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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):      
August 6, 2019
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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.10 par value
VPG
New York Stock Exchange

 
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 August 6, 2019, Vishay Precision Group, Inc. issued a press release announcing results for the second quarter of fiscal 2019. 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
 





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: August 6, 2019
By:  
/s/ William M. Clancy
 
 
Name: William M. Clancy
 
 
Title:    Executive Vice President and Chief
 
 
Financial Officer


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1
For Immediate Release
VPG Reports Fiscal 2019 Second Quarter Results
MALVERN, Pa. (August 6, 2019) - Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and sensor-based systems, today announced its results for its fiscal 2019 second quarter ended June 29, 2019.
Second Quarter Highlights:
Sales of $70.9 million.
Gross profit margin of 40.4%.
Operating margin of 11.4%, adjusted operating margin* of 12.3%.
Net earnings per diluted share of $0.41, adjusted net earnings per diluted share* of $0.45.
Cash from operations of $8.9 million with free cash flow* of $6.7 million.

Ziv Shoshani, Chief Executive Officer of VPG, commented, “We have delivered a solid operating margin and cash generation for this quarter. Despite the current macro environment, we have reported two consecutive years of above average, double digit growth, the benefits of the work we have done to optimize our global operations continue to benefit our operating results. This effect has enabled us to continue to drive margin performance across our segments, and we remain positioned to deploy capital to value generating opportunities to drive incremental returns.”
The Company's second fiscal quarter 2019 net earnings attributable to VPG stockholders was $5.6 million, or $0.41 per diluted share, compared to $7.7 million, or $0.57 per diluted share, in the second fiscal quarter of 2018. Foreign currency exchange rates for the second quarter of 2019 decreased net income by $0.2 million, or $0.02 per diluted share, relative to the prior year period.
In the six fiscal months ended June 29, 2019, net earnings attributable to VPG stockholders grew to $13.8 million, or $1.02 per diluted share, compared to $12.7 million, or $0.94 per diluted share in the six fiscal months ended June 30, 2018. Foreign currency exchange rates for the six fiscal months of 2019 increased net income by $0.1 million, or $0.01 per diluted share, relative to the prior year period.
The second fiscal quarter 2019 adjusted net earnings* attributable to VPG stockholders was $6.2 million, or $0.45 per diluted share, compared to $7.7 million, or $0.57 per diluted share in the second fiscal quarter of 2018.
In the six fiscal months ended June 29, 2019, adjusted net earnings* attributable to VPG stockholders was $14.4 million, or $1.06 per diluted share compared to $12.7 million, or $0.94 per diluted share in the six fiscal months ended June 30, 2018.
Segments
Foil Technology Products segment revenues decreased 3.5% to $33.0 million in the second fiscal quarter of 2019, down from $34.2 million in the second fiscal quarter of 2018; sequential revenue decreased 10.9% compared to $37.0 million in the first quarter of 2019. The year-over-year decrease in revenues was attributable to Pacific Instruments products in the Americas for end user customers in the avionics, military and space market and strain gage products in the test and measurement and force measurement end markets, primarily in the Americas. This was partially offset by a revenue increase in the Advanced Sensors products in the force measurement market in Asia. The sequential decrease in revenues was attributable to Pacific Instruments products for end user customers in the avionics, military and space market in the Americas.
Gross profit margin for the Foil Technology Products segment was 43.6% for the second fiscal quarter of 2019, a decrease compared to 46.1% in the second fiscal quarter of 2018, and a decrease compared to 44.7% in the first fiscal quarter of 2019. The year-over-year decrease in gross profit margin was primarily due to a decrease in volume, the impact of negative exchange rates, and an increase in wages and

