Good morning, and welcome to the Vishay Intertechnology Second Quarter 2011 Earnings Call. My name is Melissa, and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I will now turn the call over to Dr. Yahalomi. Sir, you may begin.

Good morning, thank you, Melissa. This is Lior Yahalomi, Vishay’s Chief Financial Officer. Good morning, ladies and gentlemen, and welcome to Vishay’s second quarter 2011 earnings call. On the line with me today are Dr. Gerald Paul, Vishay’s President and Chief Executive Officer; Lori Lipcaman, Vishay’s Executive Vice President and Chief Accounting Officer; and David Tomlinson, Vishay’s Senior Vice President, Corporate Controller. Before I start, Dave Tomlinson will read our customary opening statement.

You should be aware that in today’s conference call, we will be making certain forward-looking statements that discuss future events and performance. These statements are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. For a discussion of factors that could cause results to differ, please see today’s press release and Vishay’s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission.

Thank you, Dave. I will summarize our U.S. GAAP results. Dr. Paul will present a detailed analysis of the second quarter 2011 with comparisons to prior periods for our business excluding the spun-off Vishay Precision Group. As you are aware, on July 6, 2010, we completed the spin-off of Vishay Precision Group into an independently publicly-traded company. Although VPG is an independent company, due to certain continuing involvement such as common board members, limited supply agreements, and leases and trademark licenses, we did not restate prior financial statements to present VPG as a discontinued operation for U.S. GAAP purposes. To assist in the analysis of Vishay, including and excluding VPG, we realigned our U.S. GAAP reportable segments segregating VPG into its own segment. Consolidated results for the first and second quarters of 2010 include VPG. Quarterly results. For the second quarter of 2011, Vishay reported revenues of $709.8 million or 2.1% higher than the first quarter of 2011 and 1.2% higher than the second quarter of 2010. We reported earnings attributable to Vishay’s stockholders of $82.1 million compared to $75.3 million for the first quarter of 2011 and $76.7 million for the second quarter of 2010. On an adjusted basis, net earnings for the quarter two were $84.6 million compared to $85.3 million for the first quarter of 2011 and $76.7 million for the second quarter of 2010. Our consolidated gross margin for the quarter was 29.9% compared to 30.9% for the first quarter of 2011 and 30% for the second quarter of 2010. SG&A expenses for this quarter were $92.8 million, or 13.1% of revenues, compared to $92.5 million, or 13.3% of revenues, for the first quarter of 2011 and $109.3 million, or 15.6%, for the last year’s second quarter. The fiscal quarter and six fiscal months ended July…

Thank you, Lior, and good morning, everybody. I think that also in the second quarter Vishay continued its strong performance of the year 2010 and of the first quarter 2011, quite according to expectations. We achieved a gross margin, as Lior said, of 30% of sales and operating margin of 17% of sales and adjusted earnings per share of $0.50. As Lior also said, operating margin and earnings per share exclude the one-time expense of $3.9 million pre-tax. We also continue to generate free cash in a healthy way and we have generated free cash of $130 million year-to-date. And the high backlog at Vishay indicates a solid third quarter. Let me talk about the economic environment as we see it. Also, in the second quarter, business conditions remained friendly in general. There were short lead times and there are sufficient inventories at distributors and all this assures a good service level in the supply chain. The concerns around shortages from Japanese vendors have diminished. There isn’t the expected normalization of backlogs and the ASP development has started. There is continued excellent performance of industrial, the industrial segment and of European automotive. On the other hand, there is some slowdown in consumer as well as net and notebooks. Also, the seasonal upturn in Asia seems somewhat weaker than normal. The inventory build at distribution has continued in the quarter, inventories went up by 9%. On the other hand, a strong POS still justifies the relative high inventory levels at distributors; the inventory turns at distribution are overall acceptable but declining. We saw in the second quarter 3.9 turns worldwide vis-à-vis 4.2 turns in the first quarter. In the Americas 2.6 turns vis-à-vis 2.8 turns in the first quarter. In Europe 4.7 turns vis-à-vis 5.0 turns in the first quarter; and…

(Operator Instructions). Your first question comes from Steve Smigie. Steven Smigie – Raymond James & Associates: Great. Thank you. I was hoping you could comment a little bit more on the gross margin decline you are expecting sort of – is it 50 basis points, 100 basis points or just an order of magnitude on it...?

It’s just related to volume and you know we have approximately 50% variable margin, so it’s mainly volume related and you see how the mid-point goes down. It answers the question I believe. Steven Smigie – Raymond James & Associates: Okay. And it sounds like there is a little bit of excess inventory out there in the channel and I think you built a little bit here. So, if I look at typical seasonal patterns Q4 might be down a little bit. That suggests you have a little bit more gross margin erosion going forward and particularly since we have the – it seems like the return of a normal pricing patterns for the discrete devices?

