Vishay Intertechnology, Inc. (VSH)

VSH 
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Vishay Intertechnology, Inc. (VSH)

Q1 2010 Earnings Conference Call

May 5, 2010 10:00 a.m. ET

Executives

Lior Yahalomi - CFO

Dr. Felix Zandman - Executive Chairman and Chief Technical and Business Development Officer

Dr. Gerald Paul - President and CEO

Lori Lipcaman - EVP and Chief Accounting Officer

Dave Tomlinson - SVP and Corporate Controller

Analysts

Shawn Harrison - Longbow Research

Jim Suva - Citigroup

Steve Smigie - Raymond James

Jim Suva - Citigroup

Presentation

Operator

Good morning. My name is Latricia [ph] and I will be your conference operator today. At this time, I would like to welcome everyone to Vishay's First Quarter 2010 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark, there will be a question-and-answer session. [Operator Instructions]

Thank you. I would now like to turn the conference over to Dr. Yahalomi. Please go ahead, sir.

Dr. Lior Yahalomi

Thank you, Latricia. Good morning. This is Lior Yahalomi, Vishay's Chief Financial Officer. Ladies and gentlemen, you're welcome to Vishay's first quarter 2010 earnings call. On the line with me today are Dr. Felix Zandman, Vishay's Executive Chairman and Chief Technical and Business Development Officer; Dr. Gerald Paul, Vishay's President and Chief Executive Officer; Lori Lipcaman, Vishay's Executive Vice President and Chief Accounting Officer; and Dave Tomlinson, Vishay's Senior Vice President, Corporate Controller.

Before I start, Dave Tomlinson will read our customary opening statement. Dave?

David Tomlinson

You should be aware that in today's conference call we'll be making certain forward-looking statements that discuss future events and performance. These statements are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. For a discussion of factors that could cause results to differ, please see today's press release and Vishay's Form 10-K and Form 10-Q filings with the SEC.

Dr. Lior Yahalomi

Thank you, Dave. I will make summary remarks. Dr. Paul will add a more detailed analysis of our first quarter 2010. And finally Dr. Zandman will update our R&D and acquisition activities and will add summary remarks.

Quarterly results; for the first quarter of 2010, Vishay reported revenues of $640.5 million, 5.5% higher than the fourth quarter of 2009 and 42.5% higher than the first quarter of 2009. Our consolidated gross margin for the quarter was 26.1%, as compared to 22.6% for the fourth quarter of 2009, and 15.1% for the first quarter of 2009. The increase from the fourth quarter of 2009 reflects the continued recovery from the historical global economic crisis, with increased sales and the cost reduction initiatives implemented by the Company.

SG&A expenses for this quarter were 101.9 million, or 15.9% of revenues, as compared to 98.3 million or 16.2% of revenues for the fourth quarter of 2009, and 87.1 million or 19.5% for last year's first quarter. Other income and expense for the first quarter 2010 consists of $2.4 million of interest expense. The effective tax rate for the first quarter of 2010 was 27%.

Capital expenditures for the quarter were $18.1 million, compared to 24 million in our fourth quarter of 2009 and 11.3 million in our first quarter of 2009. Depreciation and amortization for the quarter was $50.4 million as compared to 60.1 million, in the fourth quarter of 2009 and 54.6 million, in the first quarter of 2009.

As announced in the press release Vishay reported earnings attributable to Vishay stock holders of $0.24 per diluted share for the first quarter of 2010. There were no unusual items for the first quarter of 2010, earnings per share of $0.24 for the quarter represents improvement as compared to net earnings per share of $0.15, for the fourth quarter of 2009, and net loss per share of $0.16 for the first quarter of 2009.

Vishay liquidity. Vishay had a total debt of 335 million, as of April 3, 2010. The debt consists predominantly of the following four segments. 105 million, of long-term notes with 92 years maturity, due on December 12, 2102 with interest rate of 90 day LIBOR plus 0%.

$87.5million of long-term loan maturing on July 1, 2011, with payments spread over the next 1.25 years, with interest rate of 30-day LIBOR plus 2.5%. 250million revolving credit facility maturing on April 20, 2012 with interest rate of 30-day LIBOR plus 1.4%, 125 million of which was used April 3, 2010.

And finally, 13.5 million of long-term loan maturing on January 27, 2014, with payments spread over five years with interest rates of 30-day LIBOR plus 3.45%. As of April 3, 2010, Vishay had cash and cash equivalence of $613 million. Total available credit line including the 125 million end used revolver in the U.S. was $170 million, at April 3rd, 2010.

Vishay total available liquidity measured by cash plus all available credit lines as of April 3, 2010, was $783 million, while our total debts payable over the next five years is only $230 million. Some other key summary financials are, total inventory at quarter end was $443 million, working capital at quarter end was approximately 1 billion, free cash flow was $50 million for the first quarter of 2010, as compared to 92 million, for the fourth quarter of 2009, and 42 million for the first quarter of 2009.

Vishay’s total liquidity is 783 million and our continuous focus on earning growth and free cash generation will further improve our liquidity throughout 2010. I will now turn the call over to Dr. Paul our President and Chief Executive Officer. Dr. Paul.

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