Vishay Precision Group Reports Third Quarter 2012 Results

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Vishay Precision Group Reports Third Quarter 2012 Results

  • Cash generated from operations was $7.3 million for the third quarter of 2012
  • Net revenues for the third quarter of 2012 were $55.4 million

MALVERN, Pa.--(BUSINESS WIRE)-- Vishay Precision Group, Inc. (NYS: VPG) ("VPG" or the "Company"), a leading producer of precision sensors and systems, based on its resistive foil technology, today announced results for the third quarter ended September 29, 2012.

Net revenues for the third quarter of 2012 were $55.4 million, representing a 7.7% decrease from the $60.0 million of net revenues for the comparable prior year period. Net earnings for the third quarter of 2012 were $1.9 million or $0.14 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 nine months ended September 29, 2012 were $166.6 million, representing an 8.3% decrease from the $181.7 million of net revenues for the comparable prior year period. Net earnings for the nine months ended September 29, 2012 were $6.5 million or $0.47 per diluted share, versus net earnings of $9.6 million, or $0.69 per diluted share for the comparable prior year period.

Commenting on the results, Ziv Shoshani, chief executive officer of VPG, said, "The overall revenues in the third quarter of 2012 were comparable to the revenue levels in the second quarter of 2012 due to projects generating approximately two million dollars in the Weighing and Control Systems segment. The demand for the third quarter of 2012 was lower compared to the second quarter of 2012, across all regions.

Comparing the results of the third quarter of 2012 to the second quarter of 2012, net revenues remained flat at $55.4 million. Net earnings for the third quarter of 2012 decreased by $1.1 million to $1.9 million compared to the second quarter of 2012.

Our Foil Technology Products ("FTP") segment revenues decreased from $26.6 million in the second quarter of 2012 to $26.3 million in the third quarter of 2012. The gross margin for the FTP segment decreased to 38.9% for the third quarter of 2012 compared to 42.6% for the second quarter of 2012, which is mainly due to an unfavorable product mix and plant shutdown.

The Force Sensors segment revenues decreased from $17.2 million in the second quarter of 2012 to $16.5 million for the third quarter of 2012. The gross margin for the Force Sensors segment was 21.5% in the second quarter of 2012 versus 20.2% in the third quarter of 2012. The decrease in gross margin is mainly due to lower volume and unfavorable product mix.

The Weighing and Control Systems segment revenues increased from $11.6 million in the second quarter of 2012 to $12.6 million for the third quarter of 2012, due to an increase in Onboard Weighing revenues in Europe. The gross margin for the Weighing and Control Systems segment decreased from 41.7% for the second quarter of 2012 to 40.9% in the third quarter of 2012 mainly due to an Onboard Weighing project which resulted in an unfavorable product mix."

Outlook

Mr. Shoshani concluded, "Inclusive of the impact of the seasonality, overall demand of our business was reduced by approximately nine percent as compared to the second quarter of 2012 as we continue to see a further slowdown in all regions, and market segments. Due to the macroeconomic conditions and uncertainties we anticipate the business for the fourth quarter will result in overall revenues in the range of $49 million to $54 million."

Conference Call and Webcast

A conference call and simultaneous audio webcast will take place at 10:00 a.m. (ET) on November 6, 2012. To access the conference call, interested parties may call 877-317-6789 or +1-412-317-6789 and enter conference number: 1001-9476, 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: 1001-9476. 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 (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.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 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 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 year ended December 31, 2011. 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 Summary of Operations
(Unaudited - In thousands, except per share data)
 
Fiscal quarter ended
September 29,October 1,
 2012  2011 
 
 
Net revenues$55,430$60,037
Costs of products sold 36,691  38,845 
Gross profit18,73921,192
Gross margin33.8%35.3%
 
Selling, general, and administrative expenses 15,646  16,482 
Operating income3,0934,710
Operating margin5.6%7.8%
 
Other income (expense):
Interest expense(75)(70)
Other (295) (763)
Total other income (expense) - net (370) (833)
 
