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EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - VISHAY INTERTECHNOLOGY INCexhibit32-1.htm
EX-31.1 - CERTIFICATION PURSUANT TO RULE 13A-14(A) OR 15D-14(A) - VISHAY INTERTECHNOLOGY INCexhibit31-1.htm
EX-31.2 - CERTIFICATION PURSUANT TO RULE 13A-14(A) OR 15D-14(A) - VISHAY INTERTECHNOLOGY INCexhibit31-2.htm
EX-32.2 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - VISHAY INTERTECHNOLOGY INCexhibit32-2.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended           July 4, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 1-7416

VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

Delaware
 
38-1686453
(State or Other Jurisdiction of Incorporation)
 
(I.R.S. Employer Identification Number)
     
63 Lancaster Avenue
Malvern, PA  19355-2143
 
610-644-1300
(Address of Principal Executive Offices)
 
(Registrant's Area Code and Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.
ýYes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):

 
Large accelerated filer ý
Accelerated filer
 
Non-accelerated filer (Do not check if smaller reporting company)
Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ý No

As of July 31, 2015, the registrant had 135,440,811 shares of its common stock and 12,129,227 shares of its Class B common stock outstanding.
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2


VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q
July 4, 2015
CONTENTS

       
Page Number
PART I.
FINANCIAL INFORMATION
   
         
 
Item 1.
Financial Statements
   
         
   
Consolidated Condensed Balance Sheets – July 4, 2015 (Unaudited) and December 31, 2014
 
4
         
   
Consolidated Condensed Statements of Operations (Unaudited) – Fiscal Quarters Ended July 4, 2015 and June 28, 2014
 
6
         
   
Consolidated Condensed Statements of Comprehensive Income (Unaudited) – Fiscal Quarters Ended July 4, 2015 and June 28, 2014
 
7
         
   
Consolidated Condensed Statements of Operations (Unaudited) – Six Fiscal Months Ended July 4, 2015 and June 28, 2014
 
8
         
   
Consolidated Condensed Statements of Comprehensive Income (Unaudited) – Six Fiscal Months Ended July 4, 2015 and June 28, 2014
 
9
         
   
Consolidated Condensed Statements of Cash Flows (Unaudited) – Six Fiscal Months Ended July 4, 2015 and June 28, 2014
 
10
         
   
Consolidated Condensed Statement of Equity (Unaudited)
 
11
         
   
Notes to the Consolidated Condensed Financial Statements (Unaudited)
 
12
         
 
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
 
31
         
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
52
         
 
Item 4.
Controls and Procedures
 
52
         
PART II.
OTHER INFORMATION
   
         
 
Item 1.
Legal Proceedings
 
53
         
 
Item 1A.
Risk Factors
 
53
         
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
53
         
 
Item 3.
Defaults Upon Senior Securities
 
53
         
 
Item 4.
Mine Safety Disclosures
 
53
         
 
Item 5.
Other Information
 
53
         
 
Item 6.
Exhibits
 
53
         
   
SIGNATURES
 
54
3


PART I  - FINANCIAL INFORMATION

Item 1. Financial Statements

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)

   
July 4,
2015
   
December 31,
2014
 
   
(Unaudited)
     
Assets
       
Current assets:
       
Cash and cash equivalents
 
$
483,020
   
$
592,172
 
Short-term investments
   
578,975
     
514,776
 
Accounts receivable, net
   
294,062
     
271,554
 
Inventories:
               
Finished goods
   
118,496
     
113,361
 
Work in process
   
198,382
     
185,769
 
Raw materials
   
123,670
     
125,464
 
Total inventories
   
440,548
     
424,594
 
                 
Deferred income taxes
   
27,355
     
17,815
 
Prepaid expenses and other current assets
   
90,997
     
105,539
 
Total current assets
   
1,914,957
     
1,926,450
 
                 
Property and equipment, at cost:
               
Land
   
89,931
     
91,844
 
Buildings and improvements
   
554,609
     
560,926
 
Machinery and equipment
   
2,357,161
     
2,368,046
 
Construction in progress
   
68,438
     
82,684
 
Allowance for depreciation
   
(2,221,802
)
   
(2,205,405
)
     
848,337
     
898,095
 
                 
Goodwill
   
143,596
     
144,359
 
                 
Other intangible assets, net
   
170,919
     
186,613
 
                 
Other assets
   
141,138
     
143,256
 
Total assets
 
$
3,218,947
   
$
3,298,773
 

Continues on following page.
4


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

   
July 4,
2015
   
December 31,
2014
 
   
(Unaudited)
     
Liabilities and equity
       
Current liabilities:
       
Notes payable to banks
 
$
17
   
$
18
 
Trade accounts payable
   
159,086
     
174,451
 
Payroll and related expenses
   
119,482
     
120,023
 
Other accrued expenses
   
149,459
     
137,576
 
Income taxes
   
20,269
     
24,671
 
Total current liabilities
   
448,313
     
456,739
 
                 
Long-term debt less current portion
   
427,294
     
454,922
 
Deferred income taxes
   
183,600
     
178,900
 
Other liabilities
   
67,519
     
76,811
 
Accrued pension and other postretirement costs
   
278,733
     
300,524
 
Total liabilities
   
1,405,459
     
1,467,896
 
                 
Stockholders' equity:
               
Vishay stockholders' equity
               
Common stock
   
13,544
     
13,532
 
Class B convertible common stock
   
1,213
     
1,213
 
Capital in excess of par value
   
2,056,611
     
2,055,246
 
(Accumulated deficit) retained earnings
   
(136,242
)
   
(175,485
)
Accumulated other comprehensive income (loss)
   
(126,900
)
   
