News Details

MALVERN, Pa.--(BUSINESS WIRE)-- Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and systems, today announced its results for its fiscal 2017 first quarter.

First Quarter Highlights:

• Revenues grow to $59.8 million, up 5.6% versus last year and up 7.1% sequentially
• Diluted EPS increase to $0.15 compared to prior year’s $0.04
• Adjusted diluted EPS increase to $0.19* compared to prior year $0.13
• Cash from operations grows to $2.9 million; free cash flow of $1.1 million*
• Book-to-bill of 1.06 reflects improving conditions in several end-markets

Ziv Shoshani, chief executive officer of VPG, commented, “We are encouraged by a solid first quarter with all segments contributing to year-over-year and sequential revenue growth. We are pleased to see indications of an improved business environment in a number of our key end markets – including test and measurement, avionics, military and space, and steel – as reflected in a positive book-to-bill of 1.06 at the end of the first quarter. Our ongoing restructuring is driving profitability and cash flow improvements and we will continue to work to capture efficiency opportunities, better serve our customers and enhance our financial performance. We have begun 2017 well and, as we progress through the year, we believe we have an excellent opportunity to leverage our end market growth and drive value to our shareholders.”

First quarter 2017 net earnings attributable to VPG stockholders grew to $2.0 million, or $0.15 per diluted share, compared to $0.5 million, or $0.04 per diluted share, in the first fiscal quarter of 2016. Foreign currency exchange rates for the first quarter of 2017, as compared to the prior year period, had a negative impact on net income of $0.9 million, or $0.07 per diluted share.

First quarter 2017 adjusted net earnings attributable to VPG stockholders grew by 48.2% to $2.5 million, or $0.19 per diluted share, compared to adjusted net earnings attributable to VPG stockholders of $1.7 million, or $0.13 per diluted share, for the comparable prior year period.

The reconciliation table within this release reconciles the Company's non-GAAP measures, which are provided for comparison with other results, and the most directly comparable U.S. GAAP measures.

Segments

Foil Technology Products segment revenues grew 5.5% to $27.8 million in the first quarter of 2017, up from $26.3 million in the first quarter of 2016; sequential growth was 9.3% up from $25.4 million in the fourth quarter of 2016. The year-over-year increase in revenues was attributable to higher volume of $1.7 million, of which $1.1 million is attributable to Pacific Instruments, acquired on April 6, 2016; sequential growth was due to higher volume mainly in precision resistors in the test and measurement market.

Gross profit margin for the segment was 41.4% for the first quarter of 2017 compared to 42.3% in the first quarter of 2016 and 40.6% in the fourth quarter of 2016 (40.8% excluding the Pacific acquisition purchase accounting adjustment of $0.1 million). The gross profit margin for the quarter was down compared to the prior year due to a negative exchange rate impact and inventory reduction, partially offset by an increase in volume. The sequential gross profit margin increase is mainly due to the increase in volume.

Force Sensors segment revenues increased 4.3% to $15.5 million in the first quarter of 2017, up from $14.8 million in the first quarter of 2016; sequential growth was 4.7% up from $14.8 million in the fourth quarter of 2016. The year-over-year increase in revenues was attributable to higher volumes with OEM customers in the precision agriculture and construction end markets, offset by a negative exchange rate. The increase in sequential revenues was attributable to higher volumes with OEM customers in the construction end market. Gross profit margin in the first quarter increased to 23.9% from 18.4% in the first quarter of 2016, primarily as a result of higher volumes and successful cost reduction programs. The slight sequential reduction from 25.3% in the fourth quarter of 2016 was due to production ramp up and related manufacturing costs.

Weighing and Control Systems segment revenues grew by 7.0% to $16.6 million in the first quarter of 2017, up from $15.5 million in the first quarter of 2016; sequential growth was 5.9% up from $15.6 million in the fourth quarter of 2016. The increase in year-over-year revenues was attributable to higher volumes primarily in the steel end market, partially offset by a negative exchange rate. The sequential increase in revenues was attributable to an increase in volume in the on-board weighing product line. First quarter 2017 gross profit margin increased to 44.3% from the first quarter of 2016 of 38.3% (40.2% excluding the Stress-Tek acquisition purchase accounting adjustment of $0.3 million). This improvement was the result of higher volume and a favorable product mix. The gross profit margin reduction from 46.5% reported in the fourth quarter of 2016 is attributable to a volume increase offset by an unfavorable product mix and, to a lesser extent, a reduction in inventory.

Outlook

“In light of an improved business environment and at constant first quarter 2017 exchange rates, we expect net revenues in the range of $58 million to $63 million for the second quarter of 2017,” concluded Mr. Shoshani.

*Use of Non-GAAP Financial Information

We define “adjusted net earnings” as net earnings attributable to VPG stockholders before acquisition purchase accounting adjustments, restructuring costs and associated tax effects. “Free cash flow” is defined as the amount of cash generated from operations ($2.9 million for the first quarter of 2017), in excess of our capital expenditures ($2.0 million for the first quarter of 2017) net of proceeds, if any, for the sale of assets ($0.2 million in the first quarter of 2017). 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 (May 9) 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 5120580, 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: 10104995. 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; 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 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, 2016. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Source: VPG