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VPG Reports Fiscal 2024 Third Quarter Results

Bay Street

MALVERN, Pa., Nov. 05, 2024 (GLOBE NEWSWIRE) — Vishay Precision Group, Inc. (NYSE: VPG), a leader in precision measurement and sensing technologies, today announced its results for its fiscal 2024 third quarter ended September 28, 2024.

Third Fiscal Quarter Highlights (comparisons are to the comparable period a year ago):

Ziv Shoshani, Chief Executive Officer of VPG, commented, “Total revenue in the third quarter was fairly stable sequentially, as trends across our markets remained mixed. Some of our cyclical markets such as steel and consumer were soft, while orders in test and measurement and avionics, military & space were higher. Total orders of $68.6 million declined 6.7% sequentially and resulted in a book-to-bill of 0.91.”

Mr. Shoshani said: “We continue to focus on our long-term strategies for organic growth, as well as to look for additional opportunities to add high-quality businesses to our platform like our recent acquisition of Nokra. As we continue to streamline our operations mainly in the Sensors and Weighing Solutions segments, we believe our operating model and our solid balance sheet positions us to achieve significant operating returns and cash flow as revenues recover.”

Third Fiscal Quarter and Nine Month Financial Trends:
The Company’s third fiscal quarter 2024 net loss attributable to VPG stockholders was $(1.4) million, or $(0.10) per diluted share, compared to $6.3 million, or $0.46 per diluted share, in the third fiscal quarter of 2023. Included in the third quarter 2024 pre-tax earnings was a loss of $2.9 million related to unrealized foreign currency effects.

In the nine fiscal months ended September 28, 2024, net earnings attributable to VPG stockholders were $9.1 million, or $0.68 per diluted share, compared to $21.5 million, or $1.57 per diluted share, in the nine fiscal months ended September 30, 2023.

The third fiscal quarter 2024 adjusted net earnings* were $2.5 million, or $0.19 per adjusted diluted net earnings per share*, compared to $6.4 million, or $0.47 per adjusted diluted net earnings per share* in the third fiscal quarter of 2023.

In the nine fiscal months ended September 28, 2024, adjusted net earnings* were $12.3 million, or $0.92 per adjusted diluted net earnings per share*, compared to $21.4 million, or $1.57 per adjusted diluted net earnings per share* in the nine fiscal months ended September 30, 2023.

Segment Performance:
The Sensors segment revenue of $28.2 million in the third fiscal quarter of 2024 decreased 13.3% from $32.5 million in the third fiscal quarter of 2023. Sequentially, revenue decreased 2.3% compared to $28.9 million in the second fiscal quarter of 2024. The year-over-year decrease in revenues was primarily attributable to lower sales of precision resistors in the Test and Measurement and Avionics, Military and Space (“AMS”) markets. Sequentially, the decrease primarily reflected lower sales of advanced sensors in the Other markets, mainly for consumer applications, which was partially offset by higher sales of precision resistors in the AMS and Test and Measurement end markets.

Gross profit margin for the Sensors segment was 31.0% for the third fiscal quarter of 2024. Gross profit margin decreased compared to 35.9% in the third fiscal quarter of 2023 and 38.3% in the second fiscal quarter of 2024. The year-over-year decrease in gross profit margin was primarily due to lower volume. Sequentially, the lower gross profit margin was primarily due to lower volume and temporary operational and labor inefficiencies.

The Weighing Solutions segment revenue of $25.2 million in the third fiscal quarter of 2024 decreased 13.1% compared to $29.0 million in the third fiscal quarter of 2023 and was 8.3% lower than $27.4 million in the second fiscal quarter of 2024. The year-over-year decrease in revenues was mainly attributable to lower sales in our Transportation and Industrial Weighing markets, as well as in our Other markets primarily for precision agriculture and medical applications. Sequentially, the decrease in revenues was primarily attributable to lower sales in the Industrial Weighing, Transportation, and Other markets.

Gross profit margin for the Weighing Solutions segment was 35.1% for the third fiscal quarter of 2024, which decreased compared to 38.7% in the third fiscal quarter of 2023 and 37.6% in the second fiscal quarter of 2024. The year-over-year and sequential decrease in gross profit margin were primarily due to lower volume and unfavorable product mix.

