Third Fiscal Quarter Highlights:
- Revenues of
$85.9 million decreased 4.7% from a year ago. - Gross profit margin was 41.9%, as compared to 41.4% reported a year ago.
- Adjusted gross profit margin* was 42.1%, as compared to 41.7% reported a year ago.
- Operating margin was 9.6%, as compared to 13.2% reported a year ago.
- Adjusted operating margin* was 11.2%, as compared to 13.7% reported a year ago.
- Diluted net earnings per share of
$0.46 compared to$0.74 reported a year ago. - Adjusted diluted net earnings per share* of
$0.47 compared to$0.69 reported a year ago. - EBITDA* was
$13.7 million with an EBITDA margin* of 15.9%. - Adjusted EBITDA* was
$13.7 million with an adjusted EBITDA margin* of 16.0%. - Cash from operating activities was
$8.9 million with adjusted free cash flow* of$6.0 million .
Third
The Company's third fiscal quarter ended
In the nine fiscal months ended
The third fiscal quarter ended
In the nine fiscal months ended
Segment Performance:
The Sensors segment revenue of
Gross profit margin for the Sensors segment was 35.9% for the third fiscal quarter of 2023. Gross profit margin decreased compared to 40.5% in the third fiscal quarter of 2022, and decreased compared to 40.1% in the second fiscal quarter of 2023. The year-over-year decrease in gross profit margin was primarily due to lower volume and temporary labor inefficiencies, partially offset by favorable foreign currency exchange rates and cost reduction programs. Sequentially, the lower gross profit margin was primarily due to lower volume and temporary labor inefficiencies.
The Weighing Solutions segment revenue of
Gross profit margin for the Weighing Solutions segment was 38.7% for the third fiscal quarter of 2023, which increased compared to 33.3% in the third fiscal quarter of 2022, and was even compared to 38.7% in the second fiscal quarter of 2023. The year-over-year increase in gross profit margin was primarily due to cost reductions, lower logistics costs, and favorable foreign currency rates, which offset the impact of lower volume. Sequentially, gross profit margin was flat, as lower operating costs offset the impact of lower volume.
The Measurement Systems segment revenue of
Gross profit margin for the Measurement Systems segment was 53.6% (or 54.5% adjusted to exclude
Near-Term Outlook
“Given current market conditions and uncertainties, we expect net revenues to be in the range of
*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 acquisitions, and start-up costs related to our new advanced sensors facility, and COVID-19 costs. We define "adjusted operating margin" as operating margin before purchase accounting adjustments related to the DTS and DSI acquisitions, start-up costs related to our new advanced sensors facility, COVID-19 costs, and restructuring costs. We define "adjusted net earnings” and "adjusted diluted net earnings per share" as net earnings attributable to VPG stockholders before purchase accounting adjustments related to the DTS and DSI acquisitions, start-up costs related to our new advanced sensors facility, COVID-19 costs, restructuring 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 adjustments related to the DTS and DSI acquisitions, start-up costs related to our new advanced sensors facility, COVID-19, restructuring costs, and foreign currency exchange gains and losses. "Adjusted free cash flow" for the third fiscal quarter of 2023 is defined as the amount of cash generated from operating activities (
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
About VPG:
Forward-Looking Statements:
From time to time, information provided by us, including, but not limited to, statements in this press release, 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
Contact:
781-222-3516
info@vpgsensors.com
