Bay Street News

Vishay Reports Results for Fourth Quarter and Year 2018

MALVERN, Pa., Feb. 05, 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 year and fiscal quarter ended December 31, 2018.

Revenues for the year ended December 31, 2018 were $3,034.7 million, compared to $2,599.4 million for the year ended December 31, 2017.  Net earnings attributable to Vishay stockholders for the year ended December 31, 2018 were $345.8 million, or $2.24 per diluted share.  Net loss attributable to Vishay stockholders for the year ended December 31, 2017 was $(20.3) million, or $(0.14) per share.

Revenues for the fiscal quarter ended December 31, 2018 were $775.9 million, compared to $781.0 million for the fiscal quarter ended September 29, 2018, and $673.5 million for the fiscal quarter ended December 31, 2017.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended December 31, 2018 were $102.4 million, or $0.69 per diluted share, compared to $77.9 million, or $0.51 per diluted share for the fiscal quarter ended September 29, 2018, and net loss attributable to Vishay stockholders of $(177.7) million, or $(1.23) per share for the fiscal quarter ended December 31, 2017.

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 $0.58 and $2.12 for the fiscal quarter and year ended December 31, 2018, respectively, $0.60 for the fiscal quarter ended September 29, 2018, and $0.37 and $1.43 for the fiscal quarter and year ended December 31, 2017, respectively.

Commenting on the results for the year 2018, Dr. Gerald Paul, President and Chief Executive Officer, stated, “2018 was a record year for Vishay in terms of revenues and the second highest ever in terms of profitability. As in the previous year, partially extreme demand from virtually all market segments drove this strength. We further increased manufacturing capacities of most of our product lines considerably and we continue to do so for several strategic lines. Driven by increased volume Vishay demonstrated the leverage of its business model.”

Dr. Paul continued, commenting on the results for the fourth quarter 2018, “When excluding exchange rate effects, revenues were flat quarter over quarter. There were signs of normalization as supply started to catch up with demand. Lead times for critical product lines, while still stretched, are starting to normalize. Market conditions overall remain stable.”

Commenting on the outlook Dr. Paul stated, “For the first quarter, we guide for revenues of $730 to $770 million and gross margins of 28% to 29% at the exchange rates for the fourth quarter.”

A conference call to discuss Vishay’s fourth quarter and full year financial results is scheduled for Tuesday, February 5, 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 4585076.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, February 5, 2019 through 11:59 p.m. ET on Tuesday, February 12, 2019. The telephone number for the replay is 800-585-8367 (+1 855-859-2056 or 404-537-3406 if calling from outside the United States or Canada) and the access code is 4585076.

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 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, product demand, manufacturing capacities, 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)      
       
  Years ended
  December 31, 2018   December 31, 2017*
       
Net revenues $   3,034,689     $   2,599,368  
Costs of products sold     2,146,165         1,896,259  
Gross profit     888,524         703,109  
Gross margin   29.3 %     27.0 %
       
Selling, general, and administrative expenses     403,404         367,831  
Restructuring and severance costs     –         11,273  
Operating income     485,120         324,005  
Operating margin   16.0 %     12.5 %
       
Other income (expense):      
Interest expense     (36,680 )       (27,850 )
Other components of net periodic pension cost     (13,118 )       (12,417 )
Other     8,037         1,738  
Loss on early extinguishment of debt     (26,583 )       –  
Loss on disposal of equity affiliate     –         (6,112 )
Total other income (expense) – net     (68,344 )       (44,641 )
       
Income before taxes     416,776         279,364  
       
Income taxes     70,239         298,924  
       
Net earnings (loss)     346,537         (19,560 )
       
Less: net earnings attributable to noncontrolling interests     779         784  
       
Net earnings (loss) attributable to Vishay stockholders $   345,758     $   (20,344 )
       
Basic earnings (loss) per share attributable to Vishay stockholders $   2.39     $   (0.14 )
       
Diluted earnings (loss) per share attributable to Vishay stockholders $   2.24     $   (0.14 )
       
Weighted average shares outstanding – basic     144,370       145,633  
       
Weighted average shares outstanding – diluted     154,622       145,633  
       
Cash dividends per share $   0.3225     $   0.2550  
       
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07      
       

 

VISHAY INTERTECHNOLOGY, INC.           
Summary of Operations          
(Unaudited – In thousands, except per share amounts)          
           
  Fiscal quarters ended
  December 31, 2018   September 29, 2018   December 31, 2017*
           
Net revenues $   775,892     $   780,972     $   673,462  
Costs of products sold     556,202         544,676         496,086  
Gross profit     219,690         236,296         177,376  
Gross margin   28.3 %     30.3 %     26.3 %
           
Selling, general, and administrative expenses     100,023         98,198         95,291  
Restructuring and severance costs     –         –         6,079  
Operating income     119,667         138,098         76,006  
Operating margin   15.4 %     17.7 %     11.3 %
           