I mean there will be some inventory reduction at Vishay as I told you, but a major part of it is raw materials and this is what I try to refer to. Of course, to the extent finished goods and work-in-process will be concerned, but it’s the smaller portion, there is some limited impact on the gross margin also. So... Steven Smigie – Raymond James & Associates: Okay. And then with regard to operating expense, I think the mid-point of the guidance you are down about 2%. Will you, on the revenue side, will you keep the OpEx dollars roughly similar or will you adjust that down a little bit to account for the sort of midpoint of the revenue range.

Well first of all, it will, for the next quarter, it will be practically unchanged at the level we had. And also even if things got worse, we will speak to our technical program. So, we may squeeze at another point. But, as a matter of fact, I want to continue with our programs, our technical programs. But we have a high backlog. We are looking for another good quarter. Steven Smigie – Raymond James & Associates: Great. And if I could sneak one last one in, on the acquisition that you guys mentioned 10% to 15%, I think you said it was, can you talk about the nature of the products in there and whether you guys expect that to be accretive or dilutive?

Lior, do you want to answer?

Yes, I mean – this is Lior. We decided that at this point not to share the nature of the product lines. But, we emphasize that it is complementary at Vishay only because we are at the term sheet level and we will share that of course at closing. What was the second question, sorry? Steven Smigie – Raymond James & Associates: Accretion...

Yes, yes, I’m sorry, as Dr. Paul indicated over last several quarters including in our M&A strategy, this will be accretive. Steven Smigie – Raymond James & Associates: Okay. And I guess you don’t want to...

(Inaudible) Steven Smigie – Raymond James & Associates: Go ahead, I am sorry.

The payback is below the eight years to be relevant. Steven Smigie – Raymond James & Associates: Okay. And just – I don’t need too much you detail, I’m just sort of curious on the product – is it still in the discrete product areas either active or passive or you’re looking to get into integrated circuits with this a little bit?

Within our passive range and it complements our portfolio right now. Steven Smigie – Raymond James & Associates: Okay. Thank you very much.

Your next question comes from Shawn Harrison. Shawn Harrison – Longbow Research LLC: Hi, good morning. Just a follow-up on the M&A, $100 million a year revenue goal that – is that something you expect to hit this year with the small transaction announced? So, we should expect more in coming quarters?

Yes.

Obviously, we are looking for our candidates at $100 million principally speaking can be achieved. Yes. Shawn Harrison – Longbow Research LLC: Okay. And then the follow-up I just want to maybe drill into the POA versus the POS at distribution, I think your statement was it was relatively high during the quarter, but are you seeing that diverge now in the – through July into early August maybe some of the trends during the early third quarter where we started to see maybe distribution pullback a little bit further?

The orders from distribution have clearly weakened in July. So, we believe that they work on the inventory. Shawn Harrison – Longbow Research LLC: Okay. I guess that flows into the backlog question, it’s still well above I guess where you would like it to see. How should we see that normalize through the back half of 2011, is that just a function of inventory adjustments or would you expect some cancellations in the backlog as maybe you bring some more capacity online?

We have – we are watching cancellations and we cannot see a significant increase of cancellations at this point. I believe we are going back in steps to our normal situation with backlogs between two and half month and three months. This will take some time. I could imagine this really extend over the second half of the year normally doesn’t go that quickly. Shawn Harrison – Longbow Research LLC: Thanks so much.

Okay.

Your next question comes from Jim Suva. Jim Suva – Citigroup Global Markets: Thank you and congratulations to you and your team, gentlemen. My question is regarding the impact of raw materials and cost of goods sold that you are using. Should we think about – are we at a gross margin level that’s now sustainable except for mix-driven or are there some additional challenges with raw materials that could impact gross margins in the quarters ahead and how we should think about that impact to your financial model? Thank you.

Jim, I mean I cannot forecast how metals – we are talking metals in reality, how metals will go. But I only see that the major pressure, which we have seen in quarter two again has gone away. It’s not as severe anymore altogether than it has been. So, if it stayed at this plateau by nature it’s not a big- it’s not an impact on our gross margin level. Our gross margin really is driven by volume and price, but as you know for half of our products really for the passives there is no price decline. And for the actives, well, it’s true, we are entering back a phase of normalized price decline, but our industry is used to that and we have cost reduction programs. But materials, I believe, may I say that from my perspective without knowing the future obviously, the worst seems to be over. Jim Suva – Citigroup Global Markets: Great. And a quick modeling question, can you help us with what you believe the forward tax rate should be for the company?

It is 27% roughly as we indicated. Jim Suva – Citigroup Global Markets: Great. Thank you, and congratulations, gentlemen, to you and your team.

