Vishay Reports Results for Fourth Quarter and Year 2014

  • Revenues for year 2014 of $2,493 million and for Q4 2014 of $611 million
  • EPS year 2014 of $0.77, or adjusted EPS of $0.92
  • Adjusted EPS for year 2014 increased 16% versus 2013
  • EPS Q4 2014 of $0.19, or adjusted EPS of $0.19
  • Cash from operations for the year 2014 of $297 million and capital expenditures of $157 million
  • Guidance for Q1 2015 for revenues of $590 - $630 million and gross margins of 24% - 25%
  • Book-to-bill for January above 1.0

MALVERN, Pa.--()--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, 2014.

“Revenues were slightly lower than expected, due to the effect of a strengthening U.S. dollar in the course of the quarter. A higher than anticipated inventory reduction increased our cash generation, but negatively impacted our margins.”

Revenues for the year ended December 31, 2014 were $2,493.3 million, compared to $2,371.0 million for the year ended December 31, 2013. The net earnings attributable to Vishay stockholders for the year ended December 31, 2014 were $117.6 million, or $0.77 per diluted share, compared to $123.0 million, or $0.81 per diluted share for the year ended December 31, 2013.

Revenues for the fiscal quarter ended December 31, 2014 were $610.8 million, compared to $616.2 million for the fiscal quarter ended December 31, 2013. The net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2014 were $29.2 million, or $0.19 per diluted share, compared to $30.0 million, or $0.20 per diluted share for the fiscal quarter ended December 31, 2013.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2014 include restructuring and severance costs of $2.0 million, and $1.2 million of one-time tax benefits related to U.S. tax law changes. Net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2013 include restructuring and severance costs of $2.8 million. The years ended December 31, 2014 and 2013 include other items affecting comparability. These items are summarized on the attached reconciliation schedule. Adjusted earnings per diluted share, which exclude these items, were $0.19 and $0.92 for the fiscal quarter and year ended December 31, 2014, respectively, and $0.21 and $0.79 for the fiscal quarter and year ended December 31, 2013, respectively.

Commenting on the results for the fourth quarter 2014, Dr. Gerald Paul, President and Chief Executive Officer, stated, “Revenues were slightly lower than expected, due to the effect of a strengthening U.S. dollar in the course of the quarter. A higher than anticipated inventory reduction increased our cash generation, but negatively impacted our margins.”

Dr. Paul stated, commenting on the results for the year 2014, “Excluding the effect of exchange rates and acquisitions, revenues increased by 4% compared to the previous year while adjusted EPS increased to $0.92 in 2014 from $0.79 in 2013 or by 16%. We tightly controlled our fixed costs, which increased, excluding acquisitions and exchange rate effects, by 2% year over year. We expect to grow further in the Asian industrial markets, to continue pursuing technological innovations, and to finalize our major cost reduction projects.”

Commenting on Vishay’s Merger and Acquisition activity, Marc Zandman, Vishay’s Executive Chairman and Chief Business Development Officer, stated, “In the year 2014 we successfully completed two acquisitions – Holy Stone Polytech and Capella Microsystems – that we expect will ensure future mid- and long-term growth for our Capacitor and Optoelectronics businesses, respectively, by adding technical capabilities which Vishay did not have in-house. We continue to explore opportunities for acquisitions to further strengthen Vishay.”

Commenting on the outlook Dr. Paul stated, “Based on a January book-to-bill above 1.0, we anticipate a good first quarter. Assuming a 1.15 U.S. dollar to euro exchange rate, we guide for revenues of $590 to $630 million and gross margins of 24% to 25%.”

Dr. Paul continued, “Vishay’s share of revenues in euro and share of costs in euro—variable as well as fixed—are approximately balanced. As a consequence, a weaker euro means that both revenues and costs translated into U.S. dollars decrease, in effect practically offsetting each other.”

A conference call to discuss fourth quarter and year ending financial results is scheduled for Thursday, February 5, 2015 at 11:00 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 63743625.

There will be a replay of the conference call from 2:00 PM ET on Thursday, February 5, 2015 through 11:59 PM ET on Wednesday, February 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 63743625.

