Exhibit 99.1
VISHAY REPORTS RESULTS FOR SECOND QUARTER 2010
MALVERN, PENNSYLVANIA – August 3, 2010 – Dr. Felix Zandman, Executive Chairman of the Board, and Dr. Gerald Paul, President and Chief Executive Officer of Vishay Intertechnology, Inc. (NYSE: VSH), announced today that revenues for the fiscal quarter ended July 3, 2010 were $701.7 million, compared to $460.3 million for the fiscal quarter ended June 27, 2009. The net income attributable to Vishay stockholders for the fiscal quarter ended July 3, 2010 was $76.7 million, or $0.40 per diluted share, compared to a net loss attributable to Vishay stockholders of $(58.9) million, or $(0.32) per share for the fiscal quarter ended June 27, 2009.
Revenues for the six fiscal months ended July 3, 2010 were $1,342.1 million, compared to $909.8 million for the six fiscal months ended June 27, 2009. The net income attributable to Vishay stockholders for the six fiscal months ended July 3, 2010 was $122.1 million, or $0.63 per diluted share, compared to a net loss attributable to Vishay stockholders of $(88.0) million, or $(0.47) per share for the six fiscal months ended June 27, 2009.
Net earnings (loss) from continuing operations attributable to Vishay stockholders include various items affecting comparability, as listed on the attached reconciliation schedule. There were no such reconciling items for the fiscal quarter or six fiscal months ended July 3, 2010. Adjusted net earnings (loss) per share, which excludes these items, was $(0.10) and $(0.18) respectively for the fiscal quarter and six fiscal months ended June 27, 2009.
On July 6, 2010, Vishay Intertechnology successfully completed the spin-off of Vishay Precision Group, Inc. (“VPG”) to its stockholders as an independently, 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 as of and for the fiscal periods ending July 3, 2010, discussed above and presented on the accompanying tables. Net earnings of VPG, included in the results of Vishay Intertechnology, were $4.0 million for the second quarter of 2010.
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Commenting on the results for the second quarter 2010, Dr. Paul stated, “In the second quarter 2010, our sales reached close to pre-crisis levels while orders stabilized on higher than pre-crisis levels. Inventories in the supply chain are still very low. Inventory turns at distribution reached record levels. In the quarter, all regions and all end markets remained strong to over-heated, in particular netbook, consumer and fixed telecom. Automotive showed a strong recovery.”
Dr. Paul continued, “The second quarter 2010 demonstrated that Vishay has fundamentally improved its earnings power: at close to pre-crisis levels of sales our operating margin and EPS have more than doubled. While we are currently enjoying excellent market conditions, we believe in ongoing and lasting measures for expansion and cost reduction. Thinking long-term we will not invest in manufacturing capacities in order to follow every spike of demand.”
Dr. Paul concluded, “The results of the second quarter 2010 and the previous quarter demonstrate that Vishay has, after three challenging years, successfully re-focused on profitability. We are positioned to reach new levels of profitability as sales return to pre-crisis levels.”
Commenting on the outlook for the third quarter 2010 Dr. Paul stated, “Based on our backlog and increasing manufacturing capacities, we anticipate revenues of between $650 to $690 million at slightly improved results. Our guidance obviously excludes revenues of VPG subsequent to the spin-off.”
Commenting on the Company's spin-off, R&D and acquisition activities, Dr. Felix Zandman, Executive Chairman of the Board and Chief Technical and Business Development Officer, stated, "I believe that our successful completion of the spin-off of Vishay Precision Group as an independent company is a natural evolution, which will enable each company to more effectively execute strategies and allocate resources and that will create value for stockholders of both companies. Already, as of today, the combined market capitalization of both companies is significantly in excess of the market capitalization of Vishay Intertechnology prior to the spinoff.”
Dr. Zandman continued, “Our R&D activities progress as planned. We are working closely with our customers to support them with the components required for their new products.”
Dr. Zandman concluded, “Based on our strong generation of free cash and the resulting continuous strengthening of our balance sheet, we are now again actively pursuing acquisitions. As previously announced, we are targeting small to mid-size companies. At the same time in order to limit our financial exposure, the Board has refined the Company’s acquisition policy. We will not pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma EBITDA. For these purposes, we will calculate pro forma EBITDA to be Vishay’s EBITDA for the four quarters preceding the acquisition plus the adjusted EBITDA of the target for the same quarters. The adjustment is for the expected savings, predominantly through synergies. At this point, we have no concrete targets for a larger acquisition.”
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Following the spin-off, Vishay Intertechnology retains no ownership interest in VPG; however, Vishay Intertechnology will not restate prior financial statements to present VPG as a “discontinued operation” for US GAAP purposes because of continuing involvement, such as common board members and trademark licenses.
