Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and sensor-based systems, today announced its results
for its fiscal 2019 first quarter ended March 30, 2019.
First Quarter Highlights:
- Growth in revenues to $76.5 million, up 4.7% year-over-year
-
Gross profit margin was 43.2% for the quarter as compared to 39.0% for
the prior year period -
Operating income increased by 54% to $12.6 million as compared to $8.2
million in the prior year period -
Operating margin for the quarter was 16.5%, compared to 11.2% for the
prior year period -
Earnings increased 65% to $0.61 per diluted share, compared to $0.37
reported last year -
Cash from operations was $8.1 million with free cash flow* of $4.8
million
Ziv Shoshani, Chief Executive Officer of VPG, commented, “We are pleased
to report a strong start to 2019, highlighted by solid revenues and a
substantial increase in margins. Performance in the quarter was largely
the result of execution on our strategic plan, which was bolstered by a
favorable mix of business during the period. We remain focused on
building on the strong cash generation delivered through the first
quarter, and driving long-term shareholder value.”
The Company grew first fiscal quarter 2019 net earnings attributable to
VPG stockholders to $8.2 million, or $0.61 per diluted share, compared
to $5.0 million, or $0.37 per diluted share, in the first fiscal quarter
of 2018. Foreign currency exchange rates for the first quarter of 2019
increased net income by $0.3 million, or $0.02 per diluted share,
relative to the prior year period.
Segments
Foil Technology Products segment revenues grew 8.5% to $37.0 million in
the first fiscal quarter of 2019, up from $34.2 million in the first
fiscal quarter of 2018; sequential revenue increased 0.8% compared to
$36.7 million in the fourth quarter of 2018. The year-over-year increase
in revenues were attributable to Pacific Instruments products in the
Americas for end user customers in the avionics, military and space
market and Advanced Sensor products in the force measurement market
primarily in Asia and the Americas.
Gross profit margin for the Foil Technology Products segment was 44.7%
for the first fiscal quarter of 2019, an increase compared to 42.8% in
the first fiscal quarter of 2018, and an increase compared to 42.0% in
the fourth fiscal quarter of 2018. The year-over-year increase in gross
profit margin was primarily due to an increase in volume. Sequentially,
gross profit margin increased due to an increase in volume and
manufacturing efficiencies.
Force Sensors segment revenues declined 13.0% to $16.7 million in the
first fiscal quarter of 2019, compared to $19.2 million in the first
fiscal quarter of 2018; sequential revenue decreased 1.6%, compared to
$17.0 million in the fourth quarter of 2018. The year-over-year and
sequential decreases in revenues were mainly attributable to OEM
customers in the force measurement market, primarily in the Americas.
Gross profit margin for the Force Sensors segment was 30.2% for the
first fiscal quarter of 2019, an increase compared to 27.3% in the first
fiscal quarter of 2018, and an increase compared to 26.6% in the fourth
fiscal quarter of 2018. The year-over-year increase in gross profit
margin was primarily due to manufacturing efficiencies and export grants
in India partially offset by a decrease in volume. Sequentially, gross
profit margin increased due to export grants in India and positive
foreign exchange rate impact partially offset by a decrease in volume.
Weighing and Control Systems segment revenues grew by 15.4% to $22.7
million in the first fiscal quarter of 2019, up from $19.7 million in
the first fiscal quarter of 2018; sequential revenue decreased 2.1% from
$23.2 million in the fourth fiscal quarter of 2018. The increase in
revenues year-over-year was primarily attributable to the steel product
line in all regions. The sequential decrease in revenue was primarily
attributable to a decrease in the steel product line in Asia and the
process weighing and onboard weighing product lines in the Americas
partially offset by an increase in the onboard weighing product line in
Europe.
The first fiscal quarter 2019 gross profit margin for the Weighing and
Control Systems segment was 50.2%, an increase compared to 43.9% from
the first fiscal quarter of 2018, and an increase compared to 46.8% from
the fourth fiscal quarter of 2018. The year-over-year increase in gross
profit margin was primarily due to the increase in volume. Sequential
gross profit margin increase was primarily due to manufacturing
efficiencies.