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 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; 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
(In thousands, except per share amounts)
 
Years ended
December 31, December 31,
2014 2013
(unaudited)
 
Net revenues $ 2,493,282 $ 2,370,979
Costs of products sold   1,881,990     1,803,719  
Gross profit 611,292 567,260
Gross margin 24.5 % 23.9 %
 
Selling, general, and administrative expenses 385,696 368,542
Restructuring and severance costs 20,897 2,814
U.S. pension settlement charges 15,588 -
Executive compensation charge (credit)   -     (1,778 )
Operating income 189,111 197,682
Operating margin 7.6 % 8.3 %
 
Other income (expense):
Interest expense (24,457 ) (23,130 )
Other   2,489     1,853  
Total other income (expense) - net   (21,968 )   (21,277 )
 
Income before taxes 167,143 176,405
 
Income taxes   49,300     52,636  
 
Net earnings 117,843 123,769
 
Less: net earnings attributable to noncontrolling interests 214 789
   
Net earnings attributable to Vishay stockholders $ 117,629   $ 122,980  
 
Basic earnings per share attributable to Vishay stockholders $ 0.80 $ 0.85
 
Diluted earnings per share attributable to Vishay stockholders $ 0.77 $ 0.81
 
Weighted average shares outstanding - basic 147,567 144,963
 
Weighted average shares outstanding - diluted 153,716 151,417
 
Cash dividends per share $ 0.24 $ -
 
     
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
 
Fiscal quarters ended
December 31, September 27, December 31,
2014 2014 2013
 
Net revenues $ 610,764 $ 638,211 $ 616,170
Costs of products sold   467,240     479,819     471,721  
Gross profit 143,524 158,392 144,449
Gross margin 23.5 % 24.8 % 23.4 %
 
Selling, general, and administrative expenses 98,396 93,837 94,601
Restructuring and severance costs 1,971 3,508 2,814
U.S. pension settlement charges   -     15,588     -  
Operating income 43,157 45,459 47,034
Operating margin 7.1 % 7.1 % 7.6 %
 
Other income (expense):
Interest expense (6,489 ) (6,167 ) (6,023 )
Other   1,443     (474 )   398  
Total other income (expense) - net   (5,046 )   (6,641 )   (5,625 )
 
Income before taxes 38,111 38,818 41,409
 
Income taxes   9,041     11,841     11,135  
 
Net earnings 29,070 26,977 30,274
 
Less: net earnings (loss) attributable to noncontrolling interests (136 ) 6 253
     
Net earnings attributable to Vishay stockholders $ 29,206   $ 26,971   $ 30,021  
 
Basic earnings per share attributable to Vishay stockholders $ 0.20 $ 0.18 $ 0.20
 
Diluted earnings per share attributable to Vishay stockholders $ 0.19 $ 0.17 $ 0.20
 
Weighted average shares outstanding - basic 147,572 147,569 147,396
 
Weighted average shares outstanding - diluted 152,440 155,546 151,156
 
Cash dividends per share $ 0.06 $ 0.06 $ -
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
 
December 31, December 31,
2014 2013
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 592,172 $ 640,348
Short-term investments 514,776 511,231
Accounts receivable, net 271,554 274,083
Inventories:
Finished goods 113,361 109,617
Work in process 185,769 197,600
Raw materials   125,464     125,491  
Total inventories 424,594 432,708
 
Deferred income taxes 17,815 21,716
Prepaid expenses and other current assets   105,539     100,594  
Total current assets 1,926,450 1,980,680
 
Property and equipment, at cost:
Land 91,844 93,685
Buildings and improvements 560,926 560,418
Machinery and equipment 2,368,046 2,340,778
Construction in progress 82,684 95,278
Allowance for depreciation   (2,205,405 )   (2,163,540 )
898,095 926,619
 
Goodwill 144,359 43,132
 
Other intangible assets, net 186,613 129,951
 
Other assets   143,256     156,757  
Total assets $ 3,298,773   $ 3,237,139  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
 
December 31, December 31,
2014 2013
(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 18 $ 2
Trade accounts payable 174,451 163,894
Payroll and related expenses 120,023 120,997
Other accrued expenses 137,576 146,670
Income taxes   24,671     17,502  
Total current liabilities 456,739 449,065
 
Long-term debt less current portion 454,922 364,911
Deferred income taxes 178,900 157,640
Other liabilities 76,811 99,426
Accrued pension and other postretirement costs   300,524     287,901  
Total liabilities   1,467,896     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 2,055,246 2,054,087
Retained earnings (accumulated deficit) (175,485 ) (257,698 )
Accumulated other comprehensive income (loss)   (69,140 )   61,634  
Total Vishay stockholders' equity   1,825,366     1,872,756  
Noncontrolling interests   5,511     5,440  
Total equity   1,830,877     1,878,196  
Total liabilities and equity $ 3,298,773   $ 3,237,139  
 
   
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(In thousands)
 
Years ended
December 31, December 31,
2014 2013
(unaudited)
Operating activities
Net earnings $ 117,843 $ 123,769

