Vishay Reports Results for Second Quarter 2018

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  • Revenues for Q2 2018 of $761 million
  • Gross Margin Q2 of 29.9%
  • Operating Margin Q2 of 16.2%
  • EPS Q2 of $0.65
  • Adjusted EPS Q2 of $0.54
  • Guidance for Q3 2018 for revenues of $755 to $795 million and gross margins of 29.0% to 30.0% at Q2 exchange rates
  • Distribution: point of sales Q2 14% over prior year and inventory turns of 3.7
  • Repatriated $274 million and paid $92 million of related foreign taxes
  • Cash from operations for trailing twelve months Q2 of $279 million and capital expenditures of $198 million
  • Both Q2 and trailing twelve months Q2 cash from operations include $106 million of cash taxes paid related to US Tax Reform and cash repatriation

MALVERN, Pa., Aug. 07, 2018 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc. VSH, one of the world's largest manufacturers of discrete semiconductors and passive components, today announced its results for the fiscal quarter and six fiscal months ended June 30, 2018.

Revenues for the fiscal quarter ended June 30, 2018 were $761.0 million, compared to $716.8 million for the fiscal quarter ended March 31, 2018, and $643.2 million for the fiscal quarter ended July 1, 2017.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended June 30, 2018 were $103.1 million, or $0.65 per diluted share, compared to $62.4 million, or $0.39 per diluted share for the fiscal quarter ended March 31, 2018, and $56.2 million, or $0.36 per diluted share for the fiscal quarter ended July 1, 2017.

As summarized on the attached reconciliation schedule, all periods presented include items affecting comparability.  Net earnings for the fiscal quarter ended June 30, 2018 have been favorably impacted by such items, primarily a change in deferred taxes related to special tax attributes of debt instruments which were repurchased during the quarter.  Adjusted earnings per diluted share, which exclude these items net of tax and the unusual tax items, were $0.54, $0.40, and $0.36 for the fiscal quarters ended June 30, 2018, March 31, 2018, and July 1, 2017, respectively.

Commenting on the results for the second quarter 2018, Dr. Gerald Paul, President and Chief Executive Officer, stated, "In the second quarter, Vishay again continued to enjoy excellent business conditions in virtually all markets and, again, Vishay's key markets of automotive and industrial show unbroken strength."

"As we announced earlier, we trust in an accelerated growth trend of our markets—in particular, the automotive and industrial end markets—for the years to come. We prepare ourselves by continuing to expand manufacturing capacities for our constrained key product lines while remaining careful in adding operational fixed costs."

Commenting on the outlook Dr. Paul stated, "Based on our ongoing capacity expansion and the number of working days in the quarter, we guide for the third quarter for revenues of $755 to $795 million and gross margins of 29.0% to 30.0% at the exchange rates for the second quarter."

A conference call to discuss Vishay's second quarter financial results is scheduled for Tuesday, August 7, 2018 at 9:00 a.m. ET. The dial-in number for the conference call is 877-589-6174 (+1 706-643-1406 if calling from outside the United States or Canada) and the conference ID is 2279867.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, August 7, 2018 through 11:59 p.m. ET on Tuesday, August 14, 2018. The telephone number for the replay is 800-585-8367 (+1 855-859-2056 or 404-537-3406 if calling from outside the United States or Canada) and the access code is 2279867.

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.

About Vishay

Vishay Intertechnology, Inc., a Fortune 1000 Company listed on the NYSE (VSH), is one of the world's largest manufacturers of discrete semiconductors (diodes, MOSFETs, and infrared optoelectronics) and passive electronic components (resistors, inductors, and capacitors). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, power supplies, and medical markets. Vishay's product innovations, successful acquisition strategy, and "one-stop shop" service have made it a global industry leader. Vishay can be found on the Internet 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 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 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 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 statements with respect to forecasted revenues, margins, manufacturing capacities, customer confidence, anticipated growth areas for the company, global growth markets generally 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 such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should," 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; 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; 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.