Consolidated Condensed Statements of Operations (Unaudited - In thousands, except per share amounts) | |||||||
Fiscal quarter ended | |||||||
Net revenues | $ | 85,854 | $ | 90,057 | |||
Costs of products sold | 49,919 | 52,737 | |||||
Gross profit | 35,935 | 37,320 | |||||
Gross profit margin | 41.9 | % | 41.4 | % | |||
Selling, general, and administrative expenses | 26,558 | 25,271 | |||||
Restructuring costs | 1,153 | 165 | |||||
Operating income | 8,224 | 11,884 | |||||
Operating margin | 9.6 | % | 13.2 | % | |||
Other income (expense): | |||||||
Interest expense | (1,119 | ) | (636 | ) | |||
Other | 1,671 | 1,223 | |||||
Other income | 552 | 587 | |||||
Income before taxes | 8,776 | 12,471 | |||||
Income tax expense | 2,419 | 2,323 | |||||
Net earnings | 6,357 | 10,148 | |||||
Less: net earnings attributable to noncontrolling interests | 77 | 30 | |||||
Net earnings attributable to VPG stockholders | $ | 6,280 | $ | 10,118 | |||
Basic earnings per share attributable to VPG stockholders | $ | 0.46 | $ | 0.74 | |||
Diluted earnings per share attributable to VPG stockholders | $ | 0.46 | $ | 0.74 | |||
Weighted average shares outstanding - basic | 13,600 | 13,649 | |||||
Weighted average shares outstanding - diluted | 13,686 | 13,708 | |||||
Consolidated Condensed Statements of Operations (Unaudited - In thousands, except per share amounts) | |||||||
Nine fiscal months ended | |||||||
Net revenues | $ | 265,520 | $ | 266,340 | |||
Costs of products sold | 153,674 | 156,436 | |||||
Gross profit | 111,846 | 109,904 | |||||
Gross profit margin | 42.1 | % | 41.3 | % | |||
Selling, general, and administrative expenses | 80,472 | 77,824 | |||||
Restructuring costs | 1,431 | 1,330 | |||||
Operating income | 29,943 | 30,750 | |||||
Operating margin | 11.3 | % | 11.5 | % | |||
Other income (expense): | |||||||
Interest expense | (3,195 | ) | (1,393 | ) | |||
Other | 2,965 | 5,006 | |||||
Other income (expense) | (230 | ) | 3,613 | ||||
Income before taxes | 29,713 | 34,363 | |||||
Income tax expense | 8,023 | 6,651 | |||||
Net earnings | 21,690 | 27,712 | |||||
Less: net earnings attributable to noncontrolling interests | 210 | 483 | |||||
Net earnings attributable to VPG stockholders | $ | 21,480 | $ | 27,229 | |||
Basic earnings per share attributable to VPG stockholders | $ | 1.58 | $ | 2.00 | |||
Diluted earnings per share attributable to VPG stockholders | $ | 1.57 | $ | 1.99 | |||
Weighted average shares outstanding - basic | 13,596 | 13,645 | |||||
Weighted average shares outstanding - diluted | 13,670 | 13,692 | |||||
Consolidated Condensed Balance Sheets (In thousands) | |||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 94,632 | $ | 88,562 | |||
Short term investment | 1,000 | — | |||||
Accounts receivable, net | 57,240 | 60,068 | |||||
Inventories: | |||||||
Raw materials | 34,952 | 31,852 | |||||
Work in process | 28,368 | 26,401 | |||||
Finished goods | 27,088 | 26,407 | |||||
Inventories, net | 90,408 | 84,660 | |||||
Prepaid expenses and other current assets | 16,454 | 18,516 | |||||
Total current assets | 259,734 | 251,806 | |||||
Property and equipment: | |||||||
Land | 4,104 | 4,117 | |||||
Buildings and improvements | 71,379 | 71,613 | |||||
Machinery and equipment | 126,582 | 125,301 | |||||
Software | 9,141 | 9,539 | |||||
Construction in progress | 10,872 | 10,075 | |||||
Accumulated depreciation | (135,366 | ) | (133,518 | ) | |||
Property and equipment, net | 86,712 | 87,127 | |||||
45,579 | 45,544 | ||||||
Intangible assets, net | 45,492 | 48,217 | |||||
Operating lease right-of-use assets | 27,440 | 24,342 | |||||
Other assets | 19,349 | 19,706 | |||||
Total assets | $ | 484,306 | $ | 476,742 | |||
Consolidated Condensed Balance Sheets (In thousands) | |||||||
(Unaudited) | |||||||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 11,875 | $ | 13,792 | |||
