Vishay Capacitor Sales Grow 13% Sequentially In June 2010 Quarter

Capacitor sales at Vishay totaled $133 million USD in the quarter ending July 3, 2010, which is up by 13% from the $118 million in capacitor sales reported for the company in the prior quarter. Capacitor sales at Vishay for the first six months of 2010 were $251 million USD. Vishay maintains global competitive positions in tantalum, plastic, aluminum and ceramic capacitors. Operating profit in the Capacitors Group was $27 million for the quarter ending July 3, 2010, and $18 million for the prior quarter (a 50% increase in operating profit on a sequential basis), making operating profit in the capacitors group for the first six months of 2010 at $45 million USD, or 18% of revenues. Operating profits in the capacitor group at Vishay increased to 20% of revenues in the quarter ending July 3, 2010; up from 15% in the prior quarter.

Sales in the Vishay Resistors and Inductors Group were $152 million in the quarter ending July 3, 2010, up by 4% from the prior quarter, when revenues were $147 million. Operating profits in the Resistor and Inductor Group increased from $46 million in the prior quarter to $48 million in the July quarter- an increase of 4% on a sequential basis. Operating profits in the Resistor and Inductor Group were 32% of revenues in the July quarter. Vishay specializes in industrial and custom resistor and inductor products, including nichrome, wirewound and thin film resistive products, as well as various types of wound inductive components and devices. Total revenues in the Resistor and Inductor product grouping at Vishay for the first six months of 2010 were $299 million USD, with operating profits of $94 million USD, or 31% of revenues.

Overall, for the entire Vishay company, including semiconductors and related products, revenues for the quarter ending July 2010 were $702 million USD, up 9.6% compared to Q1. The company noted an overall slowdown in the book-to-bill ratio at 1.15, however, in passive components, the book-to-bill ratio remained higher than the norm at 1.23, which is down slightly from the 1.35 reported in the first quarter. Europe had the highest book-to-bill ratio at the end of the second quarter at 1.24, while the Americas were at 1.17 and Asia was at 1.07. The book-to-bill ratio slowed down in all regions, however, the book-to-bill in Asia took a tremendous tumble, with the ratio dropping from 1.70 at the end of the first quarter to 1.07 at the end of the second quarter.

The company reported no change in average unit selling price for their passive component line in both the first and second quarter, after three consecutive quarters of price increases in passive components throughout 2009.

In terms of outlook, the company expects third quarter revenues for the company to decline to between $650 million and $690 million in total revenues. This would be a sequential decline of between 2% and 7% for the quarter. This excludes revenues of VPG subsequent to the spin-off.” The VPG had revenues of $52 million USD for the quarter ending July 3, 2010, therefore, Vishay expects growth of between 0% and 6% for the third quarter.

Commenting on the results for the second quarter 2010, Dr. Gerald Paul, President and Chief Executive Officer of Vishay Intertechnology, Inc. stated, “In the second quarter 2010, our sales reached close to pre-crisis levels while orders stabilized on higher than pre-crisis levels. Inventories in the supply chain are still very low. Inventory turns at distribution reached record levels. In the quarter, all regions and all end markets remained strong to over-heated, in particular netbook, consumer and fixed telecom. Automotive showed a strong recovery.”

Commenting on future acquisitions, Dr. Felix Zandman, Executive Chairman of the Board stated- “Based on our strong generation of free cash and the resulting continuous strengthening of our balance sheet, we are now again actively pursuing acquisitions. As previously announced, we are targeting small to mid-size companies. At the same time in order to limit our financial exposure, the Board has refined the Company’s acquisition policy. We will not pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma EBITDA.

Additional Resources: (1) Passive Electronic Components: World Market Outlook: 2010-2015 ISBN # 1-893211-99-1 (2010). (2) Linear Resistors: World Markets, Technologies & Opportunities: 2009-2014 ISBN # 1-893211-24-X (7/2009) (3) Capacitors: World Market Outlook: 2009-2014 ISBN # 0-929717-02-3 (6/2009)