Attached files
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| 8-K - VISHAY INTERTECHNOLOGY, INC. 8-K - VISHAY INTERTECHNOLOGY INC | form8-k.htm |
Exhibit 99.1
VISHAY REPORTS RESULTS FOR THIRD QUARTER 2011
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Revenues for Q3 2011 of $638 million
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EPS Q3 2011 of $0.31, or $0.32 excluding one-time executive compensation charge
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Cash from operations for YTD September 2011 of $288 million and capital expenditures of $90 million
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Continues to pursue recently announced growth plan of intensified internal growth through product innovation and expanded capacities supplemented by acquisitions despite macroeconomic uncertainty
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MALVERN, PENNSYLVANIA – November 1, 2011 – 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 October 1, 2011.
Revenues for the fiscal quarter ended October 1, 2011 were $637.6 million, compared to $694.4 million for the fiscal quarter ended October 2, 2010. The net earnings attributable to Vishay stockholders for the fiscal quarter ended October 1, 2011 were $50.5 million, or $0.31 per diluted share, compared to $89.8 million, or $0.47 per diluted share for the fiscal quarter ended October 2, 2010.
Revenues for the nine fiscal months ended October 1, 2011 were $2,042.6 million, compared to $2,036.5 million for the nine fiscal months ended October 2, 2010. The net earnings attributable to Vishay stockholders for the nine fiscal months ended October 1, 2011 were $207.9 million, or $1.22 per diluted share, compared to $211.9 million, or $1.10 per diluted share for the nine fiscal months ended October 2, 2010.
The results of operations for the fiscal quarter and the nine fiscal months ended October 1, 2011 include a pretax charge of $1.9 million for elements of executive compensation payable upon the resignation of the Company’s former Chief Financial Officer, Dr. Lior Yahalomi. The results of operations for the nine fiscal months ended October 1, 2011 also includes a pretax charge of $3.9 million to accelerate the recognition of certain executive compensation upon the death of Dr. Felix Zandman, the Company’s late Executive Chairman and Chief Technical and Business Development Officer, and $10.0 million of one-time tax expense related to the write-down of deferred tax assets in Israel to reflect the lower corporate income tax rate enacted in January 2011 on certain types of income earned after December 31, 2010. Adjusted net earnings per diluted share, which excludes these items, was $0.32 and $1.30, respectively, for the fiscal quarter and nine fiscal months ended October 1, 2011. There were no such reconciling items for the fiscal quarter and nine fiscal months ended October 2, 2010.
1
Commenting on the results for the third quarter 2011, Dr. Gerald Paul, President and Chief Executive Officer, stated, “In the third quarter, Vishay was confronted with an unexpected drop of demand. Especially weak was the consumer market segment resulting in lower revenues and orders from Asia and from our distributors, strongly impacting our semiconductor businesses. We adapted manufacturing capacities quickly and were able to reduce internal inventories in the quarter. For the fourth quarter, we expect an inventory reduction at distribution.”
Dr. Paul continued, “We remain very confident in the unbroken growth of our end markets. We will continue to push the main elements of our growth plan, in particular new product and process development, design-in activities supplemented by selected acquisitions, preferably in the field of specialty products.”
Commenting on the outlook for the fourth quarter 2011 Dr. Paul stated, “Based on the low order intake, we anticipate revenues of between $555 and $595 million with a mainly volume-driven gross margin reduction.”
The Company expects to file its Quarterly Report on Form 10-Q for the third fiscal quarter of 2011 with the Securities and Exchange Commission after the close of the markets on Tuesday, November 1, 2011. This financial report will be available for viewing and download at ir.vishay.com.
On July 6, 2010, Vishay Intertechnology successfully completed the spin-off of Vishay Precision Group, Inc. (“VPG”) to its stockholders as an independent, publicly-traded company. Until July 6, 2010, VPG was part of Vishay Intertechnology and its assets, liabilities, results of operations, and cash flows are included in the amounts reported in the consolidated financial statements through the date of the spin-off, including the nine fiscal months ended October 2, 2010, presented on the accompanying tables. Net earnings of VPG, included in the results of Vishay Intertechnology, were $5.8 million for the nine fiscal months ended October 2, 2010.
A conference call to discuss third quarter financial results is scheduled for Tuesday, November 1, 2011 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 14236801.
