Release Details

Vishay Intertechnology Reports Third Quarter 2023 Results

November 8, 2023

MALVERN, Pa., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc., (NYSE: VSH), one of the world's largest manufacturers of discrete semiconductors and passive electronic components, today announced results for the fiscal third quarter ended September 30, 2023.

Highlights

  • 3Q 2023 revenues of $853.7 million
  • 3Q 2023 EPS of $0.47; adjusted EPS of $0.60
  • 3Q 2023 book-to-bill of 0.63
  • Backlog at quarter end was 5.5 months
  • Returned a total of $31.1 million to stockholders

“During the third quarter, as expected, revenue decreased from the second quarter on inventory adjustments by our distribution and EMS customers in response to softened demand in industrial markets and contracting lead times. Nevertheless, we once again intentionally increased inventory with our distribution partners as we continued to execute our strategy of broadening our participation in this higher margin channel. The capacity readiness activities we have underway are increasing our value to the distribution channel and reliably supporting our accelerating design activities related to the megatrends of e-mobility, sustainability and connectivity,” said Joel Smejkal, President and Chief Executive Officer. “In addition, as announced separately today, we have signed a purchase agreement to acquire Newport wafer fab which will accelerate our plan to scale manufacturing and advance the technology differentiation of our silicon carbide MOSFETs.”

4Q 2023 Outlook
For the fourth quarter of 2023, management expects revenues in the range of $770 million and $810 million and a gross profit margin in the range of 25.5% +/- 50 basis points.

Conference Call
A conference call to discuss Vishay’s third quarter financial results is scheduled for Wednesday, November 8, 2023 at 9:00 a.m. ET. To participate in the live conference call, please pre-register at https://register.vevent.com/register/BI4d27675bed8e4ca8934830406b6e87c1. Upon registering, you will be emailed a dial-in number, and unique PIN.

A live audio webcast of the conference call and a PDF copy of the press release and the quarterly presentation will be accessible directly from the Investor Relations section of the Vishay website at http://ir.vishay.com.

There will be a replay of the conference call available on the Investor Relations website approximately one hour following the call and will remain available for 30 days.

About Vishay
Vishay manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets. Serving customers worldwide, Vishay is The DNA of tech.™ Vishay Intertechnology, Inc. is a Fortune 1,000 Company listed on the NYSE (VSH). More on Vishay at www.Vishay.com.

This press release includes certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted net earnings; adjusted earnings per share; adjusted gross margin; adjusted operating margin; free cash; earnings before interest, taxes, depreciation and amortization ("EBITDA"); adjusted EBITDA; and adjusted EBITDA margin; which are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. These non-GAAP measures supplement our GAAP measures of performance or liquidity and should not be viewed as an alternative to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, adjusted gross margin, adjusted operating margin, free cash, EBITDA, adjusted EBITDA, and adjusted EBITDA margin do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that such measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Although the terms "free cash" and "EBITDA" are not defined in GAAP, the measures are derived using various line items measured in accordance with GAAP. Reconciling items to arrive at adjusted net earnings represent significant charges or credits that are important to understanding the Company's intrinsic operations. Reconciling items to calculate adjusted gross margin, adjusted operating margin and adjusted EBITDA represent those same items used in computing adjusted net earnings, as relevant. Furthermore, the presented calculation of adjusted EBITDA is substantially similar to, but not identical to, a measure used in the calculation of financial ratios required for covenant compliance under Vishay's revolving credit facility. These reconciling items are indicated on the accompanying reconciliation schedules and are more fully described in the Company's financial statements presented in its annual report on Form 10-K and its quarterly reports presented on Forms 10-Q.

Statements contained herein that relate to the Company's future performance, including forecasted revenues and margins, capital investment, capacity expansion, stockholder returns, and the performance of the economy in general, are forward-looking statements within the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Words and expressions such as “guide,” “will,” “expect,” or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements 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; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19 or otherwise (including due to political, economic, and health instability and military conflicts and hostilities); delays or difficulties in implementing our cost reduction strategies; delays or difficulties in expanding our manufacturing capacities; an inability to attract and retain highly qualified personnel; changes in foreign currency exchange rates; uncertainty related to the effects of changes in foreign currency exchange rates; competition and technological changes in our industries; difficulties in new product development; difficulties in identifying suitable acquisition candidates, consummating a transaction on terms which we consider acceptable, and integration and performance of acquired businesses; the timing of the Newport wafer fab acquisition; that the Newport wafer fab acquisition may not be consummated, including as a result of any of the conditions precedent (including the failure to obtain any required approvals or consents, or the exercise of certain third party purchase rights); global market downturn conditions and volatilities impacting the completion of the acquisition; that the fab will not be integrated successfully into the Company’s overall business; that the expected benefits of the acquisition may not be realized; that the fab’s standards, procedures and controls will not be brought into conformance within the Company’s operation; difficulties in transitioning and retaining fab employees following the acquisition; difficulties in consolidating facilities and transferring processes and know-how; the diversion of our management’s attention from the management of our current business; changes in U.S. and foreign trade regulations and tariffs, and uncertainty regarding the same; changes in applicable domestic and foreign tax regulations, and uncertainty regarding the same; changes in applicable accounting standards and other factors affecting our operations that are set forth in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The DNA of tech® is a trademark of Vishay Intertechnology.

