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VPG Reports Fiscal 2018 Second Quarter Results

August 7, 2018

MALVERN, Pa.--(BUSINESS WIRE)--Aug 7, 2018--Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of precision sensors and systems, today announced its results for its fiscal 2018 second quarter ended June 30, 2018.

Second Quarter Highlights:

Growth in revenues to $74.2 million, up 19% year-over-year Gross margin was 42.3% for the quarter as compared to 39.7% for the prior year period Operating income increased by 93% to $11.3 million as compared to $5.9 million in the prior year period Operating margin for the quarter was 15.2%, compared to 9.4% for the prior year period Earnings increased 111% to $0.57 per diluted share, compared to $0.27 reported last year Adjusted diluted EPS* increased 97% to $0.57, compared to prior year $0.29 Book-to-bill remained strong at 1.13, reflecting healthy, stable end-markets

Ziv Shoshani, Chief Executive Officer of VPG, commented, “We continue to secure business opportunities across all of our end markets as reflected in our increased revenues. Our second quarter 2018 operating results reaffirmed that strong operating margins are firmly established in our enterprise when we execute our business strategy in a solid business environment, as we did again this quarter.”

The Company grew second fiscal quarter 2018 net earnings attributable to VPG stockholders to $7.7 million, or $0.57 per diluted share, compared to $3.6 million, or $0.27 per diluted share, in the second fiscal quarter of 2017. This growth was assisted by a foreign currency exchange rate in the second quarter of 2018 relative to the prior year period that increased net income by $0.2 million, or $0.01 per diluted share.

In the six fiscal months ended June 30, 2018, net earnings attributable to VPG stockholders grew to $12.7 million, or $0.94 per diluted share, compared to $5.6 million or $0.42 per diluted share, in the six fiscal months ended July 1, 2017. Foreign currency exchange rates for the six fiscal months ended June 30, 2018 had no impact on net income relative to the prior year period.

The second fiscal quarter 2018 adjusted net earnings attributable to VPG stockholders approximately doubled to $7.7 million, or $0.57 per diluted share, compared to adjusted net earnings attributable to VPG stockholders of $3.9 million, or $0.29 per diluted share, for the comparable prior year period.

Six fiscal months ended June 30, 2018 adjusted net earnings attributable to VPG stockholders approximately doubled to $12.7 million, or $0.94 per diluted share, compared to adjusted net earnings attributable to VPG stockholders of $6.4 million, or $0.48 per diluted share, for the comparable prior year period.

Segments

Foil Technology Products segment revenues grew 16.7% to $34.2 million in the second fiscal quarter of 2018, up from $29.3 million in the second fiscal quarter of 2017; sequential revenue was flat compared to the first quarter of 2018. The year-over-year increase in revenues was attributable to precision resistors growth in all regions for distribution and OEM customers, primarily for the test and measurement market. Additionally, strain gage products increased across all regions in the force measurement and test and measurement markets.

Gross profit margin for the Foil Technology Products segment was 46.1% for the second fiscal quarter of 2018, an increase compared to 41.9% in the second fiscal quarter of 2017 and an increase compared to 42.8% in the first fiscal quarter of 2018. The year-over-year increase in gross margin was due to an increase in volumes, labor efficiencies experienced in the second quarter of 2018 and a positive exchange rate impact. The sequential increase in gross margin was primarily attributable to labor and manufacturing efficiencies in the second quarter of 2018.

Force Sensors segment revenues grew 23.7% to $19.4 million in the second fiscal quarter of 2018, up from $15.7 million in the second fiscal quarter of 2017; sequential revenue increased slightly, up from $19.2 million in the first quarter of 2018. The year-over-year increase in revenues was mainly attributable to OEM customers in the force measurement and precision weighing markets primarily in the Americas.

Gross profit margin for the Force Sensors segment was 29.4% for the second fiscal quarter of 2018, an increase compared to 28.9% in the second fiscal quarter of 2017 and an increase compared to 27.3% in the first fiscal quarter of 2018. Gross margins were up compared to the prior year period primarily due to the volume increase experienced in the second fiscal quarter of 2018 partially offset by a negative exchange rate impact. The sequential increase in gross margins was primarily due to an increase in volume and freight savings experienced in the second fiscal quarter of 2018.

Weighing and Control Systems segment revenues grew by 19.1% to $20.7 million in the second fiscal quarter of 2018, up from $17.4 million in the second fiscal quarter of 2017; sequential revenue increased 4.9% from $19.7 million in the first fiscal quarter of 2018. The increased year-over-year revenues were attributable to all product lines in all regions, in addition to positive exchange rate impact. The sequential increase in revenue was primarily attributable to a volume increase mainly in the steel product line in Asia partially offset by lower volume in Europe for our on-board weighing and process weighing product lines as well as a negative exchange rate impact.

The second fiscal quarter 2018 gross profit margin for the segment was 48.0%, an increase compared to 45.8% from the second fiscal quarter of 2017 and 43.9% from the first fiscal quarter of 2018. The year-over-year increase in gross margin was primarily due to volume, positive exchange rate impact and cost savings. The sequential increase in gross margin was primarily due to the volume increase experienced in the second fiscal quarter of 2018.

Near-Term Outlook

“In light of a continued solid business environment, at constant second fiscal quarter 2018 exchange rates and taking into account the normal seasonality of our business, we expect net revenues in the range of $70 million to $77 million for the third 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 (August 7) 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 9209556, 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 10122235. 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 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, 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.

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