Ladies and gentlemen, thank you for standing by, and welcome to the Vishay First Quarter 2014 Earnings Conference Call. [Operator Instructions] Thank you. I will now turn the conference over to Mr. Peter Henrici. Please go ahead, sir, Senior Vice President of the Corporate Communication.

Thank you, Crystal. Good morning, and welcome to Vishay Intertechnology's first quarter 2014 conference call. With me today are Dr. Gerald Paul, Vishay's President and Chief Executive Officer; Lori Lipcaman, our Executive Vice President and Chief Financial Officer. As usual, we'll start today's call with the CFO, who will review our first quarter financial results. Dr. Gerald Paul will then give an overview of our business and discuss operational performance, as well as segment results in more detail. Finally, we'll reserve time for questions and answers. This call is being webcast from the Investor Relations section of our website at ir.vishay.com. The replay for this call will be publicly available for approximately 30 days. 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. In addition, during this call, we may refer to adjusted or other financial measures that are not prepared according to generally accepted accounting principles. We use non-GAAP measures because we believe they provide useful information about the operating performance of our businesses and should be considered by investors in conjunction with GAAP measures that we also provide. This morning, we filed a Form 8-K that outlines the various variables that impact the diluted earnings per share computation. On the Investor Relations section of our website, you can find the presentation of the Q1 2014 financial information containing some of the operational metrics Dr. Paul will be discussing. Now I turn the discussion over to Chief Financial Officer, Lori Lipcaman.

Thank you, Peter. Good morning, everyone. I'm sure that most of you have had a chance to review our earnings press release. I will focus on some highlights and key metrics. Vishay reported revenues for quarter 1 of $602 million, in line with the guidance. GAAP EPS for the quarter was $0.17. The first quarter includes a charge of $6.4 million related to our previously announced cost-reduction programs. Excluding the effect of this item and the related tax impact, adjusted EPS was $0.20 for the quarter. The revenues in the quarter of $602 million were down by 2.2% from previous quarter and up by 8.7% compared to prior year. Gross margin was 24.1%. Operating margin was 7.1%. Adjusted operating margin was 8.1%. EPS was $0.17. Adjusted EPS was $0.20. Looking at the reconciliations versus prior quarter. Adjusted operating income quarter 1 2014 compared to operating income for prior quarter based on $14 million lower sales or $15 million lower, excluding exchange rate impacts. Adjusted operating income decreased by $1 million to $49 million in Q1 2014 from $50 million in Q4 2013. The main elements were: Average selling prices had a negative impact of $6 million, representing a 1.0 ASP decline; Volume decreased with a negative impact of $2 million; Variable costs had a positive impact of $3 million, primarily due to cost-reduction efforts and lower material prices, which more than offset annual wage increases; Fixed cost increased with a negative impact of $3 million, primarily due to salary increases and incentive compensation expenses; Inventory build had a positive impact of $5 million. This inventory build is not expected to repeat in Q2. Versus prior year, adjusted operating income quarter 1 2014 compared to prior year based on $48 million higher sales or $43 million higher, excluding exchange rate impacts.…

Thank you, Lori, and good morning, everybody. I think the first quarter for Vishay has been a promising start into 2014. Our results were better than expected, and the strong order intake indicates further improvements to come. As Lori Lipcaman said, Vishay, in the first quarter, achieved gross margin of 24% of sales, adjusted operating margin of 8% of sales, adjusted earnings per share of $0.20 and GAAP earnings per share of $0.17. We generated free cash of $12 million, which is better than in prior year. And I think we can say that we remain a very reliable generator of free cash. Let me talk about the economic environment. In the first quarter, we saw continued economic improvement with fairly healthy business conditions in almost all market segments and a positive outlook across the board. Distribution, in general, built inventory in expectation of a continued upturn. POS was up by 6% quarter-over-quarter. Inventory levels, on the other hand, remained reasonable with overall turns of 3.6 versus 3.5 in prior quarter, some regional detail, the Americas 2.3 turns after 2.2 in quarter 1; Europe, 3.9 after 3.3; Asia, 4.9 after 5.3. Recovery is gaining momentum now also in Europe with strong orders, in particular from industrial. Asia grew steadily, and in the Americas, the business is stable. Automotive continues to do well with growth driven by healthy vehicle sales in Asia and America. There is now also recovery in Europe. In computers, the decline of the laptops to a degree is offset by new opportunities in service. Consumer looks promising with continued success of gaming in high-resolution products. Smartphones are solid, and fixed telecom benefits from growth in 4G and broadband networks. AMS for the mid-term future could suffer due to constraints in Military spending, but we are quite optimistic,…

