Vishay Reports Results for First Quarter 2010

May 06, 2010 by Jeff Shepard

Vishay Intertechnology announced that revenues for the fiscal quarter ended April 3, 2010 were $640.5 million, compared to $449.5 million for the fiscal quarter ended March 28, 2009. The net income attributable to Vishay stockholders for the fiscal quarter ended April 3, 2010 was $45.4 million, or $0.24 per diluted share, compared to a net loss attributable to Vishay stockholders of $(29.1) million, or $(0.16) per share for the fiscal quarter ended March 28, 2009.

Net earnings (loss) from continuing operations attributable to Vishay stockholders include various items affecting comparability, as listed on the attached reconciliation schedule. There were no such items for the fiscal quarter ended April 3, 2010. Adjusted net earnings (loss) per share, which excludes these items, was $(0.08) for the fiscal quarter ended March 28, 2009.

Commenting on the results for the first quarter 2010, Dr. Gerald Paul, President and Chief Executive Officer of Vishay, stated, "In the first quarter 2010, demand for both passive components and discrete semiconductors increased again substantially compared to the previous quarter. The order levels now exceed pre-crisis levels. Inventories in the supply chain are extremely low as manufacturing capacities have not yet caught up with demand. Our distributors reduced their inventories of our products by 6% quarter over quarter; the inventory turns at distribution were 5.0 for the first quarter. The sales increase quarter over quarter was limited by our constrained manufacturing capacities, especially for our discrete semiconductors."

Dr. Paul continued, "As previously announced, no material restructuring projects are planned for 2010. In the first quarter 2010, we generated $68 million of cash flows from operations while we had capital expenditures of $18 million. We expect to continue to substantially improve our solid financial position this year despite higher capital expenditures, due to the improvement of profits, virtually stable inventories, the absence of significant cash costs for restructuring and improved cash collection. The results of the first quarter 2010 and the previous quarter demonstrate that Vishay has after three challenging years successfully re-focused on profitability. We are positioned to reach new levels of profitability as sales return to pre-crisis levels."

Commenting on the company’s intended spin-off, R&D and acquisition activities, Dr. Felix Zandman, Executive Chairman of the Board and Chief Technical and Business Development Officer, stated, "Our Board of Directors and management team, in consultation with independent financial and legal advisors, are working on the requirements to finalize and execute the spin-off of Vishay Precision Group and expect the spin-off to occur in mid-2010. During the quarter, we achieved an important milestone on the road to launch Vishay Precision Group as an independent, publicly-traded company with the filing of the registration statement on Form 10. Our R&D activities progress as planned. We are working closely with our customers to support them with the components required for their new products."

Dr. Zandman concluded, "Based on our very strong balance sheet and the improved economic environment, we are now again actively pursuing acquisitions. We are targeting small to mid-size companies. For the passive components, we aim to strengthen and broaden our position as a specialty products supplier; for the discrete semiconductors, the intent is to increase market share and exploit synergies. The goal of our acquisition activities is to further improve our profitability."