Vishay Reports Results for Third Quarter 2012

Vishay Reports Results for Third Quarter 2012

  • Revenues for Q3 2012 of $573 million

  • Operating margin for Q3 2012 of 7.8%

  • EPS for Q3 2012 of $0.15

  • Cash from operations for YTD September 2012 of $186 million, capital expenditures of $87 million and proceeds on sale of property and equipment of $8 million

  • Guidance for Q4 2012 for revenues between $500 and $540 million at lower margins compared to Q3 2012

MALVERN, Pa.--(BUSINESS WIRE)-- Vishay Intertechnology, Inc. (NYS: 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: