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Vishay Reports Results for Second Quarter 2015


  • Revenues for Q2 2015 $590.5 million
  • Operating margin Q2 2015 of 7.5%, or adjusted operating margin of 8.4%
  • EPS Q2 2015 of $0.17, or adjusted EPS of $0.20
  • Cash from operations for trailing twelve months Q2 2015 of $290 million and capital expenditures of $153 million
  • Guidance for Q3 2015 for revenues of $560 - $600 million and gross margins of 22% to 24%

MALVERN, Pa., Aug. 04, 2015 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc. (NYSE:VSH), one of the world’s largest manufacturers of discrete semiconductors and passive components, today announced its results for the fiscal quarter and six fiscal months ended July 4, 2015.

Revenues for the fiscal quarter ended July 4, 2015 were $590.5 million, compared to $641.9 million for the fiscal quarter ended June 28, 2014. The net earnings attributable to Vishay stockholders for the fiscal quarter ended July 4, 2015 were $26.3 million, or $0.17 per diluted share, compared to $35.6 million, or $0.23 per diluted share for the fiscal quarter ended June 28, 2014.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended July 4, 2015 include restructuring and severance costs of $5.7 million. Net earnings attributable to Vishay stockholders for the fiscal quarter ended June 28, 2014 include restructuring and severance costs of $9.0 million. These items are summarized on the attached reconciliation schedule. Adjusted earnings per diluted share, which exclude these items, were $0.20 and $0.27 for the fiscal quarters ended July 4, 2015 and June 28, 2014, respectively.

Commenting on the results for the second quarter 2015, Dr. Gerald Paul, President and Chief Executive Officer, stated, “In the second quarter Vishay experienced a less favorable economic environment than anticipated. We did not achieve the projected revenue increase, but rather a repetition of the first quarter with similarly solid results. Despite a mixed outlook for our end markets and some anticipated inventory reduction of our products at distributors, we continue to expect a free cash flow generation of substantially over $100 million for the year 2015.”

Dr. Gerald Paul continued, “To defend margins and free cash flow in a potentially lower growth environment, we announced yesterday new global cost reduction programs to reduce SG&A costs by $17 million, to be fully implemented by the end of 2016, and to reduce COGS by $18 million at current volumes, to be fully implemented by the end of 2017. As announced, the expected cash costs will be approximately $30 million. These cost reductions will impact neither the R&D activities nor the initiatives in Asian markets as defined in our Growth Plan. At the same time, we continue to pursue synergetic or strategic acquisitions at appropriate valuations.”

Commenting on the outlook for the third quarter 2015, Dr. Paul stated, “Based on a 1.10 U.S. dollar to euro exchange rate, we guide for revenues of $560 to $600 million and for gross margins of 22% to 24%.”

A conference call to discuss second quarter financial results is scheduled for Tuesday, August 4, 2015 at 9:00 a.m. 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 71078044.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, August 4, 2015 through 11:59 p.m. ET on Tuesday, August 11, 2015. The telephone number for the replay is 800-585-8367 (+1 855-859-2056 or 404-537-3406 if calling from outside the United States or Canada) and the access code is 71078044.

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 https://ir.vishay.com.

About Vishay

Vishay Intertechnology, Inc., a Fortune 1000 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.

This press release includes certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted net earnings; adjusted earnings per share; earnings before interest, taxes, depreciation and amortization (“EBITDA”); adjusted EBITDA; and adjusted EBITDA margin; which are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. These non-GAAP measures supplement our GAAP measures of performance or liquidity and should not be viewed as an alternative to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin 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 such measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Although the term "EBITDA" is not defined in GAAP, the measure is derived using various line items measured in accordance with GAAP. Reconciling items to arrive at adjusted net earnings represent significant charges or credits that are important to understanding the Company's intrinsic operations. Reconciling items to calculate adjusted EBITDA represent those same items used in computing adjusted net earnings, as relevant. Furthermore, the presented calculation of adjusted EBITDA is substantially similar to, but not identical to, a measure used in the calculation of financial ratios required for covenant compliance under Vishay’s revolving credit facility. These reconciling items are indicated on the accompanying reconciliation schedules and are more fully described in the Company's financial statements presented in its annual report on Form 10-K and its quarterly reports presented on Forms 10-Q.

