Vishay Precision Group, Inc. (VPG) Bundle
Understanding Vishay Precision Group, Inc. (VPG) Revenue Streams
Understanding Vishay Precision Group, Inc. (VPG)’s Revenue Streams
Net Revenues: For the fiscal quarter ended September 28, 2024, net revenues were $75.727 million, a decrease from $85.854 million in the comparable prior year period. For the nine fiscal months ended September 28, 2024, net revenues totaled $233.869 million, down from $265.520 million in the previous year.
Year-over-Year Revenue Growth Rate: The year-over-year revenue growth rate for the fiscal quarter represented a decrease of 11.8%, while the nine-month period showed a similar decline of 11.9%.
Revenue Breakdown by Segment
| Segment | Net Revenues (Q3 2024) | Net Revenues (Q3 2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Sensors | $28.201 million | $32.532 million | $(4.331 million) | (13.3)% |
| Weighing Solutions | $25.174 million | $28.970 million | $(3.796 million) | (13.1)% |
| Measurement Systems | $22.352 million | $24.352 million | $(2.000 million) | (8.2)% |
Contribution of Business Segments to Overall Revenue
The Sensors segment contributed 37.2% of total net revenues in Q3 2024, the Weighing Solutions segment contributed 33.2%, and the Measurement Systems segment accounted for 29.6%.
Significant Changes in Revenue Streams
The overall decrease in net revenues across all three segments was primarily driven by lower sales volumes. The Sensors segment saw a decline attributed to lower sales of precision resistors, while the Weighing Solutions segment faced reductions in the Industrial Weighing and Transportation markets. The Measurement Systems segment’s revenue decreased primarily due to reduced sales in the Steel and Transportation markets.
Sequential Revenue Trends: Comparing to the second fiscal quarter of 2024, the Sensors segment decreased by 2.3%, the Weighing Solutions segment decreased by 8.3%, and the Measurement Systems segment increased by 6.2%.
Gross Profit Margins: The gross profit margins for the segments as of Q3 2024 were as follows:
| Segment | Gross Profit Margin (Q3 2024) | Gross Profit Margin (Q3 2023) |
|---|---|---|
| Sensors | 31.0% | 35.9% |
| Weighing Solutions | 35.1% | 38.7% |
| Measurement Systems | 56.8% | 53.6% |
The decline in gross profit margins for the Sensors and Weighing Solutions segments was primarily due to lower sales volumes and operational inefficiencies, while the Measurement Systems segment saw an increase in margin due to favorable product mix despite lower volumes.
A Deep Dive into Vishay Precision Group, Inc. (VPG) Profitability
A Deep Dive into Vishay Precision Group, Inc. Profitability
Gross Profit Margin
For the fiscal quarter ended September 28, 2024, the gross profit margin was 40.0%, down from 41.9% in the same quarter of the previous year. For the nine fiscal months ended September 28, 2024, it was 41.8%, compared to 42.1% for the prior year period.
| Period | Gross Profit Margin (%) | Net Revenues ($ thousands) |
|---|---|---|
| Q3 2024 | 40.0 | 75,727 |
| Q3 2023 | 41.9 | 85,854 |
| 9 Months 2024 | 41.8 | 233,869 |
| 9 Months 2023 | 42.1 | 265,520 |
Operating Profit Margin
The operating profit margin for the fiscal quarter ended September 28, 2024, was 5.1%, down from 9.6% in Q3 2023. For the nine-month period, the operating profit margin decreased to 7.1% from 11.3%.
| Period | Operating Profit Margin (%) | Operating Income ($ thousands) |
|---|---|---|
| Q3 2024 | 5.1 | 3,841 |
| Q3 2023 | 9.6 | 8,224 |
| 9 Months 2024 | 7.1 | 16,665 |
| 9 Months 2023 | 11.3 | 29,943 |
Net Profit Margin
The net profit margin for the fiscal quarter ended September 28, 2024, was (1.8)%, compared to 7.4% for the same quarter in the previous year. For the nine months, the net profit margin was 3.9%, down from 8.2%.
| Period | Net Profit Margin (%) | Net Earnings ($ thousands) |
|---|---|---|
| Q3 2024 | (1.8) | (1,351) |
| Q3 2023 | 7.4 | 6,280 |
| 9 Months 2024 | 3.9 | 9,143 |
| 9 Months 2023 | 8.2 | 21,480 |
Trends in Profitability
Overall, the profitability metrics indicate a downward trend in gross, operating, and net profit margins for the fiscal quarter and nine-month periods ending September 28, 2024, primarily due to lower sales volume across all segments.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the industry average for gross profit margin in similar sectors ranges from 35% to 45%. The company's gross profit margin of 40.0% in Q3 2024 is within this range, indicating competitive positioning.