Additionally, the Company has realigned its US GAAP reportable segments, segregating VPG into its own segment, as detailed in a current report on Form 8-K to be filed with the U.S. Securities and Exchange Commission this morning. This Form 8-K should assist users of financial data in the analysis of Vishay Intertechnology including and excluding VPG, and will be available on the SEC EDGAR website and the Investor Relations section of the Vishay website at http://ir.vishay.com.
A conference call to discuss second quarter financial results is scheduled for Tuesday, August 3, 2010 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 #87060805.
There will be a replay of the conference call from 10:30 AM ET on Tuesday, August 3, 2010 through 11:59 PM ET on Sunday, August 8, 2010. 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 #87060805.
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.
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 www.vishay.com.
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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. These non-GAAP measures should not be viewed as an alternative to GAAP measures of performance. Non-GAAP measures such as adjusted net earnings (loss) and adjusted net earnings (loss) per share do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that 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 and acquisition activity, 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. Such statements involve a number of risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from those anticipated. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results 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 and consummating a transaction on terms which we consider acceptable; and other factors affecting our operations that are set forth in our Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Dr. Lior E. Yahalomi, Executive Vice President and Chief Financial Officer, or Peter G. Henrici, Senior Vice President Corporate Communications, both of Vishay Intertechnology, Inc., +1-610-644-1300.
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VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands except earnings per share)
| | Fiscal quarters ended |
| | July 3, | | April 3, | | June 27, |
| | 2010 | | 2010 | | 2009 |
| Net revenues | | $ | 701,655 | | | $ | 640,460 | | | $ | 460,258 | |
| Costs of products sold | | | 491,062 | | | | 473,447 | | | | 381,484 | |
| Gross profit | | | 210,593 | | | | 167,013 | | | | 78,774 | |
| Gross margin | | | 30.0% | | | | 26.1% | | | | 17.1% | |
| Selling, general, and administrative expenses | | | 109,266 | | | | 101,888 | | | | 83,752 | |
| Restructuring and severance costs | | | - | | | | - | | | | 12,090 | |
| Settlement agreement gain | | | - | | | | - | | | | (28,195 | ) |
| Executive employment agreement charge | | | - | | | | - | | | | 57,824 | |
| Operating income (loss) | | | 101,327 | | | | 65,125 | | | | (46,697 | ) |
| Operating margin | | | 14.4% | | | | 10.2% | | | | -10.1% | |
| Other income (expense): | | | | | | | | | | | | |
| Interest expense | | | (2,400 | ) | | | (2,434 | ) | | | (2,787 | ) |
| Other | | | 5,956 | | | | 44 | | | | (5,510 | ) |
| Total other income (expense) - net | | | 3,556 | | | | (2,390 | ) | | | (8,297 | ) |
| Income (loss) before taxes | | | 104,883 | | | | 62,735 | | | | (54,994 | ) |
| Income taxes | | | 27,918 | | | | 17,096 | | | | 3,715 | |
| Net earnings (loss) | | | 76,965 | | | | 45,639 | | | | (58,709 | ) |
| Less: net earnings attributable to noncontrolling interests | | | 306 | | | | 219 | | | | 156 | |
| Net earnings (loss) attributable to Vishay stockholders | | $ | 76,659 | | | $ | 45,420 | | | $ | (58,865 | ) |
| Basic earnings (loss) per share attributable to Vishay stockholders | | $ | 0.41 | | | $ | 0.24 | | | $ | (0.32 | ) |
| Diluted earnings (loss) per share attributable to Vishay stockholders | | $ | 0.40 | | | $ | 0.24 | | | $ | (0.32 | ) |
| Weighted average shares outstanding - basic | | | 186,667 | | | | 186,641 | | | | 186,586 | |
| Weighted average shares outstanding - diluted | | | 193,084 | | | | 193,067 | | | | 186,586 | |
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VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands except earnings per share)
| Six fiscal months ended |
| July 3, | | June 27, |
| 2010 | | 2009 |
