Market Overview

Vishay Reports Results for Second Quarter 2020

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  • Revenues Q2 of $582 million
  • Gross margin Q2 of 22.5%; adjusted gross margin 22.6%
  • Operating margin Q2 of 7.0%; adjusted operating margin 7.2%
  • EPS Q2 of $0.17; adjusted EPS $0.18
  • Free Cash for the trailing 12 months Q2 of $151 million
  • Repurchased $75.8 million principal amount of convertible notes due 2025, at approximately 93% of face value, to provide flexibility to adjust future debt levels as necessary
  • Guidance Q3 for revenues of $580 to $620 million at a gross margin of 22.8% plus/minus 70 basis points, assuming a USD/EUR exchange rate of 0.87

MALVERN, Pa., Aug. 04, 2020 (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 July 4, 2020.

Revenues for the fiscal quarter ended July 4, 2020 were $581.7 million, compared to $612.8 million for the fiscal quarter ended April 4, 2020, and $685.2 million for the fiscal quarter ended June 29, 2019.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended July 4, 2020 were $24.7 million, or $0.17 per diluted share, compared to $27.2 million, or $0.19 per diluted share for the fiscal quarter ended April 4, 2020, and $44.5 million, or $0.31 per diluted share for the fiscal quarter ended June 29, 2019.

As summarized on the attached reconciliation schedule, all periods presented include items affecting comparability.  Adjusted earnings per diluted share, which exclude these items net of tax and the unusual tax items, were $0.18, $0.21, and $0.36 for the fiscal quarters ended July 4, 2020, April 4, 2020, and June 29, 2019, respectively.

Commenting on results for the second quarter 2020, Dr. Gerald Paul, President and Chief Executive Officer stated, "The second quarter has been strongly impacted by the lockdowns in many countries due to COVID-19, in particular the shutdown of automotive plants in Europe and the Americas. Asia, especially China, having gone through a lockdown already in the first quarter, showed a quick recovery whereas revenues in Europe and the Americas were steeply lower. The weakest end market was automotive with revenues lower by 34% compared to the first quarter."

Dr. Paul continued, "On the other hand, the second quarter seems to represent the bottom of this cycle and, clearly, the fundamentals for Vishay's growth remain intact. Vishay has successfully mastered temporary economic downturns in the past and we are doing so again. We continue to be focused on profitability and cash generation while safeguarding the health and well-being of our employees."

Commenting on the outlook Dr. Paul stated, "For the third quarter 2020 we expect lower sales to Vishay's distribution partners compensated by recovering sales to our automotive customers, and guide for revenues in the range of $580 to $620 million at a gross margin of 22.8% plus/minus 70 basis points, assuming a USD/EUR exchange rate of 0.87."

A conference call to discuss Vishay's second quarter financial results is scheduled for Tuesday, August 4, 2020 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 access code is 6075047.

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 from 12:00 p.m. ET on Tuesday, August 4, 2020, through 11:59 p.m. ET on Tuesday, August 12, 2020. The telephone number for the replay is +1 855-859-2056 (+1 404-537-3406, if calling from outside the United States or Canada) and the access code is 6075047.

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 http://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 statements with respect to forecasted revenues, margins, inventories, product demand, anticipated areas of growth, market segment performance, 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; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19; 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) 
  July 4, 2020   Fiscal quarters ended
April 4, 2020
  June 29, 2019
Net revenues $ 581,717     $ 612,841     $ 685,240  
Costs of products sold*   451,047       465,601       510,639  
Gross profit   130,670       147,240       174,601  
Gross margin   22.5 %     24.0 %     25.5 %
Selling, general, and administrative expenses**   89,127       99,832       95,112  
Restructuring and severance costs   743       -       -  
Operating income   40,800       47,408       79,489  
Operating margin   7.0 %     7.7 %     11.6 %
Other income (expense):                      
Interest expense   (8,430 )     (8,552 )     (8,204 )
Other   (1,484 )     198       (397 )
Loss on early extinguishment of debt   (1,146 )     (2,920 )     -  
Total other income (expense) - net   (11,060 )     (11,274 )     (8,601 )
Income before taxes   29,740       36,134       70,888  
Income tax expense (benefit)   4,845       8,750       26,153  
Net earnings   24,895       27,384       44,735  
Less: net earnings attributable to noncontrolling interests   242       165       258  
Net earnings attributable to Vishay stockholders $ 24,653     $ 27,219     $ 44,477  
Basic earnings per share attributable to Vishay stockholders $ 0.17     $ 0.19     $ 0.31  
Diluted earnings per share attributable to Vishay stockholders $ 0.17     $ 0.19     $ 0.31  
Weighted average shares outstanding - basic   144,846       144,792       144,621  
Weighted average shares outstanding - diluted   145,170       145,295       145,023  
Cash dividends per share $ 0.095     $ 0.095     $ 0.095  

* Includes incremental costs of products sold separable from normal operations directly attributable to the COVID-19 outbreak of $923 and $3,130 for the fiscal quarters ended July 4, 2020 and April 4, 2020, respectively.
** Includes incremental selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 outbreak of $(747) and $317, for the fiscal quarters ended July 4, 2020 and April 4, 2020, respectively.


VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
  Six fiscal months ended
  July 4, 2020   June 29, 2019
       
       
 
 
               
Net revenues $ 1,194,558     $ 1,430,399  
               
Costs of products sold*   916,648       1,044,639  
Gross profit   277,910       385,760  
Gross margin   23.3 %     27.0 %
               
Selling, general, and administrative expenses*   188,959       198,536  
Restructuring and severance costs   743       -  
Operating income   88,208       187,224  
Operating margin   7.4 %     13.1 %
               
Other income (expense):               
Interest expense   (16,982 )     (16,596 )
Other   (1,286 )     1,515  
Loss on early extinguishment of debt   (4,066 )     (1,307 )
Total other income (expense) - net   (22,334 )     (16,388 )
Income before taxes   65,874       170,836  
Income tax expense   13,595       50,460  
Net earnings   52,279       120,376  
Less: net earnings attributable to noncontrolling interests   407       440  
Net earnings attributable to Vishay stockholders $ 51,872     $ 119,936  
Basic earnings per share attributable to Vishay stockholders $ 0.36     $ 0.83  
Diluted earnings per share attributable to Vishay stockholders $ 0.36     $ 0.83  
Weighted average shares outstanding - basic   144,818       144,589  
Weighted average shares outstanding - diluted   145,232       145,158  
Cash dividends per share $ 0.19     $ 0.18  

* Includes incremental costs of products sold and selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 outbreak of $4,053 and $(430), respectively.


VISHAY INTERTECHNOLOGY, INC. 
Consolidated Condensed Balance Sheets
(In thousands)
  July 4, 2020   December 31, 2019
Assets (Unaudited)    
Current assets:              
Cash and cash equivalents $ 599,930     $ 694,133  
Short-term investments   157,246       108,822  
Accounts receivable, net
  285,529
      328,187
 
Inventories:              
Finished goods   125,177       122,466  
Work in process   196,846       187,354  
Raw materials   127,165       121,860  
Total inventories   449,188       431,680  
               
Prepaid expenses and other current assets   131,125       141,294  
Total current assets   1,623,018       1,704,116  
               
Property and equipment, at cost:              
Land   74,985       75,011  
Buildings and improvements   596,942       585,064  
Machinery and equipment   2,623,774       2,606,355  
Construction in progress   99,932       110,722  
Allowance for depreciation   (2,474,456 )     (2,425,627 )
    921,177       951,525  
Right of use assets   103,153       93,162  
               
Goodwill   150,641       150,642  
               
Other intangible assets, net   58,583       60,659  
               
Other assets   168,274       160,671  
Total assets $ 3,024,846     $ 3,120,775  
 


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)  
  July 4, 2020   December 31, 2019
  (Unaudited)    
Liabilities and equity              
Current liabilities:              
Notes payable to banks $ 1     $ 2  
Trade accounts payable   148,727       173,915  
Payroll and related expenses   126,302       122,100  
Lease liabilities   21,443       20,217  
Other accrued expenses   166,261       186,463  
Income taxes   40,642       17,731  
Total current liabilities   503,376       520,428  
               
Long-term debt less current portion   438,494       499,147  
U.S. transition tax payable   125,438       140,196  
Deferred income taxes   4,231       22,021  
Long-term lease liabilities   85,714       78,511  
Other liabilities   98,134       100,207  
Accrued pension and other postretirement costs   270,735       272,402  
Total liabilities   1,526,122       1,632,912  
               
Redeemable convertible debentures   -       174  
               
Equity:              
Vishay stockholders' equity              
Common stock   13,256       13,235  
Class B convertible common stock   1,210       1,210  
Capital in excess of par value   1,412,775       1,425,170  
Retained earnings   95,462       72,180  
Accumulated other comprehensive income (loss)   (26,326 )     (26,646 )
Total Vishay stockholders' equity   1,496,377       1,485,149  
Noncontrolling interests   2,347       2,540  
Total equity   1,498,724       1,487,689  
Total liabilities, temporary equity, and equity $ 3,024,846     $ 3,120,775  
 


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
  Six fiscal months ended
  July 4, 2020   June 29, 2019
Operating activities      
Net earnings $ 52,279     $ 120,376  
Adjustments to reconcile net earnings to      
net cash provided by operating activities:              
Depreciation and amortization   82,158       81,346  
(Gain) loss on disposal of property and equipment   (43 )     (162 )
Accretion of interest on convertible debt instruments   7,125       6,985  
Inventory write-offs for obsolescence   11,587       12,643  
Loss on early extinguishment of debt   4,066       1,307  
Deferred income taxes   (4,370 )     (5,601 )
Other   954       4,283  
Change in U.S. transition tax liability   -       (14,757 )
Change in repatriation tax liability   (16,258 )     (20,479 )
Changes in operating assets and liabilities, net of effects of businesses acquired   (12,589 )     (50,122 )
Net cash provided by operating activities   124,909       135,819  
               