Contact:
Vishay Intertechnology, Inc.
Peter Henrici
Executive Vice President, Corporate Development
+1-610-644-1300

 

VISHAY INTERTECHNOLOGY, INC.            
Summary of Operations            
(Unaudited - In thousands, except per share amounts)            
             
  Fiscal quarters ended  
  September 30, 2023   July 1, 2023   October 1, 2022  
             
Net revenues $ 853,653     $ 892,110     $ 924,798    
Costs of products sold   616,010       634,637       635,260    
Gross profit   237,643       257,473       289,538    
Gross margin   27.8 %     28.9 %     31.3 %  
             
Selling, general, and administrative expenses   122,513       122,857       106,436    
Operating income   115,130       134,616       183,102    
Operating margin   13.5 %     15.1 %     19.8 %  
             
Other income (expense):            
Interest expense   (7,153 )     (6,404 )     (4,110 )  
Loss on early extinguishment of debt   (18,874 )     -       -    
Other   7,409       5,257       2,137    
Total other income (expense) - net   (18,618 )     (1,147 )     (1,973 )  
             
Income before taxes   96,512       133,469       181,129    
             
Income tax expense   30,557       38,054       40,566    
             
Net earnings   65,955       95,415       140,563    
             
Less: net earnings attributable to noncontrolling interests   426       377       502    
             
Net earnings attributable to Vishay stockholders $ 65,529     $ 95,038     $ 140,061    
             
Basic earnings per share attributable to Vishay stockholders $ 0.47     $ 0.68     $ 0.98    
             
Diluted earnings per share attributable to Vishay stockholders $ 0.47     $ 0.68     $ 0.98    
             
Weighted average shares outstanding - basic   139,083       139,764       142,887    
             
Weighted average shares outstanding - diluted   140,001       140,478       143,447    
             
Cash dividends per share $ 0.10     $ 0.10     $ 0.10    
             

 

VISHAY INTERTECHNOLOGY, INC.        
Summary of Operations        
(Unaudited - In thousands, except per share amounts)        
         
  Nine fiscal months ended  
  September 30, 2023   October 1, 2022  
         
Net revenues $ 2,616,809     $ 2,642,103    
Costs of products sold*   1,842,980       1,832,234    
Gross profit   773,829       809,869    
Gross margin   29.6 %     30.7 %  
         
Selling, general, and administrative expenses*   365,515       329,691    
Operating income   408,314       480,178    
Operating margin   15.6 %     18.2 %  
         
Other income (expense):        
Interest expense   (18,677 )     (12,639 )  
Loss on early extinguishment of debt   (18,874 )     -    
Other   15,995       (2,234 )  
Total other income (expense) - net   (21,556 )     (14,873 )  
         
Income before taxes   386,758       465,305    
         
Income tax expense   113,199       108,023    
         
Net earnings   273,559       357,282    
         
Less: net earnings attributable to noncontrolling interests   1,211       1,260    
         
Net earnings attributable to Vishay stockholders $ 272,348     $ 356,022    
         
Basic earnings per share attributable to Vishay stockholders $ 1.95     $ 2.47    
         
Diluted earnings per share attributable to Vishay stockholders $ 1.94     $ 2.46    
         
Weighted average shares outstanding - basic   139,828       143,983    
         
Weighted average shares outstanding - diluted   140,577       144,470    
         
Cash dividends per share $ 0.30     $ 0.30    
         
* The nine fiscal months ended October 1, 2022 includes incremental costs of products sold and selling, general, and administrative expenses separable from normal operations directly attributable to the COVID-19 pandemic of $6,661 and $546, respectively.  
         

