EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1
Exhibit 99.1
 
VISHAY REPORTS RESULTS FOR SECOND QUARTER 2019


•
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 – 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.


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
                          




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