The Measurement Systems segment revenue of $22.4 million in the third fiscal quarter of 2024 decreased 8.2% year-over-year from $24.4 million in the third fiscal quarter of 2023 and was 6.2% higher than $21.0 million in the second fiscal quarter of 2024. The year-over-year decrease was primarily attributable to decreased revenue in the Steel, Transportation, and in our Other markets. Sequentially, the increase in revenue was primarily due to higher sales of Diversified Technical Systems Inc. (“DTS”) products in the AMS and Transportation markets.

Gross profit margin for the Measurement Systems segment was 56.8%, compared to 53.6% (or 54.5% reflecting an adjustment to exclude $214 thousand of purchase accounting adjustment related to the DTS and Dynamic System Inc. (“DSI”) acquisitions), in the third fiscal quarter of 2023, and 52.4% in the second fiscal quarter of 2024. The year-over-year increase in adjusted gross profit margin* was due to favorable product mix which offset the impact from lower volume. The sequentially higher adjusted gross profit margin* reflected higher volume and favorable product mix.

Near-Term Outlook
“Given our backlog and the current market conditions, we expect net revenues to be in the range of $70 million to $78 million for the fourth fiscal quarter of 2024, at constant third fiscal quarter 2024 foreign currency exchange rates,” concluded Mr. Shoshani.

*Use of Non-GAAP Financial Information:
We define “adjusted gross profit margin” as gross profit margin before purchase accounting adjustments related to the DTS and DSI acquisition. We define “adjusted operating margin” as operating margin before purchase accounting adjustment related to the DTS and DSI acquisitions, and restructuring costs and severance costs. We define “adjusted net earnings” and “adjusted diluted net earnings per share” as net earnings attributable to VPG stockholders before purchase accounting adjustment related to the DTS and DSI acquisitions, restructuring costs and severance costs, foreign currency exchange gains and losses, and associated tax effects. We define “EBITDA” as earnings before interest, taxes, depreciation, and amortization. We define “Adjusted EBITDA” as earnings before interest, taxes, depreciation, and amortization before purchase accounting adjustment related to the DTS and DSI acquisitions, restructuring costs and severance costs, and foreign currency exchange gains and losses.

Management believes that these non-GAAP measures are useful to investors because each presents what management views as our core operating results for the relevant period. The adjustments to the applicable GAAP measures relate to occurrences or events that are outside of our core operations, and management believes that the use of these non-GAAP measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods. These reconciling items are indicated on the accompanying reconciliation schedules and are more fully described in VPG’s financial statements presented in our Annual Report on Form 10-K and its Quarterly Reports on Forms 10-Q.

Conference Call and Webcast:
A conference call will be held on Tuesday, November 5, 2024 at 9:00 a.m. ET (8:00 a.m. CT). To access the conference call, interested parties may call 1-833-470-1428 or internationally +1-404-975-4839 and use passcode 148407, or log on to the investor relations page of the VPG website at ir.vpgsensors.com. A replay will be available approximately one hour after the completion of the call by calling toll-free 1-866-813-9403 or internationally 1-929-458-6194 and by using passcode 378501. The replay will also be available on the “Events” page of investor relations section of the VPG website at ir.vpgsensors.com.

About VPG:
Vishay Precision Group, Inc. (VPG) is a leader in precision measurement and sensing technologies. Our sensors, weighing solutions and measurement systems optimize and enhance our customers’ product performance across a broad array of markets to make our world safer, smarter, and more productive. To learn more, visit VPG at www.vpgsensors.com and follow us on LinkedIn.

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 or constitute “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; impact of inflation; potential issues respecting the United States federal government debt ceiling; global labor and supply chain challenges; 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 health (including pandemics) instabilities; instability caused by military hostilities in the countries in which we operate (including Israel); 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; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance; significant developments from the recent and potential changes in tariffs and trade regulation; our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter-in-place orders and business closures and the related impact on resource allocations, manufacturing and supply chains; our status as a “critical”, “essential” or “life-sustaining” business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority; our ability to execute our new corporate strategy and business continuity, operational and budget plans; 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, 2023. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report or as of the dates otherwise indicated in such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact:
Steve Cantor
Vishay Precision Group, Inc.
781-222-3516
info@vpgsensors.com