Income before taxes2,7233,877
 
Income tax expense 811  639 
 
Net earnings1,9123,238
 
Less: net loss attributable to noncontrolling interests(30)(62)
  
Net earnings attributable to VPG stockholders$1,942 $3,300 
 
 
Basic earnings per share attributable to VPG stockholders$0.15$0.25
 
Diluted earnings per share attributable to VPG stockholders$0.14$0.24
 
 
Weighted average shares outstanding - basic13,37113,346
 
Weighted average shares outstanding - diluted13,89313,831
 
 
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Summary of Operations
(Unaudited - In thousands, except per share data)
 
Nine fiscal months ended
September 29,October 1,
 2012  2011 
 
 
Net revenues$166,606$181,695
Costs of products sold 109,136  117,403 
Gross profit57,47064,292
Gross margin34.5%35.4%
 
Selling, general, and administrative expenses 47,923  49,898 
Operating income9,54714,394
Operating margin5.7%7.9%
 
Other income (expense):
Interest expense(216)(227)
Other 15  (629)
Total other income (expense) - net (201) (856)
 
Income before taxes9,34613,538
 
Income tax expense 2,796  3,911 
 
Net earnings6,5509,627
 
Less: net earnings attributable to noncontrolling interests2451
  
Net earnings attributable to VPG stockholders$6,526 $9,576 
 
 
Basic earnings per share attributable to VPG stockholders$0.49$0.72
 
Diluted earnings per share attributable to VPG stockholders$0.47$0.69
 
 
Weighted average shares outstanding - basic13,36613,342
 
Weighted average shares outstanding - diluted13,88113,820
 
 
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)
  
September 29,December 31,
 2012  2011 
Assets(unaudited)(audited)
Current assets:
Cash and cash equivalents$89,250$80,828
Accounts receivable, net33,42134,214
Net inventories49,41349,098
Deferred income taxes4,5704,638
Prepaid expenses and other current assets 10,142  8,964 
Total current assets186,796177,742
 
Property and equipment, net52,87053,738
Intangible assets, net9,00811,102
Other assets 13,830  14,023 
Total assets$262,504 $256,605 
 
Liabilities and equity
Current liabilities:
Trade accounts payable$10,150$11,458
Payroll and related expenses12,39012,741
Other accrued expenses9,1509,538
Income taxes1,6822,842
Current portion of long-term debt 185  185 
Total current liabilities33,55736,764
 
Long-term debt less current portion11,32511,463
Deferred income taxes2,8922,873
Other liabilities8,0337,769
Accrued pension and other postretirement costs 12,840  12,798 
Total liabilities 68,647  71,667 
 
Commitments and contingencies
 
Equity:
Common stock1,2351,232
Class B common stock103103
Capital in excess of par value181,553180,758
Retained earnings23,19116,665
Accumulated other comprehensive income (loss) (12,352) (13,973)
Total Vishay Precision Group, Inc. stockholders' equity193,730184,785
Noncontrolling interests 127  153 
Total equity 193,857  184,938 
Total liabilities and equity$262,504 $256,605 
 
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VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
 Nine fiscal months ended
September 29, October 1,
20122011
 
Operating activities
Net earnings$6,550$9,627

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization8,7278,425
Loss on disposal of property and equipment21920
Inventory write-offs for obsolescence996718
Share based compensation expense8661,149
Other(537)(3,084)
Changes in operating assets and liabilities (3,303) (7,155)
Net cash provided by operating activities13,5189,700
 
Investing activities
Purchase of property and equipment(5,805)(10,347)
Proceeds from sale of property and equipment 271  143 
Net cash used in investing activities(5,534)(10,204)
 
Financing activities
Principal payments on long-term debt and capital lease obligations(136)(90)
Net changes in short-term borrowings-1,326
Distributions to noncontrolling interests (50) (15)
Net cash (used in) provided by financing activities(186)1,221
Effect of exchange rate changes on cash and cash equivalents