Vishay Precision Group, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 10, 2016

Attached files

file filename
8-K - 8-K - Vishay Precision Group, Inc.vpg-20160510x8k.htm
Exhibit 99.1
For Immediate Release
VPG Reports Fiscal 2016 First Quarter Results
MALVERN, Pa. (May 10, 2016) -- Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and systems, today announced its results for its fiscal 2016 first quarter ended April 2, 2016.
Highlights:
•
First quarter net revenues of $56.6 million.
•
First quarter adjusted diluted earnings per share of $0.13.
•
New products - advanced sensors’ revenue grew approximately 95% in the first quarter 2016 from the first quarter 2015, and approximately 42% from the fourth quarter 2015.
•
Fiscal year 2016 adjusted diluted earnings per share reaffirmed - in the range of $0.80 to $1.00 - at constant exchange rates as of the first quarter of 2016.
•
Announced Pacific Instruments acquisition, a designer and manufacturer of high-performance data acquisition systems.

Ziv Shoshani, VPG’s chief executive officer said, “Revenues this quarter, which are flat compared with our first quarter 2015 revenues, included the effects of the weak global steel environment and a $1.2 million negative foreign exchange rate impact versus last year’s first quarter, due to the strengthening of the U.S. dollar. While global economic conditions remain soft, we are encouraged that our consolidated book-to-bill increased sequentially to 1.03, from 0.95 in the fourth quarter of 2015.”
Net revenues for the first quarter of 2016 were $56.6 million, flat compared with $56.6 million of net revenues for the prior year period. Comparing sequential results, net revenues for the first quarter of 2016 decreased by $2.3 million, or 3.9%, from $58.9 million in the fourth quarter of 2015.
Net earnings attributable to VPG stockholders for the first quarter of 2016 were $0.6 million, or $0.05 per diluted share, compared to net earnings attributable to VPG stockholders for the first quarter of 2015 of $0.9 million, or $0.06 per diluted share.
The following table reconciles the company's non-U.S. GAAP measures included in the press release, which are provided for comparison with other results, and the most directly comparable U.S. GAAP measures:

1


Reconciliation of Adjusted Earnings Per Share
 
 
 
(Unaudited - In thousands, except per share data)
 
 
 
 
Fiscal quarter ended
 
April 2, 2016
 
March 28, 2015
Net earnings attributable to VPG stockholders
$
480

 
$
860

 
 
 
 
Reconciling items affecting operating margin
 
 
 
Acquisition purchase accounting adjustments
296

 
—

Acquisition costs
62

 
—

Restructuring costs
675

 
78

 
 
 
 
Reconciling items affecting income tax expense
 
 
 
Tax effect of adjustments for purchase accounting, acquisition costs, restructuring costs, and discrete tax item
(179
)
 
16

Adjusted net earnings attributable to VPG stockholders
$
1,692

 
$
922

 
 
 
 
Adjusted net earnings per diluted share
$
0.13

 
$
0.07

 
 
 
 
Weighted average shares outstanding - diluted
13,399

 
13,960


Segments
The Foil Technology Products segment revenues were $26.3 million in the first quarter of 2016, up 5.0% from $25.1 million in the first quarter last year, and up 0.3% from $26.2 million in the fourth quarter of 2015. The gross margin for the segment increased to 42.3% for the first quarter of 2016 compared to 41.4% in the first quarter last year, and up from 36.5% in the fourth quarter of 2015. The gross margin increased from the comparable prior year period primarily due to higher volume. The sequential gross margin increase was primarily due to the realization of savings related to our previously announced cost reduction programs and fourth quarter adjustments.
The Force Sensors segment revenues of $14.8 million in the first quarter of 2016 were down 2.6% compared to $15.2 million in the first quarter last year, and were down 4.8% from $15.6 million in the fourth quarter of 2015. Decreased year-over-year revenues are attributable primarily to $0.3 million of negative exchange rate impact. The decrease in sequential revenues is attributable to lower volume. The gross margin for the segment was 18.4% in the first quarter of 2016 versus 21.8% in the first quarter of 2015, and 20.2% in the fourth quarter of 2015. The gross margin for the quarter decreased from the comparable prior year period primarily due to a reduction in inventory. The sequential gross margin decrease is mainly due to lower volume.
The Weighing and Control Systems segment revenues were $15.5 million in the first quarter of 2016, down 5.1% from $16.3 million in the first quarter last year, and down 9.4% from $17.1 million in the fourth quarter of 2015. Decreased year-over-year revenues were attributable to $0.8 million of negative foreign exchange rate effects and a slowdown in the steel industry, partially offset by the acquisition of Stress-Tek. The sequential decrease is attributable to lower volume in the steel industry, process weighing in Europe, and onboard weighing in the U.S., partially offset by the acquisition of Stress-Tek. The gross margin for the segment was 38.3% in the first quarter of 2016 (40.2% excluding the Stress-Tek acquisition purchase accounting adjustments of $0.3 million) versus 44.6% in the first quarter of 2015 and 47.0% in the fourth quarter of 2015 (47.8% excluding the KELK acquisition purchase accounting adjustment of $0.1 million). The year-over-year decrease in gross margin is primarily due to the negative effects of