       
VISHAY PRECISION GROUP, INC.      
Consolidated Condensed Statements of Operations      
(Unaudited – In thousands, except per share amounts)      
       
  Fiscal quarter ended
  September 28, 2024   September 30, 2023
Net revenues $ 75,727     $ 85,854  
Costs of products sold   45,467       49,919  
Gross profit   30,260       35,935  
Gross profit margin   40.0 %     41.9 %
       
Selling, general and administrative expenses   26,337       26,558  
Restructuring costs   82       1,153  
Operating income   3,841       8,224  
Operating margin   5.1 %     9.6 %
       
Other (expense) income :      
Interest expense   (648 )     (1,119 )
Other   (2,646 )     1,671  
Other (expense) income   (3,294 )     552  
       
Income before taxes   546       8,776  
       
Income tax expense   1,874       2,419  
       
Net (loss) earnings   (1,328 )     6,357  
Less: net earnings attributable to noncontrolling interests   23       77  
Net (loss) earnings attributable to VPG stockholders $ (1,351 )   $ 6,280  
       
Basic (loss) earnings per share attributable to VPG stockholders $ (0.10 )   $ 0.46  
Diluted (loss) earnings per share attributable to VPG stockholders $ (0.10 )   $ 0.46  
       
Weighted average shares outstanding – basic   13,254       13,600  
Weighted average shares outstanding – diluted   13,254       13,686  
               
       
VISHAY PRECISION GROUP, INC.      
Consolidated Condensed Statements of Operations      
(Unaudited – In thousands, except per share amounts)      
       
  Nine fiscal months ended
  September 28, 2024   September 30, 2023
Net revenues $ 233,869     $ 265,520  
Costs of products sold   136,108       153,674  
Gross profit   97,761       111,846  
Gross profit margin   41.8 %     42.1 %
       
Selling, general and administrative expenses   80,232       80,472  
Restructuring costs   864       1,431  
Operating income   16,665       29,943  
Operating margin   7.1 %     11.3 %
       
Other (expense) income :      
Interest expense   (1,925 )     (3,195 )
Other   915       2,965  
Other (expense) income   (1,010 )     (230 )
       
Income before taxes   15,654       29,713  
       
Income tax expense   6,508       8,023  
       
Net earnings   9,146       21,690  
Less: net earnings attributable to noncontrolling interests   3       210  
Net earnings attributable to VPG stockholders $ 9,143     $ 21,480  
       
Basic earnings per share attributable to VPG stockholders $ 0.68     $ 1.58  
Diluted earnings per share attributable to VPG stockholders $ 0.68     $ 1.57  
       
Weighted average shares outstanding – basic   13,367       13,596  
Weighted average shares outstanding – diluted   13,405       13,670  
               
       
VISHAY PRECISION GROUP, INC.      
Consolidated Condensed Balance Sheets      
(In thousands)      
  September 28, 2024   December 31, 2023
  (Unaudited)    
Assets      
Current assets:      
Cash and cash equivalents $ 81,077     $ 83,965  
Accounts receivable, net   52,821       56,438  
Inventories:      
Raw materials   34,027       33,973  
Work in process   28,275       26,594  
Finished goods   26,000       27,572  
Inventories, net   88,302       88,139  
       
Prepaid expenses and other current assets   20,137       14,520  
Total current assets   242,337       243,062  
       
Property and equipment:      
Land   4,186       4,154  
Buildings and improvements   73,759       72,952  
Machinery and equipment   133,281       131,738  
Software   10,198       9,619  
Construction in progress   10,761       11,379  
Accumulated depreciation   (145,391 )     (139,206 )
Property and equipment, net   86,794       90,636  
       
Goodwill   45,610       45,734  
Intangible assets, net   41,807       44,634  
Operating lease right-of-use assets   25,239       26,953  
Other assets   20,739       20,547  
Total assets $ 462,526     $ 471,566  
               
       
VISHAY PRECISION GROUP, INC.      
Consolidated Condensed Balance Sheets      
(In thousands)      
  September 28, 2024   December 31, 2023
  (Unaudited)    
Liabilities and equity      
Current liabilities:      
Trade accounts payable $ 9,986     $ 11,698  
Payroll and related expenses   17,819       18,971  
Other accrued expenses   21,989       22,427  
Income taxes   1,150       4,524  
Current portion of operating lease liabilities   4,053       4,004  
Total current liabilities   54,997       61,624  
       