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

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VISHAY INTERTECHNOLOGY, INC.      
Summary of Operations     
(Unaudited - In thousands, except per share amounts)     
      
 Fiscal quarters ended
 June 30, 2018 March 31, 2018 July 1, 2017*
      
Net revenues$  761,030  $  716,795  $  643,164 
Costs of products sold   533,792     511,495     469,327 
Gross profit   227,238     205,300     173,837 
Gross margin 29.9%  28.6%  27.0%
      
Selling, general, and administrative expenses   103,945     101,238     88,351 
Restructuring and severance costs   -     -     481 
Operating income   123,293     104,062     85,005 
Operating margin 16.2%  14.5%  13.2%
      
Other income (expense):     
Interest expense   (8,372)    (7,677)    (7,076)
Other components of net periodic pension cost   (3,450)    (3,519)    (2,969)
Other   3,397     (847)    749 
Loss on early extinguishment of debt   (17,309)    -     - 
Total other income (expense) - net   (25,734)    (12,043)    (9,296)
      
Income before taxes   97,559     92,019     75,709 
      
Income taxes   (5,703)    29,474     19,300 
      
Net earnings   103,262     62,545     56,409 
      
Less: net earnings attributable to noncontrolling interests   165     179     219 
      
Net earnings attributable to Vishay stockholders$  103,097  $  62,366  $  56,190 
      
Basic earnings per share attributable to Vishay stockholders$  0.71  $  0.43  $  0.38 
      
Diluted earnings per share attributable to Vishay stockholders$  0.65  $  0.39  $  0.36 
      
Weighted average shares outstanding - basic 144,382   144,327     146,381 
      
Weighted average shares outstanding - diluted 157,657   159,502     155,300 
      
Cash dividends per share$  0.0850  $  0.0675  $  0.0625 
      
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07     
      

 

VISHAY INTERTECHNOLOGY, INC.    
Summary of Operations   
(Unaudited - In thousands, except per share amounts)   
    
 Six fiscal months ended
 June 30, 2018 July 1, 2017*
    
Net revenues$  1,477,825  $  1,247,965 
Costs of products sold   1,045,287     912,379 
Gross profit   432,538     335,586 
Gross margin 29.3%  26.9%
    
Selling, general, and administrative expenses   205,183     181,053 
Restructuring and severance costs   -     1,950 
Operating income   227,355     152,583 
Operating margin 15.4%  12.2%
    
Other income (expense):   
Interest expense   (16,049)    (13,866)
Other components of net periodic pension cost   (6,969)    (5,859)
Other   2,550     353 
Loss on early extinguishment of debt   (17,309)    - 
Loss on disposal of equity affiliate   -     (7,060)
Total other income (expense) - net   (37,777)    (26,432)
    
Income before taxes   189,578     126,151 
    
Income taxes   23,771     32,793 
    
Net earnings   165,807     93,358 
    
Less: net earnings attributable to noncontrolling interests   344     449 
    
Net earnings attributable to Vishay stockholders$  165,463  $  92,909 
    
Basic earnings per share attributable to Vishay stockholders$  1.15  $  0.63 
    
Diluted earnings per share attributable to Vishay stockholders$  1.04  $  0.60 
    
Weighted average shares outstanding - basic   144,355   146,328 
    
Weighted average shares outstanding - diluted   158,580   155,088 
    
Cash dividends per share$  0.1525  $  0.1250 
    
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07   
    

 

VISHAY INTERTECHNOLOGY, INC.     
Consolidated Condensed Balance Sheets    
(Unaudited - in thousands)    
     
 June 30, 2018 December 31, 2017* 
     
Assets    
Current assets:    
Cash and cash equivalents$  1,007,056  $  748,032  
Short-term investments   142,690     547,136  
Accounts receivable, net   395,745     340,027  
Inventories:    
Finished goods   138,745     127,272  
Work in process   191,546     170,319  
Raw materials   149,630     132,068  
Total inventories   479,921     429,659  
     
Prepaid expenses and other current assets   118,809     130,336  
Total current assets   2,144,221     2,195,190  
     