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manufacturing costs. The sequential decrease in gross profit margin was primarily due to a decrease in volume.
Force Sensors segment revenues declined 15.5% to $16.3 million in the second fiscal quarter of 2019, compared to $19.4 million in the second fiscal quarter of 2018; sequential revenue declined 2.3%, compared to $16.7 million in the first quarter of 2019. The year-over-year decrease in revenues was mainly attributable to OEM customers in the force measurement market, primarily in the Americas. The sequential decrease in revenues was mainly attributable to OEM customers in the force measurement end market in the Americas and OEM customers in the medical end market in Europe, partially offset by an increase in revenues from OEM customers in the medical end market in the Americas.
Gross profit margin for the Force Sensors segment was 26.9% for the second fiscal quarter of 2019, a decrease compared to 29.4% in the second fiscal quarter of 2018, and a decrease compared to 30.2% in the first fiscal quarter of 2019. The year-over-year decrease in gross profit margin was primarily due to a decrease in volume. Sequentially, gross profit margin decreased due to a decrease in volume, impact of negative exchange rates, and a one-time charge.
Weighing and Control Systems segment revenues grew by 4.1% to $21.5 million in the second fiscal quarter of 2019, up from $20.7 million in the second fiscal quarter of 2018; sequential revenue decreased 5.4% from $22.7 million in the first fiscal quarter of 2019. The increase in revenues year-over-year was primarily attributable to the steel product line in Europe and the on board weighing products in Europe and the Americas. The sequential decrease in revenue was primarily attributable to a decrease in the steel product line in Europe and the Americas and process weighing products in Europe, partially offset by an increase in on-board weighing products mainly in the Americas.
The second fiscal quarter 2019 gross profit margin for the Weighing and Control Systems segment was 45.6%, a decrease compared to 48.0% from the second fiscal quarter of 2018, and a decrease compared to 50.2% from the first fiscal quarter of 2019. The year-over-year decrease in gross profit margin was primarily due to an increase in wages, higher manufacturing costs, and the impact of negative exchange rates, partially offset by an increase in volume, with an unfavorable product mix. Sequential gross profit margin decrease was primarily due to lower volume with an unfavorable product mix.
Near-Term Outlook
Given the current business environment and our most recent order intake, at constant second fiscal quarter 2019 exchange rates, we expect net revenues in the range of $67 million to $73 million for the third fiscal quarter of 2019,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define "adjusted operating margin" as operating margin before restructuring costs and executive severance costs. We define “adjusted earnings ” and "adjusted earnings per share" as net earnings attributable to VPG stockholders before restructuring costs, executive severance costs, and associated tax effects. We define "free cash flow" as the amount of cash generated from operations ($8.9 million for the second fiscal quarter of 2019), in excess of our capital expenditures ($(2.4) million for the second fiscal quarter of 2019) net of proceeds, if any, from the sale of assets ($0.2 million for the second fiscal quarter of 2019).
Conference Call and Webcast
A conference call will be held today (August 6) 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 6252344, 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 10133115. 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

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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 identifying, negotiating and 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; political, economic and military instability in the countries in which we operate; 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 achieve efficiencies; significant developments from the recent and potential changes in tariffs and trade regulation; 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, 2018. 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.
Michael Callahan, 203-682-8311
[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
 
June 29, 2019
 
June 30, 2018
Net revenues
$
70,870

 
$
74,231

Costs of products sold
42,261

 
42,865

Gross profit
28,609

 
31,366

Gross profit margin
40.4
%
 
42.3
%
 
 
 
 
Selling, general, and administrative expenses
19,896

 
19,990

Executive severance costs
611

 

Restructuring costs

 
61

Operating income
8,102

 
11,315

Operating margin
11.4
%
 
15.2
%
 
 
 
 
Other income (expense):
 
 
 
Interest expense
(359
)
 
(478
)
Other
(160
)
 
(272
)
Other income (expense)
(519
)
 
(750
)
 
 
 
 
Income before taxes
7,583

 
10,565

 
 
 
 
Income tax expense
2,003

 
2,882

 
 
 
 
Net earnings
5,580

 
7,683

Less: net earnings attributable to noncontrolling interests
15

 
(10
)
Net earnings attributable to VPG stockholders
$
5,565

 
$
7,693

 
 
 
 
Basic earnings per share attributable to VPG stockholders
$
0.41

 
$
0.57

Diluted earnings per share attributable to VPG stockholders
$
0.41

 
$
0.57

 
 
 
 
Weighted average shares outstanding - basic
13,518

 
13,464

Weighted average shares outstanding - diluted
13,595

 
13,513



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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Operations
 
