EX-99 2 a5327012ex99.txt VISHAY INTERTECHNOLOGY, INC. EXHIBIT 99 Exhibit 99 Vishay Reports Results for Year and Fourth Quarter 2006 MALVERN, Pa.--(BUSINESS WIRE)--Feb. 6, 2007--Vishay Intertechnology, Inc. (NYSE:VSH): -- Revenues for 2006 were an all-time record. -- Revenues for 2006 increased 12% over 2005. -- Net earnings of $0.73 per diluted share for year 2006 have been negatively affected by the after tax impact of certain items (enumerated below) of $0.26 per share for adjusted earnings per share of $0.99, as compared to year 2005 net earnings of $0.34 per diluted share, which were negatively affected by the after tax impact of certain items of $0.17 per share for adjusted earnings per share of $0.51. -- Net earnings per diluted share for 2006 increased 115% over 2005. -- Cash generated from operations for fourth quarter 2006 was $121 million and $349 million for year 2006. -- Cash generated from operations for 2006 increased 73% over 2005. -- Confident for year 2007. Dr. Felix Zandman, 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 year ended December 31, 2006 were $2,581.5 million compared to $2,296.5 million for the year ended December 31, 2005. Net earnings for the year ended December 31, 2006 were $139.7 million, or $0.73 per diluted share, compared with net earnings for the year ended December 31, 2005 of $62.3 million, or $0.34 per diluted share. Net revenues for the fiscal quarter ended December 31, 2006 were $635.5 million, as compared to revenues of $593.7 million, for the fiscal quarter ended December 31, 2005. Net earnings for the fiscal quarter ended December 31, 2006 were $26.3 million, or $0.14 per diluted share, compared with net earnings of $26.9 million, or $0.14 per diluted share, for the quarter ended December 31, 2005. Net earnings of $139.7 million, or $0.73 per diluted share, for the year ended December 31, 2006 were impacted by pre-tax charges for restructuring and severance costs of $40.2 million, related asset write-downs of $6.7 million, write-downs and write-offs of tantalum inventories totaling $9.6 million, losses resulting from adjustments to previously existing purchase commitments of $5.7 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 $0.26 effect on earnings per share. Net earnings of $62.3 million or $0.34 per diluted share for the year ended December 31, 2005 were impacted by pre-tax charges for restructuring and severance costs of $29.8 million, related asset write-downs of $11.4 million, purchased in-process research and development (IPR&D) of $9.7 million, and Siliconix transaction-related expenses of $3.8 million. These items were partially offset by a gain on sale of land of $2.1 million and a gain from adjustments to previously existing purchase commitments of $1.0 million. In addition, tax expense includes a $9.0 million benefit, primarily due to favorable foreign tax rulings. These items and their tax-related consequences had a negative $0.17 effect on earnings per share. Net earnings of $26.3 million or $0.14 per diluted share for the fourth quarter of 2006 were impacted by pre-tax charges for restructuring and severance costs of $12.1 million, related asset write-downs of $0.1 million, and losses resulting from adjustments to previously existing purchase commitments of $0.8 million. These items and their tax-related consequences had a negative $0.05 effect on earnings per share. Net earnings of $26.9 million or $0.14 per diluted share for the fourth quarter of 2005 were impacted by pre-tax charges for restructuring and severance costs of $11.6 million, related asset write-downs of $6.6 million, and a write-off of purchased IPR&D of $0.5 million. These items were partially offset by gains resulting from adjustments to previously existing purchase commitments of $3.4 million. In addition, tax expense includes a $5.3 million benefit, primarily due to favorable foreign tax rulings. These items and their tax-related consequences had a negative $0.03 effect on earnings per share. Commenting on the results for the fourth quarter and year 2006, Dr. Paul stated, "2006 proved to be an exceptional year for Vishay. We reached the highest revenues in our history and the operational performance was second only to the bubble year of 2000, which was impacted for the most part by very temporary price increases. Revenues for the fourth quarter were well within our guidance due to lower shipments to distribution as anticipated. Margins for the quarter were burdened by some one-time increases of fixed costs, and by a less profitable product mix. Despite our expansion activities, we generated free cash of $175 million in 2006, which compares to $81 million in 2005." Commenting on the outlook for the first quarter 2007, Dr. Paul continued, "We are guiding to revenues of $625 million to $645 million for the first quarter 2007. After the decline in orders has virtually come to an end, comparing the fourth quarter 2006 to the previous quarter, our book-to-bill ratio has recovered to 1.01 for January." Commenting on the year 2007, Dr. Paul continued, "We are confident for the current year. Our restructuring plans are winding down and for 2007 we expect restructuring charges of less than $10 million. We also anticipate the continuation