Ladies and gentlemen, thank you for standing by, and welcome to the Vishay Intertechnology, Inc. Q4 and Year 2014 Earnings Conference call. [Operator Instructions] I would now like to turn today's conference over to Peter Henrici. Please go ahead.

Thank you, Susan. Good morning, and welcome to Vishay Intertechnology Fourth Quarter and Year 2014 Conference Call. With me today are Dr. Gerald Paul, Vishay's President and Chief Executive Officer; and 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 fourth 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 a presentation of the Q4 2014 financial information containing some of the operational metrics Dr. Paul will be discussing. Johan Vandoorn, our Executive Vice President and Chief Financial -- Chief Technical Officer, will be presenting Tuesday, February 10, at the Stifel Technology, Internet & Media Conference at the Westin St. Francis Hotel in San Francisco. Now I turn the discussion over to Chief Financial Officer, Lori Lipcaman.

Thank you, Peter. Good morning, everyone. I am 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 Q4 of $611 million, within the range of our guidance. Exchange rates negatively impacted the top line by $12 million quarter-over-quarter. GAAP EPS for the quarter was $0.19. The fourth quarter includes pretax charges of $2 million related to our previously announced cost reduction programs and $1.2 million of tax benefits related to U.S. tax law changes. These items effectively netted, making adjusted EPS also $0.19 for the quarter. In September, we acquired 88.95% interest in Capella Microsystems through a successful tender offer. Capella is a fabless IC design company specializing in optoelectronic sensors. It was listed on the Taiwan Stock Exchange. We acquired the remaining shares on December 31, 2014. The acquisition of the noncontrolling interest totaled $21 million funded with cash on hand. This brings the total consideration paid for Capella to $201 million, funded with $53 million of borrowings on our revolving credit facility and of the balance with cash on hand. The borrowing on our revolving credit facility allowed us to achieve a legal structure -- legal entity structure, which provides optimal future flexibility. Capella had cash and short-term investments of approximately $50 million on the date of acquisition, making the aggregate acquisition price, net of cash, $151 million. Capella has been included in Vishay's consolidated financial statements since the completion of the tender offer with the 11.05% interest that we did not own presented as noncontrolling interest. Going forward, 100% of Capella's results will be included in the line item, net earnings attributable to Vishay stockholders. A significant value has been ascribed to amortize the intangible assets in our…

Thank you, Lori, and good morning, everybody. The year 2014 for Vishay, like for the entire electronic components industry, has been again a year of very mixed economic exposures as they relate to different developments in relevant market segments, but as well, to macro political and macroeconomic changes in prices. Vishay in 2014 achieved a gross margin of 25% of sales and adjusted operating margin of 9% of sales, adjusted earnings per share of $0.92 and GAAP earnings per share of $0.77. And we generated free cash of $143 million in the year, which represents the continuation of our good long-term performance. Due to higher-than-expected inventory reductions, the fourth quarter came in slightly below consensus. Gross margin was 24% of sales, adjusted operating margin 7% of sales, adjusted earnings per share at $0.19 and GAAP earnings per share also $0.19. Let me comment on the economic environment. After a fairly friendly first half and a reasonable third quarter, end markets during the fourth quarter weakened in general. Recent feedback, on the other hand, indicates signs of a turnaround. The book-to-bill in January was noticeably above 1. Distribution inventories were dropping in the quarter. Inventory turns continue to be reasonable. We have seen 3.4 turns worldwide versus 3.4 in the third quarter. Some regional details on that. In the Americas, it was the inventory turns of distribution were 2.4 vis-à-vis 2.3 in prior quarter; in Asia, 4.4 versus 4.5 in prior quarter; and in Europe, 3.4 versus 3.5 in the prior quarter. The orders from end customers to distribution started to recover in the fourth quarter. The economic outlook seems positive in the Americas, driven by improving employment and an increase in consumer confidence. Asian markets, despite some existing macroeconomic concerns, in particular for China, promise continuous growth in many areas…

Thank you, Dr. Paul. We are now opening the call to questions. Susan, please take the first question.

Your first question comes from the line of Ruplu Bhattacharya.

