vishay intertechnology, inc. - s&p global … today vishay — a pioneer of the electronic...

VISHAY INTERTECHNOLOGY, INC.CORPORATE PRESENTATION

MAY 2011

VISHAY TODAY STOCK BUY-BACK Q1 RESULTS LOOKING AHEAD

2

NOTES ON FORWARD-LOOKING STATEMENTS Comments in this presentation other than statements of historical fact may constitute forward-

looking statements. Forward-looking statements are subject to various risks and uncertainties that could cause actual

results to vary materially from those anticipated.. These risks and uncertainties are described in the Company’s annual report on Form 10-K for the

year ended December 31, 2010, in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Risk Factors section in Part I.

The Company undertakes no obligation to update any forward-looking statements.

Measurements such as adjusted gross profit, adjusted operating profit, adjusted income from continuing operations and free cash are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Management believes that adjusted gross profit, adjusted operating profit, adjusted income from continuing operations and free cash, “non-GAAP” measures, are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Reconciling items to arrive at adjusted gross profit, adjusted operating profit, adjusted income from continuing operations and free cash represent significant charges or credits that are important to an understanding of the Company’s intrinsic operations. These reconciling items are more fully described in the Company’s annual report on Form 10-K and its quarterly reports presented on Forms 10-Q. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies.

NON-GAAP FINANCIAL MEASURES

VISHAY TODAY


VISHAY TODAY

VISHAY — A PIONEER OF THE ELECTRONIC COMPONENTS INDUSTRY

Founded in 1962 by Dr. Felix Zandman, based on an innovative resistor technology

Since 1985, strategy of accelerated growth through focused R&D and synergistic acquisitions to become a true broad-liner on a worldwide basis

Vishay components used today by virtually all major manufacturers of electronic products worldwide

4

VISHAY TODAY

THE VISHAY VISION

Offer innovative products and technologies to meet current and future market needs

Be a broad-liner for discrete electronic components offering “one-stop shop” service and custom solutions for all market segments in all regions