Long-term debt   31,383       31,856  
Deferred income taxes   3,645       3,490  
Operating lease liabilities   20,645       22,625  
Other liabilities   14,145       14,770  
Accrued pension and other postretirement costs   7,054       7,276  
Total liabilities   131,869       141,641  
       
Equity:      
Common stock   1,336       1,330  
Class B convertible common stock   103       103  
Treasury stock   (25,335 )     (17,460 )
Capital in excess of par value   202,872       202,672  
Retained earnings   191,209       182,066  
Accumulated other comprehensive loss   (39,564 )     (38,869 )
Total Vishay Precision Group, Inc. stockholders’ equity   330,621       329,842  
Noncontrolling interests   36       83  
Total equity   330,657       329,925  
Total liabilities and equity $ 462,526     $ 471,566  
               
       
VISHAY PRECISION GROUP, INC.      
Consolidated Condensed Statements of Cash Flows      
(Unaudited – In thousands)      
       
  Nine Fiscal Months Ended
  September 28, 2024   September 30, 2023
Operating activities      
Net earnings $ 9,146     $ 21,690  
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Depreciation and amortization   11,771       11,559  
Loss (gain) on sale of property and equipment   (154 )     38  
Share-based compensation expense   1,060       1,885  
Inventory write-offs for obsolescence   1,722       1,567  
Deferred income taxes   512       691  
Foreign currency impacts and other items   (1,213 )     (2,755 )
Net changes in operating assets and liabilities:      
Accounts receivable   3,340       1,604  
Inventories   (1,816 )     (7,811 )
Prepaid expenses and other current assets   (5,576 )     1,990  
Trade accounts payable   (743 )     (1,151 )
Other current liabilities   (3,921 )     (1,082 )
Other non current assets and liabilities, net   (767 )     (170 )
Accrued pension and other postretirement costs, net   (322 )     (945 )
Net cash provided by operating activities   13,039       27,110  
       
Investing activities      
Capital expenditures   (6,965 )     (9,848 )
Proceeds from sale of property and equipment   647       50  
Net cash used in investing activities   (6,318 )     (10,798 )
       
Financing activities      
Payments on revolving facility   —       (7,000 )
Debt issuance costs   (569 )     —  
Purchase of treasury stock   (7,815 )     (1,196 )
Distributions to noncontrolling interests   (50 )     (138 )
Payments of employee taxes on certain share-based arrangements   (860 )     (825 )
Net cash used in financing activities   (9,294 )     (9,159 )
Effect of exchange rate changes on cash and cash equivalents   (315 )     (1,083 )
(Decrease) Increase in cash and cash equivalents   (2,888 )     6,070  
       
Cash and cash equivalents at beginning of period   83,965       88,562  
Cash and cash equivalents at end of period $ 81,077     $ 94,632  
       
Supplemental disclosure of investing transactions:      
Capital expenditures accrued but not yet paid $ 1,354     $ 1,204  
Supplemental disclosure of financing transactions:      
Excise tax on net share repurchases accrued but not yet paid   60       —  
               
                     
VISHAY PRECISION GROUP, INC.                    
Reconciliation of Consolidated Adjusted Gross Profit, Operating Income, Net Earnings Attributable to VPG Stockholders and Diluted Earnings Per Share    
(Unaudited – In thousands)                            
                               
  Gross Profit   Operating Income   Net (Loss) Earnings Attributable to VPG Stockholders   Diluted Earnings Per share
Three months ended September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023
As reported – GAAP $ 30,260     $ 35,935     $ 3,841     $ 8,224     $ (1,351 )   $ 6,280     $ (0.10 )   $ 0.46  
As reported – GAAP Margins   40.0 %     41.9 %     5.1 %     9.6 %                
Acquisition purchase accounting adjustments   —       214       —       214       —       214       —       0.02  
Restructuring costs   —       —       82       1,153       82       1,153       0.01       0.08  
Foreign currency exchange gain (loss)   —       —       —       —       2,912       (1,283 )     0.22       (0.09 )
Less: Tax effect of reconciling items and discrete tax items   —       —       —       —       (839 )     (77 )     (0.06 )     —  
As Adjusted – Non GAAP $ 30,260     $ 36,149     $ 3,923     $ 9,591     $ 2,482     $ 6,441     $ 0.19     $ 0.47  
As Adjusted – Non GAAP Margins   40.0 %     42.1 %     5.2 %     11.2 %                
                                               
