UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 30, 2007
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Vishay Intertechnology, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-7416 38-1686453
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
63 Lancaster Avenue
Malvern, PA 19355 19355-2143
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-644-1300
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 - Results of Operations and Financial Condition
On April 30, 2007, Vishay Intertechnology, Inc. issued a press release
announcing its financial results for the fiscal quarter ended March 31,
2007. A copy of the press release is furnished as Exhibit 99 to this
report.
Item 7.01 - Regulation FD Disclosure
Computational Guidance on Earnings Per Share Estimates
The Company frequently receives questions from analysts and shareholders
regarding its diluted earnings per share ("EPS") computation. The
information furnished in this Form 8-K provides additional information on
the impact of key variables on the EPS computation, particularly as they
relate to the second quarter of 2007.
Accounting principles require that EPS be computed based on the weighted
average shares outstanding ("basic"), and also assuming the issuance of
potentially issuable shares (such as those subject to stock options,
warrants, convertible notes, etc.) if those potentially issuable shares
would reduce EPS ("diluted").
The number of shares related to options, warrants, and similar instruments
included in diluted EPS is based on the "Treasury Stock Method" prescribed
in Statement of Financial Accounting Standards ("SFAS") No. 128. This
method assumes a theoretical repurchase of shares using the proceeds of the
respective stock option or warrant exercise at a price equal to the
issuer's average stock price during the related earnings period.
Accordingly, the number of shares includable in the calculation of diluted
EPS in respect of stock options, warrants and similar instruments is
dependent on this average stock price and will increase as the average
stock price increases.
The number of shares includable in the calculation of diluted EPS in
respect of convertible or exchangeable securities is based on the "If
Converted" method prescribed in SFAS No. 128. This method assumes the
conversion or exchange of these securities for shares of common stock. In
determining if convertible or exchangeable securities are dilutive, the
interest savings (net of tax) subsequent to an assumed conversion are added
back to net earnings. The shares related to a convertible or exchangeable
security are included in diluted EPS only if EPS as otherwise calculated is
greater than the interest savings, net of tax, divided by the shares
issuable upon exercise or conversion of the instrument ("incremental
earnings per share"). Accordingly, the calculation of diluted EPS for these
instruments is dependent on the level of net earnings. Each series of
convertible or exchangeable securities is considered individually and in
sequence, starting with the series having the lowest incremental earnings
per share, to determine if its effect is dilutive or anti-dilutive. Changes
in the variable interest rate on the Company's Exchangeable Notes due 2102
could change the order in which the convertible or exchangeable securities
are evaluated for dilution, and the earnings level at which the convertible
or exchangeable securities become dilutive.
The following estimates of shares consider the number of the Company's
shares currently outstanding and the Company's stock options, warrants and
convertible or exchangeable securities currently outstanding and their
exercise and conversion features currently in effect. Changes in these
parameters could have a material impact on the calculation of diluted EPS.
The following estimates of shares should be read in conjunction with the
information on earnings per share in the Company's filings on Form 10-Q and
Form 10-K. These estimates are unaudited and are not necessarily indicative
of the shares used in the diluted EPS computation for any prior period. The
estimates below are not necessarily indicative of the shares to be used in
the quarterly diluted EPS computation for any period subsequent to the
second quarter of 2007. The Company assumes no duty to revise these
estimates as a result of changes in the parameters on which they are based
or any changes in accounting principles. Also, the presentation is not
intended as a forecast of EPS values or share prices of the Company's
common stock for any period.
For the second quarter of 2007:
o The Company has approximately 185 million shares issued and
outstanding, including shares of common stock and class B common
stock.
o The number of shares included in diluted EPS related to options,
warrants, and similar instruments does not vary significantly and is
generally less than 1 million incremental shares.
o The Company's Convertible Subordinated Notes due 2023 are dilutive at
quarterly earnings levels in excess of approximately $24 million. The
Convertible Subordinated Notes are convertible into approximately 23
million shares. Quarterly interest, net of tax, is approximately $3.1
million. Accordingly, the weighted average shares used for earnings
per share computations at quarterly earnings levels greater than
approximately $24 million and less than approximately $28 million (see
below) is approximately 209 million shares, with an "if converted" net
interest savings of approximately $3.1 million.
o The Company's Exchangeable unsecured notes due 2102 are dilutive at
quarterly earnings levels in excess of approximately $28 million. The
Exchangeable unsecured notes are exchangeable for approximately 6
million shares. Quarterly interest, net of tax, is approximately $0.9
million. Accordingly, the weighted average shares used for the
earnings per share computation at quarterly earnings levels greater
than approximately $28 million, is approximately 215 million shares,
with an aggregate "if converted" net interest savings of approximately
$4.0 million.
