MALVERN, Pa.--(BUSINESS WIRE)--
Vishay Precision Group, Inc. (NYSE:VPG), a leading producer of precision
sensors and systems, today announced that it will reschedule the full
release of its fiscal 2015 second quarter and six months financial
results ended June 27, 2015, and its related earnings conference call,
which was originally scheduled for today, in order to complete a review
and analysis of certain potential adjustments, if any, to our historical
financial statements for a subsidiary located in India. This subsidiary
is one of several subsidiaries that manufacture components for the
company’s Force Sensors segment.
We have determined that transactions have been recorded for this Indian
subsidiary in the local currency, the Indian rupee, instead of the
functional currency, the U.S. dollar, in prior periods extending back to
2011. We are currently investigating the impact of this historical use
of the local currency instead of the functional currency and evaluating
whether the differences are material to any period or in the aggregate.
Although we are not yet in a position to estimate the amount of any
required adjustments, if any, our current expectation is that the
principal line items impacted in our Indian subsidiary’s financial
statements, and therefore our consolidated financial statements, are
property and equipment, net, depreciation expense, foreign currency
re-measurement gains and losses, and foreign currency translation gains
and losses recorded as a component of accumulated other comprehensive
income within stockholders’ equity.
In the interest of providing the investment community with relevant
information, we are providing the following preliminary unaudited
financial results for the second quarter and six months ended June 27,
2015, which are subject to change:
Net revenues for the second quarter of 2015 were $59.5 million,
representing an 8.7% decrease from $65.2 million of net revenues for the
comparable prior year period. Adverse changes in foreign exchange rates
accounted for $5.1 million of this $5.7 million decrease. Net revenues
for the six months ended June 27, 2015 were $116.1 million, representing
an 8.0% decrease from the $126.2 million of net revenues for comparable
prior year period. Adverse changes in foreign exchange rates accounted
for $9.5 million of this $10.1 million decrease. Comparing sequential
results, net revenues for the second quarter of 2015 increased by $2.9
million, or 5.1%, from $56.6 million in the first quarter of 2015.
Segments
The Foil Technology Products segment revenues were $26.2 million in the
second quarter of 2015, down 6.7% from $28.0 million in the second
quarter last year, and up 4.4% from $25.1 million in the first quarter
of 2015. Net revenues were negatively impacted by the effects of foreign
currency rates by $1.7 million in the second quarter of 2015 as compared
to the second quarter of 2014, and were negatively impacted by $0.2
million as compared to the first quarter of 2015. The gross margin for
the segment decreased to 39.6% for the second quarter of 2015 compared
to 40.2% in the second quarter last year, and down from 40.6% in the
first quarter of 2015. The gross margin decreased from the comparable
prior year period primarily due to the effects of foreign currency rates
and additional headcount for expansion of our advanced sensor platform.
Despite an increase in revenues, the sequential gross margin decrease
was due primarily to the effects of foreign currency rates and other
costs.
The Force Sensors segment revenues of $15.6 million in the second
quarter of 2015 were down 7.9% compared to $17.0 million in the second
quarter last year, and were up 2.7% from $15.2 million in the first
quarter of 2015. Decreased year-over-year revenues are attributable
primarily to the effect of foreign exchange rates. The increase in
sequential revenues is attributable to higher volume. The gross margin
for the segment was 19.8% in the second quarter of 2015 versus 21.9% in
the second quarter of 2014 and 21.9% in the first quarter of 2015. The
gross margin for the quarter decreased from the comparable prior year
period primarily due to the effects of foreign currency rates. The
sequential gross margin decreased due to a reduction in inventory.
The Weighing and Control Systems segment revenues were $17.7 million in
the second quarter of 2015, down 12.1% from $20.2 million in the second
quarter last year, and up 8.6% from $16.3 million in the first quarter
of 2015. Decreased year-over-year revenues were primarily attributable
to the effects of foreign currency rates. The sequential increase is
attributable to volume in our process weighing business. The gross
margin for the segment was 43.6% in the second quarter of 2015 versus
48.2% in the second quarter of 2014 and 44.6% in the first quarter of
2015. The year-over-year decrease in gross margin is primarily due to
the effects of foreign currency rates and unfavorable product mix. The
sequential decrease in gross margin is primarily due to higher freight
costs and unfavorable product mix.
Outlook
Assuming a similar exchange rate impact to our revenues and given the
normal seasonality in our business, we expect net revenues in the range
of $55 million to $60 million for the third quarter of 2015.
Conclusion
We are working diligently to finalize the review and analysis of our
Indian subsidiary functional currency accounting, and we expect to file
our Form 10-Q and hold our earnings call on or before August 11, 2015.
Because the assessment is ongoing, we can give no assurances that the
expected timing for the filing of our Form 10-Q and earnings call will
be met. When the assessment is complete and the company files its Form
10-Q and holds its earnings call, the financial statements may differ
materially from the results disclosed in this press release. In
addition, the assessment may impact prior-period financial statements.
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: our
inability to finalize the review and analysis of our Indian subsidiary
functional currency accounting in time to permit our Form 10-Q for the
second quarter of 2015 to be filed in a timely manner, 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; 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, 2014. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150804005888/en/
VPG
Wendy Wilson
Senior Director Investor Relations and
Corporate Communications
office 919-374-5501
mobile
919-588-0155
[email protected]
Source: VPG