                     
VISHAY PRECISION GROUP, INC.                    
Reconciliation of Consolidated Adjusted Gross Profit, Operating Income, Net Earnings Attributable to VPG Stockholders and Diluted Earnings Per Share
(Unaudited – In thousands)                              
                               
                               
  Gross Profit   Operating Income   Net Earnings Attributable to VPG Stockholders   Diluted Earnings Per share
Nine fiscal months ended September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023
As reported – GAAP $ 97,761     $ 111,846     $ 16,665     $ 29,943     $ 9,143     $ 21,480     $ 0.68     $ 1.57  
As reported – GAAP Margins   41.8 %     42.1 %     7.1 %     11.3 %                
Acquisition purchase accounting adjustments   —       304       —       304       —       304       —       0.02  
Restructuring costs   —       —       864       1,431       864       1,431       0.06       0.11  
Severance cost   —       —       347       —       347       —       0.03       —  
Foreign currency exchange gain (loss)   —       —       —       —       34       (2,139 )     —       (0.16 )
Less: Tax effect of reconciling items and discrete tax items   —       —       —       —       (1,913 )     (357 )     (0.14 )     (0.03 )
As Adjusted – Non GAAP $ 97,761     $ 112,150     $ 17,876     $ 31,678     $ 12,301     $ 21,433     $ 0.92     $ 1.57  
As Adjusted – Non GAAP Margins   41.8 %     42.2 %     7.6 %     11.9 %                
                               
         
VISHAY PRECISION GROUP, INC.        
Reconciliation of Adjusted Gross Profit by segment        
(Unaudited – In thousands)          
           
  Fiscal quarter ended
  September 28, 2024   September 30, 2023   June 29, 2024
Sensors          
As reported – GAAP $ 8,730     $ 11,681     $ 11,066  
As reported – GAAP Margins   31.0 %     35.9 %     38.3 %
As Adjusted – Non GAAP $ 8,730     $ 11,681     $ 11,066  
As Adjusted – Non GAAP Margins   31.0 %     35.9 %     38.3 %
           
Weighing Solutions          
As reported – GAAP $ 8,840     $ 11,207     $ 10,310  
As reported – GAAP Margins   35.1 %     38.7 %     37.6 %
As Adjusted – Non GAAP $ 8,840     $ 11,207     $ 10,310  
As Adjusted – Non GAAP Margins   35.1 %     38.7 %     37.6 %
           
Measurement Systems          
As reported – GAAP $ 12,690     $ 13,047     $ 11,031  
As reported – GAAP Margins   56.8 %     53.6 %     52.4 %
Acquisition purchase accounting adjustments   —       214       —  
As Adjusted – Non GAAP $ 12,690     $ 13,261     $ 11,031  
As Adjusted – Non GAAP Margins   56.8 %     54.5 %     52.4 %
                       
         
VISHAY PRECISION GROUP, INC.        
Reconciliation of Adjusted EBITDA        
(Unaudited – In thousands)          
  Fiscal quarter ended
  September 28, 2024   September 30, 2023   June 29, 2024
Net (loss) earnings attributable to VPG stockholders $ (1,351 )   $ 6,280     $ 4,603  
Interest Expense   648       1,119       649  
Income tax expense   1,874       2,419       2,316  
Depreciation   2,988       2,954       2,992  
Amortization   925       880       924  
EBITDA   5,084     $ 13,652     $ 11,484  
EBITDA MARGIN   6.7 %     15.9 %     14.8 %
Acquisition purchase accounting adjustments   —       214       —  
Restructuring costs   82       1,153       —  
Foreign currency exchange gain (loss)   2,912       (1,283 )     (1,289 )
ADJUSTED EBITDA $ 8,079     $ 13,736     $ 10,195  
ADJUSTED EBITDA MARGIN   10.7 %     16.0 %     13.2 %


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