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CST: 24/02/2020 15:56:10   

Vishay Reports Results for Second Quarter 2019

209 Days ago

  • Revenues for Q2 2019 of $685.2 million

  • Gross Margin Q2 of 25.5%

  • Operating Margin Q2 of 11.6%

  • EPS Q2 of $0.31

  • Adjusted EPS Q2 of $0.36

  • Free cash for trailing 12 months Q2 2019 of $180.4 million

  • Announced global cost reduction and management rejuvenation programs for annualized savings of $15 million at cash cost of $25 million, fully implemented by end of 2020

  • Guidance for Q3 2019 for revenues of $600 to $640 million and gross margins of 24% to 25% at Q2 exchange rates.

MALVERN, Pa., July 30, 2019 (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 29, 2019.

Revenues for the fiscal quarter ended June 29, 2019 were $685.2 million, compared to $745.2 million for the fiscal quarter ended March 30, 2019, and $761.0 million for the fiscal quarter ended June 30, 2018. Net earnings attributable to Vishay stockholders for the fiscal quarter ended June 29, 2019 were $44.5 million or $0.31 per diluted share, compared to $75.5 million, or $0.52 per diluted share, and $103.1 or $0.65 per diluted share for the fiscal quarters ended March 30, 2019, and June 30, 2018, respectively.

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 $0.36, $0.51, and $0.54 for the fiscal quarters ended June 29, 2019, March 30, 2019 and June 30, 2018 respectively.

Commenting on the results for the second quarter 2019, Dr. Gerald Paul, President and Chief Executive Officer, stated, “In the second quarter, high levels of inventories in the supply chain led to lower than expected demand, mainly from distribution, which negatively impacted Vishay’s financial performance. We are now in the process of adapting manufacturing capacities and capital expenditures to short term volume requirements. Yesterday, we announced global cost reduction and management rejuvenation programs to lower Vishay’s fixed personnel costs by $15 million annualized at a cash cost of $25 million. These programs are also designed to further enhance the quality of our organization.”                   

Dr. Paul also stated, “However long the current inventory correction will take, we continue to be confident about Vishay’s mid- and long-term growth opportunities in end markets such as automotive, industrial, medical and military. Since 2016 we have substantially expanded manufacturing capacities, so we are very well positioned to fully participate in the next upturn whatever the timing will be.”

Commenting on the outlook Dr. Paul stated, “For the third quarter we expect an acceleration of the reduction of inventories in the channel and guide for revenues in a range of $600 to $640 million and gross margins of 24% to 25%, at the same exchange rates as in the second quarter”.

A conference call to discuss Vishay’s second quarter financial results is scheduled for Tuesday, July 30, 2019 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 8387353.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, July 30, 2019 through 11:59 p.m. ET on Tuesday, August 13, 2019. The telephone number for the replay is 800-585-8367 (+1 404-537-3406 if calling from outside the United States or Canada) and the access code is 8387353.

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 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 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, inventories, product demand, manufacturing capacities, restructuring activity savings and costs, 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 29, 2019   March 30, 2019   June 30, 2018  
             
Net revenues $   685,240     $   745,159     $   761,030    
Costs of products sold     510,639         534,000         533,792    
Gross profit     174,601         211,159         227,238    
  Gross margin   25.5 %     28.3 %     29.9 %  
             
Selling, general, and administrative expenses     95,112         103,424         103,945    
Operating income     79,489         107,735         123,293    
  Operating margin   11.6 %     14.5 %     16.2 %  
             
Other income (expense):            
  Interest expense     (8,204 )       (8,392 )       (8,372 )  
  Other components of net periodic pension cost     (3,367 )       (3,396 )       (3,450 )  
  Other     2,970         5,308         3,397    
  Loss on early extinguishment of debt     -         (1,307 )       (17,309 )  
  Total other income (expense) - net     (8,601 )       (7,787 )       (25,734 )  
             
