VPG Reports Fiscal 2022 First Quarter Results

Vishay Precision Group

MALVERN, PA — Vishay Precision Group, Inc. (NYSE: VPG) this week announced its results for its fiscal 2022 first quarter ended April 2, 2022.

First Fiscal Quarter Highlights:

  • Revenues of $87.7 million increased 24.2% from a year ago.
  • Gross profit margin was 40.2%, as compared to 40.5% reported a year ago.
  • Adjusted gross profit margin was 41.0%, as compared to 40.5% reported a year ago.
  • Operating margin was 9.5%, as compared to 9.1% reported a year ago.
  • Adjusted operating margin was 10.5%, as compared to 8.7% reported a year ago.
  • Diluted net earnings per share of $0.46 compared to $0.36 reported a year ago.
  • Adjusted diluted net earnings per share of $0.49 compared to $0.31 reported a year ago.
  • EBITDA was $12.2 million with an EBITDA margin of 14.0%.
  • Adjusted EBITDA was $12.6 million with an adjusted EBITDA margin of 14.4%.
  • Book-to-bill ratio was 1.25.

Ziv Shoshani, Chief Executive Officer of VPG, commented, “We achieved another quarter of strong performance, reflecting the expanding opportunities in our high-value precision measurement markets. We grew revenue from the first quarter a year ago by 24.2%, driven by growth in all three business segments and across all of our markets. Record orders in the first quarter of $109.6 million contributed to a book-to-bill of 1.25, with each reporting segment achieving a book-to-bill ratio above 1.00. Our record backlog of $170.6 million reflects favorable market conditions and underscores the strength of our business strategy.”

Mr. Shoshani said: “Financially, we achieved adjusted diluted net earnings per share of $0.49 and an adjusted EBITDA margin of 14.4%. With our strong balance sheet and cash flow, we continue to invest in our organic growth initiatives, as well as to look for value-creating acquisitions to add to our platform.”

First Fiscal Quarter Financial Trends:

The Company’s first fiscal quarter 2022 net earnings attributable to VPG stockholders were $6.4 million, or $0.46 per diluted share, compared to $5.0 million, or $0.36 per diluted share, in the first fiscal quarter of 2021.

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The first fiscal quarter 2022 adjusted net earnings attributable to VPG stockholders were $6.6 million, or $0.49 per diluted share, compared to $4.2 million, or $0.31 per diluted share in the first fiscal quarter of 2021.

Segment Performance:

The Sensors segment revenue of $37.8 million in the first fiscal quarter of 2022 increased 18.7% from $31.8 million in the first fiscal quarter of 2021; sequentially, revenue increased 10.5% compared to $34.1 million in the fourth quarter of 2021. The year-over-year increase in revenues was primarily attributable to higher sales of precision resistors in the Test and Measurements market and higher revenue of our advanced sensors products primarily in Other markets (mainly for consumer and medical applications) and in our General Industrial markets. Sequentially, the increase in revenues reflected revenue growth in our advanced sensors products in Other markets (mainly for consumer and medical applications) and in our General Industrial end markets.

Gross profit margin for the Sensors segment was 37.8% (or 38.6% adjusted to exclude the impact of $0.2 million of start-up costs related to our new advanced sensors facility and $0.1 million impact of COVID-19) for the first fiscal quarter of 2022. Gross profit margin decreased compared to 40.3% (or 40.9% adjusted to exclude the impact of COVID-19 and $0.1 million of start-up costs) in the first fiscal quarter of 2021, and increased compared to 32.1% (or 34.8% adjusted to exclude the impact of $0.9 million of start-up costs related to the new advanced sensors facility) in the fourth fiscal quarter of 2021. The year-over-year decrease in adjusted gross profit margin was primarily due to unfavorable foreign exchange rates, wage increases, and labor inefficiencies due to the hiring of new personnel, partially offset by higher volume. Sequentially, the higher adjusted gross profit margin was primarily due to higher volume and a favorable product mix, partially offset by wage increases.

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The Weighing Solutions segment revenue of $32.8 million in the first fiscal quarter of 2022 increased 5.8% compared to $31.0 million in the first fiscal quarter of 2021 and was 2.2% higher than $32.1 million in the fourth quarter of 2021. The year-over-year increase in revenues was primarily attributable to increased revenue to our OEM customers in our Other markets (primarily for construction equipment) and in our Industrial weighing market. The sequential increase in revenues was primarily attributable to higher sales of on-board weighing products in our Transportation market and an increase in our OEM customers in our Other markets mainly for precision agriculture and medical equipment, partially offset by lower sales in the Industrial weighing market for process weighing applications.

Gross profit margin for the Weighing Solutions segment was 36.9% for the first fiscal quarter of 2022, which was a decrease compared to 38.0% (or 38.2% adjusted to exclude the impact of COVID-19) in the first fiscal quarter of 2021, and an increase compared to 34.0% in the fourth fiscal quarter of 2021. The year-over-year decrease in adjusted gross profit margin was primarily due to higher material prices, unfavorable foreign exchange rates, and wage increases, partially offset by higher volume. The sequential increase in adjusted gross profit margin was primarily due to higher volume, higher selling prices and a favorable product mix, offset by higher material costs.

The Measurement Systems segment revenue of $17.1 million in the first fiscal quarter of 2022 increased 119.7% year-over-year from $7.8 million in the first fiscal quarter of 2021 and was 27.9% lower than $23.8 million in the fourth fiscal quarter of 2021. The year-over-year increase in revenue was primarily attributable to the addition of revenue for Diversified Technical Systems, Inc. (“DTS”), which was acquired on June 1, 2021, and higher revenue of our Pacific Instruments and KELK businesses.   Sequentially, the decrease in revenue was primarily due to the lower revenue of Dynamic Systems, Inc. (“DSI”) and KELK products to the Steel market, and lower revenues for our DTS and Pacific Instruments businesses.

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Gross profit margin for the Measurement Systems segment was 51.8% (or 54.1% adjusted to exclude the $0.4 million of purchase accounting adjustments related to the DTS acquisition), compared to 51.4% (or 48.1% adjusted to exclude the purchase accounting adjustments related to the DSI acquisition and the impact of COVID-19), in the first fiscal quarter of 2021, and 54.7% (or 56.8% adjusted to exclude the $0.5 million of purchase accounting adjustments related to the DTS acquisition) in the fourth fiscal quarter of 2021. The year-over-year increase in adjusted gross profit margin was mainly due to higher revenue coming from DTS. The sequential decrease in adjusted gross profit margin was primarily due to lower revenue and unfavorable product mix.

Impacts from the Global COVID-19 Pandemic:

As of May 10, 2022, all of the Company’s facilities are open and operational. Nonetheless, given the ongoing uncertainty concerning the magnitude and duration of the COVID-19 pandemic around the world, any ongoing economic disruption may adversely affect the Company’s business and financial results.

Near-Term Outlook:
“We expect net revenues to grow sequentially and be in the range of $88 million to $96 million for the second fiscal quarter of 2022, at constant first fiscal quarter 2022 exchange rates,” concluded Mr. Shoshani.

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