Payroll and related expenses | 18,169 | 21,966 | |||||
Other accrued expenses | 24,077 | 20,306 | |||||
Income taxes | 1,774 | 4,064 | |||||
Current portion of operating lease liabilities | 3,814 | 4,208 | |||||
Total current liabilities | 59,709 | 64,336 | |||||
Long-term debt, less current portion | 53,827 | 60,799 | |||||
Deferred income taxes | 4,098 | 4,212 | |||||
Operating lease liabilities | 22,587 | 20,043 | |||||
Other liabilities | 12,900 | 13,053 | |||||
Accrued pension and other postretirement costs | 7,028 | 7,777 | |||||
Total liabilities | 160,149 | 170,220 | |||||
Equity: | |||||||
Common stock | 1,330 | 1,325 | |||||
Class B convertible common stock | 103 | 103 | |||||
(12,700 | ) | (11,504 | ) | ||||
Capital in excess of par value | 202,267 | 201,164 | |||||
Retained earnings | 177,839 | 156,359 | |||||
Accumulated other comprehensive loss | (44,729 | ) | (40,900 | ) | |||
324,110 | 306,547 | ||||||
Noncontrolling interests | 47 | (25 | ) | ||||
Total equity | 324,157 | 306,522 | |||||
Total liabilities and equity | $ | 484,306 | $ | 476,742 | |||
Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands) | |||||||
Nine Fiscal Months Ended | |||||||
Operating activities | |||||||
Net earnings | $ | 21,690 | $ | 27,712 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,559 | 11,519 | |||||
Gain on sale of property and equipment | 38 | (182 | ) | ||||
Reclassification of foreign currency translation adjustment related to disposal of subsidiary | — | 191 | |||||
Share-based compensation expense | 1,885 | 1,583 | |||||
Inventory write-offs for obsolescence | 1,567 | 1,451 | |||||
Deferred income taxes | 691 | (72 | ) | ||||
Foreign currency impacts and other items | (2,755 | ) | (3,550 | ) | |||
Net changes in operating assets and liabilities: | |||||||
Accounts receivable | 1,604 | (2,077 | ) | ||||
Inventories | (7,811 | ) | (14,151 | ) | |||
Prepaid expenses and other current assets | 1,990 | (984 | ) | ||||
Trade accounts payable | (1,151 | ) | (1,459 | ) | |||
Other current liabilities | (1,082 | ) | 1,303 | ||||
Other non current assets and liabilities, net | (170 | ) | (326 | ) | |||
Accrued pension and other postretirement costs, net | (945 | ) | (443 | ) | |||
Net cash provided by operating activities | 27,110 | 20,515 | |||||
Investing activities | |||||||
Capital expenditures | (9,848 | ) | (15,545 | ) | |||
Proceeds from sale of property and equipment | 50 | 397 | |||||
Purchase of short term investment | (1,000 | ) | — | ||||
Net cash used in investing activities | (10,798 | ) | (15,148 | ) | |||
Financing activities | |||||||
Payments on revolving facility | (7,000 | ) | — | ||||
Purchase of treasury stock | (1,196 | ) | (1,061 | ) | |||
Distributions to noncontrolling interests | (138 | ) | (366 | ) | |||
Payments of employee taxes on certain share-based arrangements | (825 | ) | (435 | ) | |||
Net cash used in financing activities | (9,159 | ) | (1,862 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,083 | ) | (7,930 | ) | |||
Increase (decrease) in cash and cash equivalents | 6,070 | (4,425 | ) | ||||
Cash and cash equivalents at beginning of period | 88,562 | 84,335 | |||||
Cash and cash equivalents at end of period | $ | 94,632 | $ | 79,910 | |||
Supplemental disclosure of investing transactions: | |||||||
Capital expenditures accrued but not yet paid | $ | 1,204 | $ | 720 | |||
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 | ||||||||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||||||||||
As reported - GAAP | $ | 35,935 | $ | 37,320 | $ | 8,224 | $ | 11,884 | $ | 6,280 | $ | 10,118 | $ | 0.46 | $ | 0.74 | |||||||||||||||
As reported - GAAP Margins | 41.9 | % | 41.4 | % | 9.6 | % | 13.2 | % | |||||||||||||||||||||||
