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 2018 second quarter ended June 30, 2018.
Second Quarter Highlights:
-
Growth in revenues to $74.2 million, up 19% year-over-year
-
Gross margin was 42.3% for the quarter as compared to 39.7% for the
prior year period
-
Operating income increased by 93% to $11.3 million as compared to $5.9
million in the prior year period
-
Operating margin for the quarter was 15.2%, compared to 9.4% for the
prior year period
-
Earnings increased 111% to $0.57 per diluted share, compared to $0.27
reported last year
-
Adjusted diluted EPS* increased 97% to $0.57, compared to prior year
$0.29
-
Book-to-bill remained strong at 1.13, reflecting healthy, stable
end-markets
Ziv Shoshani, Chief Executive Officer of VPG, commented, “We continue to
secure business opportunities across all of our end markets as reflected
in our increased revenues. Our second quarter 2018 operating results
reaffirmed that strong operating margins are firmly established in our
enterprise when we execute our business strategy in a solid business
environment, as we did again this quarter.”
The Company grew second fiscal quarter 2018 net earnings attributable to
VPG stockholders to $7.7 million, or $0.57 per diluted share, compared
to $3.6 million, or $0.27 per diluted share, in the second fiscal
quarter of 2017. This growth was assisted by a foreign currency exchange
rate in the second quarter of 2018 relative to the prior year period
that increased net income by $0.2 million, or $0.01 per diluted share.
In the six fiscal months ended June 30, 2018, net earnings attributable
to VPG stockholders grew to $12.7 million, or $0.94 per diluted share,
compared to $5.6 million or $0.42 per diluted share, in the six fiscal
months ended July 1, 2017. Foreign currency exchange rates for the six
fiscal months ended June 30, 2018 had no impact on net income relative
to the prior year period.
The second fiscal quarter 2018 adjusted net earnings attributable to VPG
stockholders approximately doubled to $7.7 million, or $0.57 per diluted
share, compared to adjusted net earnings attributable to VPG
stockholders of $3.9 million, or $0.29 per diluted share, for the
comparable prior year period.
Six fiscal months ended June 30, 2018 adjusted net earnings attributable
to VPG stockholders approximately doubled to $12.7 million, or $0.94 per
diluted share, compared to adjusted net earnings attributable to VPG
stockholders of $6.4 million, or $0.48 per diluted share, for the
comparable prior year period.
Segments
Foil Technology Products segment revenues grew 16.7% to $34.2 million in
the second fiscal quarter of 2018, up from $29.3 million in the second
fiscal quarter of 2017; sequential revenue was flat compared to the
first quarter of 2018. The year-over-year increase in revenues was
attributable to precision resistors growth in all regions for
distribution and OEM customers, primarily for the test and measurement
market. Additionally, strain gage products increased across all regions
in the force measurement and test and measurement markets.
Gross profit margin for the Foil Technology Products segment was 46.1%
for the second fiscal quarter of 2018, an increase compared to 41.9% in
the second fiscal quarter of 2017 and an increase compared to 42.8% in
the first fiscal quarter of 2018. The year-over-year increase in gross
margin was due to an increase in volumes, labor efficiencies experienced
in the second quarter of 2018 and a positive exchange rate impact. The
sequential increase in gross margin was primarily attributable to labor
and manufacturing efficiencies in the second quarter of 2018.
Force Sensors segment revenues grew 23.7% to $19.4 million in the second
fiscal quarter of 2018, up from $15.7 million in the second fiscal
quarter of 2017; sequential revenue increased slightly, up from $19.2
million in the first quarter of 2018. The year-over-year increase in
revenues was mainly attributable to OEM customers in the force
measurement and precision weighing markets primarily in the Americas.