Property and equipment, at cost:    
Land   86,919     92,285  
Buildings and improvements   607,232     606,168  
Machinery and equipment   2,438,523     2,415,769  
Construction in progress   94,911     103,058  
Allowance for depreciation   (2,330,960)    (2,311,522) 
    896,625     905,758  
     
Goodwill   147,645     142,742  
     
Other intangible assets, net   70,599     69,754  
     
Other assets   143,097     148,645  
Total assets$  3,402,187  $  3,462,089  
     
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07 
     

 

VISHAY INTERTECHNOLOGY, INC.    
Consolidated Condensed Balance Sheets (continued)   
(Unaudited - in thousands)   
    
 June 30, 2018 December 31, 2017*
    
Liabilities and stockholders' equity   
Current liabilities:   
Notes payable to banks$  123  $  4 
Trade accounts payable   212,111     222,373 
Payroll and related expenses   137,487     135,702 
Other accrued expenses   161,986     154,230 
Income taxes   39,065     50,226 
Total current liabilities   550,772     562,535 
    
Long-term debt less current portion   679,598     370,470 
U.S. transition tax payable   151,200     151,200 
Deferred income taxes   207,072     336,465 
Other liabilities   79,925     75,249 
Accrued pension and other postretirement costs   268,287     281,701 
Total liabilities   1,936,854     1,777,620 
    
Redeemable convertible debentures   79,544     252,070 
    
Equity:   
Vishay stockholders' equity   
Common stock   13,212     13,188 
Class B convertible common stock   1,210     1,213 
Capital in excess of par value   1,593,942     1,752,506 
Retained earnings (accumulated deficit)   (217,008)    (362,254)
Accumulated other comprehensive income (loss)   (7,418)    25,714 
Total Vishay stockholders' equity   1,383,938     1,430,367 
Noncontrolling interests   1,851     2,032 
Total equity   1,385,789     1,432,399 
Total liabilities, temporary equity, and equity$  3,402,187  $  3,462,089 
    
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07
    

 

VISHAY INTERTECHNOLOGY, INC.    
Consolidated Statements of Cash Flows   
(Unaudited - in thousands) 
 Six fiscal months ended
 June 30, 2018 July 1, 2017
    
Operating activities   
Net earnings$  165,807  $  93,358 
Adjustments to reconcile net earnings (loss) to    
  net cash provided by operating activities:   
Depreciation and amortization   81,174     80,380 
(Gain) loss on disposal of property and equipment   (2,242)    (51)
Accretion of interest on convertible debt instruments   2,964     2,444 
Inventory write-offs for obsolescence   11,799     9,729 
Loss on disposal of equity affiliate   -      7,060 
Loss on early extinguishment of debt   17,309     - 
Deferred income taxes   (25,669)    6,640 
Other   4,148     2,579 
U.S. transition tax   (14,400)    - 
Repatriation taxes   (92,093)    - 
Changes in operating assets and liabilities, net of effects of businesses acquired   (110,627)    (73,873)
Net cash provided by operating activities   38,170     128,266 
    
Investing activities   
Purchase of property and equipment   (76,646)    (49,067)
Proceeds from sale of property and equipment   8,378     1,288 
Purchase of businesses, net of cash acquired   (14,880)    - 
Purchase of short-term investments   (50,193)    (418,114)
Maturity of short-term investments   447,359     454,918 
Other investing activities   (935)    (6,664)
Net cash provided by (used in) investing activities   313,083     (17,639)
    
Financing activities   
Proceeds from long-term borrowings   600,000     - 
Issuance costs   (15,621)    - 
Repurchase of convertible debentures   (584,991)    - 
Net proceeds (payments) on revolving credit lines   (54,000)    (10,000)
Net changes in short-term borrowings   119     7 
Dividends paid to common stockholders   (20,148)    (16,761)
Dividends paid to Class B common stockholders   (1,845)    (1,516)
Proceeds from stock options exercised   -      1,260 
Distributions to noncontrolling interests   (525)    (740)
Cash withholding taxes paid when shares withheld for vested equity awards   (2,297)    (1,971)
Other financing activities   -      (1,255)
Net cash used in financing activities   (79,308)    (30,976)
Effect of exchange rate changes on cash and cash equivalents   (12,921)    9,600 
    