Income before taxes     70,888         99,948         97,559    
             
Income tax expense (benefit)     26,153         24,307         (5,703 )  
             
Net earnings     44,735         75,641         103,262    
             
Less: net earnings attributable to noncontrolling interests     258         182         165    
             
Net earnings attributable to Vishay stockholders $   44,477     $   75,459     $   103,097    
             
Basic earnings per share attributable to Vishay stockholders $   0.31     $   0.52     $   0.71    
             
Diluted earnings per share attributable to Vishay stockholders $   0.31     $   0.52     $   0.65    
             
Weighted average shares outstanding - basic   144,621       144,554       144,382    
             
Weighted average shares outstanding - diluted   145,023       145,289       157,657    
             
Cash dividends per share $   0.095     $   0.085     $   0.085    
             

 

VISHAY INTERTECHNOLOGY, INC.         
Summary of Operations        
(Unaudited - In thousands, except per share amounts)        
         
  Six fiscal months ended  
  June 29, 2019   June 30, 2018  
         
Net revenues $   1,430,399     $   1,477,825    
Costs of products sold     1,044,639         1,045,287    
Gross profit     385,760         432,538    
  Gross margin   27.0 %     29.3 %  
         
Selling, general, and administrative expenses     198,536         205,183    
Operating income     187,224         227,355    
  Operating margin   13.1 %     15.4 %  
         
Other income (expense):        
  Interest expense     (16,596 )       (16,049 )  
  Other components of net periodic pension cost     (6,763 )       (6,969 )  
  Other     8,278         2,550    
  Loss on early extinguishment of debt     (1,307 )       (17,309 )  
  Total other income (expense) - net     (16,388 )       (37,777 )  
         
Income before taxes     170,836         189,578    
         
Income tax expense     50,460         23,771    
         
Net earnings     120,376         165,807    
         
Less: net earnings attributable to noncontrolling interests     440         344    
         
Net earnings attributable to Vishay stockholders $   119,936     $   165,463    
         
Basic earnings per share attributable to Vishay stockholders $   0.83     $   1.15    
         
Diluted earnings per share attributable to Vishay stockholders $   0.83     $   1.04    
         
Weighted average shares outstanding - basic     144,589       144,355    
         
Weighted average shares outstanding - diluted     145,158       158,580    
         
Cash dividends per share $   0.1800     $   0.1525    
         
         
         
         

 

VISHAY INTERTECHNOLOGY, INC.         
Consolidated Condensed Balance Sheets        
(In thousands)        
         
  June 29, 2019   December 31, 2018  
  (Unaudited)      
Assets        
Current assets:        
  Cash and cash equivalents $   790,906     $   686,032    
  Short-term investments     163         78,286    
  Accounts receivable, net     365,728         397,020    
  Inventories:        
  Finished goods     132,794         138,112    
  Work in process     191,552         190,982    
  Raw materials     139,150         150,566    
  Total inventories     463,496         479,660    
         
  Prepaid expenses and other current assets     125,104         142,888    
Total current assets     1,745,397         1,783,886    
         
Property and equipment, at cost:        
  Land     74,701         87,622    
  Buildings and improvements     579,304         619,445    
  Machinery and equipment     2,559,473         2,510,001    
  Construction in progress     115,288         125,109    
  Allowance for depreciation     (2,380,546 )       (2,373,176 )  
      948,220         969,001    
         
Right of use assets     96,136         -     
         
Goodwill     150,735         147,480    
         
Other intangible assets, net     64,883         65,688    
         
Other assets     150,759         140,143    
  Total assets $   3,156,130     $   3,106,198    
         

 

VISHAY INTERTECHNOLOGY, INC.           
Consolidated Condensed Balance Sheets (continued)          
(In thousands)          
           
  June 29, 2019   December 31, 2018    
  (Unaudited)        
           
