Vishay Precision Group, Inc. (NYSE: 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 fiscal quarter ended October 1, 2011. VPG was spun-off from Vishay Intertechnology, Inc. (NYSE: VSH) as an independent publicly traded company in July 2010.

Net revenues for the third fiscal quarter of 2011 were $60.0 million, representing a 16.3% increase, over the $51.6 million of net revenues for the comparable prior year period. Net earnings for the third fiscal quarter of 2011 were $3.3 million or $0.24 per diluted share, versus net earnings of $2.6 million, or $0.19 per diluted share for the comparable prior year period.

Net revenues for the nine fiscal months ended October 1, 2011 were $181.7 million, representing a 19.0% increase over the $152.7 million of net revenues for the comparable prior year period. Net earnings for the nine fiscal months ended October 1, 2011 were $9.6 million, or $0.69 per diluted share, versus net earnings of $8.4 million, or $0.61 per diluted share for the comparable prior year period (see Note below).

Comparing the results of the third fiscal quarter of 2011 to the second fiscal quarter of 2011, net revenues decreased by 3.4%, from $62.1 million. These comparisons provide a perspective of the reduction in revenues the Company forecasted, which was primarily due to the annual European slowdown. Net earnings increased by $0.3 million from $3.0 million in the second quarter of 2011.

Commenting on the results, Ziv Shoshani, Chief Executive Officer of VPG, said, "Sales were stronger than expected in September, after the anticipated decline in August, resulting in third quarter revenues near the high end of our guidance for the third quarter. Our Foil Technology Products (FTP) segment revenues decreased from the prior quarter to $28.4 million in the third quarter, coming from declines in the precision instruments and scales manufacturing markets. The FTP gross margin was 43.1% for the third quarter. The Weighing Modules and Control Systems (WMCS) segment revenues decreased from the prior quarter to $31.6 million in the third quarter, coming in part, from declines in process weighing and on-board weighing markets. The gross margin for the segment was 28.3% for the third quarter.”

Discussing VPG’s initiatives, Mr. Shoshani explained, “Our first strategic initiative is to optimize our core businesses. The FTP segment established a manufacturing pilot line last quarter, which uses our latest intellectual property and manufacturing technology. This line is expected to lower costs by automating process steps and improving the manufacturing yield for our next-generation foil strain gage products as we ramp up production over the next 12 months. The WMCS segment is still on track to complete its new offshore manufacturing facility by the end of the year, which is expected to provide a low-cost manufacturing base for our transducer products in 2012.”

He continued, “Our second strategic initiative is creating organic growth opportunities. We continue to develop value-added, specialty products for both our FTP and WMCS segments. This is part of our “design-in win” strategy for our foil resistors, transducer products, and systems, which we expect will drive continued organic growth. We have also introduced our new miniature strain gage products that we believe will increase our total available market. We expect customers to begin qualifying these products in their next-generation designs over the next 12 to 24 months.”

Outlook

Mr. Shoshani concluded, “We are seeing a sustainable business environment for the fourth quarter across all geographic regions. We continue to enjoy significantly better sales than one year ago, an improvement which mainly came from force measurement, process weighing, and scales manufacturing. We believe the anticipated business for the fourth quarter will result in overall revenues in the range of $59 million to $63 million.”

Note: The results of operations and earnings for the nine fiscal months ended October 2, 2010 were derived in part from the historical consolidated financial statements of Vishay Intertechnology. Such results may not be indicative of the actual operating results that would have been realized had the Company operated as an independent, publicly traded company.

Conference Call and Webcast

A conference call and simultaneous audio webcast will take place at 10:00 a.m. (ET) on November 1, 2011. To access the conference call, interested parties may call 877-317-6789 or +1-412-317-6789 and enter conference number: 1000-4832, 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: 1000-4832. 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 produces sensors based on resistive foil technology, and sensor-based systems. VPG provides vertically integrated products and solutions for multiple growing markets in the areas of stress, force, weight, pressure and current measurements. As a spin-off from Vishay Intertechnology, the Company has a decades-long track record of innovation in foil precision resistors, current sensors, and strain gages, which has served as a foundation for its more recent expansion into strain gage instrumentation, load cells and transducers, weighing modules, and complete systems for process control and on-board weighing. Vishay Precision Group may be found on the internet at http://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, 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 July 2010 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 labor unrest or legal challenges to our lay-off or termination plans, underutilization of production facilities in lower-labor-cost countries, 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, 2010 filed with the Securities and Exchange Commission. 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.
Combined and Consolidated Condensed Summary of Operations
(Unaudited - In thousands, except per share data)
 
Fiscal quarter ended
October 1, October 2,
  2011     2010  
 
 
Net revenues $ 60,037 $ 51,608
Costs of products sold   38,845     32,466  
Gross profit 21,192 19,142
Gross margin 35.3 % 37.1 %
 
Selling, general, and administrative expenses   16,482     14,356  
Operating income 4,710 4,786
Operating margin 7.8 % 9.3 %
 
