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8-K - CURRENT REPORT - Vishay Precision Group, Inc.vishay_8k.htm

Vishay Precision Group Reports Fourth Quarter and Full-Year 2010 Results
  • Revenues for the fourth quarter of 2010 were $54.8 million, a 17% increase over the prior year period
     
  • Gross margins were 38.2% for the fourth quarter of 2010 compared to 32.0% in the prior year period
     
  • Net earnings were $3.3 million, or $0.24 per diluted share compared to $0.7 million, or $0.05 per diluted share in the prior year period
MALVERN, Pa.--(BUSINESS WIRE)-- Vishay Precision Group, Inc. (NYSE: VPG) ("VPG" or the “Company”), a leading producer of sensors based on resistive foil technology and sensor-based systems, today announced results for the fourth quarter ended December 31, 2010. VPG was spun-off from Vishay Intertechnology (NYSE: VSH) as an independent publicly traded company on July 6, 2010 and began trading on the New York Stock Exchange on July 7, 2010, under the symbol "VPG."
 
Net revenues for the fourth quarter of 2010 were $54.8 million, an increase of 17% versus $46.8 million for the comparable prior year period. Net earnings for the fourth quarter of 2010 were $3.3 million or $0.24 per diluted share, versus net earnings of $0.7 million, or $0.05 per diluted share for the comparable prior year period (see Notes 1, 2).
 
Net revenues for the year ended December 31, 2010 were $207.5 million, an increase of 21% versus $172.0 million for the comparable prior year period. Net earnings for the year ended December 31, 2010 were $11.7 million, or $0.85 per diluted share, versus $1.7 million, or $0.13 per diluted share, for the comparable prior year period (see Notes 1, 2). Net earnings for the year ended December 31, 2009 were negatively impacted by pretax charges of $2.0 million for restructuring and severance costs.
 
Comparing the results of the fourth quarter of 2010 to the third quarter of 2010, net revenues increased by 6.2% from $51.6 million. Net earnings increased by $0.7 million from $2.6 million in the third quarter of 2010.
 
Commenting on the results, Ziv Shoshani, Chief Executive Officer of VPG, said, "Our fourth quarter revenues were close to the high end of our revenue guidance given in our November earnings release. We experienced revenue growth over the previous quarter in both product segments, which was largely attributable to improvements in our European sales. Our Weighing Modules & Control Systems (WMCS) Segment grew nearly 9% in the fourth quarter, with higher revenues from the process weighing and on-board weighing markets.” He continued, “We maintained solid gross margins in our Foil Technology (FT) Segment and improved the gross margin in the WMCS Segment. The FT Segment reported gross margins of 46.6% in the fourth quarter 2010 compared to 45.2% in the third quarter of 2010. The WMCS Segment reported gross margins of 30.4% for the fourth quarter of 2010 as compared to 29.2% for the third quarter of 2010.”
 
Mr. Shoshani concluded, "While closing our first fiscal year as an independent public company was a big milestone for the Company, we are currently focused on our strategies for 2011. We expect to invest in the following: implementation of a new product platform within the FT Segment; construction of a new manufacturing facility for the WMCS Segment; and the addition of R&D resources. We believe these investments, combined with the Company’s superior technology, and product portfolio will enable us to grow our business and enhance value for VPG shareholders."
 
Outlook
 
Mr. Shoshani continued, “As we look at 2011 we believe our market conditions will improve and our revenues will grow on an annual basis. In the first quarter of 2011 we expect to generate revenues between $52.5 million and $56.5 million.”
 
Note 1- Earnings per Share
 
Until July 6, 2010, the operations comprising VPG's business were wholly owned by various subsidiaries of Vishay Intertechnology. As of the date of the spin-off, VPG issued 13.3 million shares of capital stock. This share amount is being utilized for the calculation of basic earnings per common share for periods presented prior to July 6, 2010 as no common stock of the Company existed prior to July 6, 2010. For periods prior to July 6, 2010, the same number of shares is being used for diluted earnings per common share as for basic earnings per common share as no common stock of the Company existed prior to July 6, 2010 and no dilutive securities of the Company were outstanding for any prior period.
 
Note 2- Financial Presentation
 
The results of operations and earnings for the year ended December 31, 2010 and for the quarter and year ended December 31, 2009, as well as the balance sheet as of December 31, 2009, were derived in whole or in part from the historical consolidated financial statements of Vishay Intertechnology. Such results may not be indicative of the actual operating results that would have been realized had the Company operated as an independent, publicly traded company.
 