Near-Term Outlook
“Given the current business environment and our most recent order
intake, at constant first fiscal quarter 2019 exchange rates, we expect
net revenues in the range of $70 million to $76 million for the second
fiscal quarter of 2019,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define “free cash flow” as the amount of cash generated from
operations ($8.1 million for the first fiscal quarter of 2019), in
excess of our capital expenditures ($3.3 million for the first fiscal
quarter of 2019) net of proceeds, if any, from the sale of assets ($0.0
million for the first fiscal quarter of 2019).
Conference Call and Webcast
A conference call will be held today (May 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
0105250, 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 10130492. 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; political,
economic and military instability in the countries in which we operate;
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,
2018. 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 | ||||||||||
| March 30, 2019 | March 31, 2018 | |||||||||
| Net revenues | $ | 76,525 | $ | 73,091 | ||||||
| Costs of products sold | 43,474 | 44,586 | ||||||||
| Gross profit | 33,051 | 28,505 | ||||||||
| Gross profit margin | 43.2 | % | 39.0 | % | ||||||
| Selling, general, and administrative expenses | 20,448 | 20,319 | ||||||||
| Operating income | 12,603 | 8,186 | ||||||||
|
Operating margin |
16.5 | % | 11.2 | % | ||||||
| Other income (expense): | ||||||||||
| Interest expense | (388 | ) | (442 | ) | ||||||
| Other | (772 | ) | (649 | ) | ||||||
| Other income (expense) – net | (1,160 | ) | (1,091 | ) | ||||||
| Income before taxes | 11,443 | 7,095 | ||||||||
| Income tax expense | 3,117 | 2,137 | ||||||||
| Net earnings | 8,326 | 4,958 | ||||||||
| Less: net earnings attributable to noncontrolling interests | 83 | (30 | ) | |||||||
| Net earnings attributable to VPG stockholders | $ | 8,243 | $ | 4,988 | ||||||
| Basic earnings per share attributable to VPG stockholders | $ | 0.61 | $ | 0.37 | ||||||
| Diluted earnings per share attributable to VPG stockholders | $ | 0.61 | $ | 0.37 | ||||||
| Weighted average shares outstanding – basic | 13,495 | 13,342 | ||||||||
| Weighted average shares outstanding – diluted | 13,563 | 13,497 | ||||||||
| VISHAY PRECISION GROUP, INC. | ||||||||||
| Consolidated Condensed Balance Sheets | ||||||||||
| (In thousands) | ||||||||||
| March 30, 2019 | December 31, 2018 | |||||||||
| (Unaudited) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 93,144 | $ | 90,159 | ||||||
| Accounts receivable, net | 52,484 | 53,156 | ||||||||
| Inventories: | ||||||||||
| Raw materials | 18,832 | 18,052 | ||||||||
| Work in process | 23,480 | 22,007 | ||||||||
| Finished goods | 21,059 | 22,182 | ||||||||
| Inventories, net | 63,371 | 62,241 | ||||||||
| Prepaid expenses and other current assets | 12,815 | 9,314 | ||||||||
| Total current assets | 221,814 | 214,870 | ||||||||
| Property and equipment, at cost: | ||||||||||
| Land | 3,411 | 3,390 | ||||||||
| Buildings and improvements | 51,298 | 51,055 | ||||||||
| Machinery and equipment | 107,404 | 105,840 | ||||||||
| Software | 8,942 | 8,532 | ||||||||
| Construction in progress | 1,542 | 2,157 | ||||||||
| Accumulated depreciation | (113,575 | ) | (111,555 | ) | ||||||
| Property and equipment, net | 59,022 | 59,419 | ||||||||
| Goodwill | 16,238 | 16,141 | ||||||||
| Intangible assets, net | 17,390 | 17,656 | ||||||||
| Other assets | 28,326 | 18,297 | ||||||||
| Total assets | $ | 342,790 | $ | 326,383 | ||||||
| Liabilities and equity | ||||||||||
| Current liabilities: | ||||||||||
| Trade accounts payable | $ | 10,736 | $ | 11,461 | ||||||
