Vishay’s CEO Discusses Capacitor, Resistor and Inductor Sales For The March Quarter; Provides June Outlook

Dr. Gerald Paul, Vishay’s President and Chief Executive Officer of Vishay Intertechnology Inc. (VSH), discussed the March 2012 quarterly performance for the Vishay line of passive components, including both the Resistors and Inductors Group and the Capacitors Group in an Earnings Call on May 2, 2012.

According to Dr. Paul “Vishay’s traditional business in the first quarter entered the phase of solid recovery. We enjoy a very strong position in the industrial automotive and military markets and benefit from the strong performance of these segments. Sales in the quarter of $158 million, 14% above prior quarter and 7% below prior year, without acquisitions, 6% above prior quarter and 15% below prior year.

The book-to-bill ratio was 1.13, which improves the backlog to a good level of 3.1 months. The gross margin was at 34% of sales, of the 30% in the prior quarter, driven mainly by higher volumes. Selling prices continue to be fairly stable, minus 0.5% versus prior quarter, minus 0.6% versus prior year. The inventory turns were at quite excellent 4.3.

As I said before, the integration of Huntington and HiRel is well underway. We achieved already in this quarter gross margins of almost 30% of sales with both acquisitions. And the profitability of these two companies is planned to grow further with expanding sales and based on some fixed cost reductions to come.

Coming to capacitors, the business is based on a broad range of technologies with a strong position into European and American market niches. We still suffered from relatively high inventories at distribution largely to perceived shortages in 2011.

Sales in the quarter were $140 million, 4% below prior quarter and 29% below prior year. We’ve seen the book-to-bill ratio of 1.12, which brings backlog up to a good level of 3.6 months. And I think indicates starting recovery also for this product line. The gross margin of capacitors went up to 26% of sales by 4% versus prior quarter due to original product mix.

ASPs were slightly declining in the quarter by 1.2% versus prior quarter by 0.8% versus prior year. We indeed gave back part of the price increases of 2011 in molded tantalum caps accelerating inventory reduction in distribution. In that sense, we believe that this is somewhat was hit, ASP decrease was a temporary one-time effect. The inventory turns of capacitors were 2.9 and we strongly believe that capacitors in the second quarter will follow resistors in terms of recovery.”

For the June 2012 quarter, Dr. Paul forecasted that overall company demand (including both active and passive components) would increase by between 7.6% and 15.1% on a quarter-to-quarter basis, or an average of 11.35%, which will signify a healthy upturn in overall component demand.


Vishay Intertechnology produces all types of capacitors, resistors and inductors as is illustrated in one of their product displays at the Capacitor & Resistor Technology Symposium