of a strong cash generation, which will benefit from the expiration of our long-term purchase commitment for tantalum. We expect an additional positive impact of $100 million on cash flow over the next three years as we utilize the tantalum we have on-hand." Commenting on the Company's acquisition activities, Dr. Zandman stated, "We are excited about the acquisition of International Rectifier's Power Control Systems (PCS) business. The finalization of the service and supply arrangements are on track for the closing expected by April 1, 2007. With a run-rate per year of about $320 million in revenues the PCS business already is at a level that we anticipated for only some time after the closing. We expect PCS to be accretive to earnings from the first quarter after the closing and to be at an annual run-rate of $40 million net profit after tax by the fourth quarter after the closing." Commenting on the Company's R&D activities, Dr. Zandman continued, "Our R&D programs are on target. New products released to the market during the last three years contributed 13% to our 2006 revenues." A conference call to discuss fourth quarter and year ending financial results is scheduled for Tuesday, February 6, 2007 at 10:00 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 #5973027. There will be a replay of the conference call from 12:30 PM (ET) on Tuesday, February 6, 2007 through 11:59 PM (ET) on Sunday, February 11, 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 #5973027. 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 and bookings, and the anticipated future benefits of the Company's product, acquisition, and research and development 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, the availability of appropriate acquisition opportunities on terms that the Company considers attractive, difficulties in integrating acquired companies including the PCS business of International Rectifier, difficulties in new product development, 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, 2005 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. Vishay does not undertake any 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, losses on early extinguishment of debt, 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 December 31, 2006 2005 ---------------- ---------------- Net revenues $ 635,487 $ 593,690 Cost of products sold 479,512 454,260 Loss (gain) on purchase commitments 849 (3,417) ---------------- ---------------- Gross profit 155,126 142,847 Gross margin 24.4% 24.1% Selling, general and administrative expenses 104,913 90,560 Purchased in-process research and development - 493 Restructuring and severance costs 12,135 11,594 Asset write-offs 102 6,603 ---------------- ---------------- Operating income 37,976 33,597 6.0% 5.7% Other income (expense): Interest expense (7,387) (8,905) Minority interest (196) 157 Other 4,722 1,713 ---------------- ---------------- Total other income (expense) - net (2,861) (7,035) ---------------- ---------------- Earnings before taxes 35,115 26,562 Income tax expense (benefit) 8,863 (328) ---------------- ---------------- Net earnings $ 26,252 $ 26,890 ================ ================ Basic earnings per share $ 0.14 $ 0.15 Diluted earnings per share $ 0.14 $ 0.14 Weighted average shares outstanding - basic 184,459 184,130 Weighted average shares outstanding - diluted 208,550 219,522 VISHAY INTERTECHNOLOGY, INC. Summary of Operations (Unaudited - In thousands except earnings per share) Year ended December 31, 2006 2005 ---------------- ---------------- Net revenues $ 2,581,477 $ 2,296,521 Cost of products sold (a) 1,916,658 1,769,978 Loss (gain) on purchase commitments 5,687 (963) ---------------- ---------------- Gross profit 659,132 527,506 Gross margin 25.5% 23.0% Selling, general and administrative expenses (b) 403,999 376,912 Purchased in-process research and development - 9,694 Siliconix transaction-related expenses - 3,751 Restructuring and severance costs 40,220 29,772 Asset write-offs 6,685 11,416 ---------------- ---------------- Operating income 208,228 95,961 8.1% 4.2% Other income (expense): Interest expense (32,215) (33,590) Loss on early extinguishment of debt (2,854) - Minority interest (978) (3,761) Other 18,391 15,401 ---------------- ---------------- Total other income (expense) - net (17,656) (21,950) ---------------- ---------------- Earnings before taxes 190,572 74,011 Income taxes 50,836 11,737 ---------------- ---------------- Net earnings $ 139,736 $ 62,274 ================ ================ Basic earnings per share $ 0.76 $ 0.35 Diluted earnings per share $ 0.73 $ 0.34 Weighted average shares outstanding - basic 184,400 177,606 Weighted average shares outstanding - diluted 210,316 189,321 (a) The year ended December 31, 2006 includes write-downs and write-offs of tantalum inventories of $9,602 and charges to settle past product quality issues of $2,885 within costs of products sold. (b) The year ended December 31, 2006 includes $3,600 of expenses within selling, general and administrative expenses to increase the estimated cost of environmental obligations associated with the 2001 General Semiconductor acquisition. VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Balance Sheets (In