Statements contained herein that relate to the Company's future performance, including statements with respect to forecasted revenues, margins, cash generation, internal growth and acquisition activity and results, new product development, cost reduction programs, and the general state of the Company, are forward-looking statements within the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should,” or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements may vary materially from those anticipated, estimated or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; delays or difficulties in implementing our cost reduction strategies; changes in foreign currency exchange rates; competition and technological changes in our industries; difficulties in new product development; difficulties in identifying suitable acquisition candidates, consummating a transaction on terms which we consider acceptable, and integration and performance of acquired businesses; uncertainty related to the effects of changes in foreign currency exchange rates; and other factors affecting our operations that are set forth in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended
July 4, 2015 April 4, 2015 June 28, 2014
Net revenues$ 590,470 $ 593,436 $ 641,929
Costs of products sold 448,988 448,398 477,836
Gross profit 141,482 145,038 164,093
Gross margin 24.0% 24.4% 25.6%
Selling, general, and administrative expenses 91,652 96,070 97,156
Restructuring and severance costs 5,660 1,410 9,014
Operating income 44,170 47,558 57,923
Operating margin 7.5% 8.0% 9.0%
Other income (expense):
Interest expense (6,736) (6,361) (5,821)
Other 1,160 3,460 208
Total other income (expense) - net (5,576) (2,901) (5,613)
Income before taxes 38,594 44,657 52,310
Income taxes 12,076 13,732 16,478
Net earnings 26,518 30,925 35,832
Less: net earnings attributable to noncontrolling interests 250 226 190
Net earnings attributable to Vishay stockholders$ 26,268 $ 30,699 $ 35,642
Basic earnings per share attributable to Vishay stockholders$ 0.18 $ 0.21 $ 0.24
Diluted earnings per share attributable to Vishay stockholders$ 0.17 $ 0.20 $ 0.23
Weighted average shares outstanding - basic 147,700 147,698 147,567
Weighted average shares outstanding - diluted 151,700 152,666 154,322
Cash dividends per share$ 0.06 $ 0.06 $ 0.06

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
Six fiscal months ended
July 4, 2015 June 28, 2014
Net revenues$ 1,183,906 $1,244,307
Costs of products sold 897,386 934,931
Gross profit 286,520 309,376
Gross margin 24.2% 24.9%
Selling, general, and administrative expenses 187,722 193,463
Restructuring and severance costs 7,070 15,418
Operating income 91,728 100,495
Operating margin 7.7% 8.1%
Other income (expense):
Interest expense (13,097) (11,801)
Other 4,620 1,520
Total other income (expense) - net (8,477) (10,281)
Income before taxes 83,251 90,214
Income taxes 25,808 28,418
Net earnings 57,443 61,796
Less: net earnings attributable to noncontrolling interests 476 344
Net earnings attributable to Vishay stockholders$ 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

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

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
July 4, 2015 December 31, 2014
(unaudited)
Liabilities and stockholders' 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
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
Retained earnings (accumulated deficit) (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

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
Changes 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
Purchase of property and equipment (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 provided by (used in) investing activities (139,831) (78,795)
Financing activities
Principal payments on long-term debt and capital lease obligations - (11)
Net proceeds (payments) on revolving credit lines (30,000) 20,000
Dividends paid to common stockholders (16,252) (16,238)
Dividends paid to Class B common stockholders (1,456) (1,456)
Net changes in short-term borrowings (1) 16
Distributions to noncontrolling interests (725) (547)
Excess tax benefit from RSUs vested 21 -
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

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended Six fiscal months ended
July 4, 2015 April 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014
GAAP net earnings attributable to Vishay stockholders$ 26,268 $ 30,699 $ 35,642 $ 56,967 $ 61,452
Reconciling items affecting operating margin:
Restructuring and severance costs$ 5,660 $ 1,410 $ 9,014 $ 7,070 $ 15,418
Reconciling items affecting tax expense (benefit):
Tax effects of items above and other one-time tax expense (benefit)$ (1,988) $ (508) $ (2,747) $ (2,496) $ (4,844)
Adjusted net earnings$ 29,940 $ 31,601 $ 41,909 $ 61,541 $ 72,026
Adjusted weighted average diluted shares outstanding 151,700 152,666 154,322 152,183 153,438
Adjusted earnings per diluted share*$ 0.20 $ 0.21 $ 0.27 $ 0.40 $ 0.47
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
Fiscal quarters ended Six fiscal months ended
July 4, 2015 April 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014
GAAP net earnings attributable to Vishay stockholders$ 26,268 $ 30,699 $ 35,642 $ 56,967 $ 61,452
Net earnings attributable to noncontrolling interests 250 226 190 476 344
Net earnings$ 26,518 $ 30,925 $ 35,832 $ 57,443 $ 61,796
Interest expense$ 6,736 $ 6,361 $ 5,821 $ 13,097 $ 11,801
Interest income (1,028) (1,197) (1,261) (2,225) (2,484)
Income taxes 12,076 13,732 16,478 25,808 28,418
Depreciation and amortization 44,775 45,410 43,576 90,185 86,931
EBITDA$ 89,077 $ 95,231 $ 100,446 $ 184,308 $ 186,462
Reconciling items
Restructuring and severance costs$ 5,660 $ 1,410 $ 9,014 $ 7,070 $ 15,418
Adjusted EBITDA$ 94,737 $ 96,641 $ 109,460 $ 191,378 $ 201,880
Adjusted EBITDA margin** 16.0% 16.3% 17.1% 16.2% 16.2%
** Adjusted EBITDA as a percentage of net revenues



Contact: Vishay Intertechnology, Inc. Peter G. Henrici Senior Vice President, Corporate Communications +1-610-644-1300

Source:Vishay Intertechnology