Vishay Reports Results For Fourth Quarter And Year 2011

Vishay Intertechnology, Inc. (NYSE: VSH), one of the world’s largest manufacturers of discrete semiconductors and passive components, today announced its results for the year and fiscal quarter ended December 31, 2011.

Revenues for the year ended December 31, 2011 were $2,594.0 million, compared to $2,725.1 million for the year ended December 31, 2010. The net earnings attributable to Vishay stockholders for the year ended December 31, 2011 were $238.8 million, or $1.42 per diluted share, compared to $359.1 million, or $1.89 per diluted share for the year ended December 31, 2010.

Revenues for the fiscal quarter ended December 31, 2011 were $551.4 million, compared to $688.6 million for the fiscal quarter ended December 31, 2010. The net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2011 were $31.0 million, or $0.19 per diluted share, compared to $147.2 million, or $0.81 per diluted share for the fiscal quarter ended December 31, 2010.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2011 includes $6.5 million of one-time tax benefits primarily related to the release of deferred tax valuation allowances in various jurisdictions. Net earnings attributable to Vishay stockholders for 2011 periods and prior year periods include various items affecting comparability, as listed on the attached reconciliation schedule. Adjusted net earnings per diluted share, which excludes these items, was $0.15 and $1.46, respectively, for the fiscal quarter and year ended December 31, 2011, compared to $0.48 and $1.58, respectively, for the fiscal quarter and year ended December 31, 2010.

Commenting on the results for the fourth quarter 2011, Dr. Gerald Paul, President and Chief Executive Officer, stated, “The fourth quarter was marked by the expected inventory reduction at distribution. The inventories of our components at distributors have been reduced by 4% in the quarter, even though the sales of our distributors to their end customers had dropped by 15% compared to the previous quarter. We expect the inventory reduction at distribution to continue during the current quarter. Due to the prompt adaptation of our manufacturing capacities, we reduced internal inventories by 10% quarter over quarter.”

Dr. Paul continued, “Our orders seem to have bottomed out and our book-to-bill is above 1 for January 2012. We anticipate a substantial recovery once the inventory correction in the supply chain is complete.”

Commenting on the results for the year 2011, Dr. Gerald Paul, stated, “2011 was, for Vishay, a year of many challenges mastered. For the Company as well as me personally, the year was overshadowed by the loss of our Founder and Executive Chairman, Dr. Felix Zandman. Both Marc Zandman, our Executive Chairman, and I are committed to carry on Dr. Zandman’s vision. In 2011, we also proved our doubled earnings potential after restructuring in 2008-09. We demonstrated again our fast reaction to a weakening demand with tight management of capacities, inventories, efficiencies and fixed costs. In 2011 we re-emphasized our commitment to increase stockholder value through increasing EPS as outlined in our growth plan.”

Commenting on the recent acquisition of HiRel Systems LLC, a leading supplier of high reliability transformers, inductors, coils, and power conversion products, Marc Zandman, Vishay’s Executive Chairman and Chief Business Development Officer, stated, “The HiRel Systems acquisition will further enhance our inductors portfolio, particularly in the field of custom magnetics. This acquisition fits well into our announced growth plan of intensified internal growth supplemented by niche acquisitions. We will continue on this route.”

Commenting on the outlook for the first quarter 2012 Dr. Paul stated, “Based on current order trends, we anticipate similar revenues as in quarter four 2011 at a slightly improved gross margin.”

On July 6, 2010, Vishay Intertechnology successfully completed the spin-off of Vishay Precision Group, Inc. (“VPG”) to its stockholders as an independent, publicly-traded company. Until July 6, 2010, VPG was part of Vishay Intertechnology and its results of operations and cash flows are included in the amounts reported in the consolidated financial statements through the date of the spin-off, including the year ended December 31, 2010, presented on the accompanying tables. Net earnings of VPG, included in the results of Vishay Intertechnology, were $5.8 million for the year ended December 31, 2010.

A conference call to discuss fourth quarter and year ending financial results is scheduled for Tuesday, February 7, 2012 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 41144161.

There will be a replay of the conference call from 10:30 AM ET on Tuesday, February 7, 2012 through 11:59 PM ET on Sunday, February 12, 2012. 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 41144161.

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.

About Vishay

Vishay Intertechnology, Inc., a Fortune 1,000 Company listed on the NYSE (VSH), is one of the world's largest manufacturers of discrete semiconductors (diodes, MOSFETs, and infrared optoelectronics) and passive electronic components (resistors, inductors, and capacitors). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, power supplies, and medical markets. Vishay’s product innovations, successful acquisition strategy, and "one-stop shop" service have made it a global industry leader. Vishay can be found on the Internet at  http://www.vishay.com.