(69,140
)
Total Vishay stockholders' equity
   
1,808,226
     
1,825,366
 
Noncontrolling interests
   
5,262
     
5,511
 
Total equity
   
1,813,488
     
1,830,877
 
Total liabilities and equity
 
$
3,218,947
   
$
3,298,773
 

See accompanying notes.
5



VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Fiscal quarters ended
 
   
July 4,
2015
   
June 28,
2014
 
         
Net revenues
 
$
590,470
   
$
641,929
 
Costs of products sold
   
448,988
     
477,836
 
Gross profit
   
141,482
     
164,093
 
                 
Selling, general, and administrative expenses
   
91,652
     
97,156
 
Restructuring and severance costs
   
5,660
     
9,014
 
Operating income
   
44,170
     
57,923
 
                 
Other income (expense):
               
Interest expense
   
(6,736
)
   
(5,821
)
Other
   
1,160
     
208
 
     
(5,576
)
   
(5,613
)
                 
Income before taxes
   
38,594
     
52,310
 
                 
Income tax expense
   
12,076
     
16,478
 
                 
Net earnings
   
26,518
     
35,832
 
                 
Less: net earnings attributable to noncontrolling interests
   
250
     
190
 
                 
Net earnings attributable to Vishay stockholders
 
$
26,268
   
$
35,642
 
                 
Basic earnings per share attributable to Vishay stockholders
 
$
0.18
   
$
0.24
 
                 
Diluted earnings per share attributable to Vishay stockholders
 
$
0.17
   
$
0.23
 
                 
Weighted average shares outstanding - basic
   
147,700
     
147,567
 
                 
Weighted average shares outstanding - diluted
   
151,700
     
154,322
 
                 
Cash dividends per share
 
$
0.06
   
$
0.06
 

See accompanying notes.
6



VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Comprehensive Income
(Unaudited - In thousands)

   
Fiscal quarters ended
 
   
July 4,
2015
   
June 28,
2014
 
         
Net earnings
 
$
26,518
   
$
35,832
 
                 
Other comprehensive income (loss), net of tax
               
                 
Foreign currency translation adjustment
   
15,482
     
(7,479
)
                 
Pension and other  post-retirement actuarial items
   
2,078
     
1,357
 
                 
Unrealized gain (loss) on available-for-sale securities
   
(961
)
   
660
 
                 
Other comprehensive income (loss)
   
16,599
     
(5,462
)
                 
Comprehensive income
   
43,117
     
30,370
 
                 
Less: comprehensive income attributable to noncontrolling interests
   
250
     
190
 
                 
Comprehensive income attributable to Vishay stockholders
 
$
42,867
   
$
30,180
 

See accompanying notes.
7


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Six fiscal months ended
 
   
July 4,
2015
   
June 28,
2014
 
         
Net revenues
 
$
1,183,906
   
$
1,244,307
 
Costs of products sold
   
897,386
     
934,931
 
Gross profit
   
286,520
     
309,376
 
                 
Selling, general, and administrative expenses
   
187,722
     
193,463
 
Restructuring and severance costs
   
7,070
     
15,418
 
Operating income
   
91,728
     
100,495
 
                 
Other income (expense):
               
Interest expense
   
(13,097
)
   
(11,801
)
Other
   
4,620
     
1,520
 
     
(8,477
)
   
(10,281
)
                 
Income before taxes
   
83,251
     
90,214
 
                 
Income taxes
   
25,808
     
28,418
 
                 
Net earnings
   
57,443
     
61,796
 
                 
Less: net earnings attributable to noncontrolling interests
   
476
     
344
 
                 
Net earnings attributable to Vishay stockholders
 
$
56,967
   
$
61,452
 
                 
Basic earnings per share attributable to Vishay stockholders
 
$
0.39
   
$
0.42
 
                 
Diluted earnings per share attributable to Vishay stockholders
 
$
0.37
   
$
0.40
 
                 
Weighted average shares outstanding - basic
   
147,699
     
147,561
 
                 
Weighted average shares outstanding - diluted
   
152,183
     
153,438
 
                 
Cash dividends per share
 
$
0.12
   
$
0.12
 

See accompanying notes.

8


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Comprehensive Income
(Unaudited - In thousands)

   
Six fiscal months ended
 
   
July 4,
2015
   
June 28,
2014
 
         
Net earnings
 
$
57,443
   
$
61,796
 
                 
Other comprehensive income (loss), net of tax
               
                 
Foreign currency translation adjustment
   
(60,836
)
   
(8,439
)
                 
Pension and other  post-retirement actuarial items
   
4,191
     
2,860
 
                 
Unrealized gain (loss) on available-for-sale securities
   
(1,115
)
   
1,188
 
                 
Other comprehensive loss
   
(57,760
)
   
(4,391
)
                 
Comprehensive income (loss)
   
(317
)
   
57,405
 
                 
Less: comprehensive income attributable to noncontrolling interests
   
476
     
344
 
                 
Comprehensive income (loss) attributable to Vishay stockholders
 
$
(793
)
 
$
57,061
 

See accompanying notes.
9



VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)

   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014
 
Operating activities
       
Net earnings
 
$
57,443
   
$
61,796
 
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
Depreciation and amortization
   
90,185
     
86,931
 
(Gain) loss on disposal of property and equipment
   
(115
)
   
23
 
Accretion of interest on convertible debentures
   
2,090
     
1,933
 
Inventory write-offs for obsolescence
   
9,329
     
9,867
 
Other
   
(10,924
)
   
1,312
 
Net change in operating assets and liabilities, net of effects of businesses acquired
   
(55,646
)
   
(62,789
)
Net cash provided by operating activities
   
92,362
     
99,073
 
                 
Investing activities
               
Capital expenditures
   
(49,550
)
   
