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Vishay Reports Results for Third Quarter 2012

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MALVERN, Pa.--(BUSINESS WIRE)--

Vishay Intertechnology, Inc. (NYSE: VSH), one of the world's largest manufacturers of discrete semiconductors and passive components, today announced its results for the fiscal quarter and nine fiscal months ended September 29, 2012.

Revenues for the fiscal quarter ended September 29, 2012 were $572.8 million, compared to $637.6 million for the fiscal quarter ended October 1, 2011. The net earnings attributable to Vishay stockholders for the fiscal quarter ended September 29, 2012 were $22.3 million, or $0.15 per diluted share, compared to $50.5 million, or $0.31 per diluted share for the fiscal quarter ended October 1, 2011.

Revenues for the nine fiscal months ended September 29, 2012 were $1,699.5 million, compared to $2,042.6 million for the nine fiscal months ended October 1, 2011. The net earnings attributable to Vishay stockholders for the nine fiscal months ended September 29, 2012 were $101.8 million, or $0.65 per diluted share, compared to $207.9 million, or $1.22 per diluted share for the nine fiscal months ended October 1, 2011.

Net earnings attributable to Vishay stockholders for the nine fiscal months ended September 29, 2012 and prior year periods include various items affecting comparability, as listed on the attached reconciliation schedule. Adjusted net earnings per diluted share, which exclude these items, were $0.15 and $0.60 for the fiscal quarter and nine fiscal months ended September 29, 2012, respectively, and $0.32 and $1.30 for the fiscal quarter and nine fiscal months ended October 1, 2011, respectively.

Commenting on the results for the third quarter of 2012, Dr. Gerald Paul, President and Chief Executive Officer, stated, “Over the course of the third quarter many of our end markets deteriorated substantially, in particular computing and consumer, which resulted in unexpectedly low orders from Asian distribution. Nonetheless the operating margin was in line with our business model. Selling, general, and administrative expenses as well as manufacturing fixed costs were kept well under control, while the quarter was burdened by temporary inefficiencies related to the volume drop and an inventory reduction.”

Dr. Paul continued, “Our current anticipation for the profitability for the full year is substantially lower than previously anticipated, which resulted in a significant shift in the estimated mix of income among our various taxing jurisdictions. As a consequence, our normalized tax rate for the year increased to 33% resulting in a very high effective tax rate for the third quarter impacting EPS.”

Commenting on Vishay's Growth Plan, Dr. Paul stated, “Despite fast changes in the economic environment, Vishay is in a position to continue to steadily pursue its Growth Plan. Since the end of 2009 we increased our technical staff in research and development as well as in product engineering by 15%, while managing to reduce our total fixed costs. We intend to continue on this path. We are also proactively expanding critical manufacturing capacities and increasing our technical sales force in Asia to better penetrate the local industrial markets. As part of our Growth Plan we continue to actively pursue small to mid-size acquisitions of niche businesses.”

Commenting on the outlook for the fourth quarter of 2012, Dr. Paul remarked, “Based on our low book to bill, we are currently anticipating revenues to fall between $500 and $540 million at accordingly lower margins compared to the third quarter of 2012.”

The Company expects to file its Quarterly Report on Form 10-Q for the third fiscal quarter of 2012 with the Securities and Exchange Commission after the close of the market on Tuesday, October 30, 2012. This financial report will be available at ir.vishay.com.

A conference call to discuss third quarter financial results is scheduled for Tuesday, October 30, 2012 at 9:00 AM ET. The dial-in number for the conference call is 877-589-6174 (+1 706-643-1406 if calling from outside the United States or Canada) and the conference ID is 32943484. There will be a replay of the conference call from 10:30 AM ET on Tuesday, October 30, 2012 through 11:59 PM ET on Monday, November 5, 2012. The telephone number for the replay is 800-585-8367 (+1 855-859-2056 or 404-537-3406 if calling from outside the United States or Canada) and the access code is 32943484.

There will also be a live audio webcast of the conference call. This can be accessed directly from the Investor Relations section of the Vishay website at http://ir.vishay.com.

About Vishay

Vishay Intertechnology, Inc., a Fortune 1,000 Company listed on the NYSE (VSH), is one of the world's largest manufacturers of discrete semiconductors (diodes, MOSFETs, and infrared optoelectronics) and passive electronic components (resistors, inductors, and capacitors). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, power supplies, and medical markets. Vishay's product innovations, successful acquisition strategy, and "one-stop shop" service have made it a global industry leader. Vishay can be found on the Internet at http://www.vishay.com.

