Exhibit 99
VISHAY REPORTS RESULTS FOR SECOND QUARTER 2006
- Sales for second quarter 2006 increased by $78.1 million or 13.4%
compared to second quarter 2005 and by $29.4 million or 4.7% compared
to first quarter 2006
- Net earnings of $0.22 per diluted share for the second quarter 2006
have been negatively affected by the after tax impact of certain items
(enumerated below) of $0.06 per share for adjusted earnings per share
of $0.28, as compared to second quarter 2005 net earnings of $0.05 per
diluted share, which were negatively affected by the after tax impact
of certain items of $0.07 per share for adjusted earnings per share of
$0.12
- Positive cash generated from operations was $77 million for second
quarter 2006
- Expect full year 2006 revenues and earnings to be best year since 2000
MALVERN, Pa., Aug. 1 /PRNewswire-FirstCall/ -- Dr. Felix Zandman, Chairman
of the Board, and Dr. Gerald Paul, President and Chief Executive Officer of
Vishay Intertechnology, Inc. (NYSE: VSH), announced today that net revenues
for the fiscal quarter ended July 1, 2006 were $660,523,000, compared to
$582,388,000 for the fiscal quarter ended July 2, 2005, an increase of $78.1
million or 13.4%. Net earnings for the fiscal quarter ended July 1, 2006 were
$42,842,000, or $0.22 per diluted share, compared with net earnings for the
fiscal quarter ended July 2, 2005 of $9,716,000, or $0.05 per diluted share.
Net earnings of $42,842,000, or $0.22, per diluted share, for the second
quarter of 2006 were impacted by pre-tax charges for restructuring and
severance costs of $8,227,000, related asset write-downs of $3,794,000, losses
resulting from adjustments to previously existing purchase commitments of
$794,000 for tantalum powder and wire, a loss on early extinguishment of debt
of $2,854,000 associated with the repurchase of the Company's Liquid Yield
Option Notes, and an adjustment to increase the estimated cost of
environmental remediation obligations associated with the 2001 General
Semiconductor acquisition of $3,600,000. These items and their tax-related
consequences had a negative $0.06 effect on earnings per share.
Net earnings of $9,716,000, or $0.05 per diluted share, for the second
quarter of 2005 were impacted by pre-tax charges for restructuring and
severance costs and related asset write-downs of $9,358,000, purchased
in-process research and development of $9,201,000, Siliconix
transaction-related expenses of $3,751,000, and losses resulting from
adjustments to previously existing purchase commitments of $1,323,000 for
tantalum powder and wire, partially offset by a gain on sale of land of
$2,120,000. In addition, tax expense included a $3,698,000 favorable benefit,
primarily due to a foreign tax ruling. These items and their tax related
consequences had a negative $0.07 effect on earnings per share.
Net revenues for the six fiscal months ended July 1, 2006 were
$1,291,609,000, compared to $1,136,754,000 for the six fiscal months ended
July 2, 2005, an increase of $154.9 million or 14%. Net earnings for the six
fiscal months ended July 1, 2006 were $81,002,000, or $0.41 per diluted share,
compared with net earnings for the six fiscal months ended July 2, 2005 of
$15,428,000, or $0.09 per diluted share.
Net earnings of $81,002,000, or $0.41 per diluted share, for the six
fiscal months ended July 1, 2006 were impacted by pre-tax charges for
restructuring and severance costs of $8,925,000, related asset write-downs of
$3,874,000, write-downs of tantalum inventories to current market value of
$8,228,000, losses resulting from adjustments to previously existing purchase
commitments of $4,097,000, a loss on early extinguishment of debt of
$2,854,000, and an adjustment to increase the estimated cost of environmental
remediation obligations associated with the 2001 General Semiconductor
acquisition of $3,600,000. These items and their tax-related consequences
had a negative $0.12 effect on earnings per share.
Net earnings for the six fiscal months ended July 2, 2005 were impacted by
pretax charges for restructuring and severance costs and related asset write-
downs of $14,385,000, purchased in-process research and development of
$9,201,000, Siliconix transaction-related expenses of $3,751,000, and losses
resulting from adjustments to previously existing purchase commitments of
$3,600,000, partially offset by a gain on sale of land of $2,120,000. In
addition, tax expense is net of a $3,698,000 benefit, primarily due to a
foreign tax ruling. These items and their tax related consequences had a
negative $0.10 effect on earnings per share.
Commenting on the results for the second quarter of 2006, Dr. Paul stated,
"After a very good first quarter, Vishay was able to improve its results
further. Due to continued high end demand and our efforts to expand critical
capacities, we increased sales in the second quarter 2006 sequentially by
4.7%, resulting in a significant improvement in our adjusted operating income.
We achieved an adjusted operating margin in line with our business model at
the current revenue level. We continued to generate free cash-cash flows from
operations for the quarter were $77 million and capital expenditures were $34
million."
Commenting on the outlook for the third quarter 2006, Dr. Paul continued,
"Strong orders from OEMs and EMS support our current business. Inventories in
the supply chain are at a reasonable level to sustain the overall business
activity. Customers remain optimistic for the second half of this year. We
expect a continued friendly business environment, which will lead us to our
best year since 2000. For the third quarter we expect sales in the range of
$650 million to $670 million and are confident to maintain our good
performance."
