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 June 28, 2014.
Revenues for the fiscal quarter ended June 28, 2014 were $641.9 million, compared to $597.7 million for the fiscal quarter ended June 29, 2013. The net earnings attributable to Vishay stockholders for the fiscal quarter ended June 28, 2014 were $35.6 million, or $0.23 per diluted share, compared to $31.3 million, or $0.21 per diluted share for the fiscal quarter ended June 29, 2013.
Net earnings attributable to Vishay stockholders for the fiscal quarter ended June 28, 2014 include restructuring and severance costs of $9.0 million. Net earnings attributable to Vishay stockholders for the fiscal quarter ended June 29, 2013 include an adjustment of $1.8 million related to performance-based stock compensation for certain former executives, following a determination that achievement of the three-year performance targets was no longer probable. These costs had been originally reported as a separate line item upon cessation of employment of these executives in 2011, and accordingly, this adjustment is also reported as a separate line item. Adjusted net earnings per diluted share, which exclude these items, were $0.27 and $0.20 for the fiscal quarters ended June 28, 2014 and June 29, 2013, respectively.
Commenting on the results for the second quarter 2014, Dr. Gerald Paul, President and Chief Executive Officer, stated, “The revenues for the second quarter were at the anticipated level but at higher margins than expected. Industrial and automotive demand remained strong in all regions. Point of sale, the sales of Vishay products by its distributors to end customers, increased 1.5% quarter over quarter as did inventories of Vishay products at its distributors. Lead times continue to be under control.”
Dr. Paul continued, “We are following our Growth Plan:
- Accelerating development of new products and technologies
- Penetrating the Asian industrial markets
- Expanding manufacturing capacities for strategic product lines to ensure short lead times.
Additionally, we are continuing our acquisition strategy to supplement our organic Growth Plan through targeted acquisitions. The recent acquisition of Holy Stone Polytech Co., Ltd., a tantalum capacitor company, represents for Vishay an entry point into the polymer tantalum market and also strengthens the Company’s position for tantalum capacitors in Japan.”
Commenting on Vishay’s Merger and Acquisition activity, Marc Zandman, Vishay’s Executive Chairman and Chief Business Development Officer, stated, “On July 11, 2014, we announced our tender offer for Taiwan based Capella Microsystems, Inc., a leading IC design company for optical sensors. Capella’s strong market position for optical sensors complements Vishay’s current capabilities in this high growth field very well. If the tender offer is successful, as we expect, Capella will continue to grow as a stand-alone business within Vishay while strengthening Vishay’s position for optical sensors by adding in-house IC design capability.”
Commenting on the outlook for the third quarter 2014 Dr. Paul stated, “We guide for revenues of $630 to $670 million at gross margins in line with this volume. If the Capella tender offer is completed during the quarter, we will provide some additional guidance regarding the impact of its inclusion in our consolidated results.”
A conference call to discuss second quarter financial results is scheduled for Tuesday, July 29, 2014 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 66287831.
There will be a replay of the conference call from 12:00 PM ET on Tuesday, July 29, 2014 through 11:59 PM ET on Monday, August 4, 2014. 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 66287831.