Be a leading supplier to our customers

Grow at a faster rate than electronics markets Vishay participates in

55

VISHAY TODAY

VISHAY — KEY STRENGTHS

Strong track record of growth through acquisitions

Broad market penetration in all industry segments and in all regions

Global technology leader in discrete semiconductors and passive components

Current and future customer-driven solutions for growth provided by R&D

Strong free cash flow generation and financial flexibility

Prudent capital structure—net cash positive

6

VISHAY TODAY

0200400600800

1,0001,2001,4001,6001,8002,0002,2002,4002,6002,8003,000

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

7

GROWTH THROUGH ACQUISITIONS

RoedersteinSprague

SferniceDraloric

Vitramon

Siliconix,Telefunken

General Semiconductor,Infineon infrared

Dale

BCcomponents

SALES IN MILLION

International RectifierPCS

YEAR

Kemet wet tantalum

Spin-off Vishay Precision Group

Q1 11: $695MAnnualized: $2.78M

VISHAY TODAY

BROAD MARKET PENETRATION

END MARKETS

SALES CHANNELSGEOGRAPHY

VISHAY REVENUES 2010EXCL. VISHAY PRECISION GROUP

COMPUTING21% CONSUMER

9%

AUTOMOTIVE15%

TELECOM12%

INDUSTRIAL24%

POWER SUPPLIES

10%

MILITARY/AERO6%

MEDICAL3%

AMERICAS23%

EUROPE36%

ASIA41%

EMS7%

OEM37%

DISTRIBUTION*56%

8

* Distribution includes Logistics Service Providers with 8%

VISHAY TODAY

BROAD CUSTOMER BASE

OEM

EMS DISTRIBUTION

NO SINGLE OEM CUSTOMER REPRESENTS OVER 5% OF SALES

9

VISHAY TODAY

BALANCED PRODUCT PORTFOLIO

45% PASSIVES - 55% SEMICONDUCTORS

VISHAY REVENUES 2010EXCL. VISHAY PRECISION GROUP

MOSFETS 24%

DIODES 23%

INFRARED OPTO 8%

RESISTORS INDUCTORS

24%

CAPACITORS 21%

10

VISHAY TODAY

BROADEST LINE OF DISCRETE SEMICONDUCTORSAND PASSIVE COMPONENTS

= Major Position = Minor PositionSource: Company estimates

DIODES MOSFETs MAGNETICS

Diodes, Rectifiers MOSFETs

Infrared Compo-nents

Opto-couplers LEDs

Aluminum, Ceramic

Power, Film,

Tantalum

Film, Power

SMD Resistors

Variable, Sensors

Inductors, Trans-

formers

VISHAY Avago AVX Fairchild Int. Rectifier Infineon KEMET KOA Murata Nichicon NXP ON Semi Panasonic Rohm Sharp ST Micro TDK/EPCOS Toshiba Yageo

SEMICONDUCTORS PASSIVE COMPONENTSOPTO CAPACITORS RESISTORS

11

VISHAY TODAY

Wirewound and other power resistors

Leaded film resistors

Thin film SMD resistors

Wet and conformal-coated tantalum capacitors

Capacitors for power electronics

MARKET AND TECHNOLOGY LEADER IN PASSIVE COMPONENTS

Source: WRTS, Company estimates

12

VISHAY TODAY

Power rectifiers

Low-voltage power MOSFETs

Infrared components

MARKET AND TECHNOLOGY LEADER INSEMICONDUCTORS

Source: WSTS, IMS, Company estimates

13

VISHAY TODAY

NATURAL HEDGEAGAINST USD-EUR CURRENCY FLUCTUATIONS

Vishay’s revenues earned and costs incurred in Euro nearly offset down to operating profit Euro weakening vs. US dollar:

• Revenues denominated in EUR are reported lower in USD (semblance of low growth)

• Costs incurred in EUR are reported lower in USD

Euro strengthening vs. US dollar:• Revenues denominated in EUR are reported higher in USD

(semblance of high growth)• Costs incurred in EUR are reported higher in USD

Currency exposure does exist in countries where we manufacture products but have less revenues:Israeli shekel, Czech koruna, Chinese yuan

14

VISHAY TODAY

1515

SALES AND GROSS MARGIN %

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36%

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02 03 04 05 06 07 08 09 10

SALES GM %

MILLIONS USD % OF SALES

VISHAY TODAY

1616

SALES AND ADJUSTED GROSS MARGIN %

0%

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18%

24%

30%

36%

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SALES GM ADJ %


VISHAY TODAY

1717

SALES AND OPERATING MARGIN %

2008: Operating Loss was ($1,648.7), see reconciliation schedule


-3%

0%

3%

6%

9%

12%

15%

18%

(500)

0

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1,000

1,500

2,000

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02 03 04 05 06 07 08 09 10

SALES OM %

VISHAY TODAY

1818

SALES AND ADJUSTED OPERATING MARGIN %

0%

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9%

12%

15%

18%

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1,000

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02 03 04 05 06 07 08 09 10

SALES OM ADJ %


VISHAY TODAY

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RECONCILIATION OF GAAP TO ADJUSTED

in millions USD 2010 2009 2008 2007 2006 2005 2004 2003 2002

Reconciling items affecting gross margin:

Loss on purchase commitments, Ta write-downs 6 16 (1) 17 18 133

Product quality claims 3

Reconciling items affecting operating margin:

Restructuring and severance costs 38 63 15 40 30 47 29 19

Asset write-downs 1 5 4 7 11 27 1 12

Settlement agreement gain (28)

Executive employment agreement charge 58

Impairment of goodwill and indefinite-lived intangibles 1,723

Terminated tender offer expenses 4

Contract termination charge 19

Siliconix transaction-related charges 4

Purchased in-process R&D 10 2

Environmental remediation 4

Gain on sale of building (5) (3)

VISHAY TODAY

2020

CAPITAL EXPENDITURES

0

50

100

150

200

250

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150

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93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

