Siliconix (NASDAQ:SILI)
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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/