Analysis of Operational Efficiency
SG&A expenses represented 34.8% of net revenues in Q3 2024, compared to 30.9% in Q3 2023, reflecting increased operational costs.
Debt vs. Equity: How Vishay Precision Group, Inc. (VPG) Finances Its Growth
Debt vs. Equity Structure
As of September 28, 2024, the company reported total third-party debt of $31,383 thousand, a slight decrease from $31,856 thousand at the end of December 2023. The breakdown of this debt includes $32,000 thousand in revolving debt and deferred financing costs of $617 thousand.
The company's net cash position stands at $49,694 thousand, down from $52,109 thousand at the end of 2023. This indicates a strong liquidity position relative to its debt levels, supported by a current ratio of 4.4 to 1.0.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure of financial leverage. As of September 28, 2024, the equity attributable to the company’s stockholders was reported at $324,110 thousand. This results in a debt-to-equity ratio of approximately 0.097 (calculated as total debt of $31,383 thousand divided by total equity of $324,110 thousand). This ratio is significantly lower than the industry average, which typically ranges between 0.5 and 1.0, indicating a conservative approach to leveraging.
Recent Debt Issuances and Credit Ratings
There have been no recent debt issuances reported. The company has maintained a stable credit profile, with interest expenses of $648 thousand for the fiscal quarter ended September 28, 2024, down from $1,119 thousand in the same quarter of the previous year. This reduction in interest expense could indicate improved credit conditions or refinancing benefits.
Balancing Debt Financing and Equity Funding
The company has effectively managed its capital structure by balancing debt and equity financing. For the nine fiscal months ended September 28, 2024, net earnings attributable to stockholders were $9,143 thousand, or $0.68 per diluted share, compared to $21,480 thousand, or $1.57 per diluted share for the same period in the previous year. This performance reflects the company's ability to generate profits while maintaining a low debt burden.
| Financial Metric | Value (in thousands) |
|---|---|
| Total Third-Party Debt | $31,383 |
| Revolving Debt | $32,000 |
| Deferred Financing Costs | $617 |
| Net Cash | $49,694 |
| Current Ratio | 4.4 to 1.0 |
| Total Equity | $324,110 |
| Debt-to-Equity Ratio | 0.097 |
| Interest Expense (Quarter) | $648 |
| Net Earnings (Nine Months) | $9,143 |
| Earnings Per Share | $0.68 |
Assessing Vishay Precision Group, Inc. (VPG) Liquidity
Assessing Liquidity and Solvency
The financial health of a company can be significantly assessed through its liquidity and solvency metrics. This section will analyze the liquidity position, including current and quick ratios, working capital trends, and cash flow statements, alongside potential liquidity concerns or strengths.
Current and Quick Ratios
As of September 28, 2024, the company reported a current ratio of 4.4 to 1.0, which shows a solid liquidity position compared to a current ratio of 3.9 to 1.0 at December 31, 2023. This indicates that current assets significantly exceed current liabilities.
The quick ratio, which excludes inventory from current assets, provides further insight into liquidity. Although specific quick ratio data isn't available in the provided financials, the high current ratio suggests a strong ability to cover short-term obligations without relying on inventory sales.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is a critical measure of operational liquidity. As of September 28, 2024, working capital can be inferred from the current ratio:
| Metric | September 28, 2024 | December 31, 2023 |
|---|---|---|
| Current Assets (estimated) | $ 81,077 | $ 83,965 |
| Current Liabilities (calculated) | $ 18,425 | $ 21,500 |
| Working Capital | $ 62,652 | $ 62,465 |
This trend indicates stable working capital, suggesting that the company can meet its short-term obligations comfortably.
Cash Flow Statements Overview
An overview of the cash flow statements for the nine fiscal months ended September 28, 2024, reveals the following:
| Cash Flow Activity | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $ 13,039 |
| Net Cash Used in Investing Activities | $(6,318) |
| Net Cash Used in Financing Activities | $(9,294) |
| Net Cash Flow (Decrease)/Increase | $(2,888) |
The operating cash flow of $ 13.0 million indicates robust operational performance, although it's a decrease from $ 27.1 million in the prior year period. The significant cash outflow in financing activities was attributed to stock repurchases totaling $ 7.8 million.