Your next question comes from Matt Sheerin. Matt Sheerin – Stifel Nicolaus & Co., Inc.: Yes, thank you, from Stifel Nicolaus. So just getting back, Dr. Paul, to the questions of distribution and customer orders in general, do you get a sense that correction that you’re seeing is going to take a quarter or given that the distributors are looking like they’re seeing weaker orders, weaker than seasonal, do you think it will take more like a couple of quarters through the December quarter to work that down?

Well, I cannot see distribution panicking at all, I mean they have a strong business, which leads me to the assumption, Matt, that this normalization will go smoothly, which I believe will take two quarters, it’s my personal opinion. But, of course, if the economy turn down, which, at the moment, the backlog doesn’t indicate at all, but if it should go down then of course there can be more pressure on the inventories. But under these conditions, which we see today, I would expect normalizations in the next six months. Matt Sheerin – Stifel Nicolaus & Co., Inc.: Okay. And you talked about some areas of strength auto, industrial, some weakness in consumer, could you talk about what you’re seeing in mobility space where I know you have a lot of exposure there, there are some winners and losers? How are you spread in terms of your exposure across the smartphone players and the tablet players now?

As a matter of fact, we are well positioned, but it’s true that this is a certain segment of weakening at the moment. And, as I said, before the seasonal upturn in Asia is not that strong this year. So, altogether it’s a picture, which indicates some slowdown there. Matt Sheerin – Stifel Nicolaus & Co., Inc.: And that’s in the – that’s in the mobility space, in the smart phones?

Yes. Matt Sheerin – Stifel Nicolaus & Co., Inc.: Okay. Could you give us a rough idea for the share count for this coming quarter, because I know you did some of the buybacks during the quarter?

Yes, Lior you can (inaudible).

We have filed an 8-K and I think it’s best if you look at that in detail and then we’ll be happy to answer any specific questions. Matt Sheerin – Stifel Nicolaus & Co., Inc.: Is that number in the 8-K?

Yes.

Yes definitely. Matt Sheerin – Stifel Nicolaus & Co., Inc.: But you can’t tell us. Okay, okay we’ll take a look. And then lastly, just on the M&A, is that – is your intent to do M&A both on the actives and the passives side or is there one preference?

The preference is for specialty products and by nature of things we find this more likely on the passives side. But we are open in both directions. I think the criteria are fixed and coming back to this – to the acquisitions, I think it’s a good sign that we have started it. It’s a very nice line, it’s complementary and fits the need of the professional industry so to speak. So, we’re back, this is the message and we will continue. Matt Sheerin – Stifel Nicolaus & Co., Inc.: Okay. Thanks a lot.

(Operator Instructions) Your next question comes from Steve Smigie. Steven Smigie – Raymond James & Associates: Great. Thanks for the follow-up. So, just with regard to the end markets, I think you indicated in the quarter just passed that you had the strength in the auto industrial. Is that continuing in your guidance, I mean are you still seeing – we’ve obviously heard of auto weakness from some other guys, but that seems more tied to maybe a one quarter Japan disruption and I think you guys are maybe less exposed to Japan than some of the others. So, any color you can provide on those markets would be great.

I think in our guidance included is a seasonal, slight seasonal decline of European industrial, but this is really seasonal I would like to highlight that. Europe has a seasonality. The auto industry this year pulls through and we do not expect to see any seasonality in automotive Europe. They are still super strong, but industrial includes a little slowdown, which is due to the summer. Steven Smigie – Raymond James & Associates: Okay. And then I guess overall you are indicating again that you see the overall environment as friendly I mean I think we’re seeing a number of people takedown the results here, but some other – even people who are taking down numbers are saying they don’t see a major negative drop-off like going into a 2008-type situation. I mean obviously GDP is not great at least in the U.S. so we are not saying things are great, but it doesn’t seem like it’s a fall to (inaudible) in the quarter?

I’m not the one to comment about the global economy. What I can see is really the situation of our business and I have to state it’s friendly, there is no question. There is some weakening in Asia, as I said before, but Vishay is positioned very strong in Europe and this helps at the moment of question. Steven Smigie – Raymond James & Associates: And the nature of that Asian weakness is that more just the local , Chinese market or is that more just ODMs and so forth at our automation products elsewhere in the world?

I personally believe that we see the results already of some overstocking and the distribution in Asia. This is I think more a correction than anything else. Steven Smigie – Raymond James & Associates: Okay, great. Thank you.

(Operator Instructions). There are no further questions. I would now turn the call over to Dr. Yahalomi for closing remarks.

Thank you, Melissa. Thank you all for your participation. We appreciate your interest and look forward for your continued interest in Vishay. Thank you.

This concludes today’s conference call. You may now disconnect.