Dr. Paul, the margins for the capacitors were still at 19%. Was it because of still the start-up costs for Holy Stone? Or was it due to orders from distribution, if you can kind of comment on that?

Holy Stone played a very small role in that, it's a small size. It's really a volume question, a volume question will be the volume were relatively disappointing in tantalum capacitors and especially also in our power capacitor arena. They were behind expectations, but we see no reasons why we should not be successful in our major programs to grow especially in Asia, which could impact mainly also the power capacitors. So it's a volume question and not really Holy Stone.

And then overall when you look at inventory and distribution now versus a year ago, would you say that inventory is more normal now than lean as it was last year? Or is it at the same level? And can you comment on POS in the quarter?

First of all, I think inventory is higher than last year. Still, the terms are reasonable. We see an improving situation in the first quarter, especially the changes coming from Asia. And you may remember, I expected an increase of -- continued decrease of inventories in Asia and I think this comes through, which, obviously, in the last year turned into a better picture for us, more orders on us. After Chinese New Year, I think, it will repeat itself.

Okay. And then last one for me is just on capital returns to shareholders. Do you think 2015 -- in 2015 you can get to cash breakeven in the U.S. with the dividend? And any outlook for a dividend increase in 2015?

Well, it's not decided yet, Ruplu. This has to be, of course, first of all, decided within the company. We do see a continuation in general of a good cash generation. You're right. The picture in the U.S. will be better than in the years before.

Your next question comes from the line of Harlan Sur. Harlan Sur - JP Morgan Chase & Co, Research Division: Your starting backlog declined for the third consecutive quarter. You're guiding flat revenues here, but you have to turn, it looks like at least, $40 million more of shipments versus the December quarter. But you've got positive book-to-bill. So how confident are you about the higher level of turns required here in the March quarter?

I think we are very confident to reach this guidance which I gave. By the way, just to say, we are not guiding for that actually. We have to take into account exchange rate. At constant exchange rates, we are guiding up for the first quarter even by 2% -- a little more than 2%. It's obvious that this decline of the euro happened in the course of the fourth quarter and for the first quarter, because we said we expect, at least in our projection, a rate of $1.15, which would be another negative vis-à-vis the euro -- for the euro vis-à-vis the dollar. So in reality, the forecasted local currency, or let's say in constant dollars, an increase of a slightly more than 2% and we are confident to achieve it. Harlan Sur - JP Morgan Chase & Co, Research Division: Okay, great. And then on just the recovery that you started to see in the fourth quarter and it looks like it's probably continued here through the first quarter, I think you -- I don't know if you've answered this in the last question, but is the POS also improving as well as you kind of monitor that? And I think, as you mentioned, is most of the strength coming out of Asia or the Americas is still strong? If you can just give us a little bit of color kind of geographical-wise.

Really, the changes are going to come like every year from Asia. It's obvious that the inventory goes down in Asia as predicted and it for sure continues in January. I don't have numbers for January, but it continues in the same trend. And the POS for the fourth quarter was about the same as for the third quarter. So no change, but according to our long-term experiences, orders on distribution in Asia, and this is really the place where the changes happen as I've said, will start to come quite abruptly after Chinese New Year. Harlan Sur - JP Morgan Chase & Co, Research Division: Okay, great. And my last question, on the Capella acquisition, as you mentioned, strong in smartphone and tablet markets. I think the team has said that there's a large opportunity to take advantage of the technology, moved out into the industrial and automotive markets. Maybe, Dr. Paul, can you give us an update on that front? And then what it's going to take to annualize revenue run rate from $40 million today to kind of the $50 million to $60 million this year that you kind of mentioned in the last earnings call?

Thank you, Harlan. So we're, first of all, it was our intention from day 1, with the acquisition for Capella, to strengthen our quite successful Opto business, which we had since years. This is going to take place, but it doesn't go overnight. They work -- our people work for industrial and for automotive and you know that qualification factors, alone, take some time. But we have started to do that. We have brought the 2 teams together and we even have hired or in process of hiring in Capella additional designers in this environment of Capella that work for the traditional project in industrial and automotive. I mean, this is a process. We have started it. I think we have acquired very competent people in Capella and I'm very optimistic that this will be a major step, a major step for growing our good business in opto products further. The starting point run rate of the sales in Capella is relatively low. In the fourth quarter, this was $9 million, as I said. But we already in the first quarter expect better sales and in the second quarter is an outlook of further improvement of the situation. This is a project business, and surprises in both directions can come quite easily vis-à-vis I expect very well that we will see over the time increases in this business, which can be quite dramatic based on the successes we have in certain projects and customers we are pursuing them.