MILLION USD MILLION USD

VISHAY TODAY

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STRONG GENERATION OF FREE CASH CASH FLOWS FROM OPERATIONS LESS CAPITAL EXPENDITURES PLUS PROCEEDS FROM SALE OF PROPERTY AND EQUIPMENT

($50)

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

($50)

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

MILLIONS MILLIONS

VISHAY TODAY

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NET CASH POSITIVE

in millions (USD)Outstanding

Debt Comments Interest

Revolving Debt (up to $450M) 240 Available through December 1, 2015 LIBOR plus 1.65%

Exchangeable Unsecured Notes 95 Due 2102 or in 91 years LIBOR

Convertible Debentures, net of discount 97

$275 M principal amount; debt discount of $178 million is amortized to the income statement as additional non-

cash interest

Cash coupon: 2.25% of principal amount;

GAAP interest expense (including

amoritzation of discount) is based on

8% of net carrying amount

TOTAL DEBT 432

CASH AND CASH EQUIVALENTS,AND SHORT TERM INVESTMENTS 1,008

as of April 2, 2011

NEW GROWTH MARKETS

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NEW GROWTH MARKETSENERGY SAVING THROUGH HYBRID AND FULLY ELECTRIC VEHICLES

ENERGY SAVING THROUGH START/STOP TECHNOLOGY IN CARS

ALTERNATE ENERGY: WIND AND SOLAR

MARKET REQUIREMENT

VISHAY SOLUTION

New functions in hybrid cars include inverters and advanced motor control and battery management

20% CAGR for hybrids expected 2009-2012

Critical components for hybrid applications: DC-links: film capacitor

modules Inverters: IGBT modules Battery controls: shunt and

discharge resistors, MOSFETs

50% of all new cars expected to be equipped with start/stop technology by 2012

Critical components for start/stop applications: DC boost converters: power

inductors, MOSFETs, Schottkydiodes, electrolytic capacitors

B6 bridges and current sensors: MOSFETs, customized Power Metal Strip® resistors

25% CAGR for solar installations 2008-2013

Critical components for alternative energy applications: Inverters: MOSFETs, intelligent

IGBT and SCR modules, snap-in electrolytic capacitors, discharge and chopper resistors

Grid filters: AC power factor correction capacitors

Junction boxes: bypass power Schottky diodes

Power capacitors

Power Schottkyby-pass diodes Discharge

/ chopperresistors

Snap-in & screw terminalelectrolytic capacitors

Phase-leg thyristors,SCR-modules

Power Metal Strip® current sense resistors

Electrolyticboost capacitors

IHLP® inductors

High break down voltage dividers

MOSFETs, TMBS® Schottky rectifiers

High current inductors

DC-Link: film capacitor module

MOSFETs,Optocouplers

Intelligent IGBT modules:MOSFETs, TANDEM diodes, ultrafast rectifiers

MOSFETs, IHLP® inductors,TMBS® Schottkyrectifiers,TVS diodes,HV MLCCs

Battery shuntcurrent sense resistors

Source: Industry estimates, RNCOS, IC Insights, Company estimates

STOCK BUY-BACK:$275MM 2.25% CONVERT


STOCK BUY-BACK

CONVERTIBLE OFFERING SUMMARY

Offering size: $275M Security: Convertible Senior Notes Maturity: November 15, 2040 Call features: Non-call 10, Soft-call life @ 150% (Vishay can call,

after year 10, at par if VSH stock price is >150% of the conversion price)

Put features: None, except upon a fundamental change Coupon: 2.25% Conversion premium / price: 12.5%, approximately $13.88 Financial covenants: None

Offering rationale: We used low coupon, long-dated convertible debt to repurchase stock. Most of our cash is offshore, and using onshore external financing is a

more efficient means to finance the share repurchase. The convertible matures in 30 years, has no financial covenants, and

provides significant financial flexibility for us.25

STOCK BUY-BACK

FINANCIAL IMPACT OF THE CONVERTIBLE Balance sheet: GAAP requires to separately account for the liability and equity components.

