Second quarter net revenues of $59.5 million,
within guidance.Company files Form 10-Q for the second quarter
and first six months of fiscal 2015.
MALVERN, Pa. -- (Business Wire)
Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its
second quarter fiscal 2015 and six months ended June 27, 2015.
Ziv Shoshani, VPG’s chief executive officer said, “We have completed our
review and analysis of certain adjustments to our historical financial
statements for a subsidiary located in India as a result of certain
transactions that were recorded for this subsidiary in the local
currency, the Indian rupee, instead of the functional currency, the U.S.
dollar, in prior periods extending back to 2011. The impact of these
prior period adjustments was not material to any of these prior periods.
As a result, we have made adjustments to our financial statements to
correct these and other immaterial errors. The adjusted financial
statements may be found in Note 12 of our Form 10-Q, which we filed with
the Securities and Exchange Commission today.”
In commenting on second quarter fiscal 2015 financial results, Mr.
Shoshani added, “From a performance perspective, our revenues continued
to be significantly impacted by the negative effect of foreign currency
exchange rates of $5.1 million, compared to the second quarter of 2014.
At the same time, our new advanced sensor product and on-board weighing
systems continue to gain traction in the marketplace. We remain focused
on our strategy of enhancing shareholder value.”
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. Net revenues for the six months ended June
27, 2015 were $116.1 million, representing an 8.1% decrease from the
$126.4 million of net revenues for comparable prior year period.
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.
Net earnings attributable to VPG stockholders for the second quarter of
2015 were $1.5 million, or $0.11 per diluted share, compared to net
earnings attributable to VPG stockholders for the second quarter of 2014
of $3.6 million, or $0.26 per diluted share. Foreign currency exchange
rates for the second quarter of 2015 as compared to the prior year
period had a negative impact on net income of $0.4 million, or $0.03 per
diluted share. Net earnings attributable to VPG stockholders for the six
months ended June 27, 2015 were $2.3 million, or $0.17 per diluted
share, compared to net earnings attributable to VPG stockholders of $4.8
million, or $0.34 per diluted share for the comparable prior year
period. Foreign currency exchange rates for the six months of 2015 as
compared to the prior year period had a negative impact on net income of
$0.8 million, or $0.06 per diluted share.
Adjusted net earnings attributable to VPG stockholders for the second
quarter of 2015 were $1.8 million, or $0.13 per diluted share, versus
adjusted net earnings attributable to VPG stockholders of $3.6 million,
or $0.26 per diluted share for the comparable prior year period. Net
earnings attributable to VPG stockholders for the second quarter of 2015
include $0.03 million of KELK acquisition purchase accounting
adjustments (which impacted costs of products sold), $0.3 million of
restructuring costs, and $0.04 million of associated tax effects.
Adjusted net earnings attributable to VPG stockholders for the six
months ended June 27, 2015 were $2.7 million, or $0.19 per diluted
share, versus adjusted net earnings attributable to VPG stockholders of
$5.0 million, or $0.36 per diluted share for the comparable prior year
period. Net earnings attributable to VPG stockholders for the six months
ended June 27, 2015 include $0.03 million of KELK acquisition purchase
accounting adjustments (which impacted cost of products sold), $0.4
million of restructuring costs, and $0.06 million of associated tax
effects, versus $0.4 million of KELK acquisition purchase accounting
adjustments and restructuring costs, and $0.1 million of associated tax
effects for the comparable prior year period.
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 exchange 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 profit
margin for the segment decreased to 39.6% for the second quarter of 2015
compared to 40.5% in the second quarter last year, and down from 41.4%
in the first quarter of 2015. The gross profit margin decreased from the
comparable prior year period primarily due to the effects of foreign
currency exchange rates and additional headcount for expansion of our
advanced sensor platform. Despite an increase in revenues, the
sequential gross profit margin decrease was due primarily to the effects
of foreign currency exchange 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 currency exchange rates of $0.9
million. The increase in sequential revenues is attributable to higher
volume. The gross profit margin for the segment was 19.0% in the second
quarter of 2015 versus 22.7% in the second quarter of 2014 and 21.8% in
the first quarter of 2015. The gross profit margin for the quarter
decreased from the comparable prior year period primarily due to the
effects of foreign currency exchange rates. The sequential gross profit
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. Net revenues were negatively impacted by the effects of foreign
currency exchange rates of $2.4 million in the second quarter of 2015 as
compared to the second quarter of 2014. The sequential increase is
attributable to volume in our process weighing business. The gross
profit 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 profit margin is
primarily due to the effects of foreign currency exchange rates and
unfavorable product mix. The sequential decrease in gross profit margin
is primarily due to higher freight costs and unfavorable product mix.
