VISHAY REPORTS RESULTS FOR THIRD QUARTER 2014

 

MALVERN, PENNSYLVANIA – October 28, 2014 – 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 27, 2014.

Revenues for the fiscal quarter ended September 27, 2014 were $638.2 million, compared to $602.9 million for the fiscal quarter ended September 28, 2013.  The net earnings attributable to Vishay stockholders for the fiscal quarter ended September 27, 2014 were $27.0 million, or $0.17 per diluted share, compared to $32.7 million, or $0.22 per diluted share for the fiscal quarter ended September 28, 2013.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended September 27, 2014 include restructuring and severance costs of $3.5 million and U.S. pension settlement charges of $15.6 million.  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 taxes subsequent to the enacting of a new tax law in Israel.  Adjusted net earnings per diluted share, which exclude these items, were $0.26 and $0.20 for the fiscal quarters ended September 27, 2014 and September 28, 2013, respectively.

Commenting on the results for the third quarter 2014, Dr. Gerald Paul, President and Chief Executive Officer, stated, "Revenues in the third quarter 2014 were slightly below the mid-point of our guidance. A strengthening US dollar and lower than expected shipments to distribution impacted the top line. In the third quarter, Asian distribution, as in previous years, reduced its orders placed with Vishay compared to previous quarters. At the same time, Vishay achieved a contributive margin for the quarter in its traditional range while keeping its fixed costs under control resulting overall in acceptable margins."

Commenting on Vishay's Merger and Acquisition activity, Marc Zandman, Vishay's Executive Chairman and Chief Business Development Officer, stated, "In September, we acquired an 88.95% interest in Taiwan-based Capella Microsystems, Inc. through a successful tender offer.  We expect to acquire the remaining shares through a merger, which was approved by Capella's shareholders on October 24, 2014. We anticipate the merger to close by the end of January 2015.  Capella is a leading fabless IC design company for optical sensors. Its strong market position for optical sensors complements Vishay's current capabilities in this high growth field very well. Capella is expected to grow as a business within Vishay while strengthening Vishay's position for optical sensors by adding in-house IC design capability and thus ensuring further growth in the mid- to long-term for our Opto business."

Commenting on the outlook Dr. Paul stated, "For the fourth quarter 2014 we anticipate a temporary slow-down of shipments to distribution and guide for revenues of $600 to $640 million at gross margins in line with this volume."

A conference call to discuss third quarter financial results is scheduled for Tuesday, October 28, 2014 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 6676040.

There will be a replay of the conference call from 12:00 PM ET on Tuesday, October 28, 2014 through 11:59 PM ET on Monday, November 3, 2014. 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 6676040.

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 U.S. generally accepted accounting principles ("GAAP"), including adjusted net earnings;  adjusted earnings per share; adjusted operating margin; earnings before interest, taxes, depreciation and amortization ("EBITDA"); adjusted EBITDA; and adjusted EBITDA margin; 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 or liquidity and should not be viewed as an alternative to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, adjusted operating margin, EBITDA, adjusted EBITDA; and adjusted EBITDA margin 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 such measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Although the term "EBITDA" is not defined in GAAP, the measure is derived using various line items measured in accordance with GAAP.  Reconciling items to arrive at adjusted net earnings and adjusted operating margin represent significant charges or credits that are important to understanding the Company's intrinsic operations. Reconciling items to calculate adjusted EBITDA represent those same items used in computing adjusted net earnings, as relevant.  Furthermore, the presented calculation of adjusted EBITDA is substantially similar to, but not identical to, a measure used in the calculation of financial ratios required for covenant compliance under Vishay's revolving credit facility.  These reconciling items are indicated on the accompanying reconciliation schedules 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 results, 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, including with respect to the pending Capella acquisition; 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 27, 2014				June 28, 2014				September 28, 2013
Net revenues		$	638,211			$	641,929				602,890
Costs of products sold			479,819				477,836				459,670
Gross profit			158,392				164,093				143,220
Gross margin			24.8	%			25.6	%			23.8	%
Selling, general, and administrative expenses			93,837				97,156				90,067
Restructuring and severance costs			3,508				9,014				-
U.S. pension settlement charges			15,588				-				-
Operating income			45,459				57,923				53,153
Operating margin			7.1	%			9.0	%			8.8	%
Other income (expense):
Interest expense			(6,167	)			(5,821	)			(5,797	)
Other			(474	)			208				556
Total other income (expense) - net			(6,641	)			(5,613	)			(5,241	)
Income before taxes			38,818				52,310				47,912
Income taxes			11,841				16,478				15,043
Net earnings			26,977				35,832				32,869
Less: net earnings attributable to noncontrolling interests			6				190				150
Net earnings attributable to Vishay stockholders		$	26,971			$	35,642			$	32,719
Basic earnings per share attributable to Vishay stockholders		$	0.18			$	0.24			$	0.23
Diluted earnings per share attributable to Vishay stockholders		$	0.17			$	0.23			$	0.22
Weighted average shares outstanding - basic			147,569				147,567				145,044
Weighted average shares outstanding - diluted			155,546				154,322				151,890
Cash dividends per share		$	0.06			$	0.06			$	-

