | |
183,542
| |
| | | |
|
|
Property and equipment, net
| | |
47,956
| | | |
49,323
| |
|
Goodwill
| | |
18,266
| | | |
18,880
| |
|
Intangible assets, net
| | |
19,838
| | | |
22,458
| |
|
Other assets
| |
|
20,074
|
| |
|
17,901
|
|
|
Total assets
| |
$
|
292,648
|
| |
$
|
292,104
|
|
| | | |
|
|
Liabilities and equity
| | | | |
|
Current liabilities:
| | | | |
|
Trade accounts payable
| |
$
|
10,290
| | |
$
|
10,258
| |
|
Payroll and related expenses
| | |
14,194
| | | |
15,016
| |
|
Other accrued expenses
| | |
14,827
| | | |
15,814
| |
|
Income taxes
| | |
525
| | | |
615
| |
|
Current portion of long-term debt
| |
|
4,882
|
| |
|
4,137
|
|
|
Total current liabilities
| | |
44,718
| | | |
45,840
| |
| | | |
|
|
Long-term debt, less current portion
| | |
19,060
| | | |
22,936
| |
|
Deferred income taxes
| | |
1,003
| | | |
1,259
| |
|
Other liabilities
| | |
7,748
| | | |
7,738
| |
|
Accrued pension and other postretirement costs
| |
|
10,061
|
| |
|
10,780
|
|
|
Total liabilities
| |
|
82,590
|
| |
|
88,553
|
|
| | | |
|
|
Commitments and contingencies
| | | | |
| | | |
|
|
Equity:
| | | | |
|
Common stock
| | |
1,273
| | | |
1,271
| |
|
Class B convertible common stock
| | |
103
| | | |
103
| |
|
Capital in excess of par value
| | |
189,335
| | | |
188,424
| |
|
Retained earnings
| | |
40,933
| | | |
32,647
| |
|
Accumulated other comprehensive income (loss)
| |
|
(21,750
|
)
| |
|
(19,027
|
)
|
|
Total Vishay Precision Group, Inc. stockholders' equity
| | |
209,894
| | | |
203,418
| |
|
Noncontrolling interests
| |
|
164
|
| |
|
133
|
|
|
Total equity
| |
|
210,058
|
| |
|
203,551
|
|
|
Total liabilities and equity
| |
$
|
292,648
|
| |
$
|
292,104
|
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | |
|
Consolidated Condensed Statements of Cash Flows
| | | | |
|
(Unaudited - In thousands)
| | | | |
| |
Nine fiscal months ended
|
| | September 27,
| | September 28,
|
| |
|
2014
|
| |
|
2013
|
|
| | | |
|
|
Operating activities:
| | | | |
|
Net earnings
| |
$
|
8,375
| | |
$
|
3,181
| |
Adjustments to reconcile net earnings to net cash provided by
operating activities:
| | | | |
|
Depreciation and amortization
| | |
8,734
| | | |
9,016
| |
|
Loss (gain) on disposal of property and equipment
| | |
61
| | | |
(27
|
)
|
|
Share-based compensation expense
| | |
780
| | | |
929
| |
|
Inventory write-offs for obsolescence
| | |
972
| | | |
901
| |
|
Other
| | |
(625
|
)
| | |
(3,214
|
)
|
|
Changes in operating assets and liabilities
| |
|
(5,757
|
)
| |
|
(4,636
|
)
|
|
Net cash provided by operating activities
| | |
12,540
| | | |
6,150
| |
| | | |
|
|
Investing activities:
| | | | |
|
Capital expenditures
| | |
(5,626
|
)
| | |
(3,910
|
)
|
|
Proceeds from sale of property and equipment
| | |
74
| | | |
76
| |
|
Purchase of business
| |
|
-
|
| |
|
(48,919
|
)
|
|
Net cash used in investing activities
| | |
(5,552
|
)
| | |
(52,753
|
)
|
| | | |
|
|
Financing activities:
| | | | |
|
Proceeds from long-term debt
| | |
-
| | | |
25,000
| |
|
Principal payments on long-term debt and capital lease obligations
| | |
(3,105
|
)
| | |
(2,362
|
)
|
|
Debt issuance costs
| | |
-
| | | |
(384
|
)
|
|
Distributions to noncontrolling interests