Gross profit margin for the Force Sensors segment was 29.4% for the
second fiscal quarter of 2018, an increase compared to 28.9% in the
second fiscal quarter of 2017 and an increase compared to 27.3% in the
first fiscal quarter of 2018. Gross margins were up compared to the
prior year period primarily due to the volume increase experienced in
the second fiscal quarter of 2018 partially offset by a negative
exchange rate impact. The sequential increase in gross margins was
primarily due to an increase in volume and freight savings experienced
in the second fiscal quarter of 2018.
Weighing and Control Systems segment revenues grew by 19.1% to $20.7
million in the second fiscal quarter of 2018, up from $17.4 million in
the second fiscal quarter of 2017; sequential revenue increased 4.9%
from $19.7 million in the first fiscal quarter of 2018. The increased
year-over-year revenues were attributable to all product lines in all
regions, in addition to positive exchange rate impact. The sequential
increase in revenue was primarily attributable to a volume increase
mainly in the steel product line in Asia partially offset by lower
volume in Europe for our on-board weighing and process weighing product
lines as well as a negative exchange rate impact.
The second fiscal quarter 2018 gross profit margin for the segment was
48.0%, an increase compared to 45.8% from the second fiscal quarter of
2017 and 43.9% from the first fiscal quarter of 2018. The year-over-year
increase in gross margin was primarily due to volume, positive exchange
rate impact and cost savings. The sequential increase in gross margin
was primarily due to the volume increase experienced in the second
fiscal quarter of 2018.
Near-Term Outlook
“In light of a continued solid business environment, at constant second
fiscal quarter 2018 exchange rates and taking into account the normal
seasonality of our business, we expect net revenues in the range of $70
million to $77 million for the third 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 (August 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
9209556, 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 10122235. 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;
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,
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 |
| | June 30, 2018 |
| July 1, 2017 |
Net revenues
| | $ | 74,231 | | |
$
|
62,319
| |
Costs of products sold
| |
| 42,865 |
| |
|
37,560
|
|
|
Gross profit
| | | 31,366 | | | |
24,759
| |
Gross profit margin
| | | 42.3 | % | | |
39.7
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 19,990 | | | |
18,591
| |
|
Restructuring costs
| |
| 61 |
| |
|
315
|
|
|
Operating income
| | | 11,315 | | | |
5,853
| |
|
Operating margin
| | | 15.2 | % | | |
9.4
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (478 | ) | | |
(468
|
)
|
|
Other
| |
| (272 | ) | |
|
(571
|
)
|
|
Other income (expense) - net
| |
| (750 | ) | |
|
(1,039
|
)
|
| | | |
|
|
Income before taxes
| | | 10,565 | | | |
4,814
| |
| | | |
|
|
Income tax expense
| |
| 2,882 |
| |
|
1,198
|
|
| | | |
|
|
Net earnings
| | | 7,683 | | | |
3,616
| |
|
Less: net earnings attributable to noncontrolling interests
| |
| (10 | ) | |
|
(3
|
)
|
|
Net earnings attributable to VPG stockholders
