On Wednesday, Vishay Intertechnology, Inc. (NYSE:VSH) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Matthew Sheerin – Stifel Nicolaus: So a question on how you see the margins playing out over the next quarter or two, Dr. Paul. You talked about temporary cost savings programs, that impact SG&A. Were there also some temporary cost reductions that impacted gross margins, so that you won’t get as much leverage as you see revenues come back. If you could just give us an idea, what we should think about in terms of gross margin and SG&A in the next quarter?
Dr. Gerald Paul – President and CEO: You are absolutely right. We will not see the full impact of the sales increase, but nice share of it. As I indicated already in the presentation, SG&A, we expect to go from 86 to approximately 90, slightly over 90, and also in manufacturing and fixed, you can expect some increase of the same magnitude. So altogether, we are not going to see the full impact, but we expect a good quarter, Matt.
Matthew Sheerin – Stifel Nicolaus: But do you still think that you can get closer like to kind of a 26% number on gross margin, where you can still get it up in the quarter? Okay. That’s great. In terms of Siliconix, I mean that obviously has been lagging, the rest of your business, and that has been an issue now. I know you have talked about actually trying to expand capacity, focusing on more higher margin, more specialty business. So could you talk about your near term and long term strategy for Siliconix?
Dr. Gerald Paul – President and CEO: No change. Siliconix remains to be one of the most important part of Vishay, no question. It has the highest growth potential, I believe, of all of our lines, and we indeed have concentrated in the last month, say even in the last year, on developing a more competitive high voltage version, which we lagged before. We have it now, behind the qualification process, and that’s a broad qualification process, and for the remainder of the year, we really expect Siliconix to come back to historical levels in terms of sales, and profitability. Already, — as it looks for the second quarter, things look much better than in the first quarter.
Matthew Sheerin – Stifel Nicolaus: Just lastly, on distribution it looks like the book-to-bill there is quite strong, inventories were down. Are your thoughts that distribution will basically just replenish what they are selling out and are not right yet in the position to be adding buffer layers of inventory? So in other words what you are selling in is basically going out so you are not going to see any near term inventory build there?
Dr. Gerald Paul – President and CEO: I would even say distribution, we continue to reduce inventory, but at a much slower rate. As a matter of fact POS is strong. So our fear that they go again into an inventory increase, it would not be justified I believe.
J. Steven Smigie – Raymond James: I was wondering if you could talk a little bit about the SG&A as we get say into the back half of the year because obviously you’ve had some of these cost reductions and it looks like you are still getting some benefit in June. So would you expect a dollar step up as we go into September, December and I guess to some extent, I’m assuming that you’ve proven revenues well in the back half, but would other – so I guess my question is, are there some cost reduction efforts that you took in March that will be going away still further in September?
Dr. Gerald Paul – President and CEO: Sure. First of all we came out as I said before, with $86 million, which was substantially below with even what I had expected, I thought. Including the acquisition we would at $90 million or so. But there were a few things which helped us. Partially, we were really adding short work and plant closings and included the SG&A people in that this will come to an end. So I expect next quarter, the second quarter to be around $90 million, maybe a little above, but not much; and for the remainder of the year, we think we can stay at this level approximately. I think we will be more or less at the same level of SG&A across this last year, but including the acquisition.
J. Steven Smigie – Raymond James: That’s on dollar level and not a percentage of revenue levels?
Dr. Gerald Paul – President and CEO: 360 or so.
J. Steven Smigie – Raymond James: With regard to the acquisition, can you talk about I apologize if you cover that, how much that impacted revenue in March how much it will impact in June?
Dr. Gerald Paul – President and CEO: It impacted margin by around $14 million, about $14 million in sales and gross margin was over 30% which will grow. We are going to have more sales in the second quarter and profitability, it has nice variable margin, we will be accordingly up.
J. Steven Smigie – Raymond James: You have a pretty decent June guide but it seems certainly some of that comes from the full quarter, the acquisition correct?
Dr. Gerald Paul – President and CEO: No, most of it comes from the normal business, most of it.