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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):      
May 8, 2018

Vishay Precision Group, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware
1-34679
27-0986328
(State or Other Jurisdiction of
(Commission File Number)
(I.R.S. Employer Identification
Incorporation or Organization)
 
Number)

3 Great Valley Parkway, Suite 150
 
Malvern, PA
19355
(Address of Principal Executive Offices)
(Zip Code)
(484) 321-5300
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[   ]      
Written communications pursuant to Rule 425 under the Securities Act
 
     
 
[   ]      
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
     
 
[   ]      
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
     
 
[   ]      
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company ¨
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





Item 2.02 Results of Operations and Financial Conditions.
On May 8, 2018, Vishay Precision Group, Inc. issued a press release announcing results for the first quarter of fiscal 2018. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and shall not be deemed to be “filed” for any purpose.
Item 9.01 Financial Statements and Exhibits.
Exhibit No.
     
Description
99.1
 
Press release, dated May 8, 2018.





SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Vishay Precision Group, Inc.
 
 
Date: May 8, 2018
By:  
/s/ William M. Clancy
 
 
Name: William M. Clancy
 
 
Title:    Executive Vice President and Chief
 
 
Financial Officer





EXHIBIT INDEX
Exhibit No.
     
Description
99.1
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1
For Immediate Release
VPG Reports Fiscal 2018 First Quarter Results
MALVERN, Pa. (May 8, 2018) - Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and systems, today announced its results for its fiscal 2018 first quarter ended March 31, 2018.
First Quarter Highlights:
Growth in revenues to $73.1 million, up 22.3% year-over-year
Earnings increased to $0.37 per diluted share, compared to $0.15 reported last year
Adjusted diluted EPS* increased 95% to $0.37 compared to prior year $0.19
Operating margin for the quarter was 11.2% as compared to 6.6% for the prior year period
Book-to-bill remained strong at 1.05, reflecting healthy, stable end-markets

Ziv Shoshani, Chief Executive Officer of VPG, commented, “Our operating performance in the first quarter of 2018 demonstrates our ability to capture opportunity across all of our end markets in the improved business environment, delivering solid operating margins. We continue to execute well against our business strategy and deliver value to our stockholders.”

The Company grew first fiscal quarter 2018 net earnings attributable to VPG stockholders to $5.0 million, or $0.37 per diluted share, compared to $2.0 million, or $0.15 per diluted share, in the first fiscal quarter of 2017.
The first fiscal quarter 2018 adjusted net earnings attributable to VPG stockholders approximately doubled to $5.0 million, or $0.37 per diluted share, compared to adjusted net earnings attributable to VPG stockholders of $2.5 million, or $0.19 per diluted share, for the comparable prior year period. This growth was achieved despite a foreign currency exchange rate headwind that reduced net income for the first fiscal quarter of 2018 by $0.2 million, or $0.02 per diluted share relative to the first fiscal quarter of 2017.
Segments
Foil Technology Products segment revenues grew 23.0% to $34.2 million in the first fiscal quarter of 2018, up from $27.8 million in the first fiscal quarter of 2017; sequential revenue increased 14.3% compared to $29.9 million in the fourth quarter of 2017. The year-over-year and sequential increases in revenues were attributable to precision resistors growth in all regions, primarily for the test and measurement market, in addition to an increase mainly in the advanced sensors products across all regions.
Gross profit margin for the segment was 42.8% for the first fiscal quarter of 2018, an increase compared to 41.4% in the first fiscal quarter of 2017 and 39.3% in the fourth fiscal quarter of 2017. The year-over-year and sequential increase in gross margin was directly due to the volume increase experienced in the first fiscal quarter of 2018.
Force Sensors segment revenues grew 24.3% to $19.2 million in the first fiscal quarter of 2018, up from $15.5 million in the first fiscal quarter of 2017; sequential revenue increased 8.5% up from $17.7 million in the fourth quarter of 2017. The year-over-year increase in revenues was mainly attributable to OEM customers in the force measurement and precision weighing markets across all regions. The increase in sequential revenue was primarily attributable to OEM customers in the force measurement market in Europe.
Gross profit margin for Force Sensors was 27.3% for the first fiscal quarter of 2018, an increase compared to 23.9% in the first fiscal quarter of 2017 and a decrease compared to 29.5% in the fourth fiscal quarter of 2017. Gross margins were up compared to the prior year period due to the volume increase experienced in the first fiscal quarter of 2018. The sequential decline in gross margins is primarily related to higher freight costs and wage increases.

