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CST: 21/02/2020 21:45:20   

Vishay Reports Results for Third Quarter 2019

115 Days ago

  • Revenues for Q3 2019 of $628 million
  • Gross Margin Q3 of 23.9%
  • Operating Margin Q3 of 8.1%
  • Adjusted Operating Margin 9.3%
  • EPS Q3 of $0.21
  • Adjusted EPS Q3 of $0.26
  • Free cash for trailing 12 months Q3 2019 of $205 million
  • Guidance for Q4 2019 for revenues of $580 to $620 million and gross margins of 23% to 24% at Q3 exchange rates

MALVERN, Pa., Oct. 29, 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 nine fiscal months ended September 28, 2019.

Revenues for the fiscal quarter ended September 28, 2019 were $628.3 million, compared to $685.2 million for the fiscal quarter ended June 29, 2019, and $781.0 million for the fiscal quarter ended September 29, 2018. Net earnings attributable to Vishay stockholders for the fiscal quarter ended September 28, 2019 were $30.0 million, or $0.21 per diluted share, compared to $44.5 million, or $0.31 per diluted share for the fiscal quarter ended June 29, 2019, and $77.9 million, or $0.51 per diluted share for the fiscal quarter ended September 29, 2018.

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 $0.26, $0.36, and $0.60 for the fiscal quarters ended September 28, 2019, June 29, 2019, and September 29, 2018, respectively.

Commenting on results for the third quarter 2019, Dr. Gerald Paul, President and Chief Executive Officer stated, “Vishay’s financial performance has been negatively impacted by low demand, especially from distribution. However, during the third quarter inventories of Vishay’s products at distribution started to come down noticeably. Still high levels of inventories in the global supply chain should impact our business for another two quarters. We are managing the slowdown by adapting costs as we have done in the past. On the other hand, our increased machine capacities will enable Vishay to participate in the next upturn to the full extent.”

Commenting on the outlook Dr. Paul stated, “For the fourth quarter we expect a continuation of the inventory reduction in the supply chain and guide for revenues in a range of $580 to $620 million and gross margins of 23% to 24%.”

A conference call to discuss Vishay’s third quarter financial results is scheduled for Tuesday, October 29, 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 access code is 9882458.

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, October 29, 2019 through 11:59 p.m. ET on Tuesday, November 12, 2019. 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 9882458.

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
  September 28, 2019   June 29, 2019   September 29, 2018
           
Net revenues $ 628,329     $ 685,240     $ 780,972  
Costs of products sold   478,250       510,639       544,676  
Gross profit   150,079       174,601       236,296  
Gross margin   23.9 %     25.5 %     30.3 %
           
Selling, general, and administrative expenses   91,796       95,112       98,198  
Restructuring and severance costs   7,255       -       -  
Operating income   51,028       79,489       138,098  
Operating margin   8.1 %     11.6 %     17.7 %
           
Other income (expense):          
Interest expense   (8,564 )     (8,204 )     (10,813 )
Other components of net periodic pension cost   (3,348 )     (3,367 )     (3,367 )
Other   5,066       2,970       2,890  
Total other income (expense) - net   (6,846 )     (8,601 )     (11,290 )
           
Income before taxes   44,182       70,888       126,808  
           
Income tax expense   13,917       26,153       48,737  
           
Net earnings   30,265       44,735       78,071  
           
Less: net earnings attributable to noncontrolling interests   227       258       195  
           
Net earnings attributable to Vishay stockholders $ 30,038     $ 44,477     $ 77,876  
           
Basic earnings per share attributable to Vishay stockholders $ 0.21     $ 0.31     $ 0.54  
           
Diluted earnings per share attributable to Vishay stockholders $ 0.21     $ 0.31     $ 0.51  
           
Weighted average shares outstanding - basic   144,628       144,621       144,383  
           
Weighted average shares outstanding - diluted   145,027       145,023       152,946  
           
Cash dividends per share $ 0.095     $ 0.095     $ 0.085  


VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
       
  Nine fiscal months ended
  September 28, 2019   September 29, 2018
       
Net revenues $ 2,058,728     $ 2,258,797  
Costs of products sold   1,522,889       1,589,963  
Gross profit   535,839       668,834  
Gross margin   26.0 %     29.6 %
       
Selling, general, and administrative expenses   290,332       303,381  
Restructuring and severance costs   7,255       -  
Operating income   238,252       365,453  
Operating margin   11.6 %     16.2 %
       