| | $ | 7,693 |
| |
$
|
3,619
|
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| | $ | 0.57 | | |
$
|
0.27
| |
|
Diluted earnings per share attributable to VPG stockholders
| | $ | 0.57 | | |
$
|
0.27
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,464 | | | |
13,257
| |
|
Weighted average shares outstanding - diluted
| | | 13,513 | | | |
13,446
| |
|
|
|
|
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Operations
|
|
(Unaudited - In thousands, except per share amounts)
|
|
|
|
| Six fiscal months ended |
| | June 30, 2018 |
| July 1, 2017 |
|
Net revenues
| | $ | 147,322 | | |
$
|
122,106
| |
|
Costs of products sold
| |
| 87,451 |
| |
|
74,830
|
|
|
Gross profit
| | | 59,871 | | | |
47,276
| |
|
Gross profit margin
| | | 40.6 | % | | |
38.7
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 40,309 | | | |
36,609
| |
|
Restructuring costs
| |
| 61 |
| |
|
869
|
|
|
Operating income
| | | 19,501 | | | |
9,798
| |
|
Operating margin
| | | 13.2 | % | | |
8.0
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (920 | ) | | |
(920
|
)
|
|
Other
| |
| (921 | ) | |
|
(1,100
|
)
|
|
Other income (expense) - net
| |
| (1,841 | ) | |
|
(2,020
|
)
|
| | | |
|
|
Income before taxes
| | | 17,660 | | | |
7,778
| |
| | | |
|
|
Income tax expense
| |
| 5,019 |
| |
|
2,159
|
|
| | | |
|
|
Net earnings
| | | 12,641 | | | |
5,619
| |
|
Less: net (earnings) loss attributable to noncontrolling interests
| |
| (40 | ) | |
|
5
|
|
|
Net earnings attributable to VPG stockholders
| | $ | 12,681 |
| |
$
|
5,614
|
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| | $ | 0.95 | | |
$
|
0.42
| |
|
Diluted earnings per share attributable to VPG stockholders
| | $ | 0.94 | | |
$
|
0.42
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,409 | | | |
13,233
| |
|
Weighted average shares outstanding - diluted
| | | 13,511 | | | |
13,442
| |
|
|
|
|
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Balance Sheets
|
|
(In thousands)
|
|
| June 30, 2018 |
| December 31, 2017 |
| | (Unaudited) | | |
| Assets | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| | $ 74,713 | | $ 74,292 |
|
Accounts receivable, net
| | 52,103 | |
46,789
|
|
Inventories:
| | | | |
|
Raw materials
| | 19,502 | |
16,601
|
|
Work in process
| | 23,936 | |
23,160
|
|
Finished goods
| | 21,984 | |
20,174
|
|
Inventories, net
| | 65,422 | |
59,935
|
|
Prepaid expenses and other current assets
| | 11,660 | |
10,299
|
|
Total current assets
| | 203,898 | |
191,315
|
| | | |
|
|
Property and equipment, at cost:
| | | | |
|
Land
| | 3,412 | |
3,434
|
|
Buildings and improvements
| | 50,376 | |
50,276
|
|
Machinery and equipment
| | 97,772 | |
95,158
|
|
Software
| | 8,160 | |
7,955
|
|
Construction in progress
| | 2,172 | |
2,252
|
|
Accumulated depreciation
| | (107,399) | |
(103,401)
|
|
Property and equipment, net
| | 54,493 | |
55,674
|
| | | |
|
| Goodwill | | 18,799 | |
19,181
|
| | | |
|
|
Intangible assets, net
| | 18,966 | |
20,475
|
| | | |
|
|
Other assets
| | 18,743 | |
19,906
|
|
Total assets
| | $ 314,899 | | $ 306,551 |
| | | |
|
| Liabilities and equity | | | | |
|
Current liabilities:
| | | | |
|
Trade accounts payable
| | $ 11,049 | | $ 13,678 |
|
Payroll and related expenses
| | 14,932 | |
15,892
|
|
Other accrued expenses
| | 16,758 | |
15,952
|
|