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Weighing and Control Systems segment revenues grew by 19.0% to $19.7 million in the first fiscal quarter of 2018, up from $16.6 million in the first fiscal quarter of 2017; sequential revenue decreased 9.7% from $21.8 million in the fourth fiscal quarter of 2017. The increased year-over-year revenues were primarily attributable to the on-board weighing and process weighing product lines in Europe and the Americas. The comparative decrease in sequential revenue was attributable to the significant revenues in the steel business, primarily in Asia, that occurred in the fourth fiscal quarter of 2017.
The first fiscal quarter 2018 gross profit margin for the segment was 43.9%, a decrease compared to 44.3% from the first fiscal quarter of 2017 and 44.8% from the fourth fiscal quarter of 2017. The year-over-year decline in gross margin was primarily due to product mix. The sequential decline in gross margin was primarily due to a reduction in volume.
Near-Term Outlook
“In light of a continued strong business environment, at constant first fiscal quarter 2018 exchange rates, we expect net revenues in the range of $71 million to $77 million for the second fiscal quarter of 2018,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define “adjusted net earnings” as net earnings attributable to VPG stockholders before restructuring costs and associated tax effects. The reconciliation table within this release reconciles the Company's non-GAAP measures, which are provided for comparison with other results, to the most directly comparable U.S. GAAP measures. Management believes that these measures are meaningful because they provide insight with respect to intrinsic operating results.
Conference Call and Webcast
A conference call will be held today (May 8) 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 5447133, 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 10119570. 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; difficulties in implementing our cost reduction strategies, such as

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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; 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, 2017. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
For Investors
ICR, Inc.
James Palczynski, 203-682-8229
[email protected]

For Media
ICR, Inc.
Phil Denning, 646-277-1258
[email protected]

###



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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Operations
 
 
 
(Unaudited - In thousands, except per share amounts)
 
 
 
 
 
 
 
 
Fiscal quarter ended
 
March 31, 2018
 
April 1, 2017
Net revenues
$
73,091

 
$
59,787

Costs of products sold
44,586

 
37,270

Gross profit
28,505

 
22,517

Gross profit margin
39.0
%
 
37.7
%
 
 
 
 
Selling, general, and administrative expenses
20,319

 
18,018

Restructuring costs

 
554

Operating income
8,186

 
3,945

Operating margin
11.2
%
 
6.6
%
 
 
 
 
Other income (expense):
 
 
 
Interest expense
(442
)
 
(452
)
Other
(649
)
 
(529
)
Other income (expense) - net
(1,091
)
 
(981
)
 
 
 
 
Income before taxes
7,095

 
2,964

 
 
 
 
Income tax expense
2,137

 
961

 
 
 
 
Net earnings
4,958

 
2,003

Less: net earnings attributable to noncontrolling interests
(30
)
 
8

Net earnings attributable to VPG stockholders
$
4,988

 
$
1,995

 
 
 
 
Basic earnings per share attributable to VPG stockholders
$
0.37

 
$
0.15

Diluted earnings per share attributable to VPG stockholders
$
0.37

 
$
0.15

 
 
 
 
Weighted average shares outstanding - basic
13,342

 
13,210

Weighted average shares outstanding - diluted
13,497

 
13,438




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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
March 31, 2018
 
December 31, 2017
 
(Unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
73,734

 
$
74,292

Accounts receivable, net
53,141

 
46,789

Inventories:
 
 
 
Raw materials
18,247

 
16,601

Work in process
23,387

 
23,160

Finished goods
19,963

 
20,174

Inventories, net
61,597

 
59,935

 
 
 
 
Prepaid expenses and other current assets
12,668

 
10,299

Total current assets
201,140

 
191,315

 
 
 
 
Property and equipment, at cost:
 
 
 
Land
3,484

 
3,434

Buildings and improvements
50,816

 
50,276

Machinery and equipment
97,199

 
95,158

Software
8,068

 
7,955

Construction in progress
2,501

 
2,252

Accumulated depreciation
(106,324
)
 
(103,401
)
Property and equipment, net
55,744

 
55,674

 
 
 
 
Goodwill
18,995

 
19,181

 
 
 
 
Intangible assets, net
19,748

 
20,475

 
 
 
 
Other assets
19,775

 
19,906

Total assets
$
315,402

 
$
306,551



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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
March 31, 2018
 
December 31, 2017
 
(Unaudited)
 
 
Liabilities and equity
 
 
 
Current liabilities:
 
 
 
Trade accounts payable
$
12,953

 
$
13,678

Payroll and related expenses
17,201

 
15,892

Other accrued expenses
16,408

 
15,952

Income taxes
2,103

 
2,515

Current portion of long-term debt
3,926

 
3,878

Total current liabilities
52,591

 
51,915

 
 
 
 
Long-term debt, less current portion
27,717

 
28,477

Deferred income taxes
2,300

 
2,300

Other liabilities
13,968

 
14,131

Accrued pension and other postretirement costs
16,952

 
16,424

Total liabilities
113,528

 
113,247

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Common stock
1,304

 
1,288

Class B convertible common stock
103

 
103

Treasury stock
(8,765
)
 