There will be a replay of the conference call from 10:30 AM ET on Tuesday, November 1, 2011 through 11:59 PM ET on Sunday, November 6, 2011. The telephone number for the replay is 800-642-1687 (+1 706-645-9291 if calling from outside the United States or Canada) and the access code is 14236801.
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.
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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, growth in end markets and the general state of the Company, are forward-looking statements within the safe harbor provisions of the 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, particularly the pace and continuation of recovery in the worldwide economy; 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.
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VISHAY INTERTECHNOLOGY, INC.
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Summary of Operations
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(Unaudited - In thousands, except per share amounts)
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Fiscal quarters ended
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October 1,
2011
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July 2,
2011
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October 2,
2010
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Net revenues
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$ | 637,649 | $ | 709,838 | $ | 694,365 | ||||||
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Costs of products sold
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470,172 | 497,648 | 475,987 | |||||||||
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Gross profit
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167,477 | 212,190 | 218,378 | |||||||||
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Gross margin
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26.3 | % | 29.9 | % | 31.5 | % | ||||||
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Selling, general, and administrative expenses
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90,271 | 92,796 | 87,475 | |||||||||
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Executive compensation charges
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1,873 | 3,889 | - | |||||||||
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Operating income
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75,333 | 115,505 | 130,903 | |||||||||
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Operating margin
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11.8 | % | 16.3 | % | 18.9 | % | ||||||
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Other income (expense):
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Interest expense
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(5,311 | ) | (4,624 | ) | (2,545 | ) | ||||||
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Other
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1,790 | (28 | ) | (4,716 | ) | |||||||
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Total other income (expense) - net
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(3,521 | ) | (4,652 | ) | (7,261 | ) | ||||||
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Income before taxes
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71,812 | 110,853 | 123,642 | |||||||||
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Income taxes
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21,120 | 28,357 | 33,490 | |||||||||
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Net earnings
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50,692 | 82,496 | 90,152 | |||||||||
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Less: net earnings attributable to noncontrolling interests
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205 | 401 | 353 | |||||||||
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Net earnings attributable to Vishay stockholders
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$ | 50,487 | $ | 82,095 | $ | 89,799 | ||||||
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Basic earnings per share attributable to Vishay stockholders
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$ | 0.32 | $ | 0.51 | $ | 0.48 | ||||||
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Diluted earnings per share attributable to Vishay stockholders
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$ | 0.31 | $ | 0.48 | $ | 0.47 | ||||||
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Weighted average shares outstanding - basic
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157,149 | 160,801 | 186,648 | |||||||||
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Weighted average shares outstanding - diluted
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163,808 | 170,645 | 193,062 | |||||||||
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Summary of Operations
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(Unaudited - In thousands, except per share amounts)
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Nine fiscal months ended
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October 1,
2011
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October 2,
2010
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Net revenues*
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$ | 2,042,638 | $ | 2,036,480 | ||||
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Costs of products sold
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1,448,308 | 1,440,496 | ||||||
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Gross profit
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594,330 | 595,984 | ||||||
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Gross margin
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29.1 | % | 29.3 | % | ||||
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Selling, general, and administrative expenses
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275,532 | 298,629 | ||||||
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Executive compensation charges
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5,762 | - | ||||||
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Operating income
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313,036 | 297,355 | ||||||
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Operating margin
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15.3 | % | 14.6 | % | ||||
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Other income (expense):
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Interest expense
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(13,989 | ) | (7,379 | ) | ||||
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Other
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1,255 | 1,284 | ||||||
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Total other income (expense) - net
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(12,734 | ) | (6,095 | ) | ||||
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Income before taxes
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300,302 | 291,260 | ||||||
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Income taxes
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91,507 | 78,504 | ||||||
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Net earnings
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208,795 | 212,756 | ||||||
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Less: net earnings attributable to noncontrolling interests
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926 | 878 | ||||||
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Net earnings attributable to Vishay stockholders*
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$ | 207,869 | $ | 211,878 | ||||
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Basic earnings per share attributable to Vishay stockholders
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$ | 1.29 | $ | 1.14 | ||||
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Diluted earnings per share attributable to Vishay stockholders
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$ | 1.22 | $ | 1.10 | ||||
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Weighted average shares outstanding - basic
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161,061 | 186,652 | ||||||
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Weighted average shares outstanding - diluted
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170,039 | 193,080 | ||||||
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* VPG net revenues included in Vishay Intertechnology, Inc. consolidated results were $101.1 million for the nine fiscal months ended October 2, 2010. VPG earnings included in net earnings attributable to Vishay stockholders were $5.8 million for the nine fiscal months ended October 2, 2010.