 
 
(Unaudited - In thousands, except per share amounts)
 
 
 
 
 
 
 
 
Six fiscal months ended
 
June 29, 2019
 
June 30, 2018
Net revenues
$
147,395

 
$
147,322

Costs of products sold
85,735

 
87,451

Gross profit
61,660

 
59,871

Gross profit margin
41.8
%
 
40.6
%
 
 
 
 
Selling, general, and administrative expenses
40,344

 
40,309

Executive severance costs
611

 

Restructuring costs

 
61

Operating income
20,705

 
19,501

Operating margin
14.0
%
 
13.2
%
 
 
 
 
Other income (expense):
 
 
 
Interest expense
(747
)
 
(920
)
Other
(932
)
 
(921
)
Other income (expense)
(1,679
)
 
(1,841
)
 
 
 
 
Income before taxes
19,026

 
17,660

 
 
 
 
Income tax expense
5,120

 
5,019

 
 
 
 
Net earnings
13,906

 
12,641

Less: net earnings (loss) attributable to noncontrolling interests
98

 
(40
)
Net earnings attributable to VPG stockholders
$
13,808

 
$
12,681

 
 
 
 
Basic earnings per share attributable to VPG stockholders
$
1.02

 
$
0.95

Diluted earnings per share attributable to VPG stockholders
$
1.02

 
$
0.94

 
 
 
 
Weighted average shares outstanding - basic
13,506

 
13,409

Weighted average shares outstanding - diluted
13,579

 
13,511




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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
June 29, 2019
 
December 31, 2018
 
(Unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
98,705

 
$
90,159

Accounts receivable, net
46,291

 
53,156

Inventories:
 
 
 
Raw materials
18,672

 
18,052

Work in process
23,835

 
22,007

Finished goods
21,775

 
22,182

Inventories, net
64,282

 
62,241

 
 
 
 
Prepaid expenses and other current assets
12,702

 
9,314

Total current assets
221,980

 
214,870

 
 
 
 
Property and equipment, at cost:
 
 
 
Land
3,391

 
3,390

Buildings and improvements
51,787

 
51,055

Machinery and equipment
109,326

 
105,840

Software
9,205

 
8,532

Construction in progress
1,319

 
2,157

Accumulated depreciation
(115,525
)
 
(111,555
)
Property and equipment, net
59,503

 
59,419

 
 
 
 
Goodwill
16,387

 
16,141

 
 
 
 
Intangible assets, net
17,190

 
17,656

 
 
 
 
Other assets
27,410

 
18,297

Total assets
$
342,470

 
$
326,383



6



VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Balance Sheets
 
 
 
(In thousands)
 
 
 
 
June 29, 2019
 
December 31, 2018
 
(Unaudited)
 
 
Liabilities and equity
 
 
 
Current liabilities:
 
 
 
Trade accounts payable
$
10,059

 
$
11,461

Payroll and related expenses
15,127

 
17,757

Other accrued expenses
17,560

 
17,031

Income taxes
2,981

 
3,879

Current portion of long-term debt
4,882

 
4,654

Total current liabilities
50,609

 
54,782

 
 
 
 
Long-term debt, less current portion
19,924

 
22,421

Deferred income taxes
2,200

 
2,200

Other liabilities
20,567

 
13,545

Accrued pension and other postretirement costs
14,928

 
14,982

Total liabilities
108,228

 
107,930

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Common stock
1,312

 
1,307

Class B convertible common stock
103

 
103

Treasury stock
(8,765
)
 
(8,765
)
Capital in excess of par value
196,875

 
196,666

Retained earnings
80,908

 
66,569

Accumulated other comprehensive loss
(36,329
)
 
(37,465
)
Total Vishay Precision Group, Inc. stockholders' equity
234,104

 
218,415

Noncontrolling interests
138

 
38

Total equity
234,242

 
218,453

Total liabilities and equity
$
342,470

 
$
326,383






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VISHAY PRECISION GROUP, INC.
 