Thank you, Dr. Paul. We will now open the call to questions. Crystal, please take the first question.

[Operator Instructions] And your first question comes from the line of Steve Smigie.

Celentano speaking for Steve. I was hoping if you can give a little color on the June quarter as far as, I guess, which end markets you're seeing being the lead drivers.

Basically, the same that has been strong in the first quarter. I do not see dramatic changes there. Automotive pulls us, no question about it. Industrial, maybe even stronger in the second quarter than it was in the first quarter. And otherwise, I see approximately the same picture, but overall, the order intake is strong at the moment, continues to be strong.

And then I was hoping you could talk a little bit about your manufacturing plant with Siliconix.

Sure. Well, as a matter of fact, I explained it, I think. So we are moving volume from a 6-inch to an 8-inch fab that we have that exists, which results into major cost reduction on the variable cost but especially also on the fixed cost side. The point that limits the timing for all that is the qualification required. We are talking automotive volume. And this qualification time leads to lead time of the project, which I indicated, which will lead us through 2015. But then most of the savings or practically all the savings kick in at the end of the project. I think we are on time in what we do, but there is a time constraint.

The next question comes from the line of Matt Sheerin. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Just a few questions for me, Dr. Paul. One, you talk about, in terms of your guidance for the June quarter, you're guiding up 7% or 8% sequentially at midpoint, and you talked about gross margin going up. Should we expect the normal incremental margin contribution in the 45% to 48% range? Or would it be lower because of the inventory build in Q1?

Well, okay, okay, that's right. So the variable margin contribution, you can expect the same. But of course, we will not continue to build inventory as we have done in the first quarter, that's clear. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. But it looks like then it should be up on a year-over-year basis, and it should be up, as you said, in line with your -- the normal leverage.

Yes. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And you talked a lot about Siliconix or the MOSFET business diversifying into industrial and automotive. Can you give us a feel for what percentage of your sales at Siliconix comes from those 2 segments relative to Vishay overall?

About 20%, 25%. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Is industrial and automotive combined?

Very well, and automotive is much stronger than industrial. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And in terms of the exposure to end markets in the quarter, was that similar to what you've seen in recent quarters? Or is automotive and industrial continuing to grow as a percentage of sales?

Well, as a matter of fact, they do well at the moment, no question. But there's some seasonality in it, of course. In the first quarter, industrial is -- Europe is strong in the first quarter, and they are, in particular, strong in industrial. But overall, they are not big swings through the year. We only know -- we only see that automotive pulls us through. It has been good. It continues to be good for us. Industrial, especially in Europe, is in the phase of a recovery. So I wouldn't be surprised, as I said before, if the industrial sales in the second quarter would be even higher. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then it sounds like your outlook is fairly promising. You sound encouraging about the year in general. Although if we look at the last 2 to 3 years, you've had very strong first half, and then your numbers have fizzled in the second half, and I think you missed -- or at the low end of guidance in the September quarter in each of the last 3 years. And do you have any visibility this year? Or are we still sort of in an environment where there's just not a lot of visibility?

You're absolutely right to remind me of our previous disappointments, made clear. On the other hand, nobody has a crystal ball. But overall, I think it's fair to say that the situation in the industry, the industries which we deliver, especially in industrial, is better this year than it has been last year. So we do have some confidence that things will not repeat themselves. I cannot exclude it of course. Nobody can actually. The visibility is practically triggered by our backlog, and the backlog is always a quarter, approximately. And I can only refer to the general responses we have from the market.