| Payroll and related expenses | 18,411 | 17,757 | ||||||||
| Other accrued expenses | 18,780 | 17,031 | ||||||||
| Income taxes | 2,277 | 3,879 | ||||||||
| Current portion of long-term debt | 4,766 | 4,654 | ||||||||
| Total current liabilities | 54,970 | 54,782 | ||||||||
| Long-term debt, less current portion | 21,172 | 22,421 | ||||||||
| Deferred income taxes | 2,200 | 2,200 | ||||||||
| Other liabilities | 21,541 | 13,545 | ||||||||
| Accrued pension and other postretirement costs | 15,029 | 14,982 | ||||||||
| Total liabilities | 114,912 | 107,930 | ||||||||
| Commitments and contingencies | ||||||||||
| Equity: | ||||||||||
| Common stock | 1,311 | 1,307 | ||||||||
| Class B convertible common stock | 103 | 103 | ||||||||
| Treasury stock | (8,765 | ) | (8,765 | ) | ||||||
| Capital in excess of par value | 196,578 | 196,666 | ||||||||
| Retained earnings | 75,343 | 66,569 | ||||||||
| Accumulated other comprehensive loss | (36,779 | ) | (37,465 | ) | ||||||
| Total Vishay Precision Group, Inc. stockholders equity | 227,791 | 218,415 | ||||||||
| Noncontrolling interests | 87 | 38 | ||||||||
| Total equity | 227,878 | 218,453 | ||||||||
| Total liabilities and equity | $ | 342,790 | $ | 326,383 | ||||||
| VISHAY PRECISION GROUP, INC. | ||||||||||
| Consolidated Condensed Statements of Cash Flows | ||||||||||
| (Unaudited – In thousands) | ||||||||||
| Fiscal quarter ended | ||||||||||
|
|
March 30, 2019 | March 31, 2018 | ||||||||
| Operating activities | ||||||||||
| Net earnings | $ | 8,326 | $ | 4,958 | ||||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||
| Depreciation and amortization | 2,854 | 2,684 | ||||||||
| Loss/(gain) on disposal of property and equipment | 1 | (53 | ) | |||||||
| Share-based compensation expense | 514 | 373 | ||||||||
| Inventory write-offs for obsolescence | 489 | 613 | ||||||||
| Deferred income taxes | 313 | 268 | ||||||||
| Other | (2,367 | ) | (723 | ) | ||||||
| Net changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | 850 | (5,519 | ) | |||||||
| Inventories, net | (1,507 | ) | (1,910 | ) | ||||||
| Prepaid expenses and other current assets | (3,484 | ) | (2,517 | ) | ||||||
| Trade accounts payable | 628 | 1,687 | ||||||||
| Other current liabilities | 1,488 | 1,943 | ||||||||
| Net cash provided by operating activities | 8,105 | 1,804 | ||||||||
| Investing activities | ||||||||||
| Capital expenditures | (3,334 | ) | (4,296 | ) | ||||||
| Proceeds from sale of property and equipment | 29 | 53 | ||||||||
| Net cash used in investing activities | (3,305 | ) | (4,243 | ) | ||||||
| Financing activities | ||||||||||
| Principal payments on long-term debt | (1,155 | ) | (2,970 | ) | ||||||
| Proceeds from revolving facility | — | 8,000 | ||||||||
| Payments on revolving facility | — | (3,000 | ) | |||||||
| Distributions to noncontrolling interests | (34 | ) | (117 | ) | ||||||
| Payments of employee taxes on certain share-based arrangements | (795 | ) | (785 | ) | ||||||
| Net cash (used in) provided by financing activities | (1,984 | ) | 1,128 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | 169 | 753 | ||||||||
| Increase(decrease) in cash and cash equivalents | 2,985 | (558 | ) | |||||||
| Cash and cash equivalents at beginning of period | 90,159 | 74,292 | ||||||||
| Cash and cash equivalents at end of period | $ | 93,144 | $ | 73,734 | ||||||
| Supplemental disclosure of non-cash investing transactions: | ||||||||||
| Capital expenditures purchased | $ | (1,986 | ) | $ | (1,773 | ) | ||||
| Supplemental disclosure of non-cash financing transactions: | ||||||||||
| Conversion of exchangeable notes to common stock | — | $ | (2,794 | ) | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190507005186/en/