Siliconix Reports Earnings for Third Quarter 2004 SANTA CLARA,
Calif., Nov. 3 /PRNewswire-FirstCall/ -- Siliconix incorporated
(NASDAQ:SILI), an 80.4% subsidiary of Vishay Intertechnology, Inc.
(NYSE:VSH), announced net income of $15.9 million, or $0.53 per
share, for the third quarter ended October 2, 2004. This is a 65%
increase over the net income of $9.6 million, or $0.32 per share,
in the third quarter of 2003 and a 4% increase over the $15.2
million, or $0.51 per share, for the second quarter ended July 3,
2004. Sales for the third quarter of 2004 were $115.2 million, 18%
more than the sales of $97.4 million for the third quarter of 2003
and 5% less than the sales of $120.7 million for the second quarter
of this year. Net income for the first nine months of 2004 was
$45.1 million, or $1.51 per share, 56% more than the net income of
$28.9 million, or $0.97 per share, for the first nine months of
2003. Sales for the first nine months of 2004 were $354.3 million,
25% more than the sales of $283.4 million for the first nine months
of 2003. The gross margin for the third quarter of 2004 was 33%,
compared to 29% for the third quarter of 2003 and 33% for the
second quarter of 2004. The year-to-year improvement was a result
of the increase in sales, better pricing, an improved product mix,
and cost reduction efforts which more than offset the increased use
of outside subcontractors. On a sequential basis, the company was
able to maintain the same 33% margin, even with 5% lesser sales,
with better pricing and a better product mix. Research and
development expenses increased by $761,000 from the third quarter
of 2003 and decreased by $410,000 from the second quarter of this
year. The year-to-year quarterly increase was attributable to
increased investment in our R&D activities, and the sequential
decrease resulted from increased allocation of engineers' time to
technology transfers to foundries. Dr. King Owyang, Siliconix
President and CEO, said, "During the first half of this year, our
distribution customers, particularly in Asia, booked orders in
anticipation of increased end-customer demand. Demand did increase,
but not as much as anticipated. Therefore, our third quarter
results reflected inventory realignment between our distributors'
order rates and their resale rates to their customers. This was
particularly noticeable in our September bookings. At the end of
the quarter, our backlog was 22% lower than at the end of the
second quarter. We understand that our distributors' resales to
their customers increased substantially in September, and they
expect a strong October and November as well. This is consistent
with inputs from our major OEM customers that their fourth-quarter
demand should be the strongest of the year. However, our customers
are definitely more cautious in their ordering patterns than
earlier this year; therefore, we anticipate the possibility of
further inventory corrections in the fourth quarter. In short,
there is as much uncertainty in the marketplace now as we have seen
in the last several years. Notwithstanding this environment, we are
maintaining our share in our major markets, so it is apparent that
our competitors in these markets are dealing with similar
phenomena." He continued, "Our efforts to increase our capacity are
yielding results, and lead times are decreasing, but this has also
allowed our customers to be more conservative in their ordering. We
expect distribution bookings to pick up again by the end of the
year, but we are unlikely to feel the impact from this until next
year." He noted, "New product introductions continue to be key in
capturing the design opportunities and providing technical
solutions to innovative application challenges. In the third
quarter, we released a total of 40 new products in our Power IC,
Power MOSFET, and Analog Switch product families. New to our
portfolio is a family of SCSI Terminators to provide a second
source option in the marketplace. PowerPAK(R) 1212 MOSFETs that
rival the performance ratings of the SOIC-8 packages at one-third
the size have been introduced for power supply and fixed telecom
applications. A selection of P- channel MOSFETs for automotive load
switching was introduced in a variety of packages and breakthrough
performance ratings. This family offers the added advantage of
reduced parts count, reduced systems cost, and increased system
reliability." Dr. Owyang added, "Our third quarter design activity
remains strong with the addition of 280 new design wins for
graphics cards; plasma and LCD displays; consumer goods such as
PDAs, digital still cameras, and games; and power supply and fixed
telecom applications." He concluded, "Our consistent approach to
solution-based investments will continue to enhance our leadership
in key markets. At the same time, our cost reduction programs and
improving manufacturing efficiencies position us to further
penetrate power management applications in the telecommunications,
portable computer, consumer, industrial, and automotive markets. We
believe that this strategy is behind our success, both in the
marketplace and financially. The Company's financial position
remains very strong; we are debt-free and continue to finance our
growth with internal profits." Siliconix is a leading manufacturer
of power MOSFETs, power ICs, analog switches, and multiplexers for
computers, cell phones, fixed communications networks, automobiles,
and other consumer and industrial electronic systems. With 2003
worldwide sales of $392.1 million, the Company's facilities include
a Class 1 wafer fab dedicated to the manufacture of power products
in Santa Clara, California, and an affiliated Class 1 wafer fab
located in Itzehoe, Germany. The Company's products are also
fabricated by subcontractors in Japan, Germany, China, Taiwan, and
the United States. Assembly and test facilities include a
company-owned facility in Taiwan, a joint venture in Shanghai,
China, and subcontractors in the Philippines, China, Taiwan and
Israel. 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, and
transducers). Vishay's components can be found in products
manufactured in a very broad range of industries worldwide. Vishay
is headquartered in Malvern, Pennsylvania, and has operations in 17
countries employing over 26,000 people. Vishay can be found on the
Internet at http://www.vishay.com/. These results will be discussed
during the Vishay Intertechnology, Inc. conference call scheduled
for today, November 3, 2004 at 11:00 AM (EST). The dial-in number
for the conference call is 888-428-4474 (612-332-0630 if calling
from outside the United States or Canada). The conference operator
will require the following information in order to admit you into
the call: Company Name: Vishay Intertechnology, Inc. and
Moderators: Vishay Executives. There will be a replay of the
conference call from 2:30 PM (EST) on Wednesday, November 3, 2004
through 11:59 PM (EST) on Monday, November 8, 2004. The telephone
number for the replay is 800-475-6701 (320-365-3844 if calling from
outside the United States or Canada). The access code is 751217.
