• Revenues for Q3 2015 $560.7 million
  • Operating margin Q3 2015 of (4.3)%, or adjusted operating margin of 7.3%
  • EPS Q3 2015 of $(0.19), or adjusted EPS of $0.17
  • Impairment of goodwill and long-lived assets of $63.0 million
  • Revenues lost due to Tianjin facility temporary shut-down approximately $20 million
  • Book-to-bill October above 1
  • Guidance for Q4 2015 for revenues of $540 – $580 million and gross margins of 21% to 23%

MALVERN, Pa., Nov. 03, 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 nine fiscal months ended October 3, 2015.

Revenues for the fiscal quarter ended October 3, 2015 were $560.7 million, compared to $638.2 million for the fiscal quarter ended September 27, 2014.  The net loss attributable to Vishay stockholders for the fiscal quarter ended October 3, 2015 was $(27.7) million, or $(0.19) per share, compared to net earnings attributable to Vishay stockholders of $27.0 million, or $0.17 per diluted share for the fiscal quarter ended September 27, 2014.

Net loss attributable to Vishay stockholders for the fiscal quarter ended October 3, 2015 includes restructuring and severance costs of $2.3 million, impairment of goodwill and long-lived assets charges of $63.0 million, and a loss related to the Tianjin explosion of $5.4 million.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended September 27, 2014 include restructuring and severance costs of $3.5 million and U.S. pension settlement charges of $15.6 million.  These items are summarized on the attached reconciliation schedule.  Adjusted earnings per diluted share, which exclude these items, were $0.17 and $0.26 for the fiscal quarters ended October 3, 2015 and September 27, 2014, respectively.

Commenting on the results for the third quarter 2015, Dr. Gerald Paul, President and Chief Executive Officer, stated, “As expected, the general economic conditions were not favorable in general. Additionally, the temporary shutdown of our Tianjin facility, caused by the shockwave of the explosion in the port of Tianjin, resulted in lost revenues of approximately $20 million in the quarter. Despite the current headwinds, we expect a free cash flow generation of substantially over $100 million for the year 2015.”

Dr. Gerald Paul continued, “The Capella business, acquired in 2014, has not performed as expected in its traditional end market of smart phones. We recorded impairment charges of $57.6 million to write down the related assets to their fair value. We still expect that the addition of Capella will, in the mid and long term, add considerable value to our entire optoelectronic components business through the creation of an in-house design capability and so to strengthen our position and potential for growing our optoelectronic business.”

Dr. Gerald Paul continued, “Our restructuring programs—the announced global fixed cost reduction and the rationalization in MOSFETs—are on plan. They will noticeably improve Vishay’s results in the future, independently of the economic environment. We believe in a cyclical rebound of the economy in the course of next year.”

Commenting on the outlook for the fourth quarter 2015 Dr. Paul stated, “We expect a continuation of the inventory reduction at distribution during the quarter and guide for revenues of $540 to $580 million and for gross margins of 21% to 23%, based on current exchange rates.”

A conference call to discuss third quarter financial results is scheduled for Tuesday, November 3, 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 57522492.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, November 3, 2015 through 11:30 p.m. ET on Tuesday, November 10, 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 57522492.

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 results, Capella’s future performance and the growth of the Company’s optoelectronics business, cost reduction programs and their financial impact, and the performance of the economy in general, 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      
  October 3, 2015   July 4, 2015   September 27, 2014      
                 
Net revenues $   560,654     $   590,470     $   638,211            
Costs of products sold     430,510         448,988         479,819            
Gross profit     130,144         141,482         158,392        
Gross margin   23.2 %     24.0 %     24.8 %      
                 
Selling, general, and administrative expenses     88,995         91,652         93,837              
Restructuring and severance costs     2,324         5,660         3,508            
Impairment of goodwill and long-lived assets     62,980         –         –        
U.S. pension settlement charges     –         –         15,588        
Operating income (loss)     (24,155 )       44,170         45,459        
Operating margin   -4.3 %     7.5 %     7.1 %      
                 
Other income (expense):                
Interest expense     (6,677 )       (6,736 )       (6,167 )          
Other     3,240         1,160         (474 )          
Loss related to Tianjin explosion     (5,350 )       –         –        
Total other income (expense) – net     (8,787 )       (5,576 )       (6,641 )      
                 
Income (loss) before taxes     (32,942 )       38,594         38,818        
                 
Income taxes     (5,392 )       12,076         11,841            
                 
Net earnings (loss)     (27,550 )       26,518         26,977        
                 
Less: net earnings attributable to noncontrolling interests     116         250         6            
                 
Net earnings (loss) attributable to Vishay stockholders $   (27,666 )   $   26,268     $   26,971        
                 
Basic earnings (loss) per share attributable to Vishay stockholders $   (0.19 )   $   0.18     $   0.18        
                 
Diluted earnings (loss) per share attributable to Vishay stockholders $   (0.19 )   $   0.17     $   0.17        
                 