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 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 http://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; adjusted operating margin; 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, adjusted operating margin, 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 and adjusted operating margin 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, product lines, market share, 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; 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, including with respect to the pending Capella acquisition; 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 | ||||||||||||
| June 28, 2014 | March 29, 2014 | June 29, 2013 | ||||||||||
| Net revenues | $ | 641,929 | $ | 602,378 | $ | 597,665 | ||||||
| Costs of products sold | 477,836 | 457,095 | 454,808 | |||||||||
| Gross profit | 164,093 | 145,283 | 142,857 | |||||||||
| Gross margin | 25.6 | % | 24.1 | % | 23.9 | % | ||||||
| Selling, general, and administrative expenses | 97,156 | 96,307 | 92,745 | |||||||||
| Restructuring and severance costs | 9,014 | 6,404 | - | |||||||||
| Executive compensation charge (credit) | - | - | (1,778 | ) | ||||||||
| Operating income | 57,923 | 42,572 | 51,890 | |||||||||
| Operating margin | 9.0 | % | 7.1 | % | 8.7 | % | ||||||
| Other income (expense): | ||||||||||||
| Interest expense | (5,821 | ) | (5,980 | ) | (5,824 | ) | ||||||
| Other | 208 | 1,312 | 784 | |||||||||
| Total other income (expense) - net | (5,613 | ) | (4,668 | ) | (5,040 | ) | ||||||
| Income before taxes | 52,310 | 37,904 | 46,850 | |||||||||
| Income taxes | 16,478 | 11,940 | 15,365 | |||||||||
| Net earnings | 35,832 | 25,964 | 31,485 | |||||||||
| Less: net earnings attributable to noncontrolling interests | 190 | 154 | 176 | |||||||||
| Net earnings attributable to Vishay stockholders | $ | 35,642 | $ | 25,810 | $ | 31,309 | ||||||
| Basic earnings per share attributable to Vishay stockholders | $ | 0.24 | $ | 0.17 | $ | 0.22 | ||||||
| Diluted earnings per share attributable to Vishay stockholders | $ | 0.23 | $ | 0.17 | $ | 0.21 | ||||||
| Weighted average shares outstanding - basic | 147,567 | 147,557 | 143,710 | |||||||||
| Weighted average shares outstanding - diluted | 154,322 | 152,556 | 151,880 | |||||||||
| Cash dividends per share | $ | 0.06 | $ | 0.06 | $ | - | ||||||
| VISHAY INTERTECHNOLOGY, INC. | ||||||||
| Summary of Operations | ||||||||
| (Unaudited - In thousands, except per share amounts) | ||||||||
| Six fiscal months ended | ||||||||
| June 28, 2014 | June 29, 2013 | |||||||
| Net revenues | $ | 1,244,307 | $ | 1,151,919 | ||||
| Costs of products sold | 934,931 | 872,328 | ||||||
| Gross profit | 309,376 | 279,591 | ||||||
| Gross margin | 24.9 | % | 24.3 | % | ||||
| Selling, general, and administrative expenses | 193,463 | 183,874 | ||||||
| Restructuring and severance costs | 15,418 | - | ||||||
| Executive compensation charge (credit) | - | (1,778 | ) | |||||
| Operating income | 100,495 | 97,495 | ||||||
| Operating margin | 8.1 | % | 8.5 | % | ||||
| Other income (expense): | ||||||||
| Interest expense | (11,801 | ) | (11,310 | ) | ||||
| Other | 1,520 | 899 | ||||||
| Total other income (expense) - net | (10,281 | ) | (10,411 | ) | ||||
| Income before taxes | 90,214 | 87,084 | ||||||
| Income taxes | 28,418 | 26,458 | ||||||
| Net earnings | 61,796 | 60,626 | ||||||
| Less: net earnings attributable to noncontrolling interests | 344 | 386 | ||||||
| Net earnings attributable to Vishay stockholders | $ | 61,452 | $ | 60,240 | ||||
| Basic earnings per share attributable to Vishay stockholders | $ | 0.42 | $ | 0.42 | ||||
| Diluted earnings per share attributable to Vishay stockholders | $ | 0.40 | $ | 0.40 | ||||
| Weighted average shares outstanding - basic | 147,561 | 143,651 | ||||||
| Weighted average shares outstanding - diluted | 153,438 | 151,256 | ||||||
| Cash dividends per share | $ | 0.12 | $ | - | ||||