(53,336
)
Proceeds from sale of property and equipment
   
1,675
     
1,741
 
Purchase of businesses, net of cash acquired
   
-
     
(20,776
)
Purchase of short-term investments
   
(185,583
)
   
(243,975
)
Maturity of short-term investments
   
91,953
     
236,624
 
Sale of other investments
   
400
     
-
 
Other investing activities
   
1,274
     
927
 
Net cash used in investing activities
   
(139,831
)
   
(78,795
)
                 
Financing activities
               
Principal payments on long-term debt and capital leases
   
-
     
(11
)
Net proceeds (payments) on revolving credit lines
   
(30,000
)
   
20,000
 
Net changes in short-term borrowings
   
(1
)
   
16
 
Dividends paid to common stockholders
   
(16,252
)
   
(16,238
)
Dividends paid to Class B common stockholders
   
(1,456
)
   
(1,456
)
Excess tax benefit from RSUs vested
   
21
     
-
 
Distributions to noncontrolling interests
   
(725
)
   
(547
)
Net cash provided by (used in) financing activities
   
(48,413
)
   
1,764
 
Effect of exchange rate changes on cash and cash equivalents
   
(13,270
)
   
(2,797
)
                 
Net increase (decrease) in cash and cash equivalents
   
(109,152
)
   
19,245
 
                 
Cash and cash equivalents at beginning of period
   
592,172
     
640,348
 
Cash and cash equivalents at end of period
 
$
483,020
   
$
659,593
 

See accompanying notes.
10



VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statement of Equity
(Unaudited - In thousands, except share and per share amounts)

   
Common Stock
   
Class B Convertible Common Stock
   
Capital in Excess of Par Value
   
Retained Earnings (Accumulated Deficit)
   
Accumulated Other Comprehensive Income (Loss)
   
Total Vishay Stockholders' Equity
   
Noncontrolling Interests
   
Total Equity
 
Balance at January 1, 2015
 
$
13,532
   
$
1,213
   
$
2,055,246
   
$
(175,485
)
 
$
(69,140
)
 
$
1,825,366
   
$
5,511
   
$
1,830,877
 
Net earnings
   
-
     
-
     
-
     
56,967
     
-
     
56,967
     
476
     
57,443
 
Other comprehensive loss
   
-
     
-
     
-
     
-
     
(57,760
)
   
(57,760
)
   
-
     
(57,760
)
Distributions to noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
(725
)
   
(725
)
Restricted stock issuances (116,498 shares)
   
12
     
-
     
(651
)
   
-
     
-
     
(639
)
   
-
     
(639
)
Dividends declared ($ 0.12 per share)
   
-
     
-
     
16
     
(17,724
)
   
-
     
(17,708
)
   
-
     
(17,708
)
Stock compensation expense
   
-
     
-
     
1,979
     
-
     
-
     
1,979
     
-
     
1,979
 
Tax effects of stock plan
   
-
     
-
     
21
     
-
     
-
     
21
     
-
     
21
 
Balance at July 4, 2015
 
$
13,544
   
$
1,213
   
$
2,056,611
   
$
(136,242
)
 
$
(126,900
)
 
$
1,808,226
   
$
5,262
   
$
1,813,488
 

See accompanying notes.
11

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
 
Note 1 – Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of Vishay Intertechnology, Inc. ("Vishay" or the "Company") have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented.  The financial statements should be read in conjunction with the consolidated financial statements filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.  The results of operations for the fiscal quarter and six fiscal months ended July 4, 2015 are not necessarily indicative of the results to be expected for the full year.

The Company reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscal quarter, which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31.  The four fiscal quarters in 2015 end on April 4, 2015, July 4, 2015, October 3, 2015, and December 31, 2015, respectively.  The four fiscal quarters in 2014 ended on March 29, 2014, June 28, 2014, September 27, 2014, and December 31, 2014, respectively.

Recently Issued Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606).  The ASU is the result of a convergence project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards.  The ASU removes inconsistencies and weaknesses in revenue requirements; provides a more robust framework for addressing revenue issues; improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; provides more useful information to users of financial statements through expanded disclosure requirements; and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer.  The ASU is effective for the Company for interim and annual periods beginning on or after January 1, 2018, with the ability to early adopt on January 1, 2017.  Vishay is currently evaluating the effect of the ASU on its revenue contracts and its adoption alternatives.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.  The ASU is the result of the FASB's simplification initiative intended to improve GAAP by reducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information.  The ASU specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note.  The ASU is effective for the Company for interim and annual periods beginning on or after January 1, 2016.  The ASU will require the Company to reclassify its capitalized debt issuance costs currently recorded as assets on the consolidated condensed balance sheets.  The ASU will have no effect on the Company's results of operations or liquidity.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statements presentation.
12

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 2 – Restructuring and Related Activities

The Company places a strong emphasis on controlling its costs.

Historically, the Company's primary cost reduction technique was through the transfer of production to the extent possible from high-labor-cost countries, such as the United States and Western Europe, to lower-labor-cost countries, such as the Czech Republic, Hungary, Israel, India, Malaysia, Mexico, the People's Republic of China, and the Philippines. Between 2001 and 2009, the Company recorded, in the consolidated statements of operations, restructuring and severance costs and related asset write-downs in order to reduce its cost structure going forward.

The Company also incurred significant costs to restructure and integrate acquired businesses, which were included in the cost of the acquisitions under then-applicable GAAP.

The Company did not initiate any new restructuring projects in the years ended December 31, 2012, 2011, or 2010.

On October 28, 2013, the Company announced various cost reduction programs as part of its continuous efforts to improve efficiency and operating performance. The cash costs of these programs, primarily severance, are expected to be approximately $32,000.  Complete implementation of all of the programs is expected to occur before the end of the first fiscal quarter of 2016.  Many of the severance costs will be recognized ratably over the required stay periods.