Income taxes
| | 2,888 | |
2,515
|
|
Current portion of long-term debt
| | 4,088 | |
3,878
|
|
Total current liabilities
| | 49,715 | |
51,915
|
| | | |
|
|
Long-term debt, less current portion
| | 26,690 | |
28,477
|
|
Deferred income taxes
| | 2,300 | |
2,300
|
|
Other liabilities
| | 13,781 | |
14,131
|
|
Accrued pension and other postretirement costs
| | 16,115 | |
16,424
|
|
Total liabilities
| | 108,601 | |
113,247
|
| | | |
|
|
Commitments and contingencies
| | | | |
| | | |
|
|
Equity:
| | | | |
|
Common stock
| | 1,307 | |
1,288
|
|
Class B convertible common stock
| | 103 | |
103
|
| Treasury stock
| | (8,765) | |
(8,765)
|
|
Capital in excess of par value
| | 195,668 | |
192,904
|
|
Retained earnings
| | 55,604 | |
43,076
|
|
Accumulated other comprehensive loss
| | (37,598) | |
(35,450)
|
| Total Vishay Precision Group, Inc. stockholders equity
| | 206,319 | |
193,156
|
|
Noncontrolling interests
| | (21) | |
148
|
|
Total equity
| | 206,298 | |
193,304
|
|
Total liabilities and equity
| | $ 314,899 | | $ 306,551 |
| | | |
|
|
|
| VISHAY PRECISION GROUP, INC. |
Consolidated Condensed Statements of Cash Flows
|
|
(Unaudited - In thousands)
|
|
|
|
| Six fiscal months ended |
| | June 30, 2018 |
| July 1, 2017 |
| Operating activities | | | | |
|
Net earnings
| | $ | 12,641 | | |
$
|
5,619
| |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
| | | | |
|
Depreciation and amortization
| | | 5,332 | | | |
5,318
| |
|
Gain on disposal of property and equipment
| | | (83 | ) | | |
(141
|
)
|
|
Share-based compensation expense
| | | 801 | | | |
492
| |
|
Inventory write-offs for obsolescence
| | | 1,158 | | | |
982
| |
|
Deferred income taxes
| | | 1,086 | | | |
(104
|
)
|
|
Other
| | | 455 | | | |
(445
|
)
|
|
Net changes in operating assets and liabilities:
| | | | |
|
Accounts receivable, net
| | | (6,141 | ) | | |
(6,928
|
)
|
|
Inventories, net
| | | (7,304 | ) | | |
(761
|
)
|
|
Prepaid expenses and other current assets
| | | (1,724 | ) | | |
(1,397
|
)
|
|
Trade accounts payable
| | | (390 | ) | | |
1,020
| |
|
Other current liabilities
| |
| 1,536 |
| |
|
3,676
|
|
|
Net cash provided by operating activities
| |
| 7,367 |
| |
|
7,331
|
|
| | | |
|
| Investing activities | | | | |
|
Capital expenditures
| | | (6,134 | ) | | |
(3,146
|
)
|
|
Proceeds from sale of property and equipment
| |
| 106 |
| |
|
326
|
|
|
Net cash used in investing activities
| |
| (6,028 | ) | |
|
(2,820
|
)
|
| | | |
|
| | | |
|
| Financing activities | | | | |
|
Principal payments on long-term debt and capital leases
| | | (3,847 | ) | | |
(1,314
|
)
|
|
Proceeds from revolving facility
| | | 11,000 | | | |
16,000
| |
|
Payments on revolving facility
| | | (6,000 | ) | | |
(16,000
|
)
|
|
Distributions to noncontrolling interests
| | | (129 | ) | | |
(46
|
)
|
|
Payments of employee taxes on certain share-based arrangements
| |
| (801 | ) | |
|
(303
|
)
|
|
Net cash provided by (used in) financing activities
| | | 223 | | | |
(1,663
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
| (1,141 | ) | |
|
1,858
|
|
|
Increase in cash and cash equivalents
| | | 421 | | | |
4,706
| |
| | | |
|
|
Cash and cash equivalents at beginning of period
| |
| 74,292 |
| |
|
58,452
|
|
|
Cash and cash equivalents at end of period
| | $ | 74,713 |
| |
$
|
63,158