 

Conference Call and Webcast
 
A conference call and simultaneous audio webcast is scheduled for Tuesday, February 15, 2011 at 10:00 a.m. (ET). To access the conference call, interested parties may call toll-free (866) 825-3209 or internationally +1 (617) 213-8061 and enter passcode: 6195-8153, or log on to http://ir.vishaypg.com for listen-only mode.
 
A replay will be available approximately one hour after the completion of the call by calling toll-free (888) 286-8010 or internationally +1 (617) 801-6888 and using the following replay passcode: 8989-0448. A replay will also be available on the VPG website at http://ir.vishaypg.com. The replay will be available via phone and website for a limited time.
 
About Vishay Precision Group
 
Vishay Precision Group produces sensors based on resistive foil technology, and sensor-based systems. VPG provides vertically integrated products and solutions for multiple growing markets in the areas of stress, force, weight, pressure and current measurements. As a spin-off from Vishay Intertechnology, the Company has a decades-long track record of innovation in foil precision resistors, current sensors, and strain gages, which has served as a foundation for its more recent expansion into strain gage instrumentation, load cells and transducers, weighing modules, and complete systems for process control and on-board weighing. Vishay Precision Group may be found on the internet at http://www.vishaypg.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, 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 in integrating acquired companies, the inability to realize anticipated synergies and expansion possibilities, unexpected costs or difficulties related to our recent spinoff and other unanticipated conditions adversely affecting the operation of these companies; 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 labor unrest or legal challenges to our lay-off or termination plans, underutilization of production facilities in lower-labor-cost countries, 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 information statement filed with the SEC on June 22, 2010 as Exhibit 99.1 to our registration statement on Form 10 and our Quarterly Report on Form 10-Q for the quarter ended October 2, 2010 filed with the Securities and Exchange Commission. 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.
Combined and Consolidated Condensed Summary of Operations
(Unaudited - In thousands, except per share data)
 
  Fiscal quarter ended  
  December 31,       December 31,  
  2010   2009  
Net revenues $ 54,828     $ 46,847    
Costs of products sold   33,873       31,853    
Gross profit   20,955       14,994    
       Gross margin   38.2%       32.0%    
                 
Selling, general, and administrative expenses   15,902       11,930    
Restructuring and severance costs   -       4    
Operating income   5,053       3,060    
       Operating margin   9.2%       6.5%    
                 
Other income (expense):                
       Interest expense   (43 )     (164 )  
       Other   (541 )     167    
       Total other income (expense) - net   (584 )     3    
                 
Income before taxes   4,469       3,063    
                 
Income tax expense   1,225       2,285    
                 
Net earnings   3,244       778    
                 
Less: net earnings (loss) attributable to noncontrolling interests   (32 )     69    
                 
Net earnings attributable to VPG stockholders $ 3,276     $ 709    
 
Basic earnings per share attributable to VPG stockholders $ 0.25     $ 0.05   (Note 1)
                 
Diluted earnings per share attributable to VPG stockholders $ 0.24     $ 0.05   (Note 1)
 
Weighted average shares outstanding - basic             13,332                 13,332   (Note 1)
                 
Weighted average shares outstanding - diluted   13,814       13,332   (Note 1)

Note 1 - Earnings per Share
Until July 6, 2010, the operations comprising VPG's business were wholly owned by various subsidiaries of Vishay Intertechnology. As of the date of the spin-off, VPG issued 13.3 million shares of capital stock. This share amount is being utilized for the calculation of basic earnings per common share for periods presented prior to July 6, 2010 as no common stock of the Company existed prior to July 6, 2010. For periods prior to July 6, 2010, the same number of shares is being used for diluted earnings per common share as for basic earnings per common share as no common stock of the Company existed prior to July 6, 2010 and no dilutive securities of the Company were outstanding for any prior period.
 

 

VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Summary of Operations
(Unaudited - In thousands, except per share data)
 
  Years ended  
  December 31,       December 31,  
  2010   2009  
Net revenues $        207,524     $        171,991    
Costs of products sold   130,396       119,286    
Gross profit   77,128       52,705    
       Gross margin   37.2%       30.6%    
                 
Selling, general, and administrative expenses   57,297       43,356    
Restructuring and severance costs   -       2,048    
Operating income   19,831       7,301    
       Operating margin   9.6%       4.2%    
                 
Other income (expense):                
       Interest expense   (390 )     (1,237 )  
       Other   (928 )     714    
       Total other income (expense) - net   (1,318 )     (523 )  
                 
Income before taxes   18,513       6,778    
                 
Income tax expense   6,770       5,057    
                 
Net earnings   11,743       1,721    
                 
Less: net earnings attributable to noncontrolling interests   37       17    
                 
Net earnings attributable to VPG stockholders $           11,706     $             1,704    
 