| Net revenues | $ | 1,342,115 | | | $ | 909,769 | |
| Costs of products sold | | 964,509 | | | | 762,971 | |
| Gross profit | | 377,606 | | | | 146,798 | |
| Gross margin | | 28.1% | | | | 16.1% | |
| Selling, general, and administrative expenses | | 211,154 | | | | 171,206 | |
| Restructuring and severance costs | | - | | | | 31,023 | |
| Settlement agreement gain | | - | | | | (28,195 | ) |
| Executive employment agreement charge | | - | | | | 57,824 | |
| Operating income (loss) | | 166,452 | | | | (85,060 | ) |
| Operating margin | | 12.4% | | | | -9.3% | |
| Other income (expense): | | | | | | | |
| Interest expense | | (4,834 | ) | | | (5,651 | ) |
| Other | | 6,000 | | | | 7,373 | |
| Total other income (expense) - net | | 1,166 | | | | 1,722 | |
| Income (loss) before taxes | | 167,618 | | | | (83,338 | ) |
| Income taxes | | 45,014 | | | | 4,425 | |
| Net earnings (loss) | | 122,604 | | | | (87,763 | ) |
| Less: net earnings attributable to noncontrolling interests | | 525 | | | | 229 | |
| Net earnings (loss) attributable to Vishay stockholders | $ | 122,079 | | | $ | (87,992 | ) |
| Basic earnings (loss) per share attributable to Vishay stockholders | $ | 0.65 | | | $ | (0.47 | ) |
| Diluted earnings (loss) per share attributable to Vishay stockholders | $ | 0.63 | | | $ | (0.47 | ) |
| Weighted average shares outstanding - basic | | 186,654 | | | | 186,572 | |
| Weighted average shares outstanding - diluted | | 193,076 | | | | 186,572 | |
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VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
| July 3, | | December 31, |
| 2010 | | 2009 |
| | (unaudited) | | | | |
| Assets | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | $ | 674,581 | | | $ | 579,189 | |
| Accounts receivable, net | | 359,588 | | | | 284,295 | |
| Inventories: | | | | | | | |
| Finished goods | | 116,922 | | | | 119,723 | |
| Work in process | | 197,051 | | | | 192,206 | |
| Raw materials | | 135,753 | | | | 122,940 | |
| Total inventories | | 449,726 | | | | 434,869 | |
| |
| Deferred income taxes | | 16,935 | | | | 16,781 | |
| Prepaid expenses and other current assets | | 103,166 | | | | 92,409 | |
| Total current assets | | 1,603,996 | | | | 1,407,543 | |
| |
| Property and equipment, at cost: | | | | | | | |
| Land | | 94,834 | | | | 98,623 | |
| Buildings and improvements | | 503,178 | | | | 528,438 | |
| Machinery and equipment | | 2,044,985 | | | | 2,126,226 | |
| Construction in progress | | 47,030 | | | | 36,193 | |
| Allowance for depreciation | | (1,762,766 | ) | | | (1,779,224 | ) |
| | 927,261 | | | | 1,010,256 | |
| |
| Intangible assets, net | | 138,301 | | | | 153,623 | |
| |
| Other assets | | 111,544 | | | | 148,124 | |
| Total assets | $ | 2,781,102 | | | $ | 2,719,546 | |
| | | | | | | | |
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VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
| July 3, | | December 31, |
| 2010 | | 2009 |
| (unaudited) | | | | |
| Liabilities and stockholders' equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Notes payable to banks | $ | 572 | | | $ | 24 | |
| Trade accounts payable | | 134,001 | | | | 118,216 | |
| Payroll and related expenses | | 109,535 | | | | 87,566 | |
| Other accrued expenses | | 185,469 | | | | 162,083 | |
| Income taxes | | 37,087 | | | | 23,558 | |
| Current portion of long-term debt | | 78,370 | | | | 16,054 | |
| Total current liabilities | | 545,034 | | | | 407,501 | |
| |
| Long-term debt less current portion | | 243,607 | | | | 320,052 | |
| Deferred income taxes | | 18,281 | | | | 13,062 | |
| Deferred grant income | | 2,296 | | | | 2,526 | |
| Other liabilities | | 134,226 | | | | 152,874 | |
| Accrued pension and other postretirement costs | | 277,255 | | | | 301,930 | |
| Total liabilities | | 1,220,699 | | | | 1,197,945 | |
| |
| Equity: | | | | | | | |
| Vishay stockholders' equity | | | | | | | |
| Common stock | | 17,229 | | | | 17,228 | |
| Class B convertible common stock | | 1,435 | | | | 1,435 | |
| Capital in excess of par value | | 2,318,953 | | | | 2,317,613 | |
| Retained earnings (accumulated deficit) | | (800,726 | ) | | | (922,805 | ) |
| Accumulated other comprehensive income | | 18,348 | | | | 102,975 | |
| Total Vishay stockholders' equity | | 1,555,239 | | | | 1,516,446 | |
| Noncontrolling interests | | 5,164 | | | | 5,155 | |
| Total equity | | 1,560,403 | | | | 1,521,601 | |