On August 3, 2015, the Company announced additional global cost reduction programs as part of its continuous efforts to improve efficiency and operating performance. These programs include a facility closure in the Netherlands that was previously announced in the second fiscal quarter of 2015.  The cash costs of these programs, primarily severance, are expected to aggregate to approximately $30,000.  Complete implementation of these programs is expected to occur before the end of 2017.

The following table summarizes restructuring and related expenses which were recognized and reported on a separate line in the accompanying consolidated statements of operations:

   
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014
   
July 4, 2015
   
June 28, 2014
 
MOSFETs Enhanced Competitiveness Program
 
$
939
   
$
1,492
   
$
2,292
   
$
3,219
 
Voluntary Separation / Retirement Program
   
20
     
7,522
     
77
     
12,199
 
Modules Production Transfer Program
   
-
     
-
     
-
     
-
 
Global Cost Reduction Programs
   
4,701
     
-
     
4,701
     
-
 
Total
 
$
5,660
   
$
9,014
   
$
7,070
   
$
15,418
 

MOSFETs Enhanced Competitiveness Program

Over a period of approximately 2 years and in a series of discrete steps, the manufacture of wafers for a substantial share of products will be transferred into a more cost-efficient fab. As a consequence, certain other manufacturing currently occurring in-house will be transferred to third-party foundries.

The total severance costs associated with these initiatives are expected to be approximately $16,000. Employees generally must remain with the Company during the production transfer period. Accordingly, the Company will accrue these severance costs ratably over the respective employees' remaining service periods.

The following table summarizes the activity to date related to this program:

Expense recorded in 2013
 
$
2,328
 
Cash paid
   
(267
)
Balance at December 31, 2013
 
$
2,061
 
Expense recorded in 2014
   
6,025
 
Cash paid
   
(856
)
Balance at December 31, 2014
 
$
7,230
 
Expense recorded in 2015
   
2,292
 
Cash paid
   
(399
)
Balance at July 4, 2015
 
$
9,123
 

Severance benefits are generally paid in a lump sum at cessation of employment.  The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated condensed balance sheets.
13

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
 
Voluntary Separation / Retirement Program

The voluntary separation / early retirement program was offered to employees worldwide who were eligible because they met job classification, age, and years-of-service criteria as of October 31, 2013. The program benefits vary by country and job classification, but generally include a cash loyalty bonus based on years of service. All employees eligible for the program have been identified, and have left or will leave the Company after the expiration of their respective transition periods.

These employees generally were not aligned with any particular segment. The effective separation / retirement date for most employees who accepted the offer was June 30, 2014 or earlier, with a few exceptions to allow for a transition period.

The following table summarizes the activity to date related to this program:

Expense recorded in 2013
 
$
486
 
Cash paid
   
(98
)
Foreign currency translation
   
3
 
Balance at December 31, 2013
 
$
391
 
Expense recorded in 2014
   
12,792
 
Cash paid
   
(8,054
)
Foreign currency translation
   
(455
)
Balance at December 31, 2014
 
$
4,674
 
Expense recorded in 2015
   
77
 
Cash paid
   
(2,058
)
Foreign currency translation
   
(244
)
Balance at July 4, 2015
 
$
2,449
 

The payment terms vary by country, but generally are paid in a lump sum at cessation of employment. Certain participants are being paid in installments.  The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated balance sheets.

Modules Production Transfer

In an effort to reduce costs and streamline production of its module products within its Diodes segment, the Company committed to two smaller cost reduction programs related to the transferring of production of certain of its products.

The following table summarizes the activity to date related to this program:

Expense recorded in 2014
 
$
2,080
 
Cash paid
   
(464
)
Foreign currency translation
   
(121
)
Balance at December 31, 2014
 
$
1,495
 
Cash paid
   
(563
)
Foreign currency translation
   
(111
)
Balance at July 4, 2015
 
$
821
 

Severance benefits are generally paid in a lump sum at cessation of employment.  The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated condensed balance sheets.

Global Cost Reduction Programs

The Global Cost Reduction Programs announced in 2015 include a plan to reduce selling, general, and administrative costs company-wide, and targeted streamlining and consolidation of production for certain product lines within its Capacitors and Resistors & Inductors segments.  During the second fiscal quarter of 2015, restructuring expenses of $4,701 were recorded related to these programs.  No amounts were paid during the second fiscal quarter of 2015 pursuant to these programs.  The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated balance sheets.
14

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
 
Note 3 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended July 4, 2015 and June 28, 2014 reflect the Company's expected tax rate on reported income from continuing operations before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States.  Accordingly, the consolidated income tax rate is a composite rate reflecting the Company's earnings and the applicable tax rates in the various jurisdictions where the Company operates.

During the six fiscal months ended July 4, 2015, the liabilities for unrecognized tax benefits increased by $378 on a net basis, principally due to increases for tax positions taken in prior periods and interest.

During 2014, the Company borrowed $53,000 on its revolving credit facility to achieve future flexibility given the legal entity and the financial structure utilized for the Capella Microsystems Inc. ("Capella") acquisition.  Subsequent to the acquisition of the noncontrolling interests in Capella on December 31, 2014, the Company planned to repatriate cash from the 2014 earnings of non-U.S. subsidiaries to the United States primarily to repay those borrowings on the revolving credit facility, and also to realign the acquired entity structure to have Capella's U.S. subsidiary directly owned by Vishay Intertechnology, Inc. The tax provision for the year ended December 31, 2014 included all U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable related to that anticipated repatriation transaction.  During the second fiscal quarter of 2015, we reduced the balance of the revolving credit facility by approximately $45,000 using cash that was repatriated.  An additional $11,000 is expected to be repatriated in August 2015 and used to further reduce the balance of the revolving credit facility.
15

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 4 – Long-Term Debt

Long-term debt consists of the following:

   
July 4, 2015
   
December 31, 2014
 
         
Credit facility
 
$
170,000
   
$
200,000
 
Exchangeable unsecured notes, due 2102
   
38,642
     
38,642
 
Convertible senior debentures, due 2040
   
104,986
     
103,841
 
Convertible senior debentures, due 2041
   
53,914
     
53,249
 
Convertible senior debentures, due 2042
   
59,752
     
59,190
 
     
427,294
     
454,922
 
Less current portion
   
-
     
-
 
   
$
427,294
   
$
454,922
 

Convertible Senior Debentures

Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms.  The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for each issuance of the Company's convertible senior debentures effective as of the ex-dividend date of each cash dividend.