(8,765
)
Capital in excess of par value
195,259

 
192,904

Retained earnings
47,911

 
43,076

Accumulated other comprehensive loss
(33,939
)
 
(35,450
)
Total Vishay Precision Group, Inc. stockholders' equity
201,873

 
193,156

Noncontrolling interests
1

 
148

Total equity
201,874

 
193,304

Total liabilities and equity
$
315,402

 
$
306,551






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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Cash Flows
 
 
 
(Unaudited - In thousands)
 
 
 
 
 
 
 
 
Three fiscal months ended
 
March 31, 2018
 
April 1, 2017
Operating activities
 
 
 
Net earnings
$
4,958

 
$
2,003

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
2,684

 
2,681

Gain on disposal of property and equipment
(53
)
 
(109
)
Share-based compensation expense
373

 
243

Inventory write-offs for obsolescence
613

 
297

Deferred income taxes
268

 
(97
)
Other
(723
)
 
(359
)
Net changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
(5,519
)
 
(3,362
)
Inventories, net
(1,910
)
 
284

Prepaid expenses and other current assets
(2,517
)
 
(2,154
)
Trade accounts payable
1,687

 
1,422

Other current liabilities
1,943

 
2,032

Net cash provided by operating activities
1,804

 
2,881

 
 
 
 
Investing activities
 
 
 
Capital expenditures
(4,296
)
 
(1,962
)
Proceeds from sale of property and equipment
53

 
148

Net cash used in investing activities
(4,243
)
 
(1,814
)
 
 
 
 
Financing activities
 
 
 
Principal payments on long-term debt and capital leases
(2,970
)
 
(657
)
Proceeds from revolving facility
8,000

 
7,000

Payments on revolving facility
(3,000
)
 
(7,000
)
Distributions to noncontrolling interests
(117
)
 
(2
)
Payments of employee taxes on certain share-based arrangements
(785
)
 
(303
)
Net cash provided by (used in) financing activities
1,128

 
(962
)
Effect of exchange rate changes on cash and cash equivalents
753

 
694

(Decrease) increase in cash and cash equivalents
(558
)
 
799

 
 
 
 
Cash and cash equivalents at beginning of period
74,292

 
58,452

Cash and cash equivalents at end of period
$
73,734

 
$
59,251

 
 
 
 
Supplemental disclosure of non-cash investing transactions:
 
 
 
Capital expenditures purchased
$
(1,773
)
 
$
(1,962
)
Supplemental disclosure of non-cash financing transactions:
 
 
 
Conversion of exchangeable notes to common stock
$
(2,794
)
 
$




VISHAY PRECISION GROUP, INC.
 
 
 
Reconciliation of Consolidated Adjusted Gross Profit Margin
(Unaudited - In thousands)
 
 
 
 
Fiscal quarter ended
 
March 31, 2018
 
April 1, 2017
Gross profit
$
28,505

 
$
22,517

Gross profit margin
39.0
%
 
37.7
%
 
 
 
 
 
 
 
 
Adjusted gross profit
$
28,505

 
$
22,517

 Adjusted gross profit margin
39.0
%
 
37.7
%

VISHAY PRECISION GROUP, INC.
 
 
 
Reconciliation of Consolidated Adjusted Operating Margin
 
 
(Unaudited - In thousands)
 
 
 
 
 
 
 
 
Fiscal quarter ended
 
March 31, 2018
 
April 1, 2017
Operating income
$
8,186

 
$
3,945

Operating margin
11.2
%
 
6.6
%
 
 
 
 
Reconciling items affecting operating margin
 
 
 
Restructuring costs

 
554

 
 
 
 
Adjusted operating income
$
8,186

 
$
4,499

 Adjusted operating margin
11.2
%
 
7.5
%



VISHAY PRECISION GROUP, INC.
 
 
 
Reconciliation of Adjusted Earnings Per Share
 
 
(Unaudited - In thousands, except per share data)
 
 
 
Fiscal quarter ended
 
March 31, 2018
 
April 1, 2017
Net earnings attributable to VPG stockholders
$
4,988

 
$
1,995

 
 
 
 
Reconciling items affecting operating margin
 
 
 
Restructuring costs

 
554

Less reconciling items affecting income tax expense
 
 
 
Tax effect of reconciling items

 
42

Adjusted net earnings attributable to VPG stockholders
$
4,988

 
$
2,507

 
 
 
 
Adjusted net earnings per diluted share
$
0.37

 
$
0.19

 
 
 
 
Weighted average shares outstanding - diluted
13,497

 
13,438



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