Liabilities and stockholders' equity          
Current liabilities:          
  Notes payable to banks $   40     $   18      
  Trade accounts payable     160,222         218,322      
  Payroll and related expenses     129,095         141,670      
  Lease liabilities     15,323         -       
  Other accrued expenses     162,937         229,660      
  Income taxes     43,979         54,436      
Total current liabilities     511,596         644,106      
           
Long-term debt less current portion     519,863         494,509      
U.S. transition tax payable     140,196         154,953      
Deferred income taxes     64,878         85,471      
Long-term lease liabilities     86,086         -       
Other liabilities     84,628         79,489      
Accrued pension and other postretirement costs     256,805         260,984      
Total liabilities     1,664,052         1,719,512      
           
Redeemable convertible debentures     -          2,016      
           
Equity:          
Vishay stockholders' equity          
  Common stock     13,235         13,212      
  Class B convertible common stock     1,210         1,210      
  Capital in excess of par value     1,426,164         1,436,011      
  Retained earnings (accumulated deficit)     55,659         (61,258 )    
  Accumulated other comprehensive income (loss)     (6,316 )       (6,791 )    
  Total Vishay stockholders' equity     1,489,952         1,382,384      
Noncontrolling interests     2,126         2,286      
Total equity     1,492,078         1,384,670      
Total liabilities, temporary equity, and equity $   3,156,130     $   3,106,198      
           
     
           
           

 

VISHAY INTERTECHNOLOGY, INC.         
Consolidated Statements of Cash Flows        
(Unaudited - in thousands)    
  Six fiscal months ended  
  June 29, 2019   June 30, 2018  
         
Operating activities        
Net earnings $   120,376     $   165,807    
Adjustments to reconcile net earnings (loss) to         
  net cash provided by operating activities:        
  Depreciation and amortization     81,346         81,174    
  (Gain) loss on disposal of property and equipment     (162 )       (2,242 )  
  Accretion of interest on convertible debt instruments     6,985         2,964    
  Inventory write-offs for obsolescence     12,643         11,799    
  Loss on early extinguishment of debt     1,307         17,309    
  Deferred income taxes     (5,601 )       (25,669 )  
  Other     4,283         4,148    
  Change in U.S. transition tax liability     (14,757 )       (14,400 )  
  Change in repatriation tax liability     (20,479 )       (92,093 )  
  Changes in operating assets and liabilities, net of effects of businesses acquired     (50,122 )       (110,627 )  
Net cash provided by operating activities     135,819         38,170    
         
Investing activities        
Purchase of property and equipment     (70,148 )       (76,646 )  
Proceeds from sale of property and equipment     464         8,378    
Purchase of businesses, net of cash acquired     (11,862 )       (14,880 )  
Purchase of short-term investments     (1,970 )       (50,193 )  
Maturity of short-term investments     79,694         447,359    
Other investing activities     2,893         (935 )  
Net cash provided by (used in) investing activities     (929 )       313,083    
         
Financing activities        
Proceeds from long-term borrowings     -          600,000    
Issuance costs     (5,394 )       (15,621 )  
Repurchase of convertible debentures     (22,695 )       (584,991 )  
Net proceeds (payments) on revolving credit lines     28,000         (54,000 )  
Net changes in short-term borrowings     22         119    
Dividends paid to common stockholders     (23,822 )       (20,148 )  
Dividends paid to Class B common stockholders     (2,178 )       (1,845 )  
Distributions to noncontrolling interests     (600 )       (525 )  
Cash withholding taxes paid when shares withheld for vested equity awards     (2,708 )       (2,297 )  
Net cash used in financing activities     (29,375 )       (79,308 )  
Effect of exchange rate changes on cash and cash equivalents     (641 )       (12,921 )  
         
Net increase in cash and cash equivalents     104,874         259,024    
         
Cash and cash equivalents at beginning of period     686,032         748,032    
Cash and cash equivalents at end of period $   790,906     $   1,007,056    
         