Other income (expense):      
Interest expense   (25,160 )     (26,862 )
Other components of net periodic pension cost   (10,111 )     (10,336 )
Other   13,344       5,440  
Loss on early extinguishment of debt   (1,307 )     (17,309 )
Total other income (expense) - net   (23,234 )     (49,067 )
       
Income before taxes   215,018       316,386  
       
Income tax expense   64,377       72,508  
       
Net earnings   150,641       243,878  
       
Less: net earnings attributable to noncontrolling interests   667       539  
       
Net earnings attributable to Vishay stockholders $ 149,974     $ 243,339  
       
Basic earnings per share attributable to Vishay stockholders $ 1.04     $ 1.69  
       
Diluted earnings per share attributable to Vishay stockholders $ 1.03     $ 1.55  
       
Weighted average shares outstanding - basic   144,602       144,364  
       
Weighted average shares outstanding - diluted   145,114       156,702  
       
Cash dividends per share $ 0.2750     $ 0.2375  


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
       
  September 28, 2019   December 31, 2018
  (Unaudited)    
Assets      
Current assets:      
Cash and cash equivalents $ 731,483     $ 686,032  
Short-term investments   56,043       78,286  
Accounts receivable, net   335,189       397,020  
Inventories:      
Finished goods   129,485       138,112  
Work in process   189,757       190,982  
Raw materials   125,411       150,566  
Total inventories   444,653       479,660  
       
Prepaid expenses and other current assets   123,712       142,888  
Total current assets   1,691,080       1,783,886  
       
Property and equipment, at cost:      
Land   74,053       87,622  
Buildings and improvements   570,727       619,445  
Machinery and equipment   2,551,127       2,510,001  
Construction in progress   113,639       125,109  
Allowance for depreciation   (2,381,868 )     (2,373,176 )
    927,678       969,001  
       
Right of use assets   93,103       -  
       
Goodwill   150,309       147,480  
       
Other intangible assets, net   62,265       65,688  
       
Other assets   147,751       140,143  
Total assets $ 3,072,186     $ 3,106,198  


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
       
  September 28, 2019   December 31, 2018
  (Unaudited)    
       
Liabilities and stockholders' equity      
Current liabilities:      
Notes payable to banks $ 7     $ 18  
Trade accounts payable   141,472       218,322  
Payroll and related expenses   131,751       141,670  
Lease liabilities   16,932       -  
Other accrued expenses   164,995       229,660  
Income taxes   25,945       54,436  
Total current liabilities   481,102       644,106  
       
Long-term debt less current portion   496,262       494,509  
U.S. transition tax payable   140,196       154,953  
Deferred income taxes   47,246       85,471  
Long-term lease liabilities   80,998       -  
Other liabilities   90,174       79,489  
Accrued pension and other postretirement costs   248,357       260,984  
Total liabilities   1,584,335       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   1,427,049       1,436,011  
Retained earnings (accumulated deficit)   71,956       (61,258 )
Accumulated other comprehensive income (loss)   (27,952 )     (6,791 )
Total Vishay stockholders' equity   1,485,498       1,382,384  
Noncontrolling interests   2,353       2,286  
Total equity   1,487,851       1,384,670  
Total liabilities, temporary equity, and equity $ 3,072,186     $ 3,106,198  


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - in thousands)
 
  Nine fiscal months ended
  September 28, 2019   September 29, 2018
       
Operating activities      
Net earnings $ 150,641     $ 243,878  
Adjustments to reconcile net earnings (loss) to      
net cash provided by operating activities:      
Depreciation and amortization   122,302       121,888  
(Gain) loss on disposal of property and equipment   (168 )     (2,216 )
Accretion of interest on convertible debt instruments   10,558       6,966  
Inventory write-offs for obsolescence   19,214       17,059  
Loss on early extinguishment of debt   1,307       17,309  
Deferred income taxes   (4,481 )     (12,348 )
Other   9,029       13,021  
Change in U.S. transition tax liability   (14,757 )     (14,400 )
Change in repatriation tax liability   (38,814 )     (156,767 )
Changes in operating assets and liabilities, net of effects of businesses acquired   (42,810 )     (125,499 )
Net cash provided by operating activities   212,021       108,891  
       