The following table summarizes some key facts and terms regarding the three series of outstanding convertible senior debentures following the adjustment made to the conversion rate of the debentures on the ex-dividend date of the June 25, 2015 dividend payment:

   
Due 2040
   
Due 2041
   
Due 2042
 
Issuance date
 
November 9, 2010
   
May 13, 2011
   
May 31, 2012
 
Maturity date
 
November 15, 2040
   
May 15, 2041
   
June 1, 2042
 
Principal amount
 
$
275,000
   
$
150,000
   
$
150,000
 
Cash coupon rate (per annum)
   
2.25
%
   
2.25
%
   
2.25
%
Nonconvertible debt borrowing rate at issuance (per annum)
   
8.00
%
   
8.375
%
   
7.50
%
Conversion rate effective June 9, 2015 (per $1 principal amount)
   
73.8821
     
53.9153
     
86.8677
 
Effective conversion price effective June 9, 2015 (per share)
 
$
13.54
   
$
18.55
   
$
11.51
 
130% of the conversion price (per share)
 
$
17.60
   
$
24.12
   
$
14.96
 
Call date
 
November 20, 2020
   
May 20, 2021
   
June 7, 2022
 

Prior to three months before the maturity date, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.

Based on an evaluation of the conversion criteria at July 4, 2015 and December 31, 2014, none of the convertible senior debentures due 2040, due 2041, or due 2042 were convertible.  The conversion criteria of the debentures will continue to be evaluated and the debentures may become convertible in the future.  At the direction of the Company's Board of Directors, the Company intends, upon conversion, to repay the principal amount of the convertible debentures in cash and settle any additional amounts in shares of the Company's common stock.  The Company intends to finance the principal amount of any converted debentures using borrowings under its credit facility.
16

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods.  The resulting discount on the debt is amortized as non-cash interest expense in future periods.

The carrying values of the liability and equity components of the convertible debentures are reflected in the Company's consolidated condensed balance sheets as follows:

   
Principal amount of
the debentures
   
Unamortized discount
   
Embedded derivative
   
Carrying value of liability component
   
Equity component - net carrying value
 
July 4, 2015
                   
Due 2040
 
$
275,000
     
(170,646
)
   
632
   
$
104,986
   
$
110,094
 
Due 2041
 
$
150,000
     
(96,564
)
   
478
   
$
53,914
   
$
62,246
 
Due 2042
 
$
150,000
     
(90,525
)
   
277
   
$
59,752
   
$
57,874
 
Total
 
$
575,000
   
$
(357,735
)
 
$
1,387
   
$
218,652
   
$
230,214
 
                                         
December 31, 2014
                                       
Due 2040
 
$
275,000
     
(171,685
)
   
526
   
$
103,841
   
$
110,094
 
Due 2041
 
$
150,000
     
(97,092
)
   
341
   
$
53,249
   
$
62,246
 
Due 2042
 
$
150,000
     
(91,048
)
   
238
   
$
59,190
   
$
57,874
 
Total
 
$
575,000
   
$
(359,825
)
 
$
1,105
   
$
216,280
   
$
230,214
 

Interest is payable on the debentures semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance.  In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances beginning ten years subsequent to issuance.

Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the fiscal quarters ended:

   
Contractual
coupon interest
   
Non-cash amortization of debt discount
   
Non-cash amortization of deferred financing costs
   
Non-cash change in value of derivative liability
   
Total interest expense related to the debentures
 
July 4, 2015
                   
Due 2040
 
$
1,547
     
524
     
22
     
165
   
$
2,258
 
Due 2041
 
$
844
     
267
     
12
     
124
   
$
1,247
 
Due 2042
 
$
844
     
263
     
14
     
46
   
$
1,167
 
Total
 
$
3,235
   
$
1,054
   
$
48
   
$
335
   
$
4,672
 
                                         
June 28, 2014
                                       
Due 2040
 
$
1,547
     
485
     
22
     
(76
)
 
$
1,978
 
Due 2041
 
$
844
     
245
     
13
     
(20
)
 
$
1,082
 
Due 2042
 
$
844
     
245
     
14
     
(21
)
 
$
1,082
 
Total
 
$
3,235
   
$
975
   
$
49
   
$
(117
)
 
$
4,142
 
17

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the six fiscal months ended:

   
Contractual
coupon interest
   
Non-cash amortization of debt discount
   
Non-cash amortization of deferred financing costs
   
Non-cash change in value of derivative liability
   
Total interest expense related to the debentures
 
July 4, 2015
                   
Due 2040
 
$
3,094
     
1,039
     
44
     
106
   
$
4,283
 
Due 2041
 
$
1,688
     
528
     
24
     
137
   
$
2,377
 
Due 2042
 
$
1,688
     
523
     
27
     
39
   
$
2,277
 
Total
 
$
6,470
   
$
2,090
   
$
95
   
$
282
   
$
8,937
 
                                         
June 28, 2014
                                       
Due 2040
 
$
3,094
     
961
     
44
     
(31
)
 