Other income (expense):
Interest expense (70 ) (31 )
Other   (763 )   (427 )
Total other income (expense) - net   (833 )   (458 )
 
Income before taxes 3,877 4,328
 
Income tax expense   639     1,698  
 
Net earnings 3,238 2,630
 
Less: net (loss) earnings attributable to noncontrolling interests (62 ) 11
   
Net earnings attributable to VPG stockholders $ 3,300   $ 2,619  
 
 
Basic earnings per share attributable to VPG stockholders $ 0.25 $ 0.20
 
Diluted earnings per share attributable to VPG stockholders $ 0.24 $ 0.19
 
 
Weighted average shares outstanding - basic 13,346 13,332
 
Weighted average shares outstanding - diluted 13,831 13,779
 
VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Summary of Operations
(Unaudited - In thousands, except per share data)
 
Nine fiscal months ended
October 1, October 2,
  2011     2010  
 
 
Net revenues $ 181,695 $ 152,697
Costs of products sold   117,403     96,525  
Gross profit 64,292 56,172
Gross margin 35.4 % 36.8 %
 
Selling, general, and administrative expenses   49,898     41,394  
Operating income 14,394 14,778
Operating margin 7.9 % 9.7 %
 
Other income (expense):
Interest expense (227 ) (347 )
Other   (629 )   (387 )
Total other income (expense) - net   (856 )   (734 )
 
Income before taxes 13,538 14,044
 
Income tax expense   3,911     5,544  
 
Net earnings 9,627 8,500
 
Less: net earnings attributable to noncontrolling interests 51 70
   
Net earnings attributable to VPG stockholders/parent $ 9,576   $ 8,430  
 
 
Basic earnings per share attributable to VPG stockholders/parent $ 0.72 $ 0.63
 
Diluted earnings per share attributable to VPG stockholders/parent $ 0.69 $ 0.61
 
 
Weighted average shares outstanding - basic 13,342 13,332
 
Weighted average shares outstanding - diluted 13,820 13,779
   
VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
 
October 1, December 31,
  2011     2010  
Assets
Current assets:
Cash and cash equivalents $ 83,318 $ 82,245
Accounts receivable, net 37,482 33,988
Inventories, net 49,952 48,337
Deferred income taxes 4,004 4,022
Prepaid expenses and other current assets   10,315     5,540  
Total current assets 185,071 174,132
 
Property and equipment, net 51,441 46,747
Intangible assets, net 12,289 14,500
Other assets   13,251     13,334  
Total assets $ 262,052   $ 248,713  
 
 
 
Liabilities and equity
Current liabilities:
Notes payable to banks $ 1,293 $ 85
Trade accounts payable 13,966 11,537
Payroll and related expenses 12,659 12,554
Other accrued expenses 9,292 8,680
Income taxes 2,405 4,847
Current portion of long-term debt   188     -  
Total current liabilities 39,803 37,703
 
Long-term debt 11,535 11,692
Deferred income taxes 3,833 4,212
Other liabilities 7,498 7,468
Accrued pension and other postretirement costs   10,887     10,708  
Total liabilities   73,556     71,783  
 
Commitments and contingencies
 
Equity:
Common stock 1,232 1,231
Class B convertible common stock 103 103
Capital in excess of par value 180,748 180,142
Retained earnings

15,470
5,894
Accumulated other comprehensive income (loss)   (9,238 )   (10,585 )

Total Vishay Precision Group, Inc. stockholders' equity
 

188,315
    176,785  
Noncontrolling interests  

181
    145  
Total equity   188,496     176,930  
Total liabilities and equity $ 262,052   $ 248,713  
 
VISHAY PRECISION GROUP, INC.
Combined and Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
 
Nine fiscal months ended
October 1,   October 2,
  2011     2010  
 
Operating activities
Net earnings $ 9,627 $ 8,500

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 8,425 7,784
Loss (gain) on disposal of property and equipment 20 (8 )
Share-based compensation expense 718 172
Inventory write-offs for obsolescence 1,149 1,027
Other (3,084 ) 5,128
Changes in operating assets and liabilities   (7,155 )   (2,575 )
Net cash provided by operating activities 9,700 20,028
 
Investing activities
Purchase of property and equipment (10,347 ) (5,481 )
Proceeds from sale of property and equipment   143     57  
Net cash used in investing activities (10,204 ) (5,424 )
 
Financing activities
Principal payments on long-term debt and capital lease obligations (90 ) (189 )
Net changes in short-term borrowings 1,326 664
(Distributions to) contributions from noncontrolling interests (15 ) 3
Transactions with Vishay Intertechnology   -     3,493  
Net cash provided by financing activities 1,221 3,971
 
Effect of exchange rate changes on cash and cash equivalents   356     (377 )
 
Increase in cash and cash equivalents   1,073     18,198  
 
Cash and cash equivalents at beginning of period   82,245     63,192  
Cash and cash equivalents at end of period $ 83,318   $ 81,390  

Copyright Business Wire 2010