| VISHAY INTERTECHNOLOGY, INC. | ||||||||
| Consolidated Condensed Balance Sheets | ||||||||
| (In thousands) | ||||||||
| June 28, 2014 | December 31, 2013 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 659,593 | $ | 640,348 | ||||
| Short-term investments | 514,397 | 511,231 | ||||||
| Accounts receivable, net | 305,395 | 274,083 | ||||||
| Inventories: | ||||||||
| Finished goods | 127,263 | 109,617 | ||||||
| Work in process | 200,643 | 197,600 | ||||||
| Raw materials | 130,981 | 125,491 | ||||||
| Total inventories | 458,887 | 432,708 | ||||||
| Deferred income taxes | 22,101 | 21,716 | ||||||
| Prepaid expenses and other current assets | 109,667 | 100,594 | ||||||
| Total current assets | 2,070,040 | 1,980,680 | ||||||
| Property and equipment, at cost: | ||||||||
| Land | 93,634 | 93,685 | ||||||
| Buildings and improvements | 568,303 | 560,418 | ||||||
| Machinery and equipment | 2,383,121 | 2,340,778 | ||||||
| Construction in progress | 71,868 | 95,278 | ||||||
| Allowance for depreciation | (2,217,024 | ) | (2,163,540 | ) | ||||
| 899,902 | 926,619 | |||||||
| Goodwill | 52,581 | 43,132 | ||||||
| Other intangible assets, net | 126,720 | 129,951 | ||||||
| Other assets | 160,259 | 156,757 | ||||||
| Total assets | $ | 3,309,502 | $ | 3,237,139 | ||||
| VISHAY INTERTECHNOLOGY, INC. | ||||||||
| Consolidated Condensed Balance Sheets (continued) | ||||||||
| (In thousands) | ||||||||
| June 28, 2014 | December 31, 2013 | |||||||
| (unaudited) | ||||||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Notes payable to banks | $ | 19 | $ | 2 | ||||
| Trade accounts payable | 161,377 | 163,894 | ||||||
| Payroll and related expenses | 128,229 | 120,997 | ||||||
| Other accrued expenses | 150,188 | 146,670 | ||||||
| Income taxes | 17,926 | 17,502 | ||||||
| Total current liabilities | 457,739 | 449,065 | ||||||
| Long-term debt less current portion | 386,806 | 364,911 | ||||||
| Deferred income taxes | 159,110 | 157,640 | ||||||
| Other liabilities | 103,806 | 99,426 | ||||||
| Accrued pension and other postretirement costs | 283,416 | 287,901 | ||||||
| Total liabilities | 1,390,877 | 1,358,943 | ||||||
| Equity: | ||||||||
| Vishay stockholders' equity | ||||||||
| Common stock | 13,532 | 13,520 | ||||||
| Class B convertible common stock | 1,213 | 1,213 | ||||||
| Capital in excess of par value | 2,055,354 | 2,054,087 | ||||||
| Retained earnings (accumulated deficit) | (213,954 | ) | (257,698 | ) | ||||
| Accumulated other comprehensive income (loss) | 57,243 | 61,634 | ||||||
| Total Vishay stockholders' equity | 1,913,388 | 1,872,756 | ||||||
| Noncontrolling interests | 5,237 | 5,440 | ||||||
| Total equity | 1,918,625 | 1,878,196 | ||||||
| Total liabilities and equity | $ | 3,309,502 | $ | 3,237,139 | ||||
| VISHAY INTERTECHNOLOGY, INC. | ||||||||
| Consolidated Condensed Statements of Cash Flows | ||||||||
| (Unaudited - in thousands) | ||||||||
| Six fiscal months ended | ||||||||
| June 28, 2014 | June 29, 2013 | |||||||
| Operating activities | ||||||||
| Net earnings | $ | 61,796 | $ | 60,626 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 86,931 | 83,456 | ||||||
| (Gain) loss on disposal of property and equipment | 23 | 86 | ||||||
| Accretion of interest on convertible debentures | 1,933 | 1,787 | ||||||
| Inventory write-offs for obsolescence | 9,867 | 9,479 | ||||||
| Other | 1,312 | (3,929 | ) | |||||
Changes in operating assets and liabilities, net of effects of businesses acquired | (62,789 | ) | (57,437 | ) | ||||
| Net cash provided by operating activities | 99,073 | 94,068 | ||||||
| Investing activities | ||||||||
| Purchase of property and equipment | (53,336 | ) | (47,173 | ) | ||||
| Proceeds from sale of property and equipment | 1,741 | 3,252 | ||||||
| Purchase of businesses, net of cash acquired or refunded | (20,776 | ) | (23,034 | ) | ||||
| Purchase of short-term investments | (243,975 | ) | (361,940 | ) | ||||