Investing activities      
Purchase of property and equipment   (100,267 )     (126,391 )
Proceeds from sale of property and equipment   486       8,455  
Purchase of businesses, net of cash acquired   (11,862 )     (14,880 )
Purchase of short-term investments   (59,440 )     (172,732 )
Maturity of short-term investments   79,765       577,524  
Other investing activities   4,021       (1,608 )
Net cash provided by (used in) investing activities   (87,297 )     270,368  
       
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   -       (150,000 )
Net changes in short-term borrowings   (12 )     -  
Dividends paid to common stockholders   (36,396 )     (31,378 )
Dividends paid to Class B common stockholders   (3,327 )     (2,873 )
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   (71,132 )     (187,685 )
Effect of exchange rate changes on cash and cash equivalents   (8,141 )     (11,501 )
       
Net increase in cash and cash equivalents   45,451       180,073  
       
Cash and cash equivalents at beginning of period   686,032       748,032  
Cash and cash equivalents at end of period $ 731,483     $ 928,105  


VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
                   
  Fiscal quarters ended   Nine fiscal months ended
  September 28, 2019   June 29, 2019   September 29, 2018   September 28, 2019   September 29, 2018
                   
GAAP net earnings attributable to Vishay stockholders $ 30,038     $ 44,477     $ 77,876     $ 149,974     $ 243,339  
                   
Reconciling items affecting operating income:                  
Restructuring and severance costs $ 7,255     $ -     $ -     $ 7,255     $ -  
                   
Reconciling items affecting other income (expense):                  
Loss on early extinguishment of debt $ -     $ -     $ -     $ 1,307     $ 17,309  
                   
Reconciling items affecting tax expense (benefit):                  
Effects of tax-basis foreign exchange gain $ -     $ 7,554     $ -     $ 7,554     $ -  
Enactment of TCJA   -       -       13,496       -       25,496  
Effects of cash repatriation program   2,604       (48 )     680       1,971       (7,010 )
Change in deferred taxes due to early extinguishment of debt   -       -       -       (1,312 )     (33,963 )
Tax effects of pre-tax items above   (1,644 )     -       -       (1,934 )     (3,784 )
                   
Adjusted net earnings $ 38,253     $ 51,983     $ 92,052     $ 164,815     $ 241,387  
                   
Adjusted weighted average diluted shares outstanding   145,027       145,023       152,946       145,114       156,702  
                   
Adjusted earnings per diluted share $ 0.26     $ 0.36     $ 0.60     $ 1.14     $ 1.54  


VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
                   
  Fiscal quarters ended   Nine fiscal months ended
  September 28, 2019   June 29, 2019   September 29, 2018   September 28, 2019   September 29, 2018
Net cash provided by operating activities $ 76,202     $ 56,301     $ 70,721     $ 212,021     $ 108,891  
Proceeds from sale of property and equipment   22       69       77       486       8,455  
Less: Capital expenditures   (30,119 )     (33,781 )     (49,745 )     (100,267 )     (126,391 )
Free cash $ 46,105     $ 22,589     $ 21,053     $ 112,240     $ (9,045 )


VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
                   
  Fiscal quarters ended   Nine fiscal months ended
  September 28, 2019   June 29, 2019   September 29, 2018   September 28, 2019   September 29, 2018
                   
GAAP net earnings attributable to Vishay stockholders $ 30,038     $ 44,477     $ 77,876     $ 149,974     $ 243,339  
Net earnings attributable to noncontrolling interests   227       258       195       667       539  
Net earnings $ 30,265     $ 44,735     $ 78,071     $ 150,641     $ 243,878  
                   
Interest expense $ 8,564     $ 8,204     $ 10,813     $ 25,160     $ 26,862  
Interest income   (2,365 )     (2,147 )     (3,504 )     (6,711 )     (8,302 )
Income taxes   13,917       26,153       48,737       64,377       72,508  
Depreciation and amortization   40,956       40,918       40,714       122,302       121,888  
EBITDA $ 91,337     $ 117,863     $ 174,831     $ 355,769     $ 456,834  
                   
Reconciling items                  
Restructuring and severance costs $ 7,255     $ -     $ -     $ 7,255     $ -  
Loss on early extinguishment of debt   -       -       -       1,307       17,309  
                   
Adjusted EBITDA $ 98,592     $ 117,863     $ 174,831     $ 364,331     $ 474,143  
                   
Adjusted EBITDA margin**   15.7 %     17.2 %     22.4 %     17.7 %     21.0 %
                   
** Adjusted EBITDA as a percentage of net revenues
                   

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