Weighted average shares outstanding – basic     147,701         147,700         147,569        
                 
Weighted average shares outstanding – diluted     147,701         151,700         155,546        
                 
Cash dividends per share $   0.06     $   0.06     $   0.06        

 

VISHAY INTERTECHNOLOGY, INC.             
Summary of Operations            
(Unaudited – In thousands, except per share amounts)            
             
  Nine fiscal months ended      
  October 3, 2015   September 27, 2014      
             
Net revenues $   1,744,560     $ 1,882,518        
Costs of products sold     1,327,896         1,414,750        
Gross profit     416,664         467,768        
Gross margin   23.9 %     24.8 %      
             
Selling, general, and administrative expenses     276,717         287,300        
Restructuring and severance costs     9,394         18,926        
Impairment of goodwill and long-lived assets     62,980         –        
U.S. pension settlement charges     –         15,588        
Operating income     67,573         145,954        
Operating margin   3.9 %     7.8 %      
             
Other income (expense):            
Interest expense     (19,774 )       (17,968 )      
Other     7,860         1,046        
Loss related to Tianjin explosion     (5,350 )       –         
Total other income (expense) – net     (17,264 )       (16,922 )      
             
Income before taxes     50,309         129,032        
             
Income taxes     20,416         40,259        
             
Net earnings     29,893         88,773        
             
Less: net earnings attributable to noncontrolling interests     592         350        
             
Net earnings attributable to Vishay stockholders $   29,301     $   88,423        
             
Basic earnings per share attributable to Vishay stockholders $   0.20     $   0.60        
             
Diluted earnings per share attributable to Vishay stockholders $   0.19     $   0.57        
             
Weighted average shares outstanding – basic   147,700       147,565        
             
Weighted average shares outstanding – diluted   151,607       154,142        
             
Cash dividends per share $   0.18     $   0.18        
             
             

 

VISHAY INTERTECHNOLOGY, INC.         
Consolidated Condensed Balance Sheets        
(In thousands)        
         
  October 3, 2015   December 31, 2014  
  (unaudited)      
Assets        
Current assets:        
Cash and cash equivalents $   390,305     $   592,172    
Short-term investments     688,987         514,776    
Accounts receivable, net     282,228         271,554    
Inventories:        
Finished goods     113,881         113,361    
Work in process     207,940         185,769    
Raw materials     124,970         125,464    
Total inventories     446,791         424,594    
         
Deferred income taxes     29,160         17,815    
Prepaid expenses and other current assets     96,279         105,539    
Total current assets     1,933,750         1,926,450    
         
Property and equipment, at cost:        
Land     90,079         91,844    
Buildings and improvements     559,757         560,926    
Machinery and equipment     2,381,285         2,368,046    
Construction in progress     71,415         82,684    
Allowance for depreciation     (2,253,961 )       (2,205,405 )  
      848,575         898,095    
         
Goodwill     138,403         144,359    
         
Other intangible assets, net     107,778         186,613    
         
Other assets     143,045         143,256    
Total assets $   3,171,551     $   3,298,773    
         

 

VISHAY INTERTECHNOLOGY, INC.           
Consolidated Condensed Balance Sheets (continued)          
(In thousands)          
           
  October 3, 2015   December 31, 2014    
  (unaudited)        
Liabilities and stockholders’ equity          
Current liabilities:          
Notes payable to banks $   11     $   18      
Trade accounts payable     148,889         174,451      
Payroll and related expenses     120,680         120,023      
Other accrued expenses     155,829         137,576      
Income taxes     25,646         24,671      
Total current liabilities     451,055         456,739      
           
Long-term debt less current portion     431,766         454,922      
Deferred income taxes     161,546         178,900      
Other liabilities     65,510         76,811      
Accrued pension and other postretirement costs     277,943         300,524      
Total liabilities     1,387,820         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     2,057,552         2,055,246      
Retained earnings (accumulated deficit)     (172,770 )       (175,485 )    
Accumulated other comprehensive income (loss)     (121,186 )       (69,140 )    
Total Vishay stockholders’ equity     1,778,353         1,825,366      
Noncontrolling interests     5,378         5,511      
Total equity     1,783,731         1,830,877      
Total liabilities and equity $   3,171,551     $   3,298,773      
           
           
           

 

VISHAY INTERTECHNOLOGY, INC.         
Consolidated Condensed Statements of Cash Flows        
(Unaudited – In thousands)    
  Nine fiscal months ended  
  October 3, 2015   September 27, 2014  
         
Operating activities        
Net earnings $   29,893     $   88,773    
Adjustments to reconcile net earnings to         
net cash provided by operating activities:        
Depreciation and amortization     134,281         132,344    
(Gain) loss on disposal of property and equipment     (116 )       (65 )  
Accretion of interest on convertible debentures     3,167         2,930    
Inventory write-offs for obsolescence     15,348         15,101    
Impairment of goodwill and long-lived assets     62,980         –    
U.S. pension settlement charges     –          15,588    
Deferred income taxes     (32,523 )       6,869    
Other     (1,939 )       (2,654 )  
Changes in operating assets and liabilities,        
net of effects of businesses acquired     (57,522 )       (61,875 )  
Net cash provided by operating activities     153,569         197,011    
         