Acquisition purchase accounting adjustments | 214 | 260 | 214 | 260 | 214 | 260 | 0.02 | 0.02 | |||||||||||||||||||||||
Restructuring costs | — | — | 1,153 | 165 | 1,153 | 165 | 0.08 | 0.01 | |||||||||||||||||||||||
Foreign currency exchange gain | — | — | — | — | (1,283 | ) | (1,261 | ) | (0.09 | ) | (0.09 | ) | |||||||||||||||||||
Less: Tax effect of reconciling items and discrete tax items | — | — | — | — | (77 | ) | (194 | ) | — | (0.01 | ) | ||||||||||||||||||||
As Adjusted - Non GAAP | $ | 36,149 | $ | 37,580 | $ | 9,591 | $ | 12,309 | $ | 6,441 | $ | 9,476 | $ | 0.47 | $ | 0.69 | |||||||||||||||
As Adjusted - Non GAAP Margins | 42.1 | % | 41.7 | % | 11.2 | % | 13.7 | % | |||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
As reported - GAAP | $ | 111,846 | $ | 109,904 | $ | 29,943 | $ | 30,750 | $ | 21,480 | $ | 27,229 | $ | 1.57 | $ | 1.99 | |||||||||||||||
As reported - GAAP Margins | 42.1 | % | 41.3 | % | 11.3 | % | 11.5 | % | |||||||||||||||||||||||
Acquisition purchase accounting adjustments | 304 | 1,310 | 304 | 1,310 | 304 | 1,310 | 0.02 | 0.10 | |||||||||||||||||||||||
COVID-19 impact | — | 138 | — | 138 | — | 138 | — | 0.01 | |||||||||||||||||||||||
Start-up costs | — | 150 | — | 150 | — | 150 | — | 0.01 | |||||||||||||||||||||||
Restructuring costs | — | — | 1,431 | 1,330 | 1,431 | 1,330 | 0.11 | 0.10 | |||||||||||||||||||||||
Foreign currency exchange gain | — | — | — | — | (2,139 | ) | (5,195 | ) | (0.16 | ) | (0.38 | ) | |||||||||||||||||||
Less: Tax effect of reconciling items and discrete tax items | — | — | — | — | (357 | ) | (496 | ) | (0.03 | ) | (0.03 | ) | |||||||||||||||||||
As Adjusted - Non GAAP | $ | 112,150 | $ | 111,502 | $ | 31,678 | $ | 33,678 | $ | 21,433 | $ | 25,458 | 1.57 | $ | 1.86 | ||||||||||||||||
As Adjusted - Non GAAP Margins | 42.2 | % | 41.9 | % | 11.9 | % | 12.6 | % | |||||||||||||||||||||||
Reconciliation of Adjusted Gross Profit by segment (Unaudited - In thousands) | |||||||||||
Fiscal quarter ended | |||||||||||
Sensors | |||||||||||
As reported - GAAP | $ | 11,681 | $ | 15,324 | $ | 14,549 | |||||
As reported - GAAP Margins | 35.9 | % | 40.5 | % | 40.1 | % | |||||
As Adjusted - Non GAAP | $ | 11,681 | $ | 15,324 | $ | 14,549 | |||||
As Adjusted - Non GAAP Margins | 35.9 | % | 40.5 | % | 40.1 | % | |||||
Weighing Solutions | |||||||||||
As reported - GAAP | $ | 11,207 | $ | 10,470 | $ | 12,107 | |||||
As reported - GAAP Margins | 38.7 | % | 33.3 | % | 38.7 | % | |||||
As Adjusted - Non GAAP | $ | 11,207 | $ | 10,470 | $ | 12,107 | |||||
As Adjusted - Non GAAP Margins | 38.7 | % | 33.3 | % | 38.7 | % | |||||
Measurement Systems | |||||||||||
As reported - GAAP | $ | 13,047 | $ | 11,526 | $ | 12,056 | |||||
As reported - GAAP Margins | 53.6 | % | 55.5 | % | 51.8 | % | |||||
Acquisition purchase accounting adjustments | 214 | 260 | 41 | ||||||||
As Adjusted - Non GAAP | $ | 13,261 | $ | 11,786 | $ | 12,097 | |||||
As Adjusted - Non GAAP Margins | 54.5 | % | 56.7 | % | 52.0 | % | |||||
Reconciliation of Adjusted EBITDA (Unaudited - In thousands) | |||||||||||
Fiscal quarter ended | |||||||||||
Net earnings attributable to VPG stockholders | $ | 6,280 | $ | 10,118 | $ | 8,236 | |||||
Interest Expense | 1,119 | 636 | 1,079 | ||||||||
Income tax expense | 2,419 | 2,323 | 3,384 | ||||||||
Depreciation | 2,954 | 2,937 | 2,933 | ||||||||
Amortization | 880 | 960 | 934 | ||||||||
EBITDA | 13,652 | $ | 16,974 | $ | 16,566 | ||||||
EBITDA MARGIN | 15.9 | % | 18.8 | % | 18.2 | % | |||||
Acquisition purchase accounting adjustments | 214 | 260 | 41 | ||||||||
Restructuring costs | 1,153 | 165 | 162 | ||||||||
Foreign currency exchange gain | (1,283 | ) | (1,261 | ) | (794 | ) | |||||
ADJUSTED EBITDA | $ | 13,736 | $ | 16,138 | $ | 15,975 | |||||
ADJUSTED EBITDA MARGIN | 16.0 | % | 17.9 | % | 17.6 | % | |||||
Source:
2023 GlobeNewswire, Inc., source