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| 8-K - CURRENT REPORT - Vishay Precision Group, Inc. | vishay_8k.htm |
Vishay Precision Group Reports Fourth Quarter and Full Year 2011 Results
- Revenues for the year 2011 were $238.1 million, a 15% increase over the prior year
- Net earnings for the year were $10.8 million, or $0.78 per diluted share
- Cash generated from operations was $5.9 million for the fourth quarter
MALVERN, Pa., February 8, 2012 (BUSINESS WIRE) -- Vishay Precision Group, Inc. (NYSE: VPG) ("VPG" or the “Company”), a leading producer of precision sensors and systems based on its resistive foil technology, today announced results for the fourth quarter and full year ended December 31, 2011. VPG was spun-off from Vishay Intertechnology, Inc. (NYSE: VSH) as an independent publicly traded company in July 2010.
Net revenues for the fourth quarter of 2011 were $56.4 million, an increase of 3% versus $54.8 million for the comparable prior year period. Net earnings for the fourth quarter of 2011 were $1.2 million or $0.09 per diluted share, versus net earnings of $3.3 million, or $0.24 per diluted share for the comparable prior year period.
Net revenues for the year ended December 31, 2011 were $238.1 million, an increase of 15% versus $207.5 million for the comparable prior year period. Net earnings for the year ended December 31, 2011 were $10.8 million, or $0.78 per diluted share, versus $11.7 million, or $0.85 per diluted share, for the comparable prior year period (see Note below).
Comparing the results of the fourth fiscal quarter of 2011 to the third fiscal quarter of 2011, net revenues decreased by 6.0%, from $60.0 million. Net earnings decreased by $2.1 million, from $3.3 million in the third quarter of 2011. These comparisons provide perspective on the adjustment to guidance that the Company preannounced last month related to a reduction in volume and manufacturing capacity issues.
Commenting on the results for the quarter, Ziv Shoshani, Chief Executive Officer of VPG, said, "Market demand in the US and Asia remained fairly stable. However, European demand dropped significantly from the third quarter, which resulted in lower revenues for the fourth quarter, mainly for the Weighing Modules and Control Systems (WMCS) segment.
Our Foil Technology Products (FTP) segment revenues decreased from the prior quarter to $26.6 million in the fourth quarter, primarily coming from manufacturing capacity issues. The FTP gross margin was 40.5% for the fourth quarter. The WMCS segment revenues decreased from the prior quarter to $29.9 million in the fourth quarter, coming mainly from declines in scale manufacturing and process weighing market demand. The gross margin for the WMCS segment was 27.1% for the fourth quarter.”
The Company intends to divide the WMCS segment into two reporting segments in its annual report on Form 10-K for the year ended December 31, 2011 in order to provide greater clarity to investors regarding its financial results and related business and market trends.
Discussing VPG’s major initiatives for 2011, Mr. Shoshani explained, “The FTP segment’s new manufacturing line is functioning as planned. We are now delivering next-generation strain gages to customers for their various evaluations and testing programs. In the WMCS segment, we moved equipment and personnel from the Company’s leased factory into our new facility in December. The new site is slowly ramping up production as planned.”
Outlook
Mr. Shoshani concluded, “We are seeing some stability in our end markets for the first quarter of 2012. We believe the anticipated business for the first quarter will result in overall revenues in the range of $53 million to $58 million.”
Note: The results of operations and earnings for the year ended December 31, 2010 were derived 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 will take place at 10:00 a.m. (ET) on February 8, 2012. To access the conference call, interested parties may call 877-317-6789 or +1-412-317-6789 and enter conference number: 1000- 8485, or log on to the IR page of the VPG website at 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 877-344-7529 or internationally +1-412-317-0088 and using the conference number: 1000-8485. The replay will also be available on the IR page of the VPG website at http://ir.vishaypg.com. It will be available via phone and website for a limited time.
About Vishay Precision Group
Vishay Precision Group produces sensors and sensor-based systems, based on its resistive foil technology. 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, 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 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 annual report on Form 10-K for the year ended December 31, 2010. 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, | |||||||
| 2011 | 2010 | |||||||
| Net revenues | $ | 56,412 | $ | 54,828 | ||||
| Costs of products sold | 37,593 | 33,873 | ||||||
| Gross profit | 18,819 | 20,955 | ||||||
| Gross margin | 33.4 | % | 38.2 | % | ||||
| Selling, general, and administrative expenses | 16,949 | 15,902 | ||||||
| Operating income | 1,870 | 5,053 | ||||||
| Operating margin | 3.3 | % | 9.2 | % | ||||
| Other income (expense): | ||||||||
| Interest expense | (49 | ) | (43 | ) | ||||
| Other | (249 | ) | (541 | ) | ||||
| Total other income (expense) - net | (298 | ) | (584 | ) | ||||
| Income before taxes | 1,572 | 4,469 | ||||||
| Income tax expense | 405 | 1,225 | ||||||
| Net earnings | 1,167 | 3,244 | ||||||
| Less: net (loss) attributable to noncontrolling interests | (28 | ) | (32 | ) | ||||