Net increase in cash and cash equivalents   259,024     89,251 
    
Cash and cash equivalents at beginning of period   748,032     471,781 
Cash and cash equivalents at end of period$  1,007,056  $  561,032 
    

 

VISHAY INTERTECHNOLOGY, INC.          
Reconciliation of Adjusted Earnings Per Share         
(Unaudited - In thousands, except per share amounts)         
 Fiscal quarters ended Six fiscal months ended
 June 30, 2018 March 31, 2018 July 1, 2017 June 30, 2018 July 1, 2017
          
GAAP net earnings attributable to Vishay stockholders$  103,097  $  62,366 $  56,190  $  165,463  $  92,909 
          
Reconciling items affecting operating income:         
Restructuring and severance costs$  -  $  - $  481  $  -  $  1,950 
          
Reconciling items affecting other income (expense):         
Loss on early extinguishment of debt$  17,309  $  - $  -  $  17,309  $  - 
Loss on disposal of equity affiliate   -      -     -      -      7,060 
          
Reconciling items affecting tax expense (benefit):         
Enactment of TCJA$  12,000  $  - $  -  $  12,000  $  - 
Effects of cash repatriation program   (9,006)    1,316    (1,240)    (7,690)    (2,208)
Change in deferred taxes due to early extinguishment of debt   (33,963)    -     -      (33,963)    -  
Tax effects of pre-tax items above    (3,784)    -     (156)    (3,784)    (597)
          
          
Adjusted net earnings$  85,653  $  63,682 $  55,275  $  149,335  $  99,114 
          
Adjusted weighted average diluted shares outstanding   157,657     159,502    155,300     158,580     155,088 
          
Adjusted earnings per diluted share$  0.54  $  0.40 $  0.36  $  0.94  $  0.64 
          

 

VISHAY INTERTECHNOLOGY, INC.          
Reconciliation of Free Cash         
(Unaudited - In thousands)         
 Fiscal quarters ended Six fiscal months ended
 June 30, 2018 March 31, 2018 July 1, 2017 June 30, 2018 July 1, 2017
Net cash provided by (used in) operating activities$  (8,689) $  46,859  $  84,592  $  38,170  $  128,266 
Proceeds from sale of property and equipment   8,194     184     345     8,378     1,288 
Less: Capital expenditures   (48,373)    (28,273)    (32,399)    (76,646)    (49,067)
Free cash$  (48,868) $  18,770  $  52,538  $  (30,098) $  80,487 
          

 

VISHAY INTERTECHNOLOGY, INC.          
Reconciliation of EBITDA and Adjusted EBITDA         
(Unaudited - In thousands)         
 Fiscal quarters ended Six fiscal months ended
 June 30, 2018 March 31, 2018 July 1, 2017 June 30, 2018 July 1, 2017
          
GAAP net earnings attributable to Vishay stockholders$  103,097  $  62,366  $  56,190  $  165,463  $  92,909 
Net earnings attributable to noncontrolling interests   165     179     219     344     449 
Net earnings$  103,262  $  62,545  $  56,409  $  165,807  $  93,358 
          
Interest expense$  8,372  $  7,677  $  7,076  $  16,049  $  13,866 
Interest income   (2,762)    (2,036)    (1,534)    (4,798)    (2,797)
Income taxes   (5,703)    29,474     19,300     23,771     32,793 
Depreciation and amortization   40,616     40,558     40,168     81,174     80,380 
EBITDA$  143,785  $  138,218  $  121,419  $  282,003  $  217,600 
          
Reconciling items         
Restructuring and severance costs$  -  $  -  $  481  $  -  $  1,950 
Loss on early extinguishment of debt   17,309     -     -     17,309     - 
Loss on disposal of equity affiliate   -     -     -     -     7,060 
          
Adjusted EBITDA$  161,094  $  138,218  $  121,900  $  299,312  $  226,610 
          
Adjusted EBITDA margin** 21.2%  19.3%  19.0%  20.3%  18.2%
          
** Adjusted EBITDA as a percentage of net revenues         
          

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