2


foreign exchange rates and unfavorable product mix. Sequentially, gross margin decreased due to lower volume.
Outlook
Mr. Shoshani concluded, “In light of global economic conditions, we expect net revenues in the range of $57 million to $62 million for the second quarter of 2016. We are reaffirming our expectation for fiscal year 2016 adjusted diluted earnings per share to be in the range of $0.80 to $1.00, at constant exchange rates as of the first quarter of 2016.”
Conference Call and Webcast
A conference call will be held today (May 10, 2016) at 10:00 a.m. EST (9:00 a.m. CDT). To access the conference call, interested parties may call 1-888-317-6003 or internationally 1-412-317-6061 and use passcode 1939174, 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: 10079715. 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 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; difficulties or delays in completing acquisitions and integrating acquired companies (including the acquisitions of Stress-Tek and Pacific Instruments); 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

3


to lower-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, 2015. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
VPG
Wendy Wilson
Senior Director Investor Relations and Corporate Communications
919-374-5501
wendy.wilson@vpgsensors.com
###




4



VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Operations
 
 
 
(Unaudited - In thousands, except per share amounts)
 
 
 
 
 
 
 
 
Fiscal quarter ended
 
April 2, 2016
 
March 28, 2015
Net revenues
$
56,629

 
$
56,608

Costs of products sold
36,854

 
35,629

Gross profit
19,775

 
20,979

Gross profit margin
34.9
%
 
37.1
%
 
 
 
 
Selling, general, and administrative expenses
18,048

 
18,748

Acquisition costs
62

 
—

Restructuring costs
675

 
78

Operating income
990

 
2,153

Operating margin
1.7
%
 
3.8
%
 
 
 
 
Other income (expense):
 
 
 
Interest expense
(328
)
 
(187
)
Other
425

 
(929
)
Other income (expense) - net
97

 
(1,116
)
 
 
 
 
Income before taxes
1,087

 
1,037

 
 
 
 
Income tax expense
591

 
190

 
 
 
 
Net earnings
496

 
847

Less: net earnings (loss) attributable to noncontrolling interests
16

 
(13
)
Net earnings attributable to VPG stockholders
$
480

 
$
860

 
 
 
 
Basic earnings per share attributable to VPG stockholders
$
0.04

 
$
0.06

Diluted earnings per share attributable to VPG stockholders
$
0.04

 
$
0.06

 
 
 
 
Weighted average shares outstanding - basic
13,178

 
13,746

Weighted average shares outstanding - diluted
13,399

 
13,960



5



VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
April 2, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
61,380

 
$
62,641

Accounts receivable, net
35,235

 
35,553

Inventories:
 
 
 
Raw materials
15,498

 
15,062

Work in process
21,362

 
20,289

Finished goods
20,196

 
20,849

Inventories, net
57,056

 
56,200

 
 
 
 
Prepaid expenses and other current assets
8,621

 
7,814

Total current assets
162,292

 
162,208

 
 
 
 
Property and equipment, at cost:
 
 
 
Land
3,631

 
3,639

Buildings and improvements
55,288

 
55,003

Machinery and equipment
86,834

 
84,409

Software
7,319

 
7,284

Construction in progress
2,561

 
2,288

Accumulated depreciation
(98,480
)
 
(95,992
)
Property and equipment, net
57,153

 
56,631

 
 
 
 
Goodwill
12,949

 
12,603

 
 
 
 
Intangible assets, net
18,026

 
17,683

 
 
 
 
Other assets
14,761

 
14,622

Total assets
$
265,181

 
$
263,747



6


VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
April 2, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Liabilities and equity
 
 
 
Current liabilities:
 
 
 