At year end, the debt component of the debentures was valued at approx. $96M, and the equity component, net of deferred tax effects, was valued at approx. $113M. The resulting debt discount of approx. $179M is amortized to the income statement as additional non-cash interest expense.

Income statement: Interest will be accreted at comparable straight debt rate (8%), which includes non-cash amortization

Cash flow: Cash interest will be based on the 2.25% coupon Share count: Used $275 mm to repurchase stock concurrently with the convertible offering.

The number of shares repurchased is approximately 21.72M. Share count for EPS:

Q4 2010 share count reflects the share repurchase, weighted for the period the shares were outstanding.

Intention is to net share settle upon conversion. Even though no physical dilution occurs until conversion, for GAAP purposes, diluted shares from the convertible are added through the treasury stock method of calculation based off $275 million offering amount and $13.88 conversion price.

Q4 2010 included 0.5M and Q1 2011 3.6M shares in denominator for these debentures. Filed 8-K on May 3 noting the impact of share price on denominator for EPS

Tax: Because the convertible includes a contingent interest feature, Vishay can take tax deductions at its comparable straight debt rate (8.00%).

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Q1 2011 FINANCIAL RESULTS


Q1 FINANCIAL INFORMATION

28

HIGHLIGHTS Q1 2011

Revenues Q1 2011 of $695 million• Up 0.9% vs. Q4 2010• Up 8.5% vs. Q1 2010

Gross Margin 30.9%

Operating Margin 17.6%

EPS Q1 of $0.49 when excluding one-time tax expense

Free Cash1 Q1 2011 $80 million

Book-to-bill for total Company at 1.01 in Q1—most markets continue to be strong

1) CASH FLOWS FROM OPERATIONS LESS CAPITAL EXPENDITURES PLUS PROCEEDS FROM SALE OF PROPERTY AND EQUIPMENT


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FINANCIAL RESULTS

in millions, except per share amounts Q1 2011 Q4 2010 Q1 2010

Net revenues $695 $689 $640

Gross profit $215 $212 $167

30.9% 30.7% 26.1%

Operating income $122 $121 $65

17.6% 17.5% 10.2%

Net earnings attributable to Vishay stockholders $75 $147 $45

Share count for EPS calculation 176 181 193

EPS $0.43 $0.81 $0.24


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ADJUSTED FINANCIAL RESULTS

in millions, except per share amounts Q1 2011 Q4 2010 Q1 2010

Net revenues $695 $689 $640

Gross profit $215 $212 $167

30.9% 30.7% 26.1%

Adjusted operating income $122 $121 $65

17.6% 17.5% 10.2%

Adjusted net earnings attributable to Vishay stockholders $85 $88 $45

Share count for EPS calculation 176 181 193

Adjusted EPS $0.49 $0.48 $0.24


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in millions Q1 2011 Q4 2010 Q1 2010

GAAP NET EARNINGS $75 $147 $45

One-time tax expense (benefit) $10 ($59) -

ADJUSTED NET EARNINGS $85 $88 $45

RECONCILIATION OF GAAP TO ADJUSTED


32

BALANCE SHEET OVERVIEW

*Long term debt includes $ 95 million of exchangeable unsecured notes due in 91 years, and is net of unamortized debt discount of $178 million.

in millions Q1 2011 Q4 2010 Q1 2010

Cash and cash equivalents,and short term investments $1,008 $897 $613

Long term debt incl. current portion* $432 $432 $334

Inventories $460 $428 $435

Inventory turns** 4.4 4.4 4.2

**We define inventory turnover for a financial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory for this same period.