         
         
         

 

VISHAY INTERTECHNOLOGY, INC.                           
Reconciliation of Adjusted Earnings Per Share                          
(Unaudited - In thousands, except per share amounts)                          
  Fiscal quarters ended   Six fiscal months ended        
  June 29, 2019   March 30, 2019   June 30, 2018   June 29, 2019   June 30, 2018        
                           
GAAP net earnings attributable to Vishay stockholders $   44,477     $   75,459     $   103,097     $   119,936     $   165,463          
                           
Reconciling items affecting other income (expense):                          
Loss on early extinguishment of debt $   -     $   1,307     $   17,309     $   1,307     $   17,309          
                           
Reconciling items affecting tax expense (benefit):                          
Effects of tax-basis foreign exchange gain $   7,554     $   -     $   -     $   7,554     $   -          
Enactment of TCJA     -          -          12,000         -          12,000          
Effects of cash repatriation program     (48 )       (585 )       (9,006 )       (633 )       (7,690 )        
Change in deferred taxes due to early extinguishment of debt     -          (1,312 )       (33,963 )       (1,312 )       (33,963 )        
Tax effects of pre-tax items above      -          (290 )       (3,784 )       (290 )       (3,784 )        
                           
Adjusted net earnings $   51,983     $   74,579     $   85,653     $   126,562     $   149,335          
                           
Adjusted weighted average diluted shares outstanding     145,023         145,289         157,657         145,158         158,580          
                           
Adjusted earnings per diluted share $   0.36     $   0.51     $   0.54     $   0.87     $   0.94          
                           
                           
                           
                           
                           

 

VISHAY INTERTECHNOLOGY, INC.                             
Reconciliation of Free Cash                            
(Unaudited - In thousands)                            
  Fiscal quarters ended   Six fiscal months ended          
  June 29, 2019   March 30, 2019   June 30, 2018   June 29, 2019   June 30, 2018          
Net cash provided by (used in) operating activities $   56,301     $   79,518     $   (8,689 )   $   135,819     $   38,170            
Proceeds from sale of property and equipment     69         395         8,194         464         8,378            
Less: Capital expenditures     (33,781 )       (36,367 )       (48,373 )       (70,148 )       (76,646 )          
Free cash $   22,589     $   43,546     $   (48,868 )   $   66,135     $   (30,098 )          
                             

 

VISHAY INTERTECHNOLOGY, INC.                           
Reconciliation of EBITDA and Adjusted EBITDA                          
(Unaudited - In thousands)                          
  Fiscal quarters ended   Six fiscal months ended        
  June 29, 2019   March 30, 2019   June 30, 2018   June 29, 2019   June 30, 2018        
                           
GAAP net earnings attributable to Vishay stockholders $   44,477     $   75,459     $   103,097     $   119,936     $   165,463          
Net earnings attributable to noncontrolling interests     258         182         165         440         344          
Net earnings $   44,735     $   75,641     $   103,262     $   120,376     $   165,807          
                           
Interest expense $   8,204     $   8,392     $   8,372     $   16,596     $   16,049          
Interest income     (2,147 )       (2,199 )       (2,762 )       (4,346 )       (4,798 )        
Income taxes     26,153         24,307         (5,703 )       50,460         23,771          
Depreciation and amortization     40,918         40,428         40,616         81,346         81,174          
EBITDA $   117,863     $   146,569     $   143,785     $   264,432     $   282,003          
                           
Reconciling items                          
Loss on early extinguishment of debt $   -      $   1,307     $   17,309     $   1,307     $   17,309          
                           
Adjusted EBITDA $   117,863     $   147,876     $   161,094     $   265,739     $   299,312          
                           
Adjusted EBITDA margin**   17.2 %     19.8 %     21.2 %     18.6 %     20.3 %        
                           
** Adjusted EBITDA as a percentage of net revenues                          
                           

 

 

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