 

VISHAY INTERTECHNOLOGY, INC.        
Consolidated Condensed Balance Sheets        
(In thousands)        
         
  September 30, 2023   December 31, 2022  
  (Unaudited)      
Assets        
Current assets:        
Cash and cash equivalents $ 1,095,119     $ 610,825    
Short-term investments   78,994       305,272    
Accounts receivable, net   442,646       416,178    
Inventories:        
Finished goods   165,936       156,234    
Work in process   271,107       261,345    
Raw materials   206,499       201,300    
Total inventories   643,542       618,879    
         
Prepaid expenses and other current assets   179,825       170,056    
Total current assets   2,440,126       2,121,210    
         
Property and equipment, at cost:        
Land   76,139       75,907    
Buildings and improvements   692,037       658,829    
Machinery and equipment   2,973,943       2,857,636    
Construction in progress   226,460       243,038    
Allowance for depreciation   (2,788,393 )     (2,704,951 )  
    1,180,186       1,130,459    
         
Right of use assets   127,992       131,193    
Deferred income taxes   128,109       104,667    
Goodwill   200,895       201,432    
Other intangible assets, net   72,126       77,896    
Other assets   91,773       98,796    
Total assets $ 4,241,207     $ 3,865,653    
         

 

VISHAY INTERTECHNOLOGY, INC.        
Consolidated Condensed Balance Sheets (continued)      
(In thousands)        
         
  September 30, 2023   December 31, 2022  
  (Unaudited)      
         
Liabilities and equity        
Current liabilities:        
Trade accounts payable $ 207,440     $ 189,099    
Payroll and related expenses   162,113       166,079    
Lease liabilities   26,097       25,319    
Other accrued expenses   238,565       261,606    
Income taxes   82,734       84,155    
Total current liabilities   716,949       726,258    
         
Long-term debt less current portion   817,257       500,937    
U.S. transition tax payable   47,027       83,010    
Deferred income taxes   138,628       117,183    
Long-term lease liabilities   103,223       108,493    
Other liabilities   92,896       92,530    
Accrued pension and other postretirement costs   182,704       187,092    
Total liabilities   2,098,684       1,815,503    
         
Equity:        
Vishay stockholders' equity        
Common stock   13,318       13,291    
Class B convertible common stock   1,210       1,210    
Capital in excess of par value   1,286,568       1,352,321    
Retained earnings   1,003,700       773,228    
Treasury stock (at cost)   (140,633 )     (82,972 )  
Accumulated other comprehensive income (loss)   (25,883 )     (10,827 )  
Total Vishay stockholders' equity   2,138,280       2,046,251    
Noncontrolling interests   4,243       3,899    
Total equity   2,142,523       2,050,150    
Total liabilities and equity $ 4,241,207     $ 3,865,653    
         

 

VISHAY INTERTECHNOLOGY, INC.        
Consolidated Condensed Statements of Cash Flows        
(Unaudited - In thousands)    
  Nine fiscal months ended  
  September 30, 2023   October 1, 2022  
         
Operating activities        
Net earnings $ 273,559     $ 357,282    
Adjustments to reconcile net earnings to net cash provided by operating activities:        
Depreciation and amortization   133,910       121,301    
(Gain) loss on disposal of property and equipment   (495 )     (372 )  
Inventory write-offs for obsolescence   27,469       18,197    
Stock compensation expense   11,610       5,717    
Loss on early extinguishment of debt   18,874       -    
Deferred income taxes   20,654       8,843    
Other   7,574       (1,445 )  
Change in U.S. transition tax liability   (27,670 )     (14,757 )  
Change in repatriation tax liability   -       (25,201 )  
Changes in operating assets and liabilities   (106,050 )     (151,773 )  
Net cash provided by operating activities   359,435       317,792    
         
Investing activities        
Purchase of property and equipment   (184,079 )     (172,175 )  
Proceeds from sale of property and equipment   1,034       472    
Purchase of businesses, net of cash acquired   (5,003 )     -    
Purchase of short-term investments   (82,166 )     (182,079 )  
Maturity of short-term investments   308,021       132,892    
Other investing activities   (1,219 )     (199 )  
Net cash provided by (used in) investing activities   36,588       (221,089 )  
         
Financing activities        
Proceeds from long-term borrowings   750,000       -    
Repurchase of convertible senior notes due 2025   (386,745 )     -    
Net payments on revolving credit facility   (42,000 )     -    
Debt issuance costs   (26,547 )     -    
Cash paid for capped call   (94,200 )     -    
Dividends paid to common stockholders   (38,207 )     (39,433 )  
Dividends paid to Class B common stockholders   (3,629 )     (3,629 )  
Repurchase of common stock held in treasury   (57,661 )     (54,671 )  
Distributions to noncontrolling interests   (867 )     (741 )  
Cash withholding taxes paid when shares withheld for vested equity awards   (3,994 )     (2,123 )  
Net cash provided by (used in) financing activities   96,150       (100,597 )  
Effect of exchange rate changes on cash and cash equivalents   (7,879 )     (35,222 )  
         