There will also be a live audio webcast of the conference call.
This can be accessed directly from the Investor Relations section
for Siliconix at http://ir.siliconix.com/. Statements contained
herein that relate to the Company's future performance, including
statements with respect to anticipated improvements in the
Company's business and business climate, future product innovation,
and implementation of cost savings 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,
cancellation of orders in our backlog, difficulties in new product
development, and other factors affecting the Company's operations,
markets, products, services, and prices that are set forth in its
December 31, 2003 Report on Form 10-K 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. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Siliconix incorporated Consolidated
Balance Sheets (Unaudited, in thousands) October 2, December 31,
2004 2003 Assets Current assets: Cash and cash equivalents $311,312
$279,464 Accounts receivable, net 47,402 49,807 Accounts receivable
from affiliates 21,271 27,800 Inventories 64,672 63,229 Other
current assets 22,287 24,429 Deferred income taxes 3,508 3,508
Total current assets 470,452 448,237 Property and equipment, at
cost: Land 1,715 1,715 Buildings and improvements 58,704 57,761
Machinery and equipment 393,581 369,350 454,000 428,826 Less
accumulated depreciation 308,149 284,735 145,851 144,091 Goodwill
7,445 7,445 Other assets 25,657 1,397 Total assets $649,405
$601,170 Liabilities and Stockholders' Equity Current liabilities:
Accounts payable $33,823 $31,196 Accounts payable to affiliates
18,669 32,256 Accrued payroll and related compensation 11,185 8,776
Other accrued liabilities 33,461 30,843 Total current liabilities
97,138 103,071 Accrued pension benefits 3,320 3,137 Deferred income
taxes 15,498 15,498 Other non-current liabilities 60,862 52,161
Minority interest 3,323 3,143 Total liabilities 180,141 177,010
Commitments and contingencies Stockholders' equity: Common stock
299 299 Additional paid-in-capital 59,373 59,373 Retained earnings
410,704 365,619 Accumulated other comprehensive loss (1,112)
(1,131) Total stockholders' equity 469,264 424,160 Total
liabilities and stockholders' equity $649,405 $601,170 Siliconix
incorporated Consolidated Statements of Fiscal Quarter Nine Fiscal
Months Operations Ended Ended (Unaudited, In thousands, except Oct.
2, Sept. 27, Oct. 2, Sept. 27, for per share information) 2004 2003
2004 2003 Net sales $115,207 $97,411 $354,283 $283,444 Cost of
products sold 77,636 69,555 241,674 200,234 Gross profit 37,571
27,856 112,609 83,210 Operating expenses: Research and development
5,467 4,706 16,638 14,419 Selling, marketing, and administrative
expenses 12,359 11,460 39,366 33,518 Operating income 19,745 11,690
56,605 35,273 Interest income 1,034 610 2,331 1,810 Other (expense)
income net (372) 92 (954) 117 Income before taxes and minority
interest 20,407 12,392 57,982 37,200 Income tax provision (4,477)
(2,722) (12,717) (8,146) Minority interest in income of
consolidated subsidiary (60) (60) (180) (180) Net income $15,870
$9,610 $45,085 $28,874 Net income per share (basic and diluted)
$0.53 $0.32 $1.51 $0.97 Shares used to compute net income per share
29,879 29,879 29,879 29,879 Contact: Peter G. Henrici, Vice
President, Investor Relations, Siliconix incorporated (NASDAQ:SILI)
408-567-8400 Robert A. Freece, Executive Vice President Vishay
Intertechnology, Inc. (NYSE:VSH) 610-251-5252 DATASOURCE: Siliconix
incorporated CONTACT: Peter G. Henrici, Vice President, Investor
Relations, Siliconix incorporated, +1-408-567-8400; or Robert A.
Freece, Executive Vice President, Vishay Intertechnology, Inc.,
+1-610-251-5252 Web site: http://ir.siliconix.com/ Web site:
http://www.vishay.com/ Web site: http://www.siliconix.com/
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