This press release includes certain financial measures which are not recognized in accordance with generally accepted accounting principles (“GAAP”), including adjusted net earnings (loss) and adjusted net earnings (loss) per share, which are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP measures supplement our GAAP measures of performance and should not be viewed as an alternative to GAAP measures of performance. Non-GAAP measures such as adjusted net earnings and adjusted earnings per diluted share do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that these measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Reconciling items to arrive at adjusted net earnings represent significant charges or credits that are important to an understanding to the Company’s intrinsic operations. These reconciling items are indicated on the accompanying reconciliation schedule and are more fully described in the Company’s financial statements presented in its annual report on Form 10-K and its quarterly reports presented on Forms 10-Q.

Statements contained herein that relate to the Company's future performance, including statements with respect to forecasted revenues, margins, cash generation, internal growth and acquisition activity, 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; 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
December 31, October 1, December 31,
  2011     2011     2010  
 
Net revenues $ 551,391 $ 637,649 $ 688,612
Costs of products sold   425,735     470,172     477,111  
Gross profit 125,656 167,477 211,501
Gross margin 22.8 % 26.3 % 30.7 %
 
Selling, general, and administrative expenses 92,091 90,271 90,918
Executive compensation charges   -     1,873     -  
Operating income 33,565 75,333 120,583
Operating margin 6.1 % 11.8 % 17.5 %
 
Other income (expense):
Interest expense (5,288 ) (5,311 ) (3,657 )
Other   2,537     1,790     (2,653 )
Total other income (expense) - net   (2,751 )   (3,521 )   (6,310 )
 
Income before taxes 30,814 71,812 114,273
 
Income taxes   (388 )   21,120     (33,264 )
 
Net earnings 31,202 50,692 147,537
 
Less: net earnings attributable to noncontrolling interests 250 205 309
     
Net earnings attributable to Vishay stockholders $ 30,952   $ 50,487   $ 147,228  
 
Basic earnings per share attributable to Vishay stockholders $ 0.20 $ 0.32 $ 0.84
 
Diluted earnings per share attributable to Vishay stockholders $ 0.19 $ 0.31 $ 0.81
 
Weighted average shares outstanding - basic 157,184 157,149 174,349
 
Weighted average shares outstanding - diluted 163,863 163,808 181,494
   
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(In thousands, except per share amounts)
 
Years ended
December 31, December 31,
  2011     2010  
(unaudited)
 
Net revenues* $ 2,594,029 $ 2,725,092
Costs of products sold   1,874,043     1,917,607  
Gross profit 719,986 807,485
Gross margin 27.8 % 29.6 %
 
Selling, general, and administrative expenses 367,623 389,547
Executive compensation charges   5,762     -  
Operating income 346,601 417,938
Operating margin 13.4 % 15.3 %
 
Other income (expense):
Interest expense (19,277 ) (11,036 )
Other   3,792     (1,369 )
Total other income (expense) - net   (15,485 )   (12,405 )
 
Income before taxes 331,116 405,533
 
Income taxes   91,119     45,240  
 
Net earnings 239,997 360,293
 
Less: net earnings attributable to noncontrolling interests 1,176 1,187
   
Net earnings attributable to Vishay stockholders* $ 238,821   $ 359,106  
 
Basic earnings per share attributable to Vishay stockholders $ 1.49 $ 1.96
 
Diluted earnings per share attributable to Vishay stockholders $ 1.42 $ 1.89
 
Weighted average shares outstanding - basic 160,094 183,618
 
Weighted average shares outstanding - diluted 168,514 190,227
 

* VPG net revenues included in Vishay Intertechnology, Inc. consolidated results were $101.1 million for the year ended December 31, 2010. VPG earnings included in net earnings attributable to Vishay stockholders were $5.8 million for the year ended December 31, 2010.
 
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
   
December 31, December 31,
  2011     2010  
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 749,088 $ 897,338
Short-term investments 249,139 -
Accounts receivable, net 270,970 330,556
Inventories:
Finished goods 104,478 109,762
Work in process 181,354 178,844
Raw materials   131,795     139,216  
Total inventories 417,627 427,822
 
Deferred income taxes 24,632 31,903
Prepaid expenses and other current assets   119,220     106,885  
Total current assets 1,830,676 1,794,504
 
Property and equipment, at cost:
Land 91,507 93,020
Buildings and improvements 493,550 477,518
Machinery and equipment 2,079,395 2,025,793
Construction in progress 94,717 75,051
Allowance for depreciation   (1,851,264 )   (1,759,268 )
907,905 912,114
 