$
4,068
 
Due 2041
 
$
1,688
     
486
     
24
     
(6
)
 
$
2,192
 
Due 2042
 
$
1,688
     
486
     
27
     
(1
)
 
$
2,200
 
Total
 
$
6,470
   
$
1,933
   
$
95
   
$
(38
)
 
$
8,460
 
18

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 5 – Accumulated Other Comprehensive Income (Loss)

The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows:

   
Pension and other post-retirement actuarial items
   
Currency translation adjustment
   
Unrealized gain (loss) on available-for-sale securities
   
Total
 
Balance at January 1, 2015
 
$
(155,760
)
 
$
84,703
     
1,917
   
$
(69,140
)
Other comprehensive income (loss) before reclassifications
   
-
     
(60,836
)
   
(1,035
)
 
$
(61,871
)
Tax effect
   
-
     
-
     
362
   
$
362
 
Other comprehensive income (loss) before reclassifications, net of tax
   
-
     
(60,836
)
   
(673
)
 
$
(61,509
)
Amounts reclassified out of AOCI
   
6,374
     
-
     
(680
)
 
$
5,694
 
Tax effect
   
(2,183
)
   
-
     
238
   
$
(1,945
)
Amounts reclassified out of AOCI, net of tax
   
4,191
     
-
     
(442
)
 
$
3,749
 
Net other comprehensive income (loss)
 
$
4,191
   
$
(60,836
)
 
$
(1,115
)
 
$
(57,760
)
Balance at July 4, 2015
 
$
(151,569
)
 
$
23,867
   
$
802
   
$
(126,900
)

Reclassifications of pension and other post-retirement actuarial items out of AOCI are included in the computation of net periodic benefit cost.  (See Note 6 for further information).  The amount of unrealized gains (losses) on available-for-sale securities reclassified out of AOCI as a result of sales of securities held by the Company's rabbi trust used to fund a deferred compensation plan was $680 for the six fiscal months ended July 4, 2015. These reclassifications are recorded as a component of compensation expense within Selling, General, and Administrative expenses on our consolidated condensed statements of operations.

Other comprehensive income (loss) includes Vishay's proportionate share of other comprehensive income (loss) of nonconsolidated subsidiaries accounted for under the equity method.
19

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 6 – Pensions and Other Postretirement Benefits

The Company maintains various retirement benefit plans.

The following table shows the components of the net periodic pension cost for the second fiscal quarters of 2015 and 2014 for the Company's defined benefit pension plans:

   
Fiscal quarter ended
July 4, 2015
   
Fiscal quarter ended
June 28, 2014
 
   
U.S. Plans
   
Non-U.S. Plans
   
U.S. Plans
   
Non-U.S. Plans
 
                 
Net service cost
 
$
-
   
$
826
   
$
-
   
$
831
 
Interest cost
   
2,885
     
1,419
     
3,834
     
2,195
 
Expected return on plan assets
   
(3,398
)
   
(456
)
   
(4,058
)
   
(532
)
Amortization of prior service cost (credit)
   
16
     
-
     
(23
)
   
1
 
Amortization of losses
   
2,074
     
1,282
     
1,810
     
691
 
Net periodic benefit cost
 
$
1,577
   
$
3,071
   
$
1,563
   
$
3,186
 

The following table shows the components of the net periodic pension cost for the six fiscal months ended July 4, 2015 and June 28, 2014 for the Company's defined benefit pension plans:

   
Six fiscal months ended
July 4, 2015
   
Six fiscal months ended
June 28, 2014
 
   
U.S. Plans
   
Non-U.S. Plans
   
U.S. Plans
   
Non-U.S. Plans
 
                 
Net service cost
 
$
-
   
$
1,655
   
$
-
   
$
1,655
 
Interest cost
   
5,828
     
2,851
     
7,668
     
4,376
 
Expected return on plan assets
   
(6,783
)
   
(910
)
   
(8,116
)
   
(1,057
)
Amortization of prior service cost (credit)
   
32
     
-
     
(46
)
   
2
 
Amortization of losses
   
4,096
     
2,581
     
3,620
     
1,378
 
Net periodic benefit cost
 
$
3,173
   
$
6,177
   
$
3,126
   
$
6,354
 

In the second fiscal quarter of 2015, the Company began the process of terminating the Vishay Retirement Plan, the Company's U.S. qualified pension plan.  Plan participants will not be adversely affected by the plan termination, but rather will have their benefits either converted into a lump sum cash payment or an annuity contract placed with an insurance carrier.

The completion of this proposed termination and settlement is contingent upon the receipt of a favorable determination letter from the Internal Revenue Service ("IRS") and meeting certain IRS and Pension Benefit Guarantee Corporation ("PBGC") requirements, which is expected to take at least one year.
 
As of the last fiscal year-end measurement date (December 31, 2014), the Vishay Retirement Plan was fully-funded on a GAAP basis.  In order to terminate the plan in accordance with IRS and PBGC requirements, the Company is required to fully fund the plan on a termination basis and will commit to contribute the additional assets necessary to do so.  The amount necessary to do so is not yet known, but is currently estimated to be between zero and $35,000.