| Total liabilities and equity | $ | 2,781,102 | | | $ | 2,719,546 | |
| | | | | | | | |
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VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
| Six fiscal months ended |
| July 3, | | June 27, |
| 2010 | | 2009 |
| Continuing operating activities | | | | | | | |
| Net earnings (loss) | $ | 122,604 | | | $ | (87,763 | ) |
| Adjustments to reconcile net earnings (loss) to | | | | | | | |
| net cash provided by continuing operating activities: | | | | | | | |
| Depreciation and amortization | | 99,262 | | | | 110,416 | |
| (Gain) loss on disposal of property and equipment | | (92 | ) | | | 239 | |
| Inventory write-offs for obsolescence | | 10,853 | | | | 14,089 | |
| Deferred grant income | | (313 | ) | | | (367 | ) |
| Other | | 13,436 | | | | (8,980 | ) |
| Changes in operating assets and liabilities, | | | | | | | |
| net of effects of businesses acquired | | (68,199 | ) | | | 41,307 | |
| Net cash provided by continuing operating activities | | 177,551 | | | | 68,941 | |
| | | | | | | | |
| Continuing investing activities | | | | | | | |
| Purchase of property and equipment | | (49,193 | ) | | | (18,266 | ) |
| Proceeds from sale of property and equipment | | 590 | | | | 512 | |
| Purchase of businesses, net of cash acquired or refunded | | - | | | | 28,195 | |
| Proceeds from loans receivable | | 15,000 | | | | - | |
| Other investing activities | | - | | | | 150 | |
| Net cash (used in) provided by continuing investing activities | | (33,603 | ) | | | 10,591 | |
| | | | | | | | |
| Continuing financing activities | | | | | | | |
| Principal payments on long-term debt and capital lease obligations | | (14,129 | ) | | | (15,069 | ) |
| Proceeds of long-term debt | | - | | | | 15,000 | |
| Debt issuance costs | | (456 | ) | | | - | |
| Net changes in short-term borrowings | | 554 | | | | (10,660 | ) |
| Distributions to noncontrolling interests | | (516 | ) | | | (116 | ) |
| Net cash used in continuing financing activities | | (14,547 | ) | | | (10,845 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | (33,927 | ) | | | 4,077 | |
| Net increase in cash and cash equivalents | | | | | | | |
| from continuing activities | | 95,474 | | | | 72,764 | |
| | | | | | | | |
| Net cash used by discontinued operating activities | | (82 | ) | | | (3,187 | ) |
| Net cash provided by discontinued investing activities | | - | | | | - | |
| Net cash used by discontinued financing activities | | - | | | | - | |
| Net cash used by discontinued operations | | (82 | ) | | | (3,187 | ) |
| | | | | | | | |
| Net increase in cash and cash equivalents | | 95,392 | | | | 69,577 | |
| | | | | | | | |
| Cash and cash equivalents at beginning of period | | 579,189 | | | | 324,164 | |
| Cash and cash equivalents at end of period | $ | 674,581 | | | $ | 393,741 | |
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VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings (Loss) Per Share
(Unaudited - In thousands except earnings per share)
| Fiscal quarters ended | | Six fiscal months ended |
| July 3, | | April 3, | | June 27, | | July 3, | | June 27, |
| 2010 | | 2010 | | 2009 | | 2010 | | 2009 |
| GAAP net earnings (loss) attributable to Vishay stockholders | $ | 76,659 | | $ | 45,420 | | $ | (58,865 | ) | | $ | 122,079 | | $ | (87,992 | ) |
| |
| Reconciling items affecting operating margin: | | | | | | | | | | | | | | | | |
| Restructuring and severance costs | $ | - | | $ | - | | $ | 12,090 | | | $ | - | | $ | 31,023 | |
| Settlement agreement gain | | - | | | - | | | (28,195 | ) | | | - | | | (28,195 | ) |
| Executive employment agreement charge | | - | | | - | | | 57,824 | | | | - | | | 57,824 | |
| |
| Reconciling items affecting tax expense (benefit): | | | | | | | | | | | | | | | | |
| Tax effects of items above and other one-time tax expense (benefit) | $ | - | | $ | - | | $ | (1,303 | ) | | $ | - | | $ | (5,737 | ) |
| |
| Adjusted net earnings (loss) | $ | 76,659 | | $ | 45,420 | | $ | (18,449 | ) | | $ | 122,079 | | $ | (33,077 | ) |
| |
| Adjusted weighted average diluted shares outstanding | | 193,084 | | | 193,067 | | | 186,586 | | | | 193,076 | | | 186,572 | |
| |
| Adjusted earnings (loss) per diluted share * | $ | 0.40 | | $ | 0.24 | | $ | (0.10 | ) | | $ | 0.63 | | $ | (0.18 | ) |
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.
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