 
 
Consolidated Condensed Statements of Cash Flows
 
 
 
(Unaudited - In thousands)
 
 
 
 
 
 
 
 
Six Fiscal Months Ended
 
June 29, 2019
 
June 30, 2018
Operating activities
 
 
 
Net earnings
$
13,906

 
$
12,641

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
5,619

 
5,332

Gain on disposal of property and equipment
(50
)
 
(83
)
Share-based compensation expense
1,086

 
801

Inventory write-offs for obsolescence
1,389

 
1,158

Deferred income taxes
379

 
1,086

Other
(2,753
)
 
455

Net changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
7,085

 
(6,141
)
Inventories, net
(3,288
)
 
(7,304
)
Prepaid expenses and other current assets
(3,301
)
 
(1,724
)
Trade accounts payable
(645
)
 
(390
)
Other current liabilities
(2,396
)
 
1,536

Net cash provided by operating activities
17,031

 
7,367

 
 
 
 
Investing activities
 
 
 
Capital expenditures
(5,764
)
 
(6,134
)
Proceeds from sale of property and equipment
214

 
106

Net cash used in investing activities
(5,550
)
 
(6,028
)
 
 
 
 
Financing activities
 
 
 
Principal payments on long-term debt
(2,311
)
 
(3,847
)
Proceeds from revolving facility

 
11,000

Payments on revolving facility

 
(6,000
)
Contributions from (distributions to) noncontrolling interests
2

 
(129
)
Payments of employee taxes on certain share-based arrangements
(854
)
 
(801
)
Net cash (used in) provided by financing activities
(3,163
)
 
223

Effect of exchange rate changes on cash and cash equivalents
228

 
(1,141
)
Increase in cash and cash equivalents
8,546

 
421

 
 
 
 
Cash and cash equivalents at beginning of period
90,159

 
74,292

Cash and cash equivalents at end of period
$
98,705

 
$
74,713

 
 
 
 
Supplemental disclosure of investing transactions:
 
 
 
Capital expenditures purchased
$
(4,992
)
 
$
(3,988
)
Supplemental disclosure of non-cash financing transactions:
 
 
 
Conversion of exchangeable notes to common stock
$

 
$
(2,794
)
Capital expenditures accrued but not yet paid as of June 29, 2019 were $1,077.




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VISHAY PRECISION GROUP, INC.
 
 
 
 
 
 
 
Reconciliation of Consolidated Adjusted Operating Margin
 
 
 
 
(Unaudited - In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal quarter ended
 
Six fiscal months ended
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Operating income
$
8,102

 
$
11,315

 
$
20,705

 
$
19,501

Operating margin
11.4
%
 
15.2
%
 
14.0
%
 
13.2
%
 
 
 
 
 
 
 
 
Reconciling items affecting operating margin
 
 
 
 
 
 
 
Executive severance costs
611

 

 
611

 

Restructuring costs

 
61

 

 
61

 
 
 
 
 
 
 
 
Adjusted operating income
$
8,713

 
$
11,376

 
$
21,316

 
$
19,562

 Adjusted operating margin
12.3
%
 
15.3
%
 
14.5
%
 
13.3
%



VISHAY PRECISION GROUP, INC.
 
 
 
 
 
 
 
Reconciliation of Adjusted Earnings Per Share
 
 
 
 
 
 
(Unaudited - In thousands, except per share data)
 
 
 
 
 
 
 
Fiscal quarter ended
 
Six fiscal months ended
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Net earnings attributable to VPG stockholders
$
5,565

 
$
7,693

 
$
13,808

 
$
12,681

 
 
 
 
 
 
 
 
Reconciling items affecting operating margin
 
 
 
 
 
 
 
Executive severance costs
611

 

 
611

 

Restructuring costs

 
61

 

 
61

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

 
9

 

 
9

Adjusted net earnings attributable to VPG stockholders
$
6,176

 
$
7,745

 
$
14,419

 
$
12,733

 
 
 
 
 
 
 
 
Adjusted net earnings per diluted share
$
0.45

 
$
0.57

 
$
1.06

 
$
0.94

 
 
 
 
 
 
 
 
Weighted average shares outstanding - diluted
13,595

 
13,513

 
13,579

 
13,511





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