20

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

The following table shows the components of the net periodic benefit cost for the second fiscal quarters of 2015 and 2014 for the Company's other postretirement benefit plans:

   
Fiscal quarter ended
July 4, 2015
   
Fiscal quarter ended
June 28, 2014
 
   
U.S. Plans
   
Non-U.S. Plans
   
U.S. Plans
   
Non-U.S. Plans
 
                 
Service cost
 
$
30
   
$
68
   
$
29
   
$
79
 
Interest cost
   
84
     
36
     
88
     
63
 
Amortization of prior service (credit)
   
(209
)
   
-
     
(206
)
   
-
 
Amortization of losses (gains)
   
23
     
19
     
(35
)
   
10
 
Net periodic benefit cost
 
$
(72
)
 
$
123
   
$
(124
)
 
$
152
 

The following table shows the components of the net periodic pension cost for the six fiscal months ended July 4, 2015 and June 28, 2014 for the Company's other postretirement benefit plans:

   
Six fiscal months ended
July 4, 2015
   
Six fiscal months ended
June 28, 2014
 
   
U.S. Plans
   
Non-U.S. Plans
   
U.S. Plans
   
Non-U.S. Plans
 
                 
Service cost
 
$
60
   
$
137
   
$
58
   
$
158
 
Interest cost
   
167
     
73
     
176
     
126
 
Amortization of prior service (credit)
   
(418
)
   
-
     
(412
)
   
-
 
Amortization of losses (gains)
   
45
     
38
     
(70
)
   
20
 
Net periodic benefit cost
 
$
(146
)
 
$
248
   
$
(248
)
 
$
304
 
21

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 7 – Stock-Based Compensation

The Company has various stockholder-approved programs which allow for the grant of stock-based compensation to officers, employees, and non-employee directors of the Company.

The amount of compensation cost related to stock-based payment transactions is measured based on the grant-date fair value of the equity instruments issued.  The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model.  The Company determines compensation cost for restricted stock units ("RSUs"), phantom stock units, and restricted stock based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vesting period for non-participating awards.  Compensation cost is recognized over the period that an officer, employee, or non-employee director provides service in exchange for the award.

The following table summarizes stock-based compensation expense recognized:

   
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014
   
July 4, 2015
   
June 28, 2014
 
                 
Stock options
 
$
-
   
$
-
   
$
-
     
-
 
Restricted stock units
   
924
     
804
     
1,838
     
1,614
 
Phantom stock units
   
-
     
-
     
141
     
131
 
Total
 
$
924
   
$
804
   
$
1,979
     
1,745
 

The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes.

The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at July 4, 2015 (amortization periods in years):

   
Unrecognized Compensation Cost
   
Weighted Average Remaining Amortization Periods
 
         
Stock options
 
$
-
     
0.0
 
Restricted stock units
   
9,480
     
1.5
 
Phantom stock units
   
-
     
0.0
 
Total
 
$
9,480
         

Unrecognized compensation cost presented in the table above includes $2,935 of unrecognized compensation cost for performance-based RSUs that are not currently expected to vest and for which no compensation cost is currently being recognized.
22

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
2007 Stock Incentive Plan

The Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, permits the grant of up to 6,500,000 shares of restricted stock, unrestricted stock, RSUs, stock options, and phantom stock units, to officers, employees, and non-employee directors of the Company.  Such instruments are available for grant until May 20, 2024.

Restricted Stock Units

RSU activity under the 2007 Program as of July 4, 2015 and changes during the six fiscal months then ended are presented below (number of RSUs in thousands):

   
Number of RSUs
   
Weighted Average Grant-date Fair Value per Unit
 
Outstanding:
       
January 1, 2015
   
1,147
   
$
12.75
 
Granted
   
349
     
13.60
 
Vested*
   
(162
)
   
11.34
 
Cancelled or forfeited
   
(276
)
   
12.88
 
Outstanding at July 4, 2015
   
1,058
   
$
13.21
 
                 
Expected to vest at July 4, 2015
   
836
         

* The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.

The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance criteria between the established target and maximum levels.  RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):

Vesting Date
 
Expected to Vest
   
Not Expected to Vest
   
Total
 
January 1, 2016
   
-
     
222
     
222
 
January 1, 2017
   
192
     
-
     
192
 
January 1, 2018
   
202
     
-
     
202
 

Phantom Stock Units

The 2007 Program authorizes the grant of phantom stock units to the extent provided for in the Company's employment agreements with certain executives.  Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in the applicable employment agreement.  Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B common stock.  Dividend equivalents are issued in the form of additional units of phantom stock.  The phantom stock units are fully vested at all times.

Phantom stock unit activity under the phantom stock plan as of July 4, 2015 and changes during the six fiscal months then ended are presented below (number of phantom stock units in thousands):

   
Number of units
   
Grant-date Fair Value per Unit
 
Outstanding:
       
January 1, 2015
   
119
     
Granted
   
10
   
$
14.09
 
Dividend equivalents issued
   
2
         
Redeemed for common stock
   
-
         
Outstanding at July 4, 2015
   
131
         
23

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Stock Options

In addition to stock options outstanding pursuant to the 2007 Program, during the periods presented, the Company had stock options outstanding under previous stockholder-approved stock option programs.  These programs are more fully described in Note 12 to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2014.  No additional options may be granted pursuant to these programs.

At December 31, 2014 and July 4, 2015, there were 105,000 options outstanding with a weighted average exercise price of $15.38.  At July 4, 2015, the weighted average remaining contractual life of all outstanding options was 1.82 years.

At July 4, 2015, there were no unvested options outstanding.

The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of the second fiscal quarter of 2015 of $11.63 per share and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on July 4, 2015 was zero because all outstanding options have exercise prices in excess of market value.  This amount changes based on changes in the market value of the Company's common stock.  During the six fiscal months ended July 4, 2015, no options were exercised.
24

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 8 – Segment Information

Vishay operates, and its chief operating decision maker makes strategic and operating decisions with regards to assessing performance and allocating resources based on, five reporting segments: MOSFETs, Diodes, Optoelectronic Components, Resistors & Inductors, and Capacitors.

