Segment Information

6 Months Ended

Jul. 04, 2020

Segment Information [Abstract]

Segment Information

Note 11 – Segment Information

Vishay is a global manufacturer and supplier of electronic components.  Vishay operates, and its chief operating decision maker makes strategic and operating decisions with regards to assessing performance and allocating resources based on, six reporting segments: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors.  These segments represent groupings of product lines based on their functionality:

● Metal oxide semiconductor field-effect transistors ("MOSFETs") function as solid-state switches to control power.

● Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering.

● Optoelectronic components emit light, detect light, or do both.

● Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.

● Inductors use an internal magnetic field to change alternating current phase and resist alternating current.

● Capacitors store energy and discharge it when needed.

The current six segment alignment reflects a change in reporting structure made during the fourth fiscal quarter of 2019.  The fiscal periods ended June 29, 2019 have been recast to separately present Resistors and Inductors.

Vishay's reporting segments generate substantially all of their revenue from product sales to the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets.  A small portion of revenues is from royalties.

The Company evaluates business segment performance on operating income, exclusive of certain items (“segment operating income”).  Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income.  The Company’s calculation of segment operating income excludes such selling, general, and administrative costs as global operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severance costs, the direct impact of the COVID-19 outbreak, goodwill and long-lived asset impairment charges, and other items.  Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company.  These items represent reconciling items between segment operating income and consolidated operating income.  Business segment assets are the owned or allocated assets used by each business.

The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit.  The Company considers segment operating income to be the more important metric because it more fully captures the business operations of the segments.

The following tables set forth business segment information:

	MOSFETs		Diodes		Optoelectronic Components		Resistors		Inductors		Capacitors		Corporate / Other*			Total
Fiscal quarter ended July 4, 2020:
Net revenues	$	118,944	$	124,187	$	49,130	$	140,412	$	65,185	$	83,859	$	-		$	581,717
Gross profit	$	26,978	$	24,904	$	11,728	$	32,513	$	20,252	$	15,218	$	(923	)	$	130,670
Segment operating income	$	17,602	$	19,814	$	7,948	$	27,879	$	17,713	$	10,524	$	(923	)	$	100,557
Fiscal quarter ended June 29, 2019:
Net revenues	$	128,842	$	142,042	$	60,675	$	165,359	$	77,024	$	111,298	$	-		$	685,240
Gross profit	$	31,933	$	28,857	$	16,231	$	46,877	$	24,538	$	26,165	$	-		$	174,601
Segment operating income	$	22,541	$	24,010	$	12,022	$	41,667	$	21,776	$	21,161	$	-		$	143,177

Six fiscal months ended July 4, 2020:
Net revenues	$	235,837	$	239,530	$	103,309	$	299,620	$	138,970	$	177,292	$	-		$	1,194,558
Gross Profit	$	55,130	$	44,422	$	26,313	$	77,286	$	43,239	$	35,573	$	(4,053	)	$	277,910
Segment Operating Income	$	36,260	$	34,236	$	18,634	$	66,764	$	38,023	$	25,594	$	(4,053	)	$	215,458
Six fiscal months ended June 29, 2019:
Net revenues	$	266,183	$	309,882	$	121,237	$	354,190	$	148,664	$	230,243	$	-		$	1,430,399
Gross Profit	$	67,992	$	72,349	$	32,248	$	109,466	$	47,818	$	55,887	$	-		$	385,760
Segment Operating Income	$	49,219	$	62,138	$	23,732	$	98,014	$	42,416	$	45,727	$	-		$	321,246

*Amounts reported in Corporate/Other above represent unallocated costs directly related to the COVID-19 outbreak, which are reported as costs of products sold on the consolidated condensed statements of operations.

	Fiscal quarters ended						Six fiscal months ended
	July 4, 2020			June 29, 2019			July 4, 2020			June 29, 2019
Reconciliation:
Segment Operating Income	$	100,557		$	143,177		$	215,458		$	321,246
Restructuring and Severance Costs		(743	)		-			(743	)		-
Impact of COVID-19 on Selling, General, and Administrative Expenses		747			-			430			-
Unallocated Selling, General, and Administrative Expenses		(59,761	)		(63,688	)		(126,937	)		(134,022	)
Consolidated Operating Income	$	40,800		$	79,489		$	88,208		$	187,224
Unallocated Other Income (Expense)		(11,060	)		(8,601	)		(22,334	)		(16,388	)
Consolidated Income Before Taxes	$	29,740		$	70,888		$	65,874		$	170,836

The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors.  The distribution of sales by customer type is shown below:

	Fiscal quarters ended				Six fiscal months ended
	July 4, 2020		June 29, 2019		July 4, 2020		June 29, 2019
Distributors	$	349,562	$	368,420	$	655,008	$	779,980
OEMs		190,799		269,026		451,928		551,662
EMS companies		41,356		47,794		87,622		98,757
Total Revenue	$	581,717	$	685,240	$	1,194,558	$	1,430,399

Net revenues were attributable to customers in the following regions:

	Fiscal quarters ended				Six fiscal months ended
	July 4, 2020		June 29, 2019		July 4, 2020		June 29, 2019
Asia	$	260,625	$	246,193	$	477,709	$	505,919
Europe		179,928		254,742		412,980		533,641
Americas		141,164		184,305		303,869		390,839
Total Revenue	$	581,717	$	685,240	$	1,194,558	$	1,430,399

The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets.  Sales by end market are presented below:

	Fiscal quarters ended				Six fiscal months ended
	July 4, 2020		June 29, 2019		July 4, 2020		June 29, 2019
Industrial	$	226,877	$	250,783	$	441,988	$	532,373
Automotive		133,834		200,580		335,777		415,366
Telecommunications		33,496		44,562		63,188		97,842
Computing		55,719		48,244		100,942		95,752
Consumer Products		22,571		30,486		43,124		64,535
Power Supplies		32,176		29,474		57,370		59,601
Military and Aerospace		41,451		47,848		85,386		95,409
Medical		35,593		33,263		66,783		69,521
Total revenue	$	581,717	$	685,240		1,194,558		1,430,399