 

---

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
		Nine fiscal months ended
		September 27, 2014				September 28, 2013
Net revenues		$	1,882,518			$	1,754,809
Costs of products sold			1,414,750				1,331,998
Gross profit			467,768				422,811
Gross margin			24.8	%			24.1	%
Selling, general, and administrative expenses			287,300				273,941
Restructuring and severance costs			18,926				-
U.S. pension settlement charges			15,588				-
Executive compensation charge (credit)			-				(1,778	)
Operating income			145,954				150,648
Operating margin			7.8	%			8.6	%
Other income (expense):
Interest expense			(17,968	)			(17,107	)
Other			1,046				1,455
Total other income (expense) - net			(16,922	)			(15,652	)
Income before taxes			129,032				134,996
Income taxes			40,259				41,501
Net earnings			88,773				93,495
Less: net earnings attributable to noncontrolling interests			350				536
Net earnings attributable to Vishay stockholders		$	88,423			$	92,959
Basic earnings per share attributable to Vishay stockholders		$	0.60			$	0.65
Diluted earnings per share attributable to Vishay stockholders		$	0.57			$	0.61
Weighted average shares outstanding - basic			147,565				144,119
Weighted average shares outstanding - diluted			154,142				151,471
Cash dividends per share		$	0.18			$	-

 

---

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
		September 27, 2014				December 31, 2013
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	575,302			$	640,348
Short-term investments			538,109				511,231
Accounts receivable, net			303,923				274,083
Inventories:
Finished goods			124,271				109,617
Work in process			195,439				197,600
Raw materials			130,675				125,491
Total inventories			450,385				432,708
Deferred income taxes			21,122				21,716
Prepaid expenses and other current assets			107,267				100,594
Total current assets			1,996,108				1,980,680
Property and equipment, at cost:
Land			92,980				93,685
Buildings and improvements			564,514				560,418
Machinery and equipment			2,368,291				2,340,778
Construction in progress			67,428				95,278
Allowance for depreciation			(2,207,101	)			(2,163,540	)
			886,112				926,619
Goodwill			147,436				43,132
Other intangible assets, net			193,913				129,951
Other assets			152,953				156,757
Total assets		$	3,376,522			$	3,237,139

 

 

---

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
		September 27, 2014				December 31, 2013
		(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks		$	17			$	2
Trade accounts payable			158,021				163,894
Payroll and related expenses			138,708				120,997
Other accrued expenses			156,699				146,670
Income taxes			16,536				17,502
Total current liabilities			469,981				449,065
Long-term debt less current portion			440,880				364,911
Deferred income taxes			181,710				157,640
Other liabilities			101,147				99,426
Accrued pension and other postretirement costs			269,325				287,901
Total liabilities			1,463,043				1,358,943
Redeemable convertible debentures			91,092				-
Equity:
Vishay stockholders' equity
Common stock			13,532				13,520
Class B convertible common stock			1,213				1,213
Capital in excess of par value			1,964,277				2,054,087
Retained earnings (accumulated deficit)			(195,837	)			(257,698	)
Accumulated other comprehensive income (loss)			12,064				61,634
Total Vishay stockholders' equity			1,795,249				1,872,756
Noncontrolling interests			27,138				5,440
Total equity			1,822,387				1,878,196
Total liabilities, temporary equity, and equity		$	3,376,522			$	3,237,139

 

 