Item 9.01 - Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
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99 Press release dated April 30, 2007
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 30, 2007
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
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Name: Richard N. Grubb
Title: Executive Vice President and
Chief Financial Officer
Exhibit 99
Vishay Reports Results for First Quarter 2007
MALVERN, Pa.--(BUSINESS WIRE)--April 30, 2007--Vishay Intertechnology, Inc.
(NYSE:VSH):
-- Sales for first quarter 2007 increased by $22.7 million, or 3.6%,
compared to fourth quarter 2006.
-- Net earnings of $0.25 per diluted share for the first quarter 2007
have been negatively affected by the after tax impact of certain items
(enumerated below) of $0.01 per share for adjusted earnings per share
of $0.26.
-- Orders increased by 10% in first quarter 2007 compared to the fourth
quarter 2006.
-- Operating margin in first quarter 2007 at 10.0%.
-- During April, integrated the Power Control Systems business acquired
from International Rectifier into the Vishay organization and acquired
PM Onboard, a transducer systems company.
Dr. Felix Zandman, Executive Chairman of the Board, and Dr. Gerald Paul,
President and Chief Executive Officer of Vishay Intertechnology, Inc.
(NYSE:VSH), announced today that net revenues for the fiscal quarter ended March
31, 2007 were $658.2 million, compared to $631.1 million for the fiscal quarter
ended April 1, 2006. Net earnings for the fiscal quarter ended March 31, 2007
were $50.0 million, or $0.25 per diluted share, compared with net earnings for
the fiscal quarter ended April 1, 2006 of $38.2 million, or $0.20 per diluted
share.
Net earnings of $50.0 million, or $0.25 per diluted share, for the fiscal
quarter ended March 31, 2007 were impacted by restructuring and severance costs
of $2.0 million, or $0.01 per share net of tax.
Net earnings of $38.2 million, or $0.20 per diluted share, for the fiscal
quarter ended April 1, 2006 were impacted by pre-tax charges for restructuring
and severance costs and related asset write-downs of $0.8 million, losses
resulting from adjustments to previously existing purchase commitments of $3.3
million and an $8.2 million write-down of tantalum inventories to then-current
market value. These items and their tax-related consequences had a negative
$0.05 effect on earnings per share.
Commenting on the results for the first quarter 2007, Dr. Paul stated,
"Vishay had a strong start into the year 2007. Solid demand from substantially
all regions and end markets resulted in a higher level of revenues than
anticipated. Orders for the first quarter were up by 10% compared to the
previous quarter. Gross margins for the first quarter 2007 recovered to 26.6%
from a disappointing 24.4% in the fourth quarter 2006. Operating margins were at
a respectable 10.0%.
"During April we integrated International Rectifier's Power Control Systems
(PCS) business into the Vishay organization. We expect it to be slightly
accretive already in the current quarter. In accordance with previous
statements, we project a contribution of approximately $14 million from the IR
acquisition to Vishay's operating profit for the first quarter 2008."
Commenting on the outlook for the second quarter 2007, Dr. Paul continued,
"We guide for sales in the range of $730 million to $750 million, which includes
expected sales for the acquired International Rectifier business of $65 million
to $70 million. We are experiencing unbroken demand from our end customers and
we expect another successful year in terms of profitability and cash
generation."
Commenting on the Company's acquisition activities, Dr. Felix Zandman,
Executive Chairman of the Board and Chief Technical and Business Development
Officer, stated, "On April 1, we completed the acquisition of International
Rectifier's PCS business. The acquired product lines, which complement Vishay's
existing product portfolio, consist of planar high-voltage MOSFETs, Schottky
diodes, diode rectifiers, fast-recovery diodes, high-power diodes and
thyristors, power modules (a combination of power diodes, thyristors, MOSFETs,
and IGBTs), and automotive modules and assemblies. The extension of Vishay's
product offerings in the high-voltage and high-power range for discrete
semiconductors represents another step in Vishay's successful strategy of being
able to offer one-stop-shop service for discrete electronic components."
