10-29-13 7:30 AM EDT | Email Article

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 28, 2013.

Revenues for the fiscal quarter ended September 28, 2013 were $602.9 million, compared to $572.8 million for the fiscal quarter ended September 29, 2012. The net earnings attributable to Vishay stockholders for the fiscal quarter ended September 28, 2013 were $32.7 million, or $0.22 per diluted share, compared to $22.3 million, or $0.15 per diluted share for the fiscal quarter ended September 29, 2012.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended September 28, 2013 include a one-time tax benefit of $2.9 million to adjust deferred tax assets subsequent to the enacting of a new tax law in Israel, which effectively increases the corporate income tax rate on certain types of income earned after January 1, 2014. Adjusted net earnings per diluted share, which excludes this item, were $0.20 for the fiscal quarter ended September 28, 2013, compared to $0.15 for the fiscal quarter ended September 29, 2012.

Commenting on the results for the third quarter 2013, Dr. Gerald Paul, President and Chief Executive Officer, stated, “Vishay’s operating margin improved compared to the previous quarter but we are disappointed about the lower than expected level of revenues. The anticipated seasonal pick up in the computing and consumer end markets during the third quarter did not materialize. Orders from distribution worldwide rapidly fell off after July.”

Dr. Gerald Paul continued, “As we announced yesterday, we are in the process of establishing a comprehensive cost reduction effort consisting of several distinct programs in order to support profitability. When fully implemented by the end of the first quarter of 2016 we expect total annualized savings of $36 million at a total cash cost of $26 million. These restructuring programs do not jeopardize our Growth Plan, which we continue to pursue by expanding manufacturing capacities in strategic product lines, by increasing our R&D and design-in efforts, by expanding our sales presence in Asia, and by acquiring specialty businesses.”

Commenting on the outlook for the fourth quarter 2013 Dr. Paul stated, “We guide for revenues of $570 to $610 million at margins in line with this level of volume.”

A conference call to discuss third quarter financial results is scheduled for Tuesday, October 29, 2013 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 68829173.

There will be a replay of the conference call from 10:30 AM ET on Tuesday, October 29, 2013 through 11:59 PM ET on Monday, November 5, 2013. 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 68829173.

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 and adjusted earnings 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 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 adjusted net earnings and adjusted net earnings per diluted share 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, product lines, market share, cost reduction programs, 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 28, June 29, September 29,
2013 2013 2012
 
Net revenues $ 602,890 $ 597,665 $ 572,781
Costs of products sold   459,670     454,808     439,227  
Gross profit 143,220 142,857 133,554
Gross margin 23.8 % 23.9 % 23.3 %
 
Selling, general, and administrative expenses 90,067 92,745 89,095
Executive compensation charge (credit)   -     (1,778 )   -  
Operating income 53,153 51,890 44,459
Operating margin 8.8 % 8.7 % 7.8 %
 
Other income (expense):
Interest expense (5,797 ) (5,824 ) (6,009 )
Other   556     784     2,726  
Total other income (expense) - net   (5,241 )   (5,040 )   (3,283 )
 
Income before taxes 47,912 46,850 41,176
 
Income taxes   15,043     15,365     18,687  
 
Net earnings 32,869 31,485 22,489
 
Less: net earnings attributable to noncontrolling interests 150 176 209
     
Net earnings attributable to Vishay stockholders $ 32,719   $ 31,309   $ 22,280  
 
Basic earnings per share attributable to Vishay stockholders $ 0.23 $ 0.22 $ 0.16
 
Diluted earnings per share attributable to Vishay stockholders $ 0.22 $ 0.21 $ 0.15
 
Weighted average shares outstanding - basic 144,937 143,603 143,273
 
Weighted average shares outstanding - diluted 151,890 151,880 150,118
 
   
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
 
Nine fiscal months ended
September 28, September 29,
2013 2012
 
Net revenues $ 1,754,809 $ 1,699,527
Costs of products sold   1,331,998     1,281,645  
Gross profit 422,811 417,882
Gross margin 24.1 % 24.6 %
 
Selling, general, and administrative expenses 273,941 262,348
Executive compensation charge (credit) (1,778 ) -
Gain on sale of property   -     (12,153 )
Operating income 150,648 167,687
Operating margin 8.6 % 9.9 %
 
Other income (expense):
Interest expense (17,107 ) (16,265 )
Other   1,455     1,940  
Total other income (expense) - net   (15,652 )   (14,325 )
 
Income before taxes 134,996 153,362
 
Income taxes   41,501     50,968  
 
Net earnings 93,495 102,394
 
Less: net earnings attributable to noncontrolling interests 536 631
   
Net earnings attributable to Vishay stockholders $ 92,959   $ 101,763  
 
Basic earnings per share attributable to Vishay stockholders $ 0.65 $ 0.67
 
Diluted earnings per share attributable to Vishay stockholders $ 0.61 $ 0.65
 
Weighted average shares outstanding - basic 144,012 150,978
 
Weighted average shares outstanding - diluted 151,471 157,770
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
 