Investing activities      
Purchase of property and equipment   (48,832 )     (70,148 )
Proceeds from sale of property and equipment   230       464  
Purchase of businesses, net of cash acquired   -       (11,862 )
Purchase of short-term investments   (157,086 )     (1,970 )
Maturity of short-term investments   108,044       79,694  
Other investing activities   (529 )     2,893  
Net cash used in investing activities   (98,173 )     (929 )
               
Financing activities              
Issuance costs   -       (5,394 )
Repurchase of convertible debt instruments   (90,525 )     (22,695 )
Net proceeds (payments) on revolving credit lines   -       28,000  
Net changes in short-term borrowings   (113 )     22  
Dividends paid to common stockholders   (25,185 )     (23,822 )
Dividends paid to Class B common stockholders   (2,299 )     (2,178 )
Distributions to noncontrolling interests   (600 )     (600 )
Cash withholding taxes paid when shares withheld for vested equity awards   (2,016 )     (2,708 )
Net cash used in financing activities   (120,738 )     (29,375 )
Effect of exchange rate changes on cash and cash equivalents   (201 )     (641 )
               
Net increase (decrease) in cash and cash equivalents   (94,203 )     104,874  
Cash and cash equivalents at beginning of period   694,133       686,032  
Cash and cash equivalents at end of period $ 599,930     $ 790,906  
 


VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
 
  Fiscal quarters ended   Six fiscal months ended
  July 4, 2020   April 4, 2020
  June 29, 2019
  July 4, 2020
  June 29, 2019
                                       
GAAP net earnings attributable to Vishay stockholders
$ 24,653     $ 27,219     $ 44,477     $ 51,872     $ 119,936  
                                       
Reconciling items affecting gross profit:                                      
Impact of the COVID-19 outbreak $ 923     $ 3,130     $ -     $ 4,053     $ -  
                                       
Other reconciling items affecting operating income:                  
Restructuring and severance costs $ 743     $ -     $ -     $ 743     $ -  
Impact of the COVID-19 outbreak   (747 )     317       -       (430 )     -  
                                       
Reconciling items affecting other income (expense):                                      
Loss on early extinguishment of debt $ 1,146     $ 2,920     $ -     $ 4,066     $ 1,307  
                                       
Reconciling items affecting tax expense (benefit):                                      
Change in deferred taxes due to early extinguishment of debt $ -     $ (1,346 )   $ -     $ (1,346 )   $ (1,312 )
Effects of tax-basis foreign exchange gain   -       -       7,554       -       7,554  
Effects of cash repatriation program   (190 )     -       (48 )     (190 )     (633 )
Tax effects of pre-tax items above   (589 )     (1,482 )     -       (2,071 )     (290 )
                                       
Adjusted net earnings $ 25,939     $ 30,758     $ 51,983     $ 56,697     $ 126,562  
                                       
Adjusted weighted average diluted shares outstanding   145,170       145,295       145,023       145,232       145,158  
                                       
Adjusted earnings per diluted share $ 0.18     $ 0.21     $ 0.36     $ 0.39     $ 0.87  
                                       


VISHAY INTERTECHNOLOGY, INC.
Reconciliation  of Free Cash
(Unaudited - In thousands)
  Fiscal quarters ended   Six fiscal months ended
  July 4, 2020   April 4, 2020   June 29, 2019   July 4, 2020      June 29, 2019
Net cash provided by operating activities $ 90,431     $ 34,478     $ 56,301     $    124,909     $ 135,819  
Proceeds from sale of property and equipment   177       53       69     230     464  
Less: Capital expenditures   (24,504 )     (24,328 )     (33,781 )   (48,832 )   (70,148 )
Free cash $ 66,104     $ 10,203     $ 22,589     $    76,307     $  66,135  
 


VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
  Fiscal quarters ended   Six fiscal months ended
  July 4, 2020   April 4, 2020   June 29, 2019   July 4, 2020   June 29, 2019
                                       
GAAP net earnings attributable to Vishay stockholders $ 24,653     $ 27,219     $ 44,477     $ 51,872     $ 119,936  
Net earnings attributable to noncontrolling interests   242       165       258       407       440  
Net earnings $ 24,895     $ 27,384     $ 44,735     $ 52,279     $ 120,376  
                                       
Interest expense $ 8,430     $ 8,552     $ 8,204     $ 16,982     $ 16,596  
Interest income   (956 )     (1,854 )     (2,147 )     (2,810 )     (4,346 )
Income taxes   4,845       8,750       26,153       13,595       50,460  
Depreciation and amortization   40,638       41,520       40,918       82,158       81,346  
EBITDA $ 77,852     $ 84,352     $ 117,863     $ 162,204     $ 264,432  
                                       
Reconciling items                                      
Impact of the COVID-19 outbreak $ 176     $ 3,447     $ -     $ 3,623     $ -  
Restructuring and severance costs   743       -       -       743       -  
Loss on early extinguishment of debt   1,146       2,920       -       4,066       1,307  
                                       
Adjusted EBITDA $ 79,917     $ 90,719     $ 117,863     $ 170,636     $ 265,739  
                                       
Adjusted EBITDA margin**   13.7 %     14.8 %     17.2 %     14.3 %     18.6 %
                   
** Adjusted EBITDA as a percentage of net revenues                  

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