Outlook
Mr. Shoshani concluded, “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.”
*Editor’s Note: We define adjusted net earnings as net earnings
attributable to VPG stockholders before acquisition purchase accounting
adjustments, restructuring costs, and associated tax effects. ** For a
reconciliation of GAAP to non-GAAP financial information, refer to the
quarterly financial tables.
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; 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.
|
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Operations
|
| (Unaudited - In thousands, except per share amounts) |
| | | |
|
| | Fiscal quarter ended |
| | June 27, 2015 | | June 28, 2014 |
| | | |
|
|
Net revenues
| | $ | 59,508 | | |
$
|
65,162
| |
|
Costs of products sold
| |
| 38,473 |
| |
|
40,253
|
|
|
Gross profit
| | | 21,035 | | | |
24,909
| |
|
Gross profit margin
| | | 35.3 | % | | |
38.2
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 18,396 | | | |
19,897
| |
|
Restructuring costs
| |
| 304 |
| |
|
7
|
|
|
Operating income
| | | 2,335 | | | |
5,005
| |
|
Operating margin
| | | 3.9 | % | | |
7.7
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (173 | ) | | |
(240
|
)
|
|
Other
| |
| (414 | ) | |
|
(247
|
)
|
|
Other income (expense) - net
| |
| (587 | ) | |
|
(487
|
)
|
| | | |
|
|
Income before taxes
| | | 1,748 | | | |
4,518
| |
| | | |
|
|
Income tax expense
| |
| 288 |
| |
|
948
|
|
| | | |
|
|
Net earnings
| | | 1,460 | | | |
3,570
| |
|
Less: net (loss) earnings attributable to noncontrolling interests
| |
| (16 | ) | |
|
(8
|
)
|
|
Net earnings attributable to VPG stockholders
| | $ | 1,476 |
| |
$
|
3,578
|
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| | $ | 0.11 | | |
$
|
0.26
| |
|
Diluted earnings per share attributable to VPG stockholders
| | $ | 0.11 | | |
$
|
0.26
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,580 | | | |
13,756
| |
|
Weighted average shares outstanding - diluted
| | | 13,790 | | | |
13,968
| |
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Operations
|
| (Unaudited - In thousands, except per share amounts) |
| | | |
|
| | Six fiscal months ended |
| | June 27, 2015 | | June 28, 2014 |
| | | |
|
|
Net revenues
| | $ | 116,116 | | |
$
|
126,402
| |
|
Costs of products sold
| |
| 74,102 |
| |
|
79,783
|
|
|
Gross profit
| | | 42,014 | | | |
46,619
| |
|
Gross profit margin
| | | 36.2 | % | | |
36.9
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 37,144 | | | |
39,060
| |
|
Restructuring costs
| |
| 382 |
| |
|
331
|
|
|
Operating income
| | | 4,488 | | | |
7,228
| |
|
Operating margin
| | | 3.9 | % | | |
5.7
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (360 | ) | | |
(456
|
)
|
|
Other
| |
| (1,343 | ) | |
|
(683
|
)
|
|
Other income (expense) - net
| |
| (1,703 | ) | |
|
(1,139
|
)
|
| | | |
|
|
Income before taxes
| | | 2,785 | | | |
6,089
| |
| | | |
|
|
Income tax expense
| |
| 478 |
| |
|
1,277
|
|
| | | |
|
|
Net earnings
| | | 2,307 | | | |
4,812
| |
|
Less: net (loss) earnings attributable to noncontrolling interests
| |
| (29 | ) | |
|
59
|
|
|
Net earnings attributable to VPG stockholders
| | $ | 2,336 |
| |
$
|
4,753
|
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| | $ | 0.17 | | |
$
|
0.35
| |
|
Diluted earnings per share attributable to VPG stockholders
| | $ | 0.17 | | |
$
|
0.34
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,663 | | | |
13,754
| |
|
Weighted average shares outstanding - diluted
| | | 13,875 | | | |
13,963
| |
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Balance Sheets
|