September 28, December 31,
2013 2012
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 644,951 $ 697,595
Short-term investments 445,614 294,943
Accounts receivable, net 280,192 247,035
Inventories:
Finished goods 115,108 109,571
Work in process 198,356 177,350
Raw materials   135,394     120,728  
Total inventories 448,858 407,649
 
Deferred income taxes 18,444 24,385
Prepaid expenses and other current assets   109,081     119,656  
Total current assets 1,947,140 1,791,263
 
Property and equipment, at cost:
Land 93,267 92,348
Buildings and improvements 555,266 523,091
Machinery and equipment 2,290,660 2,163,182
Construction in progress 75,861 101,570
Allowance for depreciation   (2,112,012 )   (1,965,639 )
903,042 914,552
 
Goodwill 42,961 34,866
 
Other intangible assets, net 133,969 133,717
 
Other assets   141,452     141,879  
Total assets $ 3,168,564   $ 3,016,277  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
 
September 28, December 31,
2013 2012
(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 6 $ 6
Trade accounts payable 152,551 147,936
Payroll and related expenses 123,549 108,353
Other accrued expenses 152,501 148,660
Income taxes   14,151     7,215  
Total current liabilities 442,758 412,170
 
Long-term debt less current portion 359,874 392,931
Deferred income taxes 135,802 129,379
Other liabilities 106,249 108,600
Accrued pension and other postretirement costs   329,494     344,961  
Total liabilities   1,374,177     1,388,041  
 
Equity:
Vishay stockholders' equity
Common stock 13,514 13,114
Class B convertible common stock 1,213 1,213
Capital in excess of par value 2,052,997 1,999,901
Retained earnings (accumulated deficit) (287,719 ) (380,678 )
Accumulated other comprehensive income (loss)   9,178     (10,222 )
Total Vishay stockholders' equity   1,789,183     1,623,328  
Noncontrolling interests   5,204     4,908  
Total equity   1,794,387     1,628,236  
Total liabilities and equity $ 3,168,564   $ 3,016,277  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine fiscal months ended
September 28, September 29,
2013 2012
 
Operating activities
Net earnings $ 93,495 $ 102,394

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

Depreciation and amortization 125,611 125,149
(Gain) loss on disposal of property and equipment 118 (13,063 )
Accretion of interest on convertible debentures 2,709 2,160
Inventory write-offs for obsolescence 14,476 16,008
Other (11,986 ) 9,813

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

  (44,862 )   (56,927 )
Net cash provided by operating activities 179,561 185,534
 
Investing activities
Purchase of property and equipment (91,591 ) (86,754 )
Proceeds from sale of property and equipment 3,866 7,770
Purchase of businesses, net of cash acquired or refunded (23,034 ) (85,493 )
Purchase of short-term investments (424,940 ) (268,286 )
Maturity of short-term investments 284,814 214,047
Other investing activities   1,246     (109 )
Net cash used in investing activities (249,639 ) (218,825 )
 
Financing activities
Proceeds of long-term borrowings - 150,000
Issuance costs (4,558 ) (4,827 )
Common stock repurchase - (150,000 )
Principal payments on long-term debt and capital lease obligations (21 ) (21 )
Net proceeds (payments) on revolving credit lines 21,000 (69,000 )
Net changes in short-term borrowings (142 ) (116 )
Proceeds from stock options exercised - 174
Excess tax benefit from RSUs vested 456 -
Distributions to noncontrolling interests   (240 )   (240 )
Net cash provided by (used in) financing activities 16,495 (74,030 )
Effect of exchange rate changes on cash and cash equivalents   939     (4,505 )
 
Net decrease in cash and cash equivalents (52,644 ) (111,826 )
 
Cash and cash equivalents at beginning of period   697,595     749,088  
Cash and cash equivalents at end of period $ 644,951   $ 637,262  
 
         
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended Nine fiscal months ended

September 28,
2013

June 29,
2013

September 29,
2012

September 28,
2013

September 29,
2012

 
GAAP net earnings attributable to Vishay stockholders $ 32,719 $ 31,309 $ 22,280 $ 92,959 $ 101,763
 

Reconciling items affecting operating margin:

Executive compensation charge (credit) $ - $ (1,778 ) $ - $ (1,778 ) $ -
Gain on sale of property - - - - (12,153 )
 
 

Reconciling items affecting tax expense (benefit):

Tax effects of items above and other one-time tax expense (benefit) $ (2,867 ) $ 633 $ - $ (3,564 ) $ 4,131
         
Adjusted net earnings $ 29,852   $ 30,164   $ 22,280 $ 87,617   $ 93,741  
 
Adjusted weighted average diluted shares outstanding 151,890 151,880 150,118 151,471 157,770
 
Adjusted earnings per diluted share* $ 0.20 $ 0.20 $ 0.15 $ 0.58 $ 0.60
 

* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

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Morningstar - 2013/10/29 - Vishay Reports Results for Third Quarter 2013
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