| Net earnings attributable to VPG stockholders | $ | 1,195 | $ | 3,276 | ||||
| Basic earnings per share attributable to VPG stockholders | $ | 0.09 | $ | 0.25 | ||||
| Diluted earnings per share attributable to VPG stockholders | $ | 0.09 | $ | 0.24 | ||||
| Weighted average shares outstanding - basic | 13,346 | 13,332 | ||||||
| Weighted average shares outstanding - diluted | 13,874 | 13,814 | ||||||
| VISHAY PRECISION GROUP, INC. | |||||||||
| Combined and Consolidated Condensed Summary of Operations | |||||||||
| (Unaudited - In thousands, except per share data) | |||||||||
| Years ended | |||||||||
| December 31, | December 31, | ||||||||
| 2011 | 2010 | ||||||||
| Net revenues | $ | 238,107 | $ | 207,524 | |||||
| Costs of products sold | 154,996 | 130,396 | |||||||
| Gross profit | 83,111 | 77,128 | |||||||
| Gross margin | 34.9 | % | 37.2 | % | |||||
| Selling, general, and administrative expenses | 66,847 | 57,297 | |||||||
| Operating income | 16,264 | 19,831 | |||||||
| Operating margin | 6.8 | % | 9.6 | % | |||||
| Other income (expense): | |||||||||
| Interest expense | (276 | ) | (390 | ) | |||||
| Other | (878 | ) | (928 | ) | |||||
| Total other income (expense) - net | (1,154 | ) | (1,318 | ) | |||||
| Income before taxes | 15,110 | 18,513 | |||||||
| Income tax expense | 4,316 | 6,770 | |||||||
| Net earnings | 10,794 | 11,743 | |||||||
| Less: net earnings attributable to noncontrolling interests | 23 | 37 | |||||||
| Net earnings attributable to VPG stockholders/parent | $ | 10,771 | $ | 11,706 | |||||
| Basic earnings per share attributable to VPG stockholders/parent | $ | 0.81 | $ | 0.88 | (Note 1) | ||||
| Diluted earnings per share attributable to VPG stockholders/parent | $ | 0.78 | $ | 0.85 | (Note 1) | ||||
| Weighted average shares outstanding - basic | 13,343 | 13,332 | (Note 1) | ||||||
| Weighted average shares outstanding - diluted | 13,834 | 13,787 | (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, | |||||||
| 2011 | 2010 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 80,828 | $ | 82,245 | ||||
| Accounts receivable, net | 34,214 | 33,988 | ||||||
| Net inventories | 49,098 | 48,337 | ||||||
| Deferred income taxes | 4,638 | 4,022 | ||||||
| Prepaid expenses and other current assets | 8,964 | 5,540 | ||||||
| Total current assets | 177,742 | 174,132 | ||||||
| Property and equipment, net | 53,738 | 46,747 | ||||||
| Intangible assets, net | 11,102 | 14,500 | ||||||
| Other assets | 14,023 | 13,334 | ||||||
| Total assets | $ | 256,605 | $ | 248,713 | ||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Notes payable to banks | $ | - | $ | 85 | ||||
| Trade accounts payable | 11,458 | 11,537 | ||||||
| Payroll and related expenses | 12,741 | 12,554 | ||||||
| Other accrued expenses | 9,538 | 8,680 | ||||||
| Income taxes | 2,842 | 4,847 | ||||||
| Current portion of long-term debt | 185 | - | ||||||
| Total current liabilities | 36,764 | 37,703 | ||||||
| Long-term debt less current portion | 11,463 | 11,692 | ||||||
| Deferred income taxes | 2,873 | 4,212 | ||||||
| Other liabilities | 7,769 | 7,468 | ||||||
| Accrued pension and other postretirement costs | 12,798 | 10,708 | ||||||
| Total liabilities | 71,667 | 71,783 | ||||||
| Commitments and contingencies | ||||||||
| Equity: | ||||||||
| Common stock | 1,232 | 1,231 | ||||||
| Class B common stock | 103 | 103 | ||||||
| Capital in excess of par value | 180,758 | 180,142 | ||||||
| Retained earnings | 16,665 | 5,894 | ||||||
| Accumulated other comprehensive income (loss) | (13,973 | ) | (10,585 | ) | ||||
| Total Vishay Precision Group, Inc. stockholders' equity | 184,785 | 176,785 | ||||||
| Noncontrolling interests | 153 | 145 | ||||||
| Total equity | 184,938 | 176,930 | ||||||
| Total liabilities and equity | $ | 256,605 | $ | 248,713 | ||||
| VISHAY PRECISION GROUP, INC. | ||||||||
| Combined and Consolidated Condensed Statements of Cash Flows | ||||||||
| (Unaudited - In thousands) | ||||||||
| Years ended | ||||||||
| December 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Operating activities | ||||||||
| Net earnings | $ | 10,794 | $ | 11,743 | ||||
| Adjustments to reconcile net earnings to | ||||||||
| net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 11,321 | 10,578 | ||||||
| Loss on disposal of property and equipment | 20 | 32 | ||||||
| Inventory write-offs for obsolescence | 1,658 | 1,158 | ||||||
| Share based compensation expense | 961 | 397 | ||||||
| Other | (3,994 | ) | (109 | ) | ||||
| Changes in operating assets and liabilities | (5,168 | ) | (2,104 | ) | ||||
| Net cash provided by operating activities | 15,592 | 21,695 | ||||||
| Investing activities | ||||||||
| Purchase of property and equipment | (16,291 | ) | (8,398 | ) | ||||
| Proceeds from sale of property and equipment | 147 | 56 | ||||||
| Net cash used in investing activities | (16,144 | ) | (8,342 | ) | ||||
| Financing activities | ||||||||
| Principal payments on long-term debt and capital lease obligations | (136 | ) | (193 | ) | ||||
| Net changes in short-term borrowings | (83 | ) | 74 | |||||
| Distributions to noncontrolling interests | (15 | ) | (16 | ) | ||||
| Transactions with Vishay Intertechnology | - | 7,253 | ||||||
| Net cash (used in) provided by financing activities | (234 | ) | 7,118 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (631 | ) | (1,418 | ) | ||||
| Increase (decrease) in cash and cash equivalents | (1,417 | ) | 19,053 | |||||
| Cash and cash equivalents at beginning of year | 82,245 | 63,192 | ||||||
| Cash and cash equivalents at end of year | $ | 80,828 | $ | 82,245 | ||||