Other income (expense):          
Interest expense     (9,818 )       (10,813 )       (7,046 )
Other components of net periodic pension cost     (2,782 )       (3,367 )       (3,470 )
Other     2,597         2,890         587  
Loss on early extinguishment of debt     (9,274 )       –         –  
Gain (loss) on disposal of equity affiliate     –         –         948  
Total other income (expense) – net     (19,277 )       (11,290 )       (8,981 )
           
Income before taxes     100,390         126,808         67,025  
           
Income taxes     (2,269 )       48,737         244,526  
           
Net earnings (loss)     102,659         78,071         (177,501 )
           
Less: net earnings attributable to noncontrolling interests     240         195         156  
           
Net earnings (loss) attributable to Vishay stockholders $   102,419     $   77,876     $   (177,657 )
           
Basic earnings (loss) per share attributable to Vishay stockholders $   0.71     $   0.54     $   (1.23 )
           
Diluted earnings (loss) per share attributable to Vishay stockholders $   0.69     $   0.51     $   (1.23 )
           
Weighted average shares outstanding – basic   144,384       144,383       144,165  
           
Weighted average shares outstanding – diluted   148,378       152,946       144,165  
           
Cash dividends per share $   0.0850     $   0.0850     $   0.0675  
           
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07          
           

 

VISHAY INTERTECHNOLOGY, INC.       
Consolidated Condensed Balance Sheets      
(Unaudited – in thousands)      
       
  December 31, 2018   December 31, 2017*
       
Assets      
Current assets:      
Cash and cash equivalents $   686,032     $   748,032  
Short-term investments     78,286         547,136  
Accounts receivable, net     397,020         340,027  
Inventories:      
Finished goods   138,112       127,272  
Work in process   190,982       170,319  
Raw materials   150,566       132,068  
Total inventories   479,660       429,659  
       
Prepaid expenses and other current assets   142,888       130,336  
Total current assets   1,783,886       2,195,190  
       
Property and equipment, at cost:      
Land   87,622       92,285  
Buildings and improvements   619,445       606,168  
Machinery and equipment   2,510,001       2,415,769  
Construction in progress   125,109       103,058  
Allowance for depreciation   (2,373,176 )     (2,311,522 )
    969,001       905,758  
       
Goodwill   147,480       142,742  
       
Other intangible assets, net   65,688       69,754  
       
Other assets   140,143       148,645  
Total assets $ 3,106,198     $ 3,462,089  
       
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07
       

 

VISHAY INTERTECHNOLOGY, INC.      
Consolidated Condensed Balance Sheets (continued)      
(Unaudited – in thousands)      
       
  December 31, 2018   December 31, 2017*
       
Liabilities and stockholders’ equity      
Current liabilities:      
Notes payable to banks $ 18     $ 4  
Trade accounts payable   218,322       222,373  
Payroll and related expenses   141,670       135,702  
Other accrued expenses   229,660       154,230  
Income taxes   54,436       50,226  
Total current liabilities   644,106       562,535  
       
Long-term debt less current portion   494,509       370,470  
U.S. transition tax payable   154,953       151,200  
Deferred income taxes   85,471       336,465  
Other liabilities   79,489       75,249  
Accrued pension and other postretirement costs   260,984       281,701  
Total liabilities   1,719,512       1,777,620  
       
Redeemable convertible debentures   2,016       252,070  
       
Equity:      
Vishay stockholders’ equity      
Common stock   13,212       13,188  
Class B convertible common stock   1,210       1,213  
Capital in excess of par value   1,436,011       1,752,506  
Retained earnings (accumulated deficit)   (61,258 )     (362,254 )
Accumulated other comprehensive income (loss)   (6,791 )     25,714  
Total Vishay stockholders’ equity   1,382,384       1,430,367  
Noncontrolling interests   2,286       2,032  
Total equity   1,384,670       1,432,399  
Total liabilities, temporary equity, and equity $ 3,106,198     $ 3,462,089  
       
*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07
       
       

 

VISHAY INTERTECHNOLOGY, INC.        
Consolidated Statements of Cash Flows        
(In thousands)    
  Years ended  
  December 31, 2018   December 31, 2017  
  (unaudited)      
Operating activities        
Net earnings $ 346,537     $ (19,560 )  
Adjustments to reconcile net earnings (loss) to        
net cash provided by operating activities:        
Depreciation and amortization   161,863       163,146    
(Gain) loss on disposal of property and equipment   (2,216 )     (265 )  
Accretion of interest on convertible debt instruments   10,769       4,984    
Inventory write-offs for obsolescence   23,872       17,771    
Loss on disposal of equity affiliate         6,112    
Pensions and other postretirement benefits, net of contributions   (1,549 )     (2,425 )  
Loss on early extinguishment of debt   26,583          
Deferred income taxes   (55,206 )     52,377    
Other   21,194       13,044    
U.S. transition tax   (14,757 )     180,000    
Repatriation taxes   (156,767 )        
Changes in operating assets and liabilities, net of effects of businesses acquired   (101,817 )     (46,407 )  
Net cash provided by operating activities   258,506       368,777    
         
