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Vishay Reports Results for Third Quarter 2007

November 05, 2007 by Jeff Shepard

Vishay Intertechnology, Inc. announced that net revenues for the fiscal quarter ended September 29, 2007 were $729.6 million, compared to $654.4 million for the fiscal quarter ended September 30, 2006. Income from continuing operations for the fiscal quarter ended September 29, 2007 was $37.1 million, or $0.20 per diluted share, compared with net earnings for the fiscal quarter ended September 30, 2006 of $32.5 million, or $0.17 per diluted share.

On April 1, 2007, Vishay acquired the Power Control Systems ("PCS") business of International Rectifier Corp.. The company intends to sell the automotive modules and subsystems business unit ("ASBU") acquired as part of the PCS business. The operations of the ASBU have been classified as discontinued operations. The loss from discontinued operations for the third quarter was $1.9 million, resulting in net earnings of $35.2 million, or $0.19 per diluted share.

Income from continuing operations for the third quarter of 2007 of $37.1 million, or $0.20 per diluted share, was impacted by a pretax charge for restructuring and severance costs of $9.9 million. Additionally, reported income tax expense is net of benefits totaling $0.9 million for changes in uncertain tax positions and a change in enacted tax rates. These items, net, had a negative $0.05 per share effect on income from continuing operations.

Net earnings for the third quarter of 2006 of $32.5 million, or $0.17 per diluted share, were impacted by pretax charges for restructuring and severance costs of $19.2 million, related asset write-downs of $2.7 million, inventory obsolescence charges for discontinued tantalum products of $1.4 million, losses resulting from adjustments to previously existing purchase commitments of $0.7 million, and charges totaling $2.9 million to settle past quality claims. These items and their tax-related consequences had a negative $0.10 effect on earnings per share.

Net revenues for the nine fiscal months ended September 29, 2007 were $2,103.7 million, compared to $1,946.0 million for the nine fiscal months ended September 30, 2006. Income from continuing operations for the nine fiscal months ended September 29, 2007 was $129.1 million, or $0.67 per diluted share, compared with net earnings for the nine fiscal months ended September 30, 2006 of $113.5 million, or $0.59 per diluted share. The loss from discontinued operations for nine fiscal months ended September 29, 2007 was $3.2 million, resulting in net earnings of $125.9 million, or $0.66 per diluted share.

Income from continuing operations for the nine fiscal months ended September 29, 2007 of $129.1 million, or $0.67 per diluted share, was impacted by pretax charges for restructuring and severance costs of $13.2 million and related asset write-downs of $2.7 million. These items and their tax-related consequences, plus additional tax expense for changes in uncertain tax positions net of benefits for a change in enacted tax rates totaling $2.5 million, had a negative $0.09 per share effect on income from continuing operations.

Net earnings for the nine fiscal months ended September 30, 2006 of $113.5 million, or $0.59 per diluted share, were impacted by pretax charges for restructuring and severance costs of $28.1 million, related asset write-downs of $6.6 million, losses resulting from adjustments to previously existing purchase commitments of $4.8 million, write-downs and write-offs of tantalum inventories totaling $9.6 million, a loss on early extinguishment of debt of $2.9 million, an adjustment to increase the estimated cost of environmental remediation obligations associated with the 2001 General Semiconductor acquisition of $3.6 million, and charges totaling $2.9 million to settle past product quality issues. These items and their tax related consequences had a negative $0.21 effect on earnings per share.