Your next question comes from the line of Steve Smigie.

This is Vince Celentano in for Steve. I want to talk a little bit about the industrial trends that you've been seeing. So it looks like this quarter you were down about 7% sequentially. Can you talk a little bit how much of that was seasonal versus the trend mix that you've been seeing in other areas? And then going forward, can you talk a little bit about -- I know you were -- you've been seeing strength in China. Can you talk a little bit about if you have any visibility to when you see Europe and America starting to improve and then just trends in general?

So let me concentrate on industrial, which is important for us. As you know, it's our most important segment we are shipping to. And let me start with the most positive one, this is the United States. We have seen major improvements, especially also in industrial and it seems to hold. So it's going well. In Asia, the overgrowth has come down, but if you really look into the segments, which are relevant for us, I think industrial in China or Asia in general is strong and faster growing even than in the United States. The problem is Europe. The European growth in industrial has been really low in the last year. They have problems, Europe in general. The growth is not so great. On the other hand, as I tried to say before, if you -- first of all, the weaker euro could -- should help exactly these people in sense that Europe that export a lot. And secondly, when you look at industrials in Europe, just a general remark, it's not just Siemens, so to speak, or other biggies. It's a big variety of the smaller companies that are very often world market leaders in their segment. I do believe that the strength of the European industrial industry is unchanged. And again, I repeat it, the weaker euro should help. So I see a fairly good year there.

Okay, great. And then just in general, as far as the currency impacts you've been seeing, the $12 million this quarter, given your long-term goal of 5% growth, do you see that as an attainable goal for 2015? And if so, what do you think needs to happen in order to achieve that?

Well, I do believe that we are on track in our growth plans. But of course, I don't manage the exchange rates obviously. It's obvious that if the dollar weakens vis-à-vis the -- the euro weakens vis-à-vis the U.S. dollar, you'll see an impact on the top line, this cannot be avoided. Approximately 1/3 of our sales goes in Europe, invoiced in euro. The good part of it is that we, as I tried to say, on the operating margin line are practically not impacted by these changes because our share of sales between the euro and the dollar is about the same as our costs. So in the first approximation, really as you would look at it, our results do not suffer from swings. But of course, the top line, there is nothing to be done. It would suffer if the euro continued to weaken, which at the moment, doesn't look that way. It seems to recover little.

Your next question comes from the line of Shawn Harrison.

This is Gausia Chowdhury calling in for Shawn. You had mentioned that the book-to-bill improved in January. I was wondering if you could break that down by region and how that compares to what you typically see for this time of year and maybe compare to last year as well.

I wouldn't know this detail at the moment, but it's a substantial improvement over the situation in Q4 and it came somewhat earlier than we are used to. It's quite -- general, it's from distribution and OEM there's a very broad recovery. And we've seen Asia, in particular, stronger than we had it in the fourth quarter. So I think we are -- this is -- I mean, the normal cycle is like that in our industry, that we start to see more orders in the first quarter leading them to a good second quarter. It's always the same. But it comes early this year and it's remarkably strong.

Okay, great. And then going back to Capella, you had mentioned that you'll see some improvement as you move through the year. What about the run rate -- I'm sorry, the accretion expectations, have those changed at all for 2015?

Well, basically, it will be. At least the present run rate does not give a positive impact to earnings per share, it does not. Cash-wise, it's positive, but does not give a positive impact to earnings per share, but this is due to the amortization of intangibles, which is easy to calculate. I believe that with a good project, which we are pursuing many projects, we will definitely also make them accretive. But we are working on projects.

Okay, great. And then, lastly, I might have missed it, I'm sorry. Usually, you -- I think you said for Opto that the gross margin was at 35% for the year.