This press release includes certain financial measures which are not recognized in accordance with generally accepted accounting principles (“GAAP”), including adjusted net earnings (loss) and adjusted net earnings (loss) per share, which are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP measures supplement our GAAP measures of performance and should not be viewed as an alternative to GAAP measures of performance. Non-GAAP measures such as adjusted net earnings and adjusted earnings per diluted share do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that these measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Reconciling items to arrive at adjusted net earnings represent significant charges or credits that are important to an understanding to the Company's intrinsic operations. These reconciling items are indicated on the accompanying reconciliation schedule and are more fully described in the Company's financial statements presented in its annual report on Form 10-K and its quarterly reports presented on Forms 10-Q.

Statements contained herein that relate to the Company's future performance, including statements with respect to forecasted revenues, margins, cash generation, internal growth and acquisition activity, and the general state of the Company, are forward-looking statements within the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should,” or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements 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; difficulties in implementing our cost reduction strategies; changes in foreign currency exchange rates; competition and technological changes in our industries; difficulties in new product development; difficulties in identifying suitable acquisition candidates, consummating a transaction on terms which we consider acceptable, and integration and performance of acquired businesses; uncertainty related to the effects of changes in foreign currency exchange rates; and other factors affecting our operations that are set forth in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. 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 INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
     
Fiscal quarters ended
September 29, June 30, October 1,
  2012     2012     2011  
 
Net revenues $ 572,781 $ 588,199 $ 637,649
Costs of products sold   439,227     440,580     470,172  
Gross profit 133,554 147,619 167,477
Gross margin 23.3 % 25.1 % 26.3 %
 
Selling, general, and administrative expenses 89,095 86,889 90,271
Gain on sale of property - (12,153 ) -
Executive compensation charge   -     -     1,873  
Operating income 44,459 72,883 75,333
Operating margin 7.8 % 12.4 % 11.8 %
 
Other income (expense):
Interest expense (6,009 ) (5,539 ) (5,311 )
Other   2,726     (2,094 )   1,790  
Total other income (expense) - net   (3,283 )   (7,633 )   (3,521 )
 
Income before taxes 41,176 65,250 71,812
 
Income taxes   18,687     19,420     21,120  
 
Net earnings 22,489 45,830 50,692
 
Less: net earnings attributable to noncontrolling interests 209 159 205
     
Net earnings attributable to Vishay stockholders $ 22,280   $ 45,671   $ 50,487  
 
Basic earnings per share attributable to Vishay stockholders $ 0.16 $ 0.30 $ 0.32
 
Diluted earnings per share attributable to Vishay stockholders $ 0.15 $ 0.29 $ 0.31
 
Weighted average shares outstanding - basic 143,273 152,462 157,149
 
Weighted average shares outstanding - diluted 150,118 159,249 163,808
 
 
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
   
Nine fiscal months ended
September 29, October 1,
2012 2011
 
Net revenues $ 1,699,527 $ 2,042,638
Costs of products sold   1,281,645     1,448,308  
Gross profit 417,882 594,330
Gross margin 24.6 % 29.1 %
 
Selling, general, and administrative expenses 262,348 275,532
Gain on sale of property (12,153 ) -
Executive compensation charges   -     5,762  
Operating income 167,687 313,036
Operating margin 9.9 % 15.3 %
 
Other income (expense):
Interest expense (16,265 ) (13,989 )
Other   1,940     1,255  
Total other income (expense) - net   (14,325 )   (12,734 )
 
Income before taxes 153,362 300,302
 
Income taxes   50,968     91,507  
 
Net earnings 102,394 208,795
 
Less: net earnings attributable to noncontrolling interests 631 926
   
Net earnings attributable to Vishay stockholders $ 101,763   $ 207,869  
 
Basic earnings per share attributable to Vishay stockholders $ 0.67 $ 1.29
 
Diluted earnings per share attributable to Vishay stockholders $ 0.65 $ 1.22
 
Weighted average shares outstanding - basic 150,978 161,061
 
Weighted average shares outstanding - diluted 157,770 170,039
 
 
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
   
September 29, December 31,
  2012     2011  
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 637,262 $ 749,088
Short-term investments 303,872 249,139
Accounts receivable, net 278,092 270,970
Inventories:
Finished goods 110,293 104,478
Work in process 186,922 181,354
Raw materials   131,223     131,795  
Total inventories 428,438 417,627
 
Deferred income taxes 25,005 24,632
Prepaid expenses and other current assets   121,851     119,220  
Total current assets 1,794,520 1,830,676
 