Commenting on the Company's performance, Dr. Felix Zandman, Chairman of
the Board and Chief Technical and Business Development Officer, stated, "Sales
and adjusted operating results for Vishay have reached a level we have not
attained since 2000/2001. Our strategy of focus on cost reduction, R&D, and
acquisitions is on target."
A conference call to discuss second quarter financial results is scheduled
for Tuesday, August 1, 2006 at 11:00 AM (EDT). 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 #2585530.
There will be a replay of the conference call from 12:30 PM (EDT) on
Tuesday, August 1, 2006 through 11:59 PM (EDT) on Sunday, August 6, 2006. 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 #2585530.
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, rectifiers, transistors, and optoelectronics and selected ICs) and
passive electronic components (resistors, capacitors, inductors, sensors, and
transducers). Vishay's components can be found in products manufactured in a
very broad range of industries worldwide. Vishay is headquartered in Malvern,
Pennsylvania, and has operations in 17 countries employing over 27,000 people.
Vishay can be found on the Internet at http://www.vishay.com.
Statements contained herein that relate to the Company's future
performance, including statements with respect to trends in revenues,
bookings, and margins and the anticipated future benefits of the Company's
product, acquisition, research and development and cost reduction strategies
are forward-looking statements within the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. 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 in the markets that we serve,
the availability of appropriate acquisition opportunities on terms that the
Company considers attractive, difficulties in integrating acquired companies,
difficulties in implementing our cost reduction strategies such as labor
unrest or legal challenges to our lay-off or termination plans, under-
utilization of production facilities in lower-labor-cost countries, operation
of redundant facilities due to difficulties in transferring production to
lower-labor-cost countries, difficulties in new product development, an
inability to attract and retain highly qualified personnel, the current
hostilities in Israel where the Company conducts certain of its businesses,
and other factors affecting the Company's operations, markets, products,
services, and prices that are set forth in its Annual Report on Form 10-K for
the year ended December 31, 2005 filed with the Securities and Exchange
Commission. You are urged to refer to the Company's Form 10-K for a detailed
discussion of these factors. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Management believes that stating the impact on net earnings of items such
as restructuring and severance, asset write-downs, charges for in-process
research and development, gains or losses on purchase commitments, losses on
early extinguishment of debt, special tax items and other items not reflecting
on-going operating activities is meaningful to investors because it provides
insight with respect to intrinsic operating results of the Company and,
management believes, is a common measure of performance in the industries in
which the Company competes. Investors should be aware, however, that this is a
non-GAAP measure of performance and should not be considered as a substitute
for the comparable GAAP measure.
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands except earnings per share)
Fiscal quarter ended
---------------------------
July 1, July 2,
2006 2005
------------ ------------
Net revenues $ 660,523 $ 582,388
Cost of products sold 479,808 449,018
Loss on purchase commitments 794 1,323
Gross profit 179,921 132,047
Gross margin 27.2% 22.7%
Selling, general and administrative
expenses* 104,317 95,838
Purchased in-process research and
development - 9,201
Siliconix transaction-related
expenses - 3,751
Restructuring and severance costs 8,227 9,227
Asset write-offs 3,794 131
Operating income 63,583 13,899
9.6% 2.4%
Other income (expense):
Interest expense (8,407) (8,462)
Loss on early extinguishment of debt (2,854) -
Minority interest (381) (1,112)
Other 3,723 6,593
Total other income (expense) - net (7,919) (2,981)
Earnings before taxes 55,664 10,918
Income taxes 12,822 1,202
Net earnings $ 42,842 $ 9,716
Basic earnings per share $ 0.23 $ 0.06
Diluted earnings per share $ 0.22 $ 0.05
Weighted average shares outstanding -
basic 184,419 176,198
Weighted average shares outstanding -
diluted 217,803 177,133
* The fiscal quarter ended July 1, 2006 includes $3,600 of expenses within
selling, general and administrative expenses to increase the estimated cost of
environmental obligations associated with the 2001 General Semiconductor
acquisition.
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands except earnings per share)
Six fiscal months ended
---------------------------
July 1, July 2,
2006 2005
------------ ------------
Net revenues $ 1,291,609 $ 1,136,754
Cost of products sold* 951,094 884,288
Loss on purchase commitments 4,097 3,600
Gross profit 336,418 248,866
Gross margin 26.0% 21.9%
Selling, general and administrative
expenses** 200,169 192,178
Purchased in-process research and
development - 9,201
Siliconix transaction-related
expenses - 3,751
Restructuring and severance costs 8,925 14,254
Asset write-offs 3,874 131
Operating income 123,450 29,351
9.6% 2.6%
Other income (expense):
Interest expense (17,064) (16,515)
Loss on early extinguishment of debt (2,854) -
Minority interest (567) (3,764)
Other 8,004 10,246
Total other income (expense) - net (12,481) (10,033)
Earnings before taxes 110,969 19,318
Income taxes 29,967 3,890
Net earnings $ 81,002 $ 15,428
Basic earnings per share $ 0.44 $ 0.09
Diluted earnings per share $ 0.41 $ 0.09
Weighted average shares outstanding -
basic 184,345 171,125
Weighted average shares outstanding -
diluted 218,204 172,115
* The six fiscal months ended July 1, 2006 includes write-downs of tantalum
inventories of $8,228 within costs of products sold.