Yes.

Could you break that down by the quarter? And then there was some, I think, missing information for the Diodes segment as well in terms of turns and ASPs and same for Opto. Could you provide any of that information?

Sure, definitely. I missed to say it, obviously. Just a second. Let me start out with the Diodes. Just a second. 23% for the Diodes in the year, 23%, sorry, it was not said. And what was the other part of the question?

Yes, sure. I was just saying that for Opto, I think you had given it for the year. I was wondering what it was for the quarter and then...

I said it. So Opto for the quarter, I can tell you, was 32%, if I remember right. It was 32% in the quarter. But for the year, it was 35%. And this is just a pure volume gain. There's no deterioration out of any other reason.

[Operator Instructions] Your next question comes from the line of Matt Sheerin. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: You answered most of the questions, Dr. Paul. Just a couple. Regarding the MOSFET or silicon x cost cutting, you said it was going to start kicking in, in Q1 of next year. So my calculation shows it should be very significant margin leverage next year in that business, right? I mean, you should be going from single digits to at least the teens, right, in terms of gross margin?

Better than that. First of all, unfortunately, it's the end of the first quarter, which we always said. So we will see the impact in the second quarter happening. And the impact is about 8 percentage points. That means we have, depending, of course, in the situation of the entire market and the business, we have a chance to get to slightly over 20% gross, yes. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And you said you had, I think, 5% year-on-year ASP erosion in that business. Are those kind of expectations, at least like low single-digit ASP erosion baked into that?

Yes, because we also have cost reduction, ongoing cost reduction. We hold our variable margin, Matt, despite all this ongoing price decline, which we have seen since decades, so to speak, one decade for sure, are quite constant over the years because we do not only have price decline, we have also have also substantial cost reduction. And it's a state of -- this is normal. I think all of my competitors do the same. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And your commentary regarding a pretty significant pickup in bookings at the beginning of the year following a weak December, is your take that there was a little bit of an inventory build in September and customers were just very cautious and now they're starting to refresh a little bit? And your commentary about kind of seasonality going into the next quarter, it seems like the setup for your business is pretty strong going into Q2.

I do agree, Matt. That's exactly what has happened according to our information. Inventory levels in distribution, Asian distribution, have really grown. And at the moment, I think we did have the same statement a quarter ago. Now they work it down and it's true. At the moment, the business situation therefore improves in this respect also. Matthew Sheerin - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then just lastly, on M&A, you did a couple of deals last year. Where are you looking this year? Is it both on the semiconductor and the passive side of the business?

It's opportunistic. We are pursuing -- pursuing is the wrong word, we are looking on both sides as we are really looking mainly for specialty businesses. There may be a natural chance higher on the passives, but it's not so that we are only looking for passive acquisitions in general. It's only more likely to find there is something.

Your next question comes from the line of Jim Suva.

Dr. Paul and team, this is Mike Cadiz for Jim Suva at Citigroup. My question this afternoon is more theoretical. And given generally the volatility in oil and its general price declines and perhaps of other materials, how would you see this affecting end demand, and on another level, cost of goods sold? I would imagine potentially higher margins due to lower costs. And that's my question.

I see. So first of all, the energy cost is part of our P&L, right? So how do we benefit we, as Vishay, from lower energy costs? I ask myself the same question, so I'm not completely unprepared. So as a matter of fact, the impact is not so great for us. As a matter of fact, given a reduction, which is not unrealistic, and this depends very much on the country and the contract you have, et cetera, I would suspect can be, for us, $5 million approximately. Don't take me literally, but it's a more philosophical question, as you said. Say $5 million, so not that huge. The bigger impact, I do believe, comes from the markets. As you said, I do believe and I believe America just shows it that this cheaper energy costs really raise the readiness of people to buy, which naturally helps us, not only us in general. So I would agree this -- indirectly for us, this lower energy costs should support the year 2015 on the top line. A little bit impact also in the costs.

At this time, there are no further questions. I would now like to turn the floor back over to management for any closing remarks.

Thank you, Susan, and thank you for your interest in Vishay Intertechnology. This concludes our fourth quarter earnings call.