| (In thousands) |
| | | |
|
| | June 27, 2015 | | December 31,
2014 |
| | (Unaudited) | | |
| Assets | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| | $ | 65,456 | | |
$
|
79,642
| |
|
Accounts receivable, net
| | | 38,250 | | | |
37,427
| |
|
Inventories:
| | | | |
|
Raw materials
| | | 13,808 | | | |
14,223
| |
|
Work in process
| | | 21,245 | | | |
19,813
| |
|
Finished goods
| |
| 20,716 |
| |
|
18,806
|
|
|
Inventories, net
| | | 55,769 | | | |
52,842
| |
| | | |
|
|
Deferred income taxes
| | | 5,552 | | | |
5,636
| |
|
Prepaid expenses and other current assets
| |
| 9,394 |
| |
|
10,361
|
|
|
Total current assets
| | | 174,421 | | | |
185,908
| |
| | | |
|
|
Property and equipment, at cost:
| | | | |
|
Land
| | | 1,891 | | | |
1,893
| |
|
Buildings and improvements
| | | 50,555 | | | |
49,909
| |
|
Machinery and equipment
| | | 79,948 | | | |
78,500
| |
|
Software
| | | 6,997 | | | |
6,837
| |
|
Construction in progress
| | | 2,678 | | | |
2,928
| |
|
Accumulated depreciation
| |
| (91,820 | ) | |
|
(89,374
|
)
|
|
Property and equipment, net
| | | 50,249 | | | |
50,693
| |
| | | |
|
|
Goodwill
| | | 12,046 | | | |
12,788
| |
| | | |
|
|
Intangible assets, net
| | | 15,416 | | | |
17,381
| |
| | | |
|
|
Other assets
| |
| 20,352 |
| |
|
20,393
|
|
|
Total assets
| | $ | 272,484 |
| |
$
|
287,163
|
|
| | | |
|
| Liabilities and equity | | | | |
|
Current liabilities:
| | | | |
|
Trade accounts payable
| | $ | 8,780 | | |
$
|
10,559
| |
|
Payroll and related expenses
| | | 14,046 | | | |
14,216
| |
|
Other accrued expenses
| | | 14,776 | | | |
16,902
| |
|
Income taxes
| | | 127 | | | |
2,133
| |
|
Current portion of long-term debt
| |
| 16,366 |
| |
|
5,120
|
|
|
Total current liabilities
| | | 54,095 | | | |
48,930
| |
| | | |
|
|
Long-term debt, less current portion
| | | 4,635 | | | |
17,713
| |
|
Deferred income taxes
| | | 610 | | | |
638
| |
|
Other liabilities
| | | 7,431 | | | |
7,644
| |
|
Accrued pension and other postretirement costs
| |
| 12,014 |
| |
|
12,353
|
|
|
Total liabilities
| |
| 78,785 |
| |
|
87,278
|
|
| | | |
|
|
Commitments and contingencies
| | | | |
| | | |
|
|
Equity:
| | | | |
|
Common stock
| | | 1,276 | | | |
1,273
| |
|
Class B convertible common stock
| | | 103 | | | |
103
| |
|
Treasury stock
| | | (6,169 | ) | | |
(32
|
)
|
|
Capital in excess of par value
| | | 189,769 | | | |
189,532
| |
|
Retained earnings
| | | 37,671 | | | |
35,335
| |
|
Accumulated other comprehensive loss
| |
| (29,111 | ) | |
|
(26,560
|
)
|
|
Total Vishay Precision Group, Inc. stockholders' equity
| | | 193,539 | | | |
199,651
| |
|
Noncontrolling interests
| |
| 160 |
| |
|
234
|
|
|
Total equity
| |
| 193,699 |
| |
|
199,885
|
|
|
Total liabilities and equity
| | $ | 272,484 |
| |
$
|
287,163
|
|
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Cash Flows
|
| (Unaudited - In thousands) |
| | | |
|
| | Six fiscal months ended |
| | June 27, 2015 | | June 28, 2014 |
| | | |
|
| Operating activities | | | | |
|
Net earnings
| | $ | 2,307 | | |
$
|
4,812
| |
|
Adjustments to reconcile net earnings to net cash (used in) provided
by operating activities:
| | | | |
|
Impairment of goodwill and indefinite-lived intangibles
| | | | |
|
Depreciation and amortization
| | | 5,524 | | | |
5,783
| |
|
(Gain) loss on disposal of property and equipment
| | | (1 | ) | | |
9
| |
|
Share-based compensation expense
| | | 416 | | | |
485
| |
|
Inventory write-offs for obsolescence
| | | 916 | | | |
562
| |
|
Other
| | | 1,121 | | | |
(54
|
)
|
|
Net changes in operating assets and liabilities:
| | | | |
|
Accounts receivable, net