Trade accounts payable
$
8,903

 
$
8,004

Payroll and related expenses
12,698

 
13,888

Other accrued expenses
15,524

 
16,604

Income taxes
788

 
527

Current portion of long-term debt
2,173

 
2,120

Total current liabilities
40,086

 
41,143

 
 
 
 
Long-term debt, less current portion
30,539

 
31,037

Deferred income taxes
334

 
334

Other liabilities
7,497

 
7,195

Accrued pension and other postretirement costs
11,534

 
11,597

Total liabilities
89,990

 
91,306

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Common stock
1,277

 
1,276

Class B convertible common stock
103

 
103

Treasury stock
(8,765
)
 
(8,765
)
Capital in excess of par value
190,694

 
190,436

Retained earnings
22,807

 
22,327

Accumulated other comprehensive loss
(31,118
)
 
(33,121
)
Total Vishay Precision Group, Inc. stockholders' equity
174,998

 
172,256

Noncontrolling interests
193

 
185

Total equity
175,191

 
172,441

Total liabilities and equity
$
265,181

 
$
263,747






7


VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Cash Flows
 
 
 
(Unaudited - In thousands)
 
 
 
 
 
 
 
 
Three fiscal months ended
 
April 2, 2016
 
March 28, 2015
Operating activities
 
 
 
Net earnings
$
496

 
$
847

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
2,746

 
2,787

(Gain) loss on disposal of property and equipment
(15
)
 
2

Share-based compensation expense
356

 
267

Inventory write-offs for obsolescence
363

 
480

Other
(826
)
 
967

Net changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
915

 
(546
)
Inventories, net
(866
)
 
(3,518
)
Prepaid expenses and other current assets
(795
)
 
(775
)
Trade accounts payable
791

 
(42
)
Other current liabilities
(2,514
)
 
(2,818
)
Net cash provided by (used in) operating activities
651

 
(2,349
)
 
 
 
 
Investing activities
 
 
 
Capital expenditures
(2,191
)
 
(2,800
)
Proceeds from sale of property and equipment
28

 
—

Net cash used in investing activities
(2,163
)
 
(2,800
)
 
 
 
 
Financing activities
 
 
 
Principal payments on long-term debt and capital leases
(531
)
 
(1,280
)
Purchase of treasury stock
—

 
(1,231
)
Distributions to noncontrolling interests
(8
)
 
(16
)
Net cash used in financing activities
(539
)
 
(2,527
)
Effect of exchange rate changes on cash and cash equivalents
790

 
(1,754
)
Decrease in cash and cash equivalents
(1,261
)
 
(9,430
)
 
 
 
 
Cash and cash equivalents at beginning of period
62,641

 
79,642

Cash and cash equivalents at end of period
$
61,380

 
$
70,212





8


VISHAY PRECISION GROUP, INC.
 
 
 
Reconciliation of Consolidated Adjusted Gross Profit Margin
 
 
(Unaudited - In thousands)
 
 
 
 
Fiscal quarter ended
 
April 2, 2016
 
March 28, 2015
Gross profit
$
19,775

 
$
20,979

Gross profit margin
34.9
%
 
37.1
%
 
 
 
 
Reconciling items affecting gross profit margin
 
 
 
Acquisition purchase accounting adjustments
296

 
—

 
 
 
 
Adjusted gross profit
$
20,071

 
$
20,979

 Adjusted gross profit margin
35.4
%
 
37.1
%




VISHAY PRECISION GROUP, INC.
 
 
 
Reconciliation of Adjusted Earnings Per Share
 
 
 
(Unaudited - In thousands, except per share data)
 
 
 
 
Fiscal quarter ended
 
April 2, 2016
 
March 28, 2015
Net earnings attributable to VPG stockholders
$
480

 
$
860

 
 
 
 
Reconciling items affecting operating margin
 
 
 
Acquisition purchase accounting adjustments
296

 
—

Acquisition costs
62

 
—

Restructuring costs
675

 
78

 
 
 
 
Reconciling items affecting income tax expense
 
 
 
Tax effect of adjustments for purchase accounting, acquisition costs, restructuring costs, and discrete tax item
(179
)
 
16

Adjusted net earnings attributable to VPG stockholders
$
1,692

 
$
922

 
 
 
 
Adjusted net earnings per diluted share
$
0.13

 
$
0.07

 
 
 
 
Weighted average shares outstanding - diluted
13,399

 
13,960





9

Vishay Precision Group, Inc. Reports