The Company evaluates business segment performance on operating income, exclusive of certain items ("segment operating income").  Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income.  The Company's calculation of segment operating income excludes such selling, general, and administrative costs as global operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severance costs, executive compensation charges (credits), material gains and losses on sales of property, and other items.  Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company.  These items represent reconciling items between segment operating income and consolidated operating income.  Business segment assets are the owned or allocated assets used by each business.

The following tables set forth business segment information:

   
MOSFETs
   
Diodes
   
Optoelectronic Components
   
Resistors & Inductors
   
Capacitors
   
Total
 
Fiscal quarter ended July 4, 2015:
                       
Product Sales
 
$
106,348
   
$
138,722
   
$
72,977
   
$
178,786
   
$
92,891
   
$
589,724
 
Royalty Revenues
   
-
     
-
     
-
     
746
     
-
   
$
746
 
Total Revenue
 
$
106,348
   
$
138,722
   
$
72,977
   
$
179,532
   
$
92,891
   
$
590,470
 
                                                 
Gross Margin
 
$
14,708
   
$
31,600
   
$
24,331
   
$
53,342
   
$
17,501
   
$
141,482
 
                                                 
Fiscal quarter ended June 28, 2014:
                                               
Product Sales
 
$
123,971
   
$
149,571
   
$
63,258
   
$
192,536
   
$
111,744
   
$
641,080
 
Royalty Revenues
   
71
     
-
     
-
     
778
     
-
   
$
849
 
Total Revenue
 
$
124,042
   
$
149,571
   
$
63,258
   
$
193,314
   
$
111,744
   
$
641,929
 
                                                 
Gross Margin
 
$
18,871
   
$
34,706
   
$
22,788
   
$
61,395
   
$
26,333
   
$
164,093
 
                                                 


Six fiscal months ended July 4, 2015:
                       
Product Sales
 
$
213,107
   
$
275,233
   
$
141,602
   
$
365,178
   
$
186,927
   
$
1,182,047
 
Royalty Revenues
   
11
     
-
     
-
     
1,848
     
-
   
$
1,859
 
Total Revenue
 
$
213,118
   
$
275,233
   
$
141,602
   
$
367,026
   
$
186,927
   
$
1,183,906
 
                                                 
Gross Margin
 
$
28,466
   
$
61,490
   
$
46,514
   
$
112,191
   
$
37,859
   
$
286,520
 
                                                 
Six fiscal months ended June 28, 2014:
                                               
Product Sales
 
$
237,084
   
$
286,500
   
$
120,756
   
$
380,525
   
$
217,255
   
$
1,242,120
 
Royalty Revenues
   
99
     
-
     
-
     
2,088
     
-
   
$
2,187
 
Total Revenue
 
$
237,183
   
$
286,500
   
$
120,756
   
$
382,613
   
$
217,255
   
$
1,244,307
 
                                                 
Gross Margin
 
$
31,488
   
$
64,471
   
$
44,025
   
$
121,515
   
$
47,877
   
$
309,376
 
25

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)


   
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014
   
July 4, 2015
   
June 28, 2014
 
Operating margin reconciliation:
               
MOSFETs
 
$
5,140
   
$
9,493
   
$
9,667
   
$
11,980
 
Diodes
   
25,528
     
28,130
     
49,013
     
51,188
 
Optoelectronic Components
   
19,163
     
18,945
     
36,250
     
36,349
 
Resistors & Inductors
   
44,470
     
51,969
     
93,995
     
102,305
 
Capacitors
   
11,786
     
20,122
     
26,350
     
35,463
 
Restructuring and Severance Costs
   
(5,660
)
   
(9,014
)
   
(7,070
)
   
(15,418
)
Unallocated Selling, General, and Administrative Expenses
   
(56,257
)
   
(61,722
)
   
(116,477
)
   
(121,372
)
Consolidated Operating Income
 
$
44,170
   
$
57,923
   
$
91,728
   
$
100,495
 
26

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)


Note 9 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (shares in thousands):

   
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014
   
July 4, 2015
   
June 28, 2014
 
                 
Numerator:
               
Numerator for basic earnings per share:
               
Net earnings
 
$
26,268
   
$
35,642
   
$
56,967
   
$
61,452
 
                                 
Adjustment to the numerator for continuing operations and net earnings:
                               
Interest savings assuming conversion of dilutive convertible and exchangeable notes, net of tax
   
17
     
15
     
33
     
30
 
                                 
Numerator for diluted earnings per share:
                               
Net earnings
 
$
26,285
   
$
35,657
   
$
57,000
   
$
61,482
 
                                 
Denominator:
                               
Denominator for basic earnings per share:
                               
Weighted average shares
   
147,570
     
147,449
     
147,569
     
147,444
 
Outstanding phantom stock units
   
130
     
118
     
130
     
117
 
Adjusted weighted average shares
   
147,700
     
147,567
     
147,699
     
147,561
 
                                 
Effect of dilutive securities:
                               
Convertible and exchangeable debt instruments
   
3,788
     
6,513
     
4,283
     
5,647
 
Restricted stock units
   
212
     
234
     
198
     
222
 
Other
   
-
     
8
     
3
     
8
 
Dilutive potential common shares
   
4,000
     
6,755
     
4,484
     
5,877
 
                                 
Denominator for diluted earnings per share:
                               
Adjusted weighted average shares
   
151,700
     
154,322
     
152,183
     
153,438
 
                                 
Basic earnings per share attributable to Vishay stockholders
 
$
0.18
   
$
0.24
   
$
0.39
   
$
0.42
 
                                 
Diluted earnings per share attributable to Vishay stockholders
 
$
0.17
   
$
0.23
   
$
0.37
   
$
0.40
 
27

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Diluted earnings per share for the periods presented do not reflect the following weighted average potential common shares that would have an antidilutive effect or have unsatisfied performance conditions (in thousands):

   
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 4, 2015
   
June 28, 2014