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Long-Term Debt
 9 Months Ended
Oct. 03, 2020
Long-Term Debt [Abstract]  
Long-Term Debt
Note 7 – Long-Term Debt

Long-term debt consists of the following:

  
October 3, 2020
    
December 31, 2019
  
             
Credit facility
  
$
-
    
$
-
  
Convertible senior notes, due 2025
    
403,345
      
509,128
  
Convertible senior debentures, due 2040
    
129
      
126
  
Convertible senior debentures, due 2041
    
1,065
      
6,677
  
Deferred financing costs
    
(12,249
)
    
(16,784
)
     
392,290
      
499,147
  
Less current portion
    
-
      
-
  
   
$
392,290
    
$
499,147
  

The following table summarizes some key facts and terms regarding the outstanding convertible debt instruments as of October 3, 2020:

  
Convertible
Senior Notes
Due 2025
    
Convertible
Senior
Debentures
Due 2040
    
Convertible
Senior
Debentures
Due 2041
  
Issuance date
  
June 12, 2018
    
November 9, 2010
    
May 13, 2011
  
Maturity date
  
June 15, 2025
    
November 15, 2040
    
May 15, 2041
  
Principal amount as of October 3, 2020
  
$
465,344
    
$
300
    
$
2,640
  
Cash coupon rate (per annum)
    
2.25
%
    
2.25
%
    
2.25
%
Nonconvertible debt borrowing rate at issuance (per annum)
    
5.50
%
    
8.00
%
    
8.375
%
Conversion rate effective September 10, 2020 (per $1 principal amount)
    
31.8674
      
81.4200
      
59.4161
  
Effective conversion price effective September 10, 2020 (per share)
  
$
31.38
    
$
12.28
    
$
16.83
  
130% of the conversion price (per share)
  
$
40.79
    
$
15.96
    
$
21.88
  
Call date
    
n/a
    
November 20, 2020
    
May 20, 2021
  

The terms of the convertible senior debentures due 2040 and due 2041 are generally congruent.

Prior to three months before the maturity date, the holders may convert their convertible senior debentures due 2040 and due 2041 only under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.  The convertible senior debentures due 2040 and due 2041 are not currently convertible.

Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) during any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions.  The convertible senior notes due 2025 are not currently convertible.

Vishay may not redeem the convertible senior debentures prior to the respective call dates.  On or after the call date and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption.

The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible debt instruments effective as of the ex-dividend date of each cash dividend.  The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock.

GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods.  The resulting discount on the debt is amortized as non-cash interest expense in future periods.



The carrying values of the liability and equity components of the convertible debt instruments are reflected in the Company’s consolidated condensed balance sheets as follows:

  
Principal
amount of the
debt
instruments
    
Unamortized
discount
    
Carrying
value of
liability
component
    
Equity
component
(including
temporary
equity) -net
carrying value
  
October 3, 2020
                        
Convertible senior notes due 2025
  
$
465,344
      
(61,999
)
  
$
403,345
    
$
66,127
  
Convertible senior debentures due 2040 and due 2041
  
$
2,940
      
(1,746
)
  
$
1,194
    
$
1,216
  
Total
  
$
468,284
    
$
(63,745
)
  
$
404,539
    
$
67,343
  
                                 
December 31, 2019
                                
Convertible senior notes due 2025
  
$
600,000
      
(90,872
)
  
$
509,128
    
$
85,262
  
Convertible senior debentures due 2040 and due 2041
  
$
17,190
      
(10,387
)
  
$
6,803
    
$
7,129
  
Total
  
$
617,190
    
$
(101,259
)
  
$
515,931
    
$
92,391
  

Interest is payable on the convertible debt instruments semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company’s estimated nonconvertible debt borrowing rate at the time of issuance.  In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the convertible senior debentures due 2040 and due 2041 and under certain other circumstances, beginning in 2020 and 2021, respectively.  The convertible senior notes due 2025 do not possess contingent interest features.

Interest expense related to the convertible debt instruments is reflected on the consolidated condensed statements of operations for the fiscal quarters ended:

  
Contractual
coupon
interest
    
Non-cash
amortization
of debt
discount
    
Other non-cash
interest expense
    
Total interest
expense
related to the
debt
instruments
  
October 3, 2020
                        
Convertible senior notes due 2025
  
$
2,839
      
3,099
      
382
    
$
6,320
  
Convertible senior debentures
  
$
16
      
8
      
-
    
$
24
  
Total
  
$
2,855
    
$
3,107
    
$
382
    
$
6,344
  
                                 
September 28, 2019
                                
Convertible senior notes due 2025
  
$
3,375
      
3,520
      
454
    
$
7,349
  
Convertible senior debentures
  
$
118
      
53
      
(8
)
  
$
163
  
Total
  
$
3,493
    
$
3,573
    
$
446
    
$
7,512
  



Interest expense related to the convertible debt instruments is reflected on the consolidated condensed statements of operations for the nine fiscal months ended:

  
Contractual
coupon
interest
    
Non-cash
amortization
of debt
discount
    
Other non-cash
interest expense
    
Total interest
expense related to the
debt
instruments
  
October 3, 2020
                        
Convertible senior notes due 2025
  
$
9,480
      
10,195
      
1,271
    
$
20,946
  
Convertible senior debentures
  
$
76
      
37
      
-
    
$
113
  
Total
  
$
9,556
    
$
10,232
    
$
1,271
    
$
21,059
  
                                 
September 28, 2019
                                
Convertible senior notes due 2025
  
$
10,125
      
10,388
      
1,362
    
$
21,875
  
Convertible senior debentures
  
$
385
      
170
      
(26
)
  
$
529
  
Total
  
$
10,510
    
$
10,558
    
$
1,336
    
$
22,404
  

Other non-cash interest expense includes amortization of deferred financing costs and changes in the value of embedded derivative liabilities.

The Company used cash to repurchase $58,886 and $134,656 principal amount of convertible senior notes due 2025 in the fiscal quarter and nine fiscal months ending October 3, 2020, respectively.  The net carrying value of the debentures repurchased was $50,922 and $115,978, respectively.  In accordance with the authoritative accounting guidance for convertible debt, the aggregate repurchase payments in the fiscal quarter and nine fiscal months ending October 3, 2020 of $57,652 and $128,328, respectively, were allocated between the liability ($53,531 and $118,587, respectively) and equity ($4,121 and $9,741, respectively) components of the convertible notes, using the Company's nonconvertible debt borrowing rate at the time of the repurchases.  As a result, the Company recognized losses on extinguishment of convertible notes of $3,454 and $4,600, including the write-off of unamortized debt issuance costs in the fiscal quarter and nine fiscal months ended October 3, 2020, respectively.

The Company used cash to repurchase $14,250 principal amount of convertible senior debentures due 2041 in the first fiscal quarter of 2020.  The net carrying value of the debentures repurchased was $5,645.  The aggregate repurchase payment of $19,849 was allocated between the liability ($8,452) and equity ($11,397) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchase.  As a result, the Company recognized a loss on extinguishment of convertible debentures of $2,920, including the write-off of unamortized debt issuance costs in the first fiscal quarter of 2020.