| Maturity of short-term investments | 236,624 | 190,602 | ||||||
| Other investing activities | 927 | 934 | ||||||
| Net cash used in investing activities | (78,795 | ) | (237,359 | ) | ||||
| Financing activities | ||||||||
| Principal payments on long-term debt and capital lease obligations | (11 | ) | (14 | ) | ||||
| Net proceeds (payments) on revolving credit lines | 20,000 | 11,000 | ||||||
| Net changes in short-term borrowings | 16 | 698 | ||||||
| Excess tax benefit from RSUs vested | - | 456 | ||||||
| Dividends paid to common stockholders | (16,238 | ) | - | |||||
| Dividends paid to Class B common stockholders | (1,456 | ) | - | |||||
| Distributions to noncontrolling interests | (547 | ) | - | |||||
| Net cash provided by financing activities | 1,764 | 12,140 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (2,797 | ) | (5,245 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 19,245 | (136,396 | ) | |||||
| Cash and cash equivalents at beginning of period | 640,348 | 697,595 | ||||||
| Cash and cash equivalents at end of period | $ | 659,593 | $ | 561,199 | ||||
| VISHAY INTERTECHNOLOGY, INC. | ||||||||||||||||||||
| Reconciliation of Adjusted Earnings Per Share | ||||||||||||||||||||
| (Unaudited - In thousands, except per share amounts) | ||||||||||||||||||||
| Fiscal quarters ended | Six fiscal months ended | |||||||||||||||||||
| June 28, 2014 | March 29, 2014 | June 29, 2013 | June 28, 2014 | June 29, 2013 | ||||||||||||||||
| GAAP net earnings attributable to Vishay stockholders | $ | 35,642 | $ | 25,810 | $ | 31,309 | $ | 61,452 | $ | 60,240 | ||||||||||
Reconciling items affecting operating margin: | ||||||||||||||||||||
| Restructuring and severance costs | $ | 9,014 | $ | 6,404 | $ | - | $ | 15,418 | $ | - | ||||||||||
| Executive compensation charge (credit) | - | - | (1,778 | ) | - | (1,778 | ) | |||||||||||||
Reconciling items affecting tax expense (benefit): | ||||||||||||||||||||
| Tax effects of items above and other one-time tax expense (benefit) | $ | (2,747 | ) | $ | (2,097 | ) | $ | 633 | $ | (4,844 | ) | $ | (697 | ) | ||||||
| Adjusted net earnings | $ | 41,909 | $ | 30,117 | $ | 30,164 | $ | 72,026 | $ | 57,765 | ||||||||||
| Adjusted weighted average diluted shares outstanding | 154,322 | 152,556 | 151,880 | 153,438 | 151,256 | |||||||||||||||
| Adjusted earnings per diluted share* | $ | 0.27 | $ | 0.20 | $ | 0.20 | $ | 0.47 | $ | 0.38 | ||||||||||
| * 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 | |||||||||||||||||||
| June 28, 2014 | March 29, 2014 | June 29, 2013 | June 28, 2014 | June 29, 2013 | ||||||||||||||||
| GAAP net earnings attributable to Vishay stockholders | $ | 35,642 | $ | 25,810 | $ | 31,309 | $ | 61,452 | $ | 60,240 | ||||||||||
| Net earnings attributable to noncontrolling interests | 190 | 154 | 176 | 344 | 386 | |||||||||||||||
| Net earnings | $ | 35,832 | $ | 25,964 | $ | 31,485 | $ | 61,796 | $ | 60,626 | ||||||||||
| Interest expense | $ | 5,821 | $ | 5,980 | $ | 5,824 | $ | 11,801 | $ | 11,310 | ||||||||||
| Interest income | (1,261 | ) | (1,223 | ) | (1,073 | ) | (2,484 | ) | (2,307 | ) | ||||||||||
| Income taxes | 16,478 | 11,940 | 15,365 | 28,418 | 26,458 | |||||||||||||||
| Depreciation and amortization | 43,576 | 43,355 | 42,110 | 86,931 | 83,456 | |||||||||||||||
| EBITDA | $ | 100,446 | $ | 86,016 | $ | 93,711 | $ | 186,462 | $ | 179,543 | ||||||||||
Reconciling items | ||||||||||||||||||||
| Restructuring and severance costs | $ | 9,014 | $ | 6,404 | $ | - | $ | 15,418 | $ | - | ||||||||||
| Executive compensation charge (credit) | - | - | (1,778 | ) | - | (1,778 | ) | |||||||||||||
| Adjusted EBITDA | $ | 109,460 | $ | 92,420 | $ | 91,933 | $ | 201,880 | $ | 177,765 | ||||||||||
| Adjusted EBITDA margin** | 17.1 | % | 15.3 | % | 15.4 | % | 16.2 | % | 15.4 | % | ||||||||||
| ** Adjusted EBITDA as a percentage of net revenues | ||||||||||||||||||||
Contacts:
Peter G. Henrici
Senior Vice
President, Corporate Communications
+1-610-644-1300