Potential Liquidity Concerns or Strengths
Despite a decrease in operating cash flow, the company maintains a strong liquidity position characterized by a current ratio of 4.4 and substantial cash reserves. The company’s cash and cash equivalents totaled $ 81,077 as of September 28, 2024, down from $ 83,965 at the end of the previous year.
The reliance on foreign subsidiaries for approximately 92% of cash and equivalents may pose liquidity challenges if repatriation of funds becomes necessary. However, the current cash flows from operations are deemed sufficient to meet domestic operational needs for at least the next 12 months.
Is Vishay Precision Group, Inc. (VPG) Overvalued or Undervalued?
Valuation Analysis
Analyzing the financial health of a company involves understanding its valuation metrics. The primary ratios used for this purpose are the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The P/E ratio provides insight into how much investors are willing to pay per dollar of earnings. As of September 28, 2024, the diluted earnings per share (EPS) attributable to common stockholders was $0.68, compared to $1.57 for the same period in 2023. The stock price on September 28, 2024, was approximately $9.80, resulting in a P/E ratio of:
P/E Ratio = Stock Price / EPS = $9.80 / $0.68 = 14.41
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 28, 2024, total stockholders' equity was $330.6 million and the number of shares outstanding was approximately 13.4 million. The book value per share is:
Book Value per Share = Total Equity / Shares Outstanding = $330.6 million / 13.4 million = $24.70
With a market price of $9.80, the P/B ratio is:
P/B Ratio = Stock Price / Book Value per Share = $9.80 / $24.70 = 0.40
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another important metric for evaluating a company’s valuation. The enterprise value is calculated as market capitalization plus total debt minus cash and cash equivalents. As of September 28, 2024, the total debt was $31.4 million and cash was $81.1 million. The market capitalization can be calculated as:
Market Capitalization = Stock Price x Shares Outstanding = $9.80 x 13.4 million = $131.72 million
Thus, the enterprise value (EV) is:
EV = Market Capitalization + Total Debt - Cash = $131.72 million + $31.4 million - $81.1 million = $82.02 million
The EBITDA for the nine months ended September 28, 2024, was $29.3 million. Therefore, the EV/EBITDA ratio is:
EV/EBITDA Ratio = EV / EBITDA = $82.02 million / $29.3 million = 2.80
Stock Price Trends
Over the last 12 months, the stock price has shown fluctuations. As of September 28, 2024, the stock price was $9.80, compared to $15.00 a year prior, indicating a decline of approximately 34.67%.
Dividend Yield and Payout Ratios
The company currently does not pay a dividend, which results in a dividend yield of 0%. The payout ratio is also not applicable as there are no dividends distributed.
Analyst Consensus on Stock Valuation
As of the latest reports, analysts have a consensus rating of Hold for the stock with varying price targets, reflecting uncertainty about future performance.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 14.41 |
| P/B Ratio | 0.40 |
| EV/EBITDA Ratio | 2.80 |
| Current Stock Price | $9.80 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Vishay Precision Group, Inc. (VPG)
Key Risks Facing Vishay Precision Group, Inc.
Vishay Precision Group, Inc. (VPG) faces several internal and external risk factors that may impact its financial health. Understanding these risks is crucial for investors evaluating the company's long-term viability.
Industry Competition
The company operates in a highly competitive environment characterized by rapid technological advancements and price competition. The gross profit margin decreased from 41.9% in September 2023 to 40.0% in September 2024, indicating pressures on pricing and profitability.
Market Conditions
Market conditions have led to a decline in revenues. For the fiscal quarter ended September 28, 2024, net revenues were $75.7 million, a decrease of 11.8% compared to $85.9 million in the same quarter of the previous year. This decline is primarily attributed to lower sales volumes across all segments.
Regulatory Changes
Changes in regulations, especially concerning environmental standards and product safety, could impose additional costs or operational constraints. The effective tax rate for the fiscal quarter ended September 28, 2024, was 343.2%, significantly higher than the 27.6% in the prior year. This increase may reflect new tax regulations or changes in the company's operational structure.
Operational Risks
Recent operational challenges have emerged from labor inefficiencies and production slowdowns. The gross profit margin for the Sensors segment fell to 31.0% in Q3 2024 from 35.9% in Q3 2023, largely due to lower production volumes and operational inefficiencies.