---

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - in thousands)
		Nine fiscal months ended
		September 27, 2014				September 28, 2013
Operating activities
Net earnings		$	88,773			$	93,495
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization			132,344				125,611
(Gain) loss on disposal of property and equipment			(65	)			118
Accretion of interest on convertible debentures			2,930				2,709
Inventory write-offs for obsolescence			15,101				14,476
U.S. pension settlement charges			15,588				-
Other			4,215				(11,986	)
Changes in operating assets and liabilities,
net of effects of businesses acquired			(61,875	)			(44,862	)
Net cash provided by operating activities			197,011				179,561
Investing activities
Purchase of property and equipment			(90,507	)			(91,591	)
Proceeds from sale of property and equipment			2,345				3,866
Purchase of businesses, net of cash acquired or refunded			(198,186	)			(23,034	)
Purchase of short-term investments			(335,341	)			(424,940	)
Maturity of short-term investments			330,734				284,814
Other investing activities			1,734				1,246
Net cash used in investing activities			(289,221	)			(249,639	)
Financing activities
Debt issuance costs			-				(4,558	)
Principal payments on long-term debt and capital lease obligations			(11	)			(21	)
Net proceeds (payments) on revolving credit lines			73,000				21,000
Net changes in short-term borrowings			14				(142	)
Excess tax benefit from RSUs vested			-				456
Dividends paid to common stockholders			(24,358	)			-
Dividends paid to Class B common stockholders			(2,183	)			-
Proceeds from stock options exercised			50				-
Distributions to noncontrolling interests			(547	)			(240	)
Other financing activities			(1,323	)			-
Net cash provided by financing activities			44,642				16,495
Effect of exchange rate changes on cash and cash equivalents			(17,478	)			939
Net increase (decrease) in cash and cash equivalents			(65,046	)			(52,644	)
Cash and cash equivalents at beginning of period			640,348				697,595
Cash and cash equivalents at end of period		$	575,302			$	644,951

 

 

---

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
		Fiscal quarters ended												Nine fiscal months ended
		September 27, 2014				June 28, 2014				September 28, 2013				September 27, 2014				September 28, 2013
GAAP net earnings attributable to Vishay stockholders		$	26,971			$	35,642			$	32,719			$	88,423			$	92,959
Reconciling items affecting operating margin:
Restructuring and severance costs		$	3,508			$	9,014			$	-			$	18,926			$	-
U.S. pension settlement charges			15,588				-				-				15,588				-
Executive compensation charge (credit)			-				-				-				-				(1,778	)
Reconciling items affecting tax expense (benefit):
Tax effects of items above and other one-time tax expense (benefit)		$	(6,011	)		$	(2,747	)		$	(2,867	)		$	(10,855	)		$	(3,564	)
Adjusted net earnings		$	40,056			$	41,909			$	29,852			$	112,082			$	87,617
Adjusted weighted average diluted shares outstanding			155,546				154,322				151,890				154,142				151,471
Adjusted earnings per diluted share*		$	0.26			$	0.27			$	0.20			$	0.73			$	0.58
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

 

---

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
		Fiscal quarters ended												Nine fiscal months ended
		September 27, 2014				June 28, 2014				September 28, 2013				September 27, 2014				September 28, 2013
GAAP net earnings attributable to Vishay stockholders		$	26,971			$	35,642			$	32,719			$	88,423			$	92,959
Net earnings attributable to noncontrolling interests			6				190				150				350				536
Net earnings		$	26,977			$	35,832			$	32,869			$	88,773			$	93,495
Interest expense		$	6,167			$	5,821			$	5,797			$	17,968			$	17,107
Interest income			(1,172	)			(1,261	)			(1,019	)			(3,656	)			(3,326	)
Income taxes			11,841				16,478				15,043				40,259				41,501
Depreciation and amortization			45,413				43,576				42,155				132,344				125,611
EBITDA		$	89,226			$	100,446			$	94,845			$	275,688			$	274,388
Reconciling items
Restructuring and severance costs		$	3,508			$	9,014			$	-				18,926				-
U.S. pension settlement charges			15,588				-				-				15,588				-
Executive compensation charge (credit)			-				-				-				-				(1,778	)
Adjusted EBITDA		$	108,322			$	109,460			$	94,845			$	310,202			$	272,610
Adjusted EBITDA margin**			17.0	%			17.1	%			15.7	%			16.5	%			15.5	%
** Adjusted EBITDA as a percentage of net revenues

 

Source: Vishay Intertechnology, Inc.