in millions


33

CASH FLOW OVERVIEW

in millions Q1 2011 Q4 2010 Q1 2010

Depreciation $41 $42 $45

Amortization $4 $5 $6

Cash from operations $98 $206 $68

CapEx $19 $65 $18

Free Cash* $80 $141 $50*Cash flows from operations less capital expenditures plus proceeds from sale of property and equipment

in millions Q2 2008 Q1 2009


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BOOK-TO-BILL DETAIL

Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010

Book-to-bill VISHAY 1.01 0.83 1.04 1.15 1.46

Book-to-bill semiconductors 1.05 0.81 1.02 1.08 1.57

Book-to-bill passive components 0.97 0.84 1.06 1.23 1.35

Book-to-bill distribution 0.99 0.71 0.95 1.17 1.67

Book-to-bill OEMs 1.04 0.97 1.16 1.14 1.22

Book-to-bill Americas 1.00 0.76 1.09 1.17 1.30

Book-to-bill Europe 1.00 0.97 1.20 1.24 1.31

Book-to-bill Asia 1.04 0.73 0.88 1.07 1.70


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OPERATIONAL METRICS

Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010

Change in ASP vs. prior year VISHAY 5.1 5.2 4.2 1.1 (1.5)

Change in ASP vs. prior year semis 4.1 5.1 5.5 2.3 (2.9)

Change in ASP vs. prior year passives 6.3 5.4 2.6 0.0 (0.0)

FX effect on sales vs. previous quarter - $12 $3 ($18) ($13)

Backlog at quarter end VISHAY $912 $881 $1,010 $988 $908

Backlog in months 3.9 3.8 4.4 4.2 4.3


36

Excl. Spin-Off Vishay Precision Group:VISHAY SALES AND GROSS MARGIN %

0

4

8

12

16

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28

32

36

300

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2004 2005 2006 2007 2008 2009 2010 2011

SALES GM %

$ in millions %


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VISHAY SALESBY PRODUCT SEGMENT

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2004 2005 2006 2007 2008 2009 2010 2011

MOSFETs Diodes Opto Resistors Capacitors

$ in millions$ in millions


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VISHAY GROSS MARGINSBY PRODUCT SEGMENTS

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2004 2005 2006 2007 2008 2009 2010 2011

MOSFETs Diodes Opto Resistors Capacitors

% %


39

GUIDANCE FOR Q2 2011

Revenues of $695 to $735 million at performance levels similar to Q1 2011

LOOKING AHEAD


LOOKING AHEAD

41

Broad product portfolio

Strong market position in numerous lines

Balanced geographic footprint

Right mix of sales channels

Contribution margin of 45% plus

Break-even point lowered to $1,850 million

Reliable generation of “free cash”$200 to $300 million per year

VISHAY TODAY

LOOKING AHEAD

42

By organic growth

By acquisitions

By stock buy-back

While maintaining prudent capital structure

DRIVE SHAREHOLDER VALUE

IMPROVE EPS

LOOKING AHEAD

43

Growth through innovative products

Growth through improved market penetration

Growth through leveraging broad product portfolio: “one-stop shop” service

Supported by continuously growing end markets

ORGANIC GROWTH

LOOKING AHEAD

44

GROWTH THROUGH R&D

Sales of products less than 5 years old at a level of approximately 25%

Equivalent to a contribution of approx. 5% per year to organic growth

More than offsets aging of product portfolio

LOOKING AHEAD

45

TARGETED ACQUISITION STRATEGY

Solid product portfolios complementing Vishay’s existing product lines

Board decision to limit maximum debt/EBITDA for Vishay plus target: 2.5x

Cash payback in less than 8 years

Accretive to earnings in less than 12 months

Compatible with Vishay: can be integrated and run by Vishay’s present organization

Contribution margins of over 40%

LOOKING AHEAD

46

TARGETED ACQUISITION STRATEGY

Acquisitions in passive components:

• Strengthen and broaden Vishay’s position as a specialty products supplier

Acquisitions in discrete semiconductors:

• Increase market share and exploit synergies

47

SUMMARY

Doubled earnings power during crisis

Will further improve EPS by growth

Maintaining strong financial position

vishay intertechnology, inc. - s&p global … today vishay — a pioneer of the electronic...

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