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VISHAY INTERTECHNOLOGY, INC.
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Consolidated Condensed Balance Sheets
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(In thousands)
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October 1,
2011
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December 31,
2010
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Assets
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(unaudited)
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Current assets:
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Cash and cash equivalents
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$ | 705,061 | $ | 897,338 | ||||
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Short-term investments
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329,912 | - | ||||||
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Accounts receivable, net
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296,951 | 330,556 | ||||||
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Inventories:
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Finished goods
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113,989 | 109,762 | ||||||
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Work in process
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192,201 | 178,844 | ||||||
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Raw materials
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150,916 | 139,216 | ||||||
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Total inventories
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457,106 | 427,822 | ||||||
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Deferred income taxes
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32,545 | 31,903 | ||||||
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Prepaid expenses and other current assets
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152,064 | 106,885 | ||||||
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Total current assets
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1,973,639 | 1,794,504 | ||||||
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Property and equipment, at cost:
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Land
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93,612 | 93,020 | ||||||
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Buildings and improvements
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490,364 | 477,518 | ||||||
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Machinery and equipment
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2,089,682 | 2,025,793 | ||||||
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Construction in progress
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73,256 | 75,051 | ||||||
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Allowance for depreciation
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(1,857,498 | ) | (1,759,268 | ) | ||||
| 889,416 | 912,114 | |||||||
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Goodwill
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9,525 | - | ||||||
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Other intangible assets, net
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107,889 | 113,830 | ||||||
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Other assets
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137,816 | 145,645 | ||||||
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Total assets
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$ | 3,118,285 | $ | 2,966,093 | ||||
6
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VISHAY INTERTECHNOLOGY, INC.
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Consolidated Condensed Balance Sheets (continued)
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(In thousands)
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October 1,
2011
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December 31,
2010
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(unaudited)
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Liabilities and stockholders' equity
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Current liabilities:
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Notes payable to banks
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$ | 50 | $ | 23 | ||||
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Trade accounts payable
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150,802 | 167,795 | ||||||
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Payroll and related expenses
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118,084 | 122,234 | ||||||
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Other accrued expenses
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169,808 | 186,049 | ||||||
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Income taxes
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65,017 | 51,060 | ||||||
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Total current liabilities
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503,761 | 527,161 | ||||||
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Long-term debt less current portion
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423,440 | 431,682 | ||||||
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Deferred income taxes
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125,125 | 82,043 | ||||||
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Deferred grant income
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2,348 | 2,788 | ||||||
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Other liabilities
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127,948 | 134,152 | ||||||
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Accrued pension and other postretirement costs
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282,623 | 291,117 | ||||||
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Total liabilities
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1,465,245 | 1,468,943 | ||||||
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Equity:
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Vishay stockholders' equity
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Common stock
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14,373 | 15,061 | ||||||
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Class B convertible common stock
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1,345 | 1,435 | ||||||
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Capital in excess of par value
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2,085,742 | 2,156,981 | ||||||
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Retained earnings (accumulated deficit)
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(534,368 | ) | (742,237 | ) | ||||
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Accumulated other comprehensive income
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80,103 | 60,491 | ||||||
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Total Vishay stockholders' equity
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1,647,195 | 1,491,731 | ||||||
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Noncontrolling interests
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5,845 | 5,419 | ||||||
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Total equity
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1,653,040 | 1,497,150 | ||||||
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Total liabilities and equity
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$ | 3,118,285 | $ | 2,966,093 | ||||
7
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VISHAY INTERTECHNOLOGY, INC.