Investing activities        
Purchase of property and equipment     (86,767 )       (90,507 )  
Proceeds from sale of property and equipment     1,989         2,345    
Purchase of businesses, net of cash acquired     –          (198,186 )  
Purchase of short-term investments     (362,595 )       (335,341 )  
Maturity of short-term investments     161,611         330,734    
Sale of other investments     400         –    
Other investing activities     (3,464 )       1,734    
Net cash provided by (used in) investing activities     (288,826 )       (289,221 )  
         
Financing activities        
Principal payments on long-term debt and capital lease obligations     –          (11 )  
Net proceeds (payments) on revolving credit lines     (27,000 )       73,000    
Net changes in short-term borrowings     (7 )       14    
Dividends paid to common stockholders     (24,378 )       (24,358 )  
Dividends paid to Class B common stockholders     (2,184 )       (2,183 )  
Excess tax benefit from RSUs vested     21         –    
Proceeds from stock options exercised     –          50    
Distributions to noncontrolling interests     (725 )       (547 )  
Other financing activities     –          (1,323 )  
Net cash provided by (used in) financing activities     (54,273 )       44,642    
Effect of exchange rate changes on cash and cash equivalents     (12,337 )       (17,478 )  
         
Net increase (decrease) in cash and cash equivalents     (201,867 )       (65,046 )  
         
Cash and cash equivalents at beginning of period     592,172         640,348    
Cash and cash equivalents at end of period $   390,305     $ 575,302    
         
         

 

VISHAY INTERTECHNOLOGY, INC.                           
Reconciliation of Adjusted Earnings Per Share                          
(Unaudited – In thousands, except per share amounts)                          
  Fiscal quarters ended   Nine fiscal months ended        
  October 3, 2015   July 4, 2015   September 27, 2014   October 3, 2015   September 27, 2014        
                           
GAAP net earnings (loss) attributable to Vishay stockholders $   (27,666 )   $   26,268     $   26,971     $   29,301     $   88,423          
                           
Reconciling items affecting operating margin:                          
Restructuring and severance costs $   2,324     $   5,660     $   3,508     $   9,394     $   18,926          
Impairment of goodwill and long-lived assets     62,980         –         –         62,980         –          
U.S. pension settlement charges     –         –         15,588         –         15,588          
                           
Reconciling items other income (expense):                          
Loss related to Tianjin explosion $   5,350     $   –     $   –     $   5,350     $   –          
                           
Reconciling items affecting tax expense (benefit):                          
Tax effects of items above and other one-time tax expense (benefit) $   (16,831 )   $   (1,988 )   $   (6,011 )   $   (19,327 )   $   (10,855 )            
                           
Adjusted net earnings $   26,157     $   29,940     $   40,056     $   87,698     $   112,082          
                           
Adjusted weighted average diluted shares outstanding     150,455         151,700         155,546         151,607         154,142          
                           
Adjusted earnings per diluted share* $   0.17     $   0.20     $   0.26     $   0.58     $   0.73          
                           
* 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   Nine fiscal months ended
  October 3, 2015   July 4, 2015   September 27, 2014   October 3, 2015   September 27, 2014
                   
GAAP net earnings (loss) attributable to Vishay stockholders $   (27,666 )   $   26,268     $   26,971     $   29,301     $   88,423  
Net earnings attributable to noncontrolling interests     116         250         6         592         350  
Net earnings (loss) $   (27,550 )   $   26,518     $   26,977     $   29,893     $   88,773  
                   
Interest expense $   6,677     $   6,736     $   6,167     $   19,774     $   17,968  
Interest income     (1,115 )       (1,028 )       (1,172 )       (3,340 )       (3,656 )
Income taxes     (5,392 )       12,076         11,841         20,416         40,259  
Depreciation and amortization     44,096         44,775         45,413         134,281         132,344  
EBITDA $   16,716     $   89,077     $   89,226     $   201,024     $   275,688  
                   
Reconciling items                  
Restructuring and severance costs $   2,324     $   5,660     $   3,508     $   9,394     $   18,926  
Impairment of goodwill and long-lived assets     62,980         –         –         62,980         –  
U.S. pension settlement charges     –         –         15,588         –         15,588  
Loss related to Tianjin explosion     5,350         –         –         5,350         –  
                   
Adjusted EBITDA $   87,370     $   94,737     $   108,322     $   278,748     $   310,202  
                   
Adjusted EBITDA margin**   15.6 %     16.0 %     17.0 %     16.0 %     16.5 %
                   
** Adjusted EBITDA as a percentage of net revenues                  
                   

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