| |
|
(58
|
)
| |
|
(64
|
)
|
|
Net cash (used in) provided by financing activities
| | |
(3,163
|
)
| | |
22,190
| |
|
Effect of exchange rate changes on cash and cash equivalents
| |
|
(1,186
|
)
| |
|
(1,195
|
)
|
| | | |
|
|
Increase (decrease) in cash and cash equivalents
| |
|
2,639
|
| |
|
(25,608
|
)
|
| | | |
|
|
Cash and cash equivalents at beginning of period
| |
|
72,785
|
| |
|
93,881
|
|
|
Cash and cash equivalents at end of period
| |
$
|
75,424
|
| |
$
|
68,273
|
|
| | | | | | | |
|
Supplemental disclosure of non-cash financing transactions:
| | | | | | | | |
Conversion of exchangeable notes to common stock
| |
$
|
-
| | |
$
|
5,861
| |
|
|
| 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 27,
| | September 28,
| | September 27,
| | September 28,
|
| |
|
2014
|
| |
|
2013
|
| |
|
2014
|
| |
|
2013
|
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
|
Net earnings attributable to VPG stockholders
| |
$
|
3,119
| | |
$
|
1,466
| | |
$
|
8,286
| | |
$
|
3,163
| |
| | | | | | | | | | | |
|
Reconciling items affecting operating margin | | | | | | | | | | | | |
| | | | | | | | | | | |
|
|
Acquisition purchase accounting adjustments
| | |
15
| | | |
903
| | | |
56
| | | |
4,401
| |
|
Acquisition costs
| | |
-
| | | |
57
| | | |
-
| | | |
752
| |
|
Restructuring costs
| | |
144
| | | |
99
| | | |
475
| | | |
487
| |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
Reconciling items affecting income tax
expense | | | | | | | | | | | | |
|
Tax effect of purchase accounting adjustments, acquisition cost
adjustments, restructuring cost adjustments, and discrete items
| | |
54
| | | |
1,297
| | | |
149
| | | |
2,643
| |
| | | | | | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Adjusted net earnings attributable to VPG stockholders
| |
$
|
3,224
|
| |
$
|
1,228
|
| |
$
|
8,668
|
| |
$
|
6,160
|
|
| | | | | | | | | | | |
|
|
Weighted average shares outstanding - diluted
| | |
13,977
| | | |
13,944
| | | |
13,968
| | | |
13,940
| |
| | | | | | | | | | | |
|
|
Adjusted net earnings per diluted share
| |
$
|
0.23
| | |
$
|
0.09
| | |
$
|
0.62
| | |
$
|
0.44
| |
|
| |
| |
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | | | | | |
|
Reconciliation of Consolidated Adjusted Gross Margin
| | | | | | |
|
(Unaudited - In thousands)
| | | | | | | | |
| | | | | | | |
|
| |
Fiscal quarter ended
| |
Nine fiscal months ended
|
| | September 27,
| | September 28,
| | September 27,
| | September 28,
|
| |
|
2014
|
| |
|
2013
|
| |
|
2014
|
| |
|
2013
|
|
| | | | | | | |
|
| | | | | | | |
|
|
Gross profit
| |
$
|
23,777
| | |
$
|
19,243
| | |
$
|
70,521
| | |
$
|
60,772
| |
|
Gross margin
| | |
37.5
|
%
| | |
33.3
|
%
| | |
37.2
|
%
| | |
34.1
|
%
|
| | | | | | | |
|
Reconciling items affecting gross margin | | | | | | | | |
|
Acquisition purchase accounting adjustments
| | |
15
| | | |
903
| | | |
56
| | | |
4,401
| |
| |
| |
| |
| |
|
|
Adjusted gross profit
| |
$
|
23,792
|
| |
$
|
20,146
|
| |
$
|
70,577
|
| |
$
|
65,173
|
|
|
Adjusted gross margin
| | |
37.5
|
%
| | |
34.9
|
%
| | |
37.2
|
%
| | |
36.6
|
%
|
VPG
Wendy Wilson
Senior Director Investor Relations and
Corporate Communications
919-374-5501
[email protected]
Source: VPG