| | | (1,671 | ) | | |
(4,857
|
)
|
|
Inventories, net
| | | (4,345 | ) | | |
346
| |
|
Prepaid expenses and other current assets
| | | 943 | | | |
(586
|
)
|
|
Trade accounts payable
| | | (1,670 | ) | | |
(281
|
)
|
|
Other current liabilities
| |
| (3,589 | ) | |
|
(1,338
|
)
|
|
Net cash (used in) provided by operating activities
| |
| (49 | ) | |
|
4,881
|
|
| | | |
|
| Investing activities | | | | |
|
Capital expenditures
| | | (5,037 | ) | | |
(3,435
|
)
|
|
Proceeds from sale of property and equipment
| |
| 65 |
| |
|
63
|
|
|
Net cash used in investing activities
| |
| (4,972 | ) | |
|
(3,372
|
)
|
| | | |
|
| Financing activities | | | | |
|
Principal payments on long-term debt and capital leases
| | | (1,810 | ) | | |
(2,070
|
)
|
|
Purchase of treasury stock
| | | (6,137 | ) | | |
—
| |
|
Distributions to noncontrolling interests
| |
| (45 | ) | |
|
(43
|
)
|
|
Net cash used in financing activities
| | | (7,992 | ) | | |
(2,113
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
| (1,173 | ) | |
|
250
|
|
|
Decrease in cash and cash equivalents
| | | (14,186 | ) | | |
(354
|
)
|
| | | |
|
|
Cash and cash equivalents at beginning of period
| |
| 79,642 |
| |
|
72,809
|
|
|
Cash and cash equivalents at end of period
| | $ | 65,456 |
| |
$
|
72,455
|
|
| | | | | | | |
|
|
| |
| |
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | | | | | |
|
Reconciliation of Consolidated Adjusted Gross Profit Margin
| | | | | | | | |
| (Unaudited - In thousands) | | | | | | | | |
| | | | | | | |
|
| | Fiscal quarter ended | | Six fiscal months ended |
| | June 27, 2015 | | June 28, 2014 | | June 27, 2015 | | June 28, 2014 |
|
Gross profit
| | $ | 21,035 | | |
$
|
24,909
| | | $ | 42,014 | | |
$
|
46,619
| |
|
Gross profit margin
| | | 35.3 | % | | |
38.2
|
%
| | | 36.2 | % | | |
36.9
|
%
|
| | | | | | | |
|
Reconciling items affecting gross profit
margin | | | | | | | | |
|
Acquisition purchase accounting adjustments
| | | 26 | | | |
2
| | | | 26 | | | |
41
| |
| |
| |
| |
| |
|
|
Adjusted gross profit
| | $ | 21,061 |
| |
$
|
24,911
|
| | $ | 42,040 |
| |
$
|
46,660
|
|
|
Adjusted gross profit margin
| | | 35.4 | % | | |
38.2
|
%
| | | 36.2 | % | | |
36.9
|
%
|
| | | | | | | |
|
| | | | | | | |
|
| | | | | | | |
|
| 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 27, 2015 | | June 28, 2014 | | June 27, 2015 | | June 28, 2014 |
|
Net earnings attributable to VPG stockholders
| | $ | 1,476 | | |
$
|
3,578
| | | $ | 2,336 | | |
$
|
4,753
| |
| | | | | | | |
|
Reconciling items affecting operating margin | | | | | | | | |
|
Acquisition purchase accounting adjustments
| | | 26 | | | |
2
| | | | 26 | | | |
41
| |
|
Restructuring costs
| | | 304 | | | |
7
| | | | 382 | | | |
331
| |
| | | | | | | |
|
Reconciling items affecting income tax
expense | | | | | | | | |
|
Tax effect of adjustments for purchase accounting and restructuring
costs
| |
| 41 |
| |
|
2
|
| |
| 57 |
| |
|
94
|
|
|
Adjusted net earnings attributable to VPG stockholders
| | $ | 1,765 |
| |
$
|
3,585
|
| | $ | 2,687 |
| |
$
|
5,031
|
|
| | | | | | | |
|
|
Weighted average shares outstanding - diluted
| | | 13,790 | | | |
13,968
| | | | 13,875 | | | |
13,963
| |
| | | | | | | |
|
|
Adjusted net earnings per diluted share
| | $ | 0.13 | | |
$
|
0.26
| | | $ | 0.19 | | |
$
|
0.36
| |
| | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150903005761/en/
Contacts:
VPG
Wendy Wilson
Senior Director Investor Relations and
Corporate Communications
919-374-5501
wendy.wilson@vpgsensors.com
Source: VPG
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