Property and equipment, at cost:
Land 91,895 91,507
Buildings and improvements 514,036 493,550
Machinery and equipment 2,125,322 2,079,395
Construction in progress 86,771 94,717
Allowance for depreciation   (1,931,633 )   (1,851,264 )
886,391 907,905
 
Goodwill 34,866 9,051
 
Other intangible assets, net 136,726 103,927
 
Other assets   135,671     142,171  
Total assets $ 2,988,174   $ 2,993,730  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
 
September 29, December 31,
  2012     2011  
(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 5 $ 13
Trade accounts payable 135,397 154,942
Payroll and related expenses 103,240 109,833
Other accrued expenses 158,883 161,119
Income taxes   31,007     13,881  
Total current liabilities 428,532 439,788
 
Long-term debt less current portion 389,040 399,054
Deferred income taxes 128,728 110,356
Other liabilities 111,097 117,235
Accrued pension and other postretirement costs   298,502     319,136  
Total liabilities   1,355,899     1,385,569  
 
Equity:
Vishay stockholders' equity
Common stock 13,114 14,374
Class B convertible common stock 1,213 1,345
Capital in excess of par value 1,999,906 2,086,925
Retained earnings (accumulated deficit) (401,653 ) (503,416 )
Accumulated other comprehensive income (loss)   14,149     3,778  
Total Vishay stockholders' equity   1,626,729     1,603,006  
Noncontrolling interests   5,546     5,155  
Total equity   1,632,275     1,608,161  
Total liabilities and equity $ 2,988,174   $ 2,993,730  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine fiscal months ended
September 29, October 1,
  2012     2011  
 
 
Operating activities
Net earnings $ 102,394 $ 208,795

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization 125,149 135,275
(Gain) loss on disposal of property and equipment (13,063 ) (1,073 )
Accretion of interest on convertible debentures 2,160 1,448
Inventory write-offs for obsolescence 16,008 15,434
Other 9,813 2,275

Changes in operating assets and liabilities, net of effects of businesses acquired

  (56,927 )   (74,379 )
Net cash provided by operating activities 185,534 287,775
 
Investing activities
Purchase of property and equipment (86,754 ) (89,708 )
Proceeds from sale of property and equipment 7,770 1,956
Purchase of businesses, net of cash acquired or refunded (85,493 ) (19,335 )
Purchase of short-term investments (268,286 ) (497,258 )
Maturity of short-term investments 214,047 158,785
Other investing activities   (109 )   2,472  
Net cash used in investing activities (218,825 ) (443,088 )
 
Financing activities
Proceeds of long-term borrowings 150,000 150,000
Issuance costs (4,827 ) (4,429 )
Common stock repurchase (150,000 ) (150,000 )
Principal payments on long-term debt and capital lease obligations (21 ) (670 )
Net proceeds (payments) on revolving credit lines (69,000 ) (60,000 )
Net changes in short-term borrowings (116 ) 28
Proceeds from stock options exercised 174 9,675
Excess tax benefit from stock options exercised - 555
Distributions to noncontrolling interests   (240 )   (500 )
Net cash used in financing activities (74,030 ) (55,341 )
Effect of exchange rate changes on cash and cash equivalents   (4,505 )   18,377  
 
Net decrease in cash and cash equivalents (111,826 ) (192,277 )
 
Cash and cash equivalents at beginning of period   749,088     897,338  
Cash and cash equivalents at end of period $ 637,262   $ 705,061  
 
 
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)        
  Fiscal quarters ended Nine fiscal months ended
September 29, June 30, October 1, September 29, October 1,
2012 2012 2011 2012 2011
 
GAAP net earnings attributable to Vishay stockholders $ 22,280 $ 45,671 $ 50,487 $ 101,763 $ 207,869
 

Reconciling items affecting operating margin:

Gain on sale of property $ - $ (12,153 ) $ - $ (12,153 ) $ -
Executive compensation charges - - 1,873 - 5,762
 

Reconciling items affecting tax expense (benefit):

Tax effects of items above and other one-time tax expense (benefit) $ - $ 4,131 $ (684 ) $ 4,131 $ 7,921
         
Adjusted net earnings $ 22,280 $ 37,649   $ 51,676   $ 93,741   $ 221,552
 
Adjusted weighted average diluted shares outstanding 150,118 159,249 163,808 157,770 170,039
 
Adjusted earnings per diluted share* $ 0.15 $ 0.24 $ 0.32 $ 0.60 $ 1.30
 
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

Vishay Intertechnology, Inc.
Peter G. Henrici
Senior Vice President, Corporate Communications
+1-610-644-1300


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