Basic earnings per share attributable to VPG stockholders $ 0.88     $ 0.13   (Note 1)
                 
Diluted earnings per share attributable to VPG stockholders $ 0.85     $ 0.13   (Note 1)
                 
Weighted average shares outstanding - basic   13,332       13,332   (Note 1)
                 
Weighted average shares outstanding - diluted   13,787       13,332   (Note 1)

Note 1 - Earnings per Share
Until July 6, 2010, the operations comprising VPG's business were wholly owned by various subsidiaries of Vishay Intertechnology. As of the date of the spin-off, VPG issued 13.3 million shares of capital stock. This share amount is being utilized for the calculation of basic earnings per common share for periods presented prior to July 6, 2010 as no common stock of the Company existed prior to July 6, 2010. For periods prior to July 6, 2010, the same number of shares is being used for diluted earnings per common share as for basic earnings per common share as no common stock of the Company existed prior to July 6, 2010 and no dilutive securities of the Company were outstanding for any prior period.
 

 

VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
 
    December 31,   December 31,
        2010       2009
Assets                
Current assets:                
       Cash and cash equivalents   $ 82,245     $ 63,192  
       Accounts receivable, net     33,988       23,345  
       Net inventories     48,337       43,802  
       Deferred income taxes     4,022       4,960  
       Prepaid expenses and other current assets     5,540       4,522  
Total current assets     174,132       139,821  
 
Property and equipment, net     46,747       44,599  
Intangible assets, net     14,500       17,217  
Other assets     13,334       8,142  
              Total assets   $ 248,713     $ 209,779  
 
Liabilities and equity                
Current liabilities:              
 
       Notes payable to banks   $ 85     $ 9  
       Trade accounts payable     11,537       5,805  
       Net payable to affiliates     -       18,495  
       Payroll and related expenses     12,554       6,619  
       Other accrued expenses     8,680       4,573  
       Income taxes     4,847       1,647  
       Current portion of long-term debt     -       184  
Total current liabilities     37,703       37,332  
 
Long-term debt less current portion     11,692       1,551  
Deferred income taxes     4,212       5,993  
Other liabilities     7,468       6,141  
Accrued pension and other postretirement costs     10,708       10,549  
Total liabilities     71,783       61,566  
 
Commitments and contingencies                
 
Equity:                
Common stock     1,231       -  
Class B common stock     103       -  
Capital in excess of par value     180,142       -  
Retained earnings     5,894       -  
Parent net investment     -       157,258  
Accumulated other comprehensive income (loss)     (10,585 )     (9,168 )
Total Vishay Precision Group, Inc. stockholders' or parent equity     176,785       148,090  
Noncontrolling interests     145       123  
Total equity     176,930       148,213  
Total liabilities and equity   $         248,713     $          209,779  
                 
 

 

VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
 
    Years ended
     December 31,     December 31, 
    2010   2009
Operating activities                
Net earnings        $ 11,743          $ 1,721  
Adjustments to reconcile net earnings to net cash provided by operating activities:                
       Depreciation and amortization     10,578       11,465  
       Loss on disposal of property and equipment     32       34  
       Inventory write-offs for obsolescence     1,158       3,114  
       Other     287       (2,177 )
       Changes in operating assets and liabilities     (2,103 )     15,079  
Net cash provided by operating activities     21,695       29,236  
 
Investing activities                
Purchase of property and equipment     (8,398 )     (2,181 )
Proceeds from sale of property and equipment     56       812  
Other investing activities     -       1,438  
Net cash (used in) provided by investing activities     (8,342 )     69  
 
Financing activities                
Principal payments on long-term debt and capital lease obligations     (193 )     (569 )
Net changes in short-term borrowings     74       (541 )
Distributions to noncontrolling interests     (16 )     (16 )
Transactions with Vishay Intertechnology     7,253       (36,876 )
Net cash provided by (used in) financing activities     7,118       (38,002 )
Effect of exchange rate changes on cash and cash equivalents     (1,418 )     1,508  
 
Increase (decrease) in cash and cash equivalents     19,053       (7,189 )
 
Cash and cash equivalents at beginning of year     63,192       70,381  
Cash and cash equivalents at end of year   $             82,245     $             63,192  
                 
 
  Contacts  
  Vishay Precision Group, Inc.
  Michael Sheaffer
  Investor Relations
  484-321-5327
  Investors@VishayPG.com
 
 
 
Source: Vishay Precision Group, Inc.