** The six fiscal months ended July 1, 2006 includes $3,600 of expenses within
selling, general and administrative expenses to increase the estimated cost of
environmental obligations associated with the 2001 General Semiconductor
acquisition.
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
July 1, December 31,
2006 2005
------------ ------------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 575,047 $ 622,577
Short-term investments - 9,925
Accounts receivable - net 390,124 350,850
Inventories:
Finished goods 155,713 149,709
Work in process 195,087 181,125
Raw materials 176,343 157,036
Deferred income taxes 41,229 39,115
Prepaid expenses and other current
assets 91,616 96,295
Total current assets 1,625,159 1,606,632
Property and equipment, at cost:
Land 93,825 92,650
Buildings and improvements 418,918 406,798
Machinery and equipment 1,748,537 1,684,736
Construction in progress 64,305 67,229
Allowance for depreciation (1,240,118) (1,160,821)
Total property and equipment, net 1,085,467 1,090,592
Goodwill 1,443,239 1,434,901
Other intangible assets, net 169,548 174,220
Other assets 204,732 221,246
Total assets $ 4,528,145 $ 4,527,591
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 6,626 $ 3,473
Trade accounts payable 132,472 142,709
Payroll and related expenses 121,542 118,814
Other accrued expenses 165,210 173,982
Income taxes 29,550 29,655
Current portion of long-term debt 1,794 1,533
Total current liabilities 457,194 470,166
Long-term debt less current portion 613,438 751,553
Deferred income taxes 27,607 27,091
Deferred grant income 8,967 11,896
Other liabilities 160,153 149,938
Accrued pension and other
postretirement costs 272,686 256,986
Minority interest 4,376 4,109
Stockholders' equity:
Common stock 17,007 16,946
Class B common stock 1,438 1,468
Capital in excess of par value 2,229,262 2,225,966
Retained earnings 738,168 657,166
Unearned compensation - (95)
Accumulated other comprehensive
income (2,151) (45,599)
Total stockholders' equity 2,983,724 2,855,852
Total liabilities and
stockholders' equity $ 4,528,145 $ 4,527,591
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Earnings Per Share
(Unaudited - In thousands except earnings per share)
Fiscal quarter Six fiscal months
ended ended
----------------------- -----------------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Numerator:
Numerator for basic earnings
per share - net earnings $ 42,842 $ 9,716 $ 81,002 $ 15,428
Interest savings assuming conversion
of dilutive convertible and
exchangeable notes, net of tax 4,678 - 9,476 -
Numerator for diluted earnings per
share - adjusted net earnings $ 47,520 $ 9,716 $ 90,478 $ 15,428
Denominator:
Denominator for basic earnings per
share - weighted average shares 184,419 176,198 184,345 171,125
Effect of dilutive securities
Convertible and exchangeable
notes** 32,351 - 32,916 -
Employee stock options 947 859 858 914
Other 86 76 85 76
Dilutive potential common shares 33,384 935 33,859 990
Denominator for diluted earnings per
share - adjusted weighted average
shares 217,803 177,133 218,204 172,115
Basic earnings per share $ 0.23 $ 0.06 $ 0.44 $ 0.09
Diluted earnings per share $ 0.22 $ 0.05 $ 0.41 $ 0.09
Diluted earnings per share for the periods presented do not reflect the
following weighted-average potential common shares, as the effect would be
antidilutive:
Fiscal quarter Six fiscal months
ended ended
----------------------- -----------------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Convertible and exchangeable notes:
Convertible Subordinated Notes,
due 2023 - 23,496 - 23,496
LYONs, due 2021** - 11,137 - 10,697
Exchangeable Unsecured Notes,
due 2102 - 6,176 - 6,176
Weighted average employee stock
options 4,112 6,614 4,697 6,339
Weighted average warrants 8,824 8,824 8,824 8,824
** The Company made a cash repurchase of all outstanding LYONs pursuant to the
option of the holders to require the Company to repurchase the LYONs on June 4,
2006. In 2005, based on its action to settle the holders' purchase option on the
June 4, 2004 purchase date in common stock, the Company assumed for purposes of
the earnings per share computation that all future purchase options for the
LYONs would be settled in stock based on the settlement formula set forth in the
indenture governing the LYONs. Due to the decision to utilize cash to repurchase
the notes on the June 4, 2006, purchase date, the earnings per share computation
for the 2006 periods are based on the 3,809 shares that would have been issued
in a normal conversion, weighted for the period they were outstanding.
Contact: Richard N. Grubb,
Executive Vice President and
Chief Financial Officer or
Peter G. Henrici, Senior Vice
President Corporate Communications
610-644-1300
SOURCE Vishay Intertechnology, Inc.
-0- 08/01/2006
/CONTACT: Richard N. Grubb, 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/
/Web site: http://www.vishay.com /