Market Overview

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. (NYSE: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

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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