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization 179,455 170,132
(Gain) loss on disposal of property and equipment (195 ) 26
Accretion of interest on convertible debentures 3,943 3,646
Inventory write-offs for obsolescence 21,394 19,108
U.S. pension settlement charges 15,588 -
Other (2,751 ) (14,602 )

Changes in operating assets and liabilities, net of effects of businesses acquired

  (38,240 )   (10,009 )
Net cash provided by operating activities 297,037 292,070
 
Investing activities
Purchase of property and equipment (156,974 ) (153,077 )
Proceeds from sale of property and equipment 2,889 4,681
Purchase of businesses, net of cash acquired or refunded (197,986 ) (23,034 )
Purchase of short-term investments (495,762 ) (664,867 )
Maturity of short-term investments 485,306 465,668
Sale of short-term investments 13,658 -
Other investing activities   617     (176 )
Net cash used in investing activities (348,252 ) (370,805 )
 
Financing activities
Debt issuance costs - (4,558 )
Principal payments on long-term debt and capital lease obligations (11 ) (28 )
Net proceeds (payments) on revolving credit lines 86,000 25,000
Dividends paid to common stockholders (32,477 ) -
Dividends paid to Class B common stockholders (2,911 ) -
Net changes in short-term borrowings 16 (146 )
Distributions to noncontrolling interests (547 ) (257 )
Acquisition of noncontrolling interests in Capella (21,067 ) -
Proceeds from stock options exercised 50 -
Excess tax benefit from stock options exercised - 196
Other financing activities   (1,324 )   (3,638 )
Net cash provided by financing activities 27,729 16,569
Effect of exchange rate changes on cash and cash equivalents   (24,690 )   4,919  
 
Net decrease in cash and cash equivalents (48,176 ) (57,247 )
 
Cash and cash equivalents at beginning of year   640,348     697,595  
Cash and cash equivalents at end of year $ 592,172   $ 640,348  
 
         
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
 
Fiscal quarters ended Years ended
December 31, September 27, December 31, December 31, December 31,
2014 2014 2013 2014 2013
 
GAAP net earnings attributable to Vishay stockholders $ 29,206 $ 26,971 $ 30,021 $ 117,629 $ 122,980
 

Reconciling items affecting operating margin:

Restructuring and severance costs $ 1,971 $ 3,508 $ 2,814 $ 20,897 $ 2,814
U.S. pension settlement charges - 15,588 - 15,588 -
Executive compensation charge (credit) - - - - (1,778 )
 

Reconciling items affecting tax expense (benefit):

Tax effects of items above and other one-time tax expense (benefit) $ (1,991 ) $ (6,011 ) $ (988 ) $ (12,846 ) $ (4,552 )
 
Adjusted net earnings $ 29,186   $ 40,056   $ 31,847   $ 141,268   $ 119,464  
 
Adjusted weighted average diluted shares outstanding 152,440 155,546 151,156 153,716 151,417
 
Adjusted earnings per diluted share* $ 0.19 $ 0.26 $ 0.21 $ 0.92 $ 0.79
 
* 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 Years ended
December 31, 2014 September 27, 2014 December 31, 2013 December 31, 2014 December 31, 2013
 
GAAP net earnings attributable to Vishay stockholders $ 29,206 $ 26,971 $ 30,021 $ 117,629 $ 122,980
Net earnings attributable to noncontrolling interests   (136 )   6     253     214     789  
Net earnings $ 29,070 $ 26,977 $ 30,274 $ 117,843 $ 123,769
 
Interest expense $ 6,489 $ 6,167 $ 6,023 $ 24,457 $ 23,130
Interest income (1,283 ) (1,172 ) (1,240 ) (4,939 ) (4,566 )
Income taxes 9,041 11,841 11,135 49,300 52,636
Depreciation and amortization   47,111     45,413     44,521     179,455     170,132  
EBITDA $ 90,428 $ 89,226 $ 90,713 $ 366,116 $ 365,101
 

Reconciling items

Restructuring and severance costs $ 1,971 $ 3,508

$

2,814

$

20,897

$

2,814
U.S. pension settlement charges - 15,588 - 15,588 -
Executive compensation charge (credit) - - - - (1,778 )
         
Adjusted EBITDA $ 92,399   $ 108,322   $ 93,527   $ 402,601   $ 366,137  
 
Adjusted EBITDA margin** 15.1 % 17.0 % 15.2 % 16.1 % 15.4 %
 
** Adjusted EBITDA as a percentage of net revenues
 

Contacts

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

Vishay Intertechnology, Inc.