thousands) December 31, December 31, 2006 2005 ---------------- ---------------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 671,586 $ 622,577 Short-term investments - 9,925 Accounts receivable - net 351,656 350,850 Inventories: Finished goods 163,576 149,709 Work in process 194,734 181,125 Raw materials 178,543 157,036 Deferred income taxes 34,879 39,115 Prepaid expenses and other current assets 128,784 96,295 ---------------- ---------------- Total current assets 1,723,758 1,606,632 Property and equipment, at cost: Land 94,803 92,650 Buildings and improvements 441,659 406,798 Machinery and equipment 1,818,660 1,684,736 Construction in progress 85,288 67,229 Allowance for depreciation (1,316,045) (1,160,821) ---------------- ---------------- Total property and equipment, net 1,124,365 1,090,592 Goodwill 1,463,992 1,434,901 Other intangible assets, net 168,263 174,220 Other assets 223,251 221,246 ---------------- ---------------- Total assets $ 4,703,629 $ 4,527,591 ================ ================ VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Balance Sheets (continued) (In thousands) December 31, December 31, 2006 2005 ---------------- ---------------- (Unaudited) Liabilities and stockholders' equity Current liabilities: Notes payable to banks $ 526 $ 3,473 Trade accounts payable 145,919 142,709 Payroll and related expenses 132,922 118,814 Other accrued expenses 203,986 173,982 Income taxes 46,109 29,655 Current portion of long-term debt 3,728 1,533 ---------------- ---------------- Total current liabilities 533,190 470,166 Long-term debt less current portion 608,434 751,553 Deferred income taxes 28,880 27,091 Deferred grant income 5,732 11,896 Other liabilities 155,963 149,938 Accrued pension and other postretirement costs 285,823 256,986 Minority interest 4,794 4,109 Stockholders' equity: Common stock 17,010 16,946 Class B common stock 1,436 1,468 Capital in excess of par value 2,229,972 2,225,966 Retained earnings 796,902 657,166 Unearned compensation - (95) Accumulated other comprehensive income (loss) 35,493 (45,599) ---------------- ---------------- Total stockholders' equity 3,080,813 2,855,852 ---------------- ---------------- Total liabilities and stockholders' equity $ 4,703,629 $ 4,527,591 ================ ================ VISHAY INTERTECHNOLOGY, INC. Computation of Earnings Per Share (Unaudited - In thousands except earnings per share) Fiscal quarter ended Year ended December 31, December 31, 2006 2005 2006 2005 ---------- ---------- --------- --------- Numerator: Numerator for basic earnings per share - net earnings $ 26,252 $ 26,890 $139,736 $ 62,274 Interest savings assuming conversion of dilutive convertible and exchangeable notes, net of tax 3,090 3,778 13,518 2,722 ---------- ---------- --------- --------- Numerator for diluted earnings per share - adjusted net earnings $ 29,342 $ 30,668 $153,254 $ 64,996 ========== ========== ========= ========= Denominator: Denominator for basic earnings per share - weighted average shares 184,459 184,130 184,400 177,606 Effect of dilutive securities Convertible and exchangeable notes (c) 23,496 34,445 25,114 10,737 Employee stock options 515 876 722 907 Other 80 71 80 71 ---------- ---------- --------- --------- Dilutive potential common shares 24,091 35,392 25,916 11,715 ---------- ---------- --------- --------- Denominator for diluted earnings per share - adjusted weighted average shares 208,550 219,522 210,316 189,321 ========== ========== ========= ========= Basic earnings per share $ 0.14 $ 0.15 $ 0.76 $ 0.35 ========== ========== ========= ========= Diluted earnings per share $ 0.14 $ 0.14 $ 0.73 $ 0.34 ========== ========== ========= ========= Diluted earnings per share for the periods presented do not reflect the following weighted- average potential common shares, as the effect would be antidilutive (in thousands): Fiscal quarter ended Year ended December 31, December 31, 2006 2005 2006 2005 ---------- ---------- --------- --------- Convertible and exchangeable notes: Convertible Subordinated Notes, due 2023 - - - 23,496 Exchangeable Unsecured Notes, due 2102 6,176 6,176 6,176 6,176 Weighted average employee stock options 5,108 6,475 4,936 6,300 Weighted average warrants 8,824 8,824 8,824 8,824 (c) The Company made a cash repurchase of all outstanding LYONs pursuant to the option of the holders to require the Company to repurchase the LYONs on June 4, 2006. In 2005, based on its action to settle the holders' purchase option on the June 4, 2004 purchase date in common stock, the Company assumed for purposes of the earnings per share computation that all future purchase options for the LYONs would be settled in stock based on the settlement formula set forth in the indenture governing the LYONs. Due to the decision to utilize cash to repurchase the notes on the June 4, 2006, purchase date, the earnings per share computation for the year-to-date 2006 period is based on the 3,809 shares that would have been issued in a normal conversion, weighted for the period they were outstanding. The LYONs were dilutive for year ended December 31, 2006, as well as the quarter and year ended December 31, 2005. CONTACT: Vishay Intertechnology, Inc. Richard N. Grubb, +1-610-644-1300 or Peter G. Henrici, +1-610-644-1300