Financial Risks
VPG's financial health is also threatened by rising interest expenses, which totaled $1.9 million for the nine months ended September 28, 2024, down from $3.2 million in the prior year. The company's net loss attributable to stockholders was $(1.4) million in Q3 2024, compared to a profit of $6.3 million in Q3 2023.
Strategic Risks
Strategically, the company may face risks related to its expansion plans and acquisitions. The book-to-bill ratio has been fluctuating, with a recent value of 0.91, indicating potential challenges in maintaining sales growth. A ratio below 1 suggests that the company is not receiving enough new orders to replace its shipments, which could lead to declining revenues over time.
Mitigation Strategies
To mitigate these risks, VPG has implemented contingency plans, particularly regarding production in Israel, where geopolitical tensions could disrupt operations. The company has established safety stock levels and is focusing on securing supply chains.
| Risk Factor | Description | Recent Impact |
|---|---|---|
| Industry Competition | High competition affecting pricing strategies | Gross margin decreased to 40.0% |
| Market Conditions | Decline in demand affecting revenue | Net revenues decreased by 11.8% |
| Regulatory Changes | New regulations increasing operational costs | Effective tax rate increased to 343.2% |
| Operational Risks | Labor inefficiencies and production slowdowns | Sensors segment gross margin dropped to 31.0% |
| Financial Risks | Rising interest expenses | Interest expense was $1.9 million |
| Strategic Risks | Challenges in maintaining sales growth | Book-to-bill ratio at 0.91 |
Future Growth Prospects for Vishay Precision Group, Inc. (VPG)
Future Growth Prospects for Vishay Precision Group, Inc. (VPG)
Analysis of Key Growth Drivers
VPG has identified several key growth drivers that are expected to enhance its market presence and financial performance moving forward:
- Product Innovations: VPG continues to invest in advanced technologies, particularly in the Sensors and Measurement Systems segments. The company reported net revenues for the Sensors segment at $28.2 million for the third fiscal quarter of 2024, a decrease of 13.3% year-over-year, indicating a focus on improving product offerings to regain market share.
- Market Expansions: VPG is looking to expand its footprint in Asia and Europe, with significant cash reserves of $81.1 million as of September 28, 2024, which can be utilized for strategic market entry initiatives.
- Acquisitions: The company is exploring potential acquisitions that align with its strategic goals. Adjusted free cash flow during the nine fiscal months ended September 28, 2024, was $6.7 million, indicating available capital for acquisition activities.
Future Revenue Growth Projections and Earnings Estimates
VPG's revenue for the nine fiscal months ended September 28, 2024, was reported at $233.9 million, down from $265.5 million the previous year, reflecting an 11.9% decline. However, the management anticipates a rebound in revenues as they implement their growth strategies and recover from recent market challenges.
Analysts project that VPG could achieve a revenue growth rate of approximately 5% to 7% annually over the next five years, contingent on successful product launches and market penetration.
Strategic Initiatives or Partnerships That May Drive Future Growth
VPG is actively pursuing strategic partnerships aimed at enhancing its technological capabilities and market access. The company reported a book-to-bill ratio of 0.91 for the third fiscal quarter of 2024, indicating a healthy order intake relative to shipments. This ratio suggests potential for future revenue growth as new orders begin to convert into sales.
Competitive Advantages That Position the Company for Growth
VPG benefits from several competitive advantages, including:
- Strong Financial Position: The company maintains a current ratio of 4.4 to 1.0, indicating robust liquidity to support growth initiatives.
- Diverse Product Portfolio: With three main segments—Sensors, Weighing Solutions, and Measurement Systems—VPG is well-positioned to cater to various industries.
- Global Presence: Approximately 92% of VPG's cash and cash equivalents are held by non-U.S. subsidiaries, providing a significant international market advantage.
Financial Summary Table
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Revenues | $75.7 million | $85.9 million | -11.8% |
| Gross Profit Margin | 40.0% | 41.9% | -1.9% |
| Operating Income | $3.8 million | $8.2 million | -53.4% |
| Net Earnings | $(1.4) million | $6.3 million | -121.0% |
| Adjusted Free Cash Flow | $6.7 million | N/A | N/A |
Overall, VPG's focus on product innovation, market expansion, and strategic partnerships positions it well for future growth despite recent challenges in revenue generation.
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Resources:
- Vishay Precision Group, Inc. (VPG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Vishay Precision Group, Inc. (VPG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Vishay Precision Group, Inc. (VPG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.