|
|
| | | |
|
| Supplemental disclosure of non-cash investing transactions: | | | | |
|
Capital expenditures purchased
| | $ | (3,988 | ) | |
$
|
(3,146
|
)
|
| Supplemental disclosure of non-cash financing transactions: | | | | |
|
Conversion of exchangeable notes to common stock
| | $ | (2,794 | ) | |
$
|
(1,303
|
)
|
|
|
|
| VISHAY PRECISION GROUP, INC. |
|
Reconciliation of Consolidated Adjusted Gross Profit Margin
|
|
(Unaudited - In thousands)
|
|
| Fiscal quarter ended |
|
| Six fiscal months ended |
| | June 30, 2018 |
| July 1, 2017 | | | June 30, 2018 |
| July 1, 2017 |
|
Gross profit
| | $ | 31,366 | | |
$
|
24,759
| | | | $ | 59,871 | | |
$
|
47,276
| |
|
Gross profit margin
| | | 42.3 | % | | |
39.7
|
%
| | | | 40.6 | % | | |
38.7
|
%
|
| | | | | | | | |
|
| |
| |
| | |
| |
|
|
Adjusted gross profit
| | $ | 31,366 |
| |
$
|
24,759
|
| | | $ | 59,871 |
| |
$
|
47,276
|
|
|
Adjusted gross profit margin
| | | 42.3 | % | | |
39.7
|
%
| | | | 40.6 | % | | |
38.7
|
%
|
| | | | | | | | |
|
| | | | | | | | |
|
| VISHAY PRECISION GROUP, INC. | | | | | | | | | |
|
Reconciliation of Consolidated Adjusted Operating Margin
| | | | | | | | | |
|
(Unaudited - In thousands)
| | | | | | | | | |
| | | | | | | | |
|
| | Fiscal quarter ended | | | Six fiscal months ended |
| | June 30, 2018 | | July 1, 2017 | | | June 30, 2018 | | July 1, 2017 |
|
Operating income
| | $ | 11,315 | | |
$
|
5,853
| | | | $ | 19,501 | | |
$
|
9,798
| |
|
Operating margin
| | | 15.2 | % | | |
9.4
|
%
| | | | 13.2 | % | | |
8.0
|
%
|
| | | | | | | | |
|
Reconciling items affecting operating margin | | | | | | | | | |
|
Restructuring costs
| | | 61 | | | |
315
| | | | | 61 | | | |
869
| |
| |
| |
| | |
| |
|
Adjusted operating income
| | $ | 11,376 |
| |
$
|
6,168
|
| | | $ | 19,562 |
| |
$
|
10,667
|
|
|
Adjusted operating margin
| | | 15.3 | % | | |
9.9
|
%
| | | | 13.3 | % | | |
8.7
|
%
|
| | | | | | | | |
|
| | | | | | | | |
|
| VISHAY PRECISION GROUP, INC. | | | | | | | | | |
|
Reconciliation of Adjusted Earnings Per Share
| | | | | | | | | |
|
(Unaudited - In thousands, except per share data)
| | | | | | | | | |
| | Fiscal quarter ended | | | Six fiscal months ended |
| | June 30, 2018 | | July 1, 2017 | | | June 30, 2018 | | July 1, 2017 |
|
Net earnings attributable to VPG stockholders
| | $ | 7,693 | | |
$
|
3,619
| | | | $ | 12,681 | | |
$
|
5,614
| |
| | | | | | | | |
|
Reconciling items affecting operating margin | | | | | | | | | |
|
Restructuring costs
| | | 61 | | | |
315
| | | | | 61 | | | |
869
| |
Less reconciling items affecting income tax
expense | | | | | | | | | |
|
Tax effect of reconciling items
| |
| 9 |
| |
|
13
|
| | |
| 9 |
| |
|
56
|
|
|
Adjusted net earnings attributable to VPG stockholders
| | $ | 7,745 |
| |
$
|
3,921
|
| | | $ | 12,733 |
| |
$
|
6,427
|
|
| | | | | | | | |
|
|
Adjusted net earnings per diluted share
| | $ | 0.57 | | |
$
|
0.29
| | | | $ | 0.94 | | |
$
|
0.48
| |
| | | | | | | | |
|
|
Weighted average shares outstanding - diluted
| | | 13,513 | | | |
13,446
| | | | | 13,511 | | | |
13,442
| |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180807005158/en/
VPG
For Investors
ICR, Inc.
Michael Callahan,
203-682-8311
[email protected]
or
For
Media
ICR, Inc.
Phil Denning, 646-277-1258
[email protected]
Source: VPG