Goodwill 9,051 -
 
Other intangible assets, net 103,927 113,830
 
Other assets   142,171     145,645  
Total assets $ 2,993,730   $ 2,966,093  
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
 
December 31, December 31,
  2011     2010  
(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 13 $ 23
Trade accounts payable 154,942 167,795
Payroll and related expenses 109,833 122,234
Other accrued expenses 161,119 186,049
Income taxes   13,881     51,060  
Total current liabilities 439,788 527,161
 
Long-term debt less current portion 399,054 431,682
Deferred income taxes 110,356 82,043
Other liabilities 117,235 136,940
Accrued pension and other postretirement costs   319,136     291,117  
Total liabilities   1,385,569     1,468,943  
 
Equity:
Vishay stockholders' equity
Common stock 14,374 15,061
Class B convertible common stock 1,345 1,435
Capital in excess of par value 2,086,925 2,156,981
Retained earnings (accumulated deficit) (503,416 ) (742,237 )
Accumulated other comprehensive income   3,778     60,491  
Total Vishay stockholders' equity   1,603,006     1,491,731  
Noncontrolling interests   5,155     5,419  
Total equity   1,608,161     1,497,150  
Total liabilities and equity $ 2,993,730   $ 2,966,093  
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(In thousands)
 
Years ended
December 31, December 31,
  2011     2010  
(unaudited)
 
Continuing operating activities
Net earnings $ 239,997 $ 360,293

Adjustments to reconcile net earnings (loss) to net cash provided by continuing operating activities:
Depreciation and amortization 179,706 189,541
(Gain) loss on disposal of property and equipment (930 ) 574
Accretion of interest on convertible debentures 2,046 188
Inventory write-offs for obsolescence 21,118 21,449
Other (13,397 ) (28,511 )

Changes in operating assets and liabilities, net of effects of businesses acquired or spun-off
  (52,503 )   1,730  
Net cash provided by continuing operating activities 376,037 545,264
 
Continuing investing activities
Purchase of property and equipment (168,641 ) (145,413 )
Proceeds from sale of property and equipment 2,162 1,188
Purchase of businesses, net of cash acquired or refunded (19,335 ) -
Purchase of short-term investments (497,258 ) -
Maturity of short-term investments 226,792 -
Sale of investments 2,167 -
Proceeds from loans receivable - 15,000
Other investing activities   1,350     (2,287 )
Net cash used in continuing investing activities (452,763 ) (131,512 )
 
Continuing financing activities
Proceeds of long-term borrowings 150,000 275,000
Issuance costs (4,429 ) (15,116 )
Common stock repurchase (150,000 ) (275,000 )
Principal payments on long-term debt and capital lease obligations (681 ) (104,581 )
Net (payments) proceeds on revolving credit lines (85,000 ) 115,000
Net changes in short-term borrowings (10 ) 528
Proceeds from stock options exercised 9,675 -
Excess tax benefit from stock options exercised 555 -
Distributions to noncontrolling interests (1,440 ) (757 )
Distribution in connection with spin-off of VPG   -     (70,600 )
Net cash used in continuing financing activities (81,330 ) (75,526 )
Effect of exchange rate changes on cash and cash equivalents   9,806     (19,995 )

Net (decrease) increase in cash and cash equivalents from continuing activities
  (148,250 )   318,231  
 
Net cash used in discontinued operating activities - (82 )
Net cash used in discontinued investing activities - -
Net cash used in discontinued financing activities   -     -  
Net cash used in discontinued operations   -     (82 )
 
Net (decrease) increase in cash and cash equivalents (148,250 ) 318,149
 
Cash and cash equivalents at beginning of year   897,338     579,189  
Cash and cash equivalents at end of year $ 749,088   $ 897,338  
 
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
   
Fiscal quarters ended Years ended
December 31,   October 1,   December 31, December 31,   December 31,
2011 2011 2010 2011 2010
 
GAAP net earnings attributable to Vishay stockholders $ 30,952 $ 50,487 $ 147,228 $ 238,821 $ 359,106
 

Reconciling items affecting operating margin:
Executive compensation charges - 1,873 - 5,762 -
 

Reconciling items affecting tax expense (benefit):
Tax effects of items above and other one-time tax expense (benefit) (6,538 ) (684 ) (59,484 ) 1,383 (59,484 )
         
Adjusted net earnings $ 24,414   $ 51,676   $ 87,744   $ 245,966 $ 299,622  
 
Adjusted weighted average diluted shares outstanding 163,863 163,808 181,494 168,514 190,227
 
Adjusted earnings per diluted share** $ 0.15 $ 0.32 $ 0.48 $ 1.46 $ 1.58
 
** Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

Copyright Business Wire 2010

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