Your next question comes from the line of Ruplu Bhattacharya.

Dr. Paul, I just wanted to start by asking you a clarification on inventory in the channel. I think you said your POS was good at 6% quarter-over-quarter. But did inventory overall in the channel increase? And if you can just comment on the regional trend channel in Europe versus Asia.

So as you said, the POS, that is the sales of our distributors, came up by 6%. Looking at the inventory development, which added -- it is about 3% up. So in fact, the inventory went up more slowly than the POS, the sales. And on seasonality, I would not like to comment too much. It's very -- people react to distribution. They react very quickly to changes, to perceived changes. I wouldn't talk about seasonality there.

Okay. Okay, and then what is the current book to bill tracking at?

It's very solid, really solid. It's over 1.

Over 1, okay. And then just on the dividend, do you think that either end of this year or by next year, do you think you can be cash breakeven in the U.S. including the dividend?

I would say next year maybe, yes, we have a chance, right.

Okay. Okay. And I'm sorry, just the last quick one for me. I might have missed this. What was the turns in the capacitors?

Of course, I have to look it up, I think, 3 or so. Let me see. My colleagues are faster than me, maybe. No, I'm faster. We have inventory turns, 3.3.

3.3, okay. And just sorry, one more for me. You've added sales force and you've added engineers in China. Are they at full productivity now? Are they fully trained? Or will it still take a little bit more time?

This is not a black-and-white picture, of course. We were getting people over the last 12 months more or less. Some people are fully trained, and some are in the process of being trained. It's not completed at this point. But we have all the people on board we wanted to have.

Okay. So but we haven't seen the full benefit yet of them coming on board?

No, no, no. It takes time anyway as you know.

[Operator Instructions] And your next question comes from the line of Shawn Harrison.

Wanted to just get back to the prior question in terms of distribution. Last year, the issue was in Asia. The book to bill this year seemed much more normal. Is there anything you're seeing abnormal out of Asia distribution right now?

No, no, no, but it didn't happen in the first quarter, as you will recall. Matt Sheerin reminded me of that. It was mid of the year, and it really was always Asian distribution but not at this part in the year. As I said, I cannot exclude it, but it appears more solid, the whole picture, than in the prior 2 years.

Okay. And I may have missed this, but point of sale was up 6% at distribution. Point of purchase was only up 3%?

Yes.

Okay. You've mentioned lead times moving out in some products. Is there any certain area and is it something that we should be watching at this point in time? Or is it just a little bit of a market seasonality right now?

Anyway, I didn't want to give this message. It goes -- the emphasis of my sentence was -- goes out -- goes -- starts to increase slowly, and it's fully under control. And it's more in the actives than in the passives. There's no question about it. So we do have some packages, especially in diodes, where our capacity still has to be increased.

Okay. Is it -- and I guess it would be a function tied to the auto and industrial demand.

Yes. Yes, indeed.

Okay. And then finally just a clarification. The early retirement savings of $10 million that you'll reach a full run rate in the fourth quarter, that'll all be coming out of SG&A. Am I correct?

No, no, no, about 2/3 out of SG&A and say, 1/3 out of manufacturing fixed.

Your next question comes from the line of Jim Suva.

With lead times starting to improve in end markets, as you mentioned, with the actives and such, is there -- are you seeing a more favorable pricing? Or do you think that will come down the road? Or how should we think about the pricing that you're seeing in your outlook for pricing?

I mean, the pressure on the lead times is not big enough at this point, I would say, to impact pricing, which was just an observation, and it's kind of logical. We got great orders, and we could not exactly follow production capacities. But this will not convert immediately into lower price pressure. But as you may have heard from us, as a matter of fact, the price pressure, at this point in time, is not super high. We classified it as normal. And in certain areas, indeed, we have low price pressure. But I would not relate this at any moment to any lead time stretch out.

[Operator Instructions] And at this time, there are no further questions in queue. I'll now turn the conference back over to Peter.

Thank you for your interest in Vishay Intertechnology, and this concludes our call.