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Consolidated Condensed Statements of Cash Flows
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(Unaudited - In thousands)
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Nine fiscal months ended
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October 1,
2011
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October 2,
2010
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Continuing operating activities
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Net earnings
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$ | 208,795 | $ | 212,756 | ||||
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Adjustments to reconcile net earnings (loss) to
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net cash provided by continuing operating activities:
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Depreciation and amortization
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136,406 | 143,789 | ||||||
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(Gain) loss on disposal of property and equipment
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(1,073 | ) | 176 | |||||
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Accretion of interest on convertible debentures
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1,448 | - | ||||||
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Inventory write-offs for obsolescence
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15,434 | 17,022 | ||||||
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Deferred grant income
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(351 | ) | (426 | ) | ||||
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Other
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12,943 | 44,081 | ||||||
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Changes in operating assets and liabilities,
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net of effects of businesses acquired or spun-off
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(85,827 | ) | (78,265 | ) | ||||
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Net cash provided by continuing operating activities
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287,775 | 339,133 | ||||||
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Continuing investing activities
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Purchase of property and equipment
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(89,708 | ) | (80,079 | ) | ||||
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Proceeds from sale of property and equipment
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1,956 | 725 | ||||||
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Purchase of businesses, net of cash acquired or refunded
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(19,335 | ) | - | |||||
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Purchase of short-term investments
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(497,258 | ) | - | |||||
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Maturity of short-term investments
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158,785 | - | ||||||
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Proceeds from loans receivable
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- | 15,000 | ||||||
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Other investing activities
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2,472 | (1,355 | ) | |||||
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Net cash used in continuing investing activities
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(443,088 | ) | (65,709 | ) | ||||
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Continuing financing activities
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Proceeds of long-term borrowings
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150,000 | - | ||||||
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Issuance costs
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(4,429 | ) | (456 | ) | ||||
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Common stock repurchase
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(150,000 | ) | - | |||||
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Principal payments on long-term debt and capital lease obligations
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(670 | ) | (25,998 | ) | ||||
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Net payments on revolving credit lines
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(60,000 | ) | - | |||||
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Net changes in short-term borrowings
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28 | 511 | ||||||
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Proceeds from stock options exercised
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9,675 | - | ||||||
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Excess tax benefit from stock options exercised
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555 | - | ||||||
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Distributions to noncontrolling interests
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(500 | ) | (757 | ) | ||||
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Distribution in connection with spin-off of VPG
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- | (70,600 | ) | |||||
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Net cash used in continuing financing activities
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(55,341 | ) | (97,300 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents
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18,377 | (9,860 | ) | |||||
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Net (decrease) increase in cash and cash equivalents
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from continuing activities
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(192,277 | ) | 166,264 | |||||
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Net cash used in discontinued operating activities
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- | (82 | ) | |||||
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Net cash used in discontinued investing activities
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- | - | ||||||
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Net cash used in discontinued financing activities
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- | - | ||||||
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Net cash used in discontinued operations
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- | (82 | ) | |||||
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Net (decrease) increase in cash and cash equivalents
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(192,277 | ) | 166,182 | |||||
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Cash and cash equivalents at beginning of period
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897,338 | 579,189 | ||||||
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Cash and cash equivalents at end of period
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$ | 705,061 | $ | 745,371 | ||||
8
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Reconciliation of Adjusted Earnings Per Share
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(Unaudited - In thousands, except per share amounts)
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Fiscal quarters ended
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Nine fiscal months ended
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October 1,
2011
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July 2,
2011
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October 2,
2010
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October 1,
2011
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October 2,
2010
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GAAP net earnings attributable to Vishay stockholders
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$ | 50,487 | $ | 82,095 | $ | 89,799 | $ | 207,869 | $ | 211,878 | ||||||||||
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Reconciling items affecting operating margin:
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Executive compensation charges
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$ | 1,873 | $ | 3,889 | $ | - | $ | 5,762 | $ | - | ||||||||||
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Reconciling items affecting tax expense (benefit):
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Tax effects of items above and other one-time tax expense (benefit)
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$ | (684 | ) | $ | (1,419 | ) | $ | - | $ | 7,921 | $ | - | ||||||||
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Adjusted net earnings
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$ | 51,676 | $ | 84,565 | $ | 89,799 | $ | 221,552 | $ | 211,878 | ||||||||||
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Adjusted weighted average diluted shares outstanding
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163,808 | 170,645 | 193,062 | 170,039 | 193,080 | |||||||||||||||
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Adjusted earnings per diluted share**
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$ | 0.32 | $ | 0.50 | $ | 0.47 | $ | 1.30 | $ | 1.10 | ||||||||||
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** Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.
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Contact:
Vishay Intertechnology, Inc.
Peter G. Henrici
Senior Vice President, Corporate Communications
+1-610-644-1300
9