Net increase (decrease) in cash and cash equivalents   484,294       (39,116 )  
         
Cash and cash equivalents at beginning of period   610,825       774,108    
Cash and cash equivalents at end of period $ 1,095,119     $ 734,992    
         

 

VISHAY INTERTECHNOLOGY, INC.                    
Reconciliation of Adjusted Earnings Per Share                    
(Unaudited - In thousands, except per share amounts)                    
  Fiscal quarters ended   Nine fiscal months ended  
  September 30, 2023   July 1, 2023   October 1, 2022   September 30, 2023   October 1, 2022  
                     
GAAP net earnings attributable to Vishay stockholders $ 65,529     $ 95,038   $ 140,061     $ 272,348     $ 356,022    
                     
Reconciling items affecting gross profit:                    
Impact of the COVID-19 pandemic $ -     $ -   $ -     $ -     $ 6,661    
                     
Other reconciling items affecting operating income:                    
Impact of the COVID-19 pandemic $ -     $ -   $ -     $ -     $ 546    
                     
Reconciling items affecting other income (expense):                    
Loss on early extinguishment of debt $ 18,874     $ -   $ -     $ 18,874     $ -    
                     
Reconciling items affecting tax expense (benefit):                    
Effect of changes in uncertain tax positions $ -     $ -   $ (5,941 )   $ -     $ (5,941 )  
Tax effects of pre-tax items above   (498 )     -     -       (498 )     (1,802 )  
                     
Adjusted net earnings $ 83,905     $ 95,038   $ 134,120     $ 290,724     $ 355,486    
                     
Adjusted weighted average diluted shares outstanding   140,001       140,478     143,447       140,577       144,470    
                     
Adjusted earnings per diluted share $ 0.60     $ 0.68   $ 0.93     $ 2.07     $ 2.46    
                     

 

VISHAY INTERTECHNOLOGY, INC.                  
Reconciliation of Free Cash                  
(Unaudited - In thousands)                  
  Fiscal quarters ended   Nine fiscal months ended
  September 30, 2023   July 1, 2023   October 1, 2022   September 30, 2023   October 1, 2022
Net cash provided by operating activities $ 122,303       107,239       209,480     $ 359,435     $ 317,792  
Proceeds from sale of property and equipment   21       687       95       1,034       472  
Less: Capital expenditures   (66,829 )     (71,676 )     (76,475 )     (184,079 )     (172,175 )
Free cash $ 55,495     $ 36,250     $ 133,100     $ 176,390     $ 146,089  
                   

 

VISHAY INTERTECHNOLOGY, INC.                  
Reconciliation of EBITDA and Adjusted EBITDA                  
(Unaudited - In thousands)                  
  Fiscal quarters ended   Nine fiscal months ended
  September 30, 2023   July 1, 2023   October 1, 2022   September 30, 2023   October 1, 2022
                   
GAAP net earnings attributable to Vishay stockholders $ 65,529     $ 95,038     $ 140,061     $ 272,348     $ 356,022  
Net earnings attributable to noncontrolling interests   426       377       502       1,211       1,260  
Net earnings $ 65,955     $ 95,415     $ 140,563     $ 273,559     $ 357,282  
                   
Interest expense $ 7,153     $ 6,404     $ 4,110     $ 18,677     $ 12,639  
Interest income   (9,183 )     (6,292 )     (1,836 )     (21,419 )     (3,186 )
Income taxes   30,557       38,054       40,566       113,199       108,023  
Depreciation and amortization   46,216       44,393       40,334       133,910       121,301  
EBITDA $ 140,698     $ 177,974     $ 223,737     $ 517,926     $ 596,059  
                   
Reconciling items                  
Impact of the COVID-19 pandemic $ -     $ -     $ -     $ -     $ 7,207  
Loss on early extinguishment of debt   18,874       -       -       18,874       -  
                   
Adjusted EBITDA $ 159,572     $ 177,974     $ 223,737     $ 536,800     $ 603,266  
                   
Adjusted EBITDA margin**   18.7 %     19.9 %     24.2 %     20.5 %     22.8 %
                   
** Adjusted EBITDA as a percentage of net revenues                  
                   

 

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Source: Vishay Intertechnology, Inc.