Dr. Zandman continued, "In April as well we successfully completed the
offer to acquire the whole of the issued share capital of UK based PM Group Plc.
We intend to only retain PM Group's on-board vehicle weighing business, PM
Onboard. The total net cost to Vishay for this business is approximately GBP
13.2 million ($26.5 million). Revenues for PM Group's on-board vehicle weighing
business were in the year ended December 31, 2006 GBP 15.4 million ($30.8
million). PM Onboard is an advanced designer and manufacturer of systems used in
the weighing and process control industries. This strategic acquisition fits
Vishay's plan for vertical integration in its Measurements Group--to expand from
the base technology of strain gages where Vishay is the market leader to
transducers and instruments to weighing systems and process control. This
acquisition will provide for Vishay's Measurements Group the foundation for
growth in Europe in the market for bulk haulage. In addition, the expertise of
PM Onboard can be used in the Americas and Asia to expand beyond bulk haulage
into other areas of weighing systems and process control."
Commenting on the Company's R&D activities, Dr. Zandman continued, "Our R&D
programs are on target. The share of new products released to the market is
constantly increasing."
A conference call to discuss first quarter financial results is scheduled
for Monday, April 30, 2007 at 10:00 a.m. (EDT). 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 #5482879.
There will be a replay of the conference call from 12:30 p.m. (EDT) on
Monday, April 30, 2007 through 11:59 p.m. (EDT) on Saturday, May 5, 2007. The
telephone number for the replay is 800-642-1687 (+1 706-645-9291 if calling from
outside the United States or Canada) and the access code is #5482879.
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.
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, rectifiers, transistors, and optoelectronics and selected ICs) and
passive electronic components (resistors, capacitors, inductors, sensors, and
transducers). These components are used in virtually all types of electronic
devices and equipment, in the industrial, computing, automotive, consumer,
telecommunications, military, aerospace, and medical markets. Its product
innovations, successful acquisition strategy, and ability to provide "one-stop
shop" service have made Vishay a global industry leader. Vishay can be found on
the Internet at http://www.vishay.com.
Statements contained herein that relate to the Company's future
performance, including statements with respect to trends in revenues, bookings,
and margins and the anticipated future benefits of the Company's product,
acquisition, research and development and cost reduction strategies are
forward-looking statements within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are based on current
expectations only, and are subject to certain risks, uncertainties, and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results 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, particularly in the markets that we serve; difficulties
in integrating acquired companies, including International Rectifier's PCS
business and the PM Group on-board vehicle weighing business, the inability to
realize anticipated synergies and expansion possibilities and other
unanticipated conditions adversely affecting the operating of these companies;
difficulties in new product development; changes in competition and technology
in the markets that we serve and the mix of our products required to address
these changes; an inability to attract and retain highly qualified personnel,
particularly in respect of our acquired businesses; difficulties in implementing
our cost reduction strategies such as labor unrest or legal challenges to our
lay-off or termination plans, under-utilization of production facilities in
lower-labor-cost countries, operation of redundant facilities due to
difficulties in transferring production to lower-labor-cost countries; and other
factors affecting the Company's operations, markets, products, services, and
prices that are set forth in its Annual Report on Form 10-K for the year ended
December 31, 2006 filed with the Securities and Exchange Commission. You are
urged to refer to the Company's Form 10-K for a detailed discussion of these
factors. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Management believes that stating the impact on net earnings of items such
as restructuring and severance, asset write-downs, charges for in-process
research and development, gains or losses on purchase commitments, special tax
items and other items not reflecting on-going operating activities is meaningful
to investors because it provides insight with respect to intrinsic operating
results of the Company and, management believes, is a common measure of
performance in the industries in which the Company competes. Investors should be
aware, however, that this is a non-GAAP measure of performance and should not be
considered as a substitute for the comparable GAAP measure.
VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands except earnings per share)
Fiscal quarter ended
March 31, April 1,
2007 2006
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Net revenues $ 658,192 $ 631,086
Costs of products sold (a) 483,041 471,286
Loss on purchase commitments - 3,303
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Gross profit 175,151 156,497
Gross margin 26.6% 24.8%
Selling, general, and administrative
expenses 106,988 95,852
Restructuring and severance costs and
related asset write-downs 2,026 778
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Operating income 66,137 59,867
Operating margin 10.0% 9.5%
Other income (expense):
Interest expense (7,191) (8,657)
Minority interest (289) (186)
Other 7,085 4,281
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Total other income (expense) - net (395) (4,562)
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Earnings before taxes 65,742 55,305
Income taxes 15,778 17,145
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Net earnings $ 49,964 $ 38,160
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Basic earnings per share $ 0.27 $ 0.21
Diluted earnings per share $ 0.25 $ 0.20
Weighted average shares outstanding - basic 184,466 184,272
Weighted average shares outstanding -
diluted 214,830 218,611
(a) The fiscal quarter ended April 1, 2006 includes write-downs of
tantalum inventories of $8,228 within costs of products sold.
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
March 31, December 31,
2007 2006
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Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 333,253 $ 671,586
Accounts receivable - net 394,201 351,656
Inventories:
Finished goods 162,913 163,576
Work in process 205,783 194,734
Raw materials 179,380 178,543
Deferred income taxes 38,086 38,368
Prepaid expenses and other current
assets 123,620 128,784
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Total current assets 1,437,236 1,727,247
Property and equipment, at cost:
Land 95,076 94,803
Buildings and improvements 447,001 441,659
Machinery and equipment 1,848,600 1,818,660
Construction in progress 82,137 85,288
Allowance for depreciation (1,357,603) (1,316,045)
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Net property and equipment 1,115,211 1,124,365
Goodwill 1,444,490 1,463,992
Other intangible assets, net 168,000 168,263
Cash held for acquisitions (b) 333,414 -
Other assets 181,037 208,029
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Total assets $ 4,679,388 $ 4,691,896
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VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
March 31, December 31,
2007 2006
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(Unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 39 $ 526
Trade accounts payable 128,314 145,919
Payroll and related expenses 137,728 132,922
Other accrued expenses 175,968 203,986
Income taxes 46,519 47,333
Current portion of long-term debt 2,186 3,728
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Total current liabilities 490,754 534,414
Long-term debt less current portion 608,012 608,434
Deferred income taxes 18,133 15,923
Deferred grant income 4,287 5,732
Other liabilities 120,563 155,963
Accrued pension and other postretirement
costs 288,887 285,823
Minority interest 4,521 4,794
Stockholders' equity:
Common stock 17,011 17,010
Class B common stock 1,436 1,436
Capital in excess of par value 2,230,515 2,229,972
Retained earnings (c) 844,775 796,902
Accumulated other comprehensive income 50,494 35,493
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Total stockholders' equity 3,144,231 3,080,813
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Total liabilities and
stockholders' equity $ 4,679,388 $ 4,691,896
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(b) Represents cash held in escrow for April 2007 acquisitions of the
Power Control Systems business of International Rectifier Corporation
and PM Group PLC.
(c) Reflects adjustment of $2,091 to initially apply the provisions of
FASB Interpretation No. 48, adopted January 1, 2007.
VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Earnings Per Share
(Unaudited - In thousands except earnings per share)
Fiscal quarter ended
March 31, April 1,
2007 2006
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Numerator:
Numerator for basic earnings per share -
net earnings $ 49,964 $ 38,160
Interest savings assuming conversion of
dilutive convertible and exchangeable
notes, net of tax 4,005 4,799
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Numerator for diluted earnings per share -
adjusted net earnings $ 53,969 $ 42,959
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Denominator:
Denominator for basic earnings per share -
weighted average shares 184,466 184,272
Effect of dilutive securities
Convertible and exchangeable notes (d) 29,673 33,481
Employee stock options 585 769
Other 106 89
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Dilutive potential common shares 30,364 34,339
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Denominator for diluted earnings per share
- adjusted weighted average shares 214,830 218,611
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Basic earnings per share $ 0.27 $ 0.21
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Diluted earnings per share $ 0.25 $ 0.20
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Diluted earnings per share for the periods presented do not reflect
the following weighted-average potential common shares, as the effect
would be antidilutive:
Fiscal quarter ended
March 31, April 1,
2007 2006
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Convertible and exchangeable notes:
Convertible Subordinated Notes, due 2023 - -
LYONs, due 2021 (d) - -
Exchangeable Unsecured Notes, due 2102 - -
Weighted average employee stock options 4,066 5,282
Weighted average warrants 8,824 8,824
(d) The LYONs were redeemed in June 2006. Prior to redemption, they
were convertible into 3,809 shares of common stock.
CONTACT: Vishay Intertechnology, Inc.
Richard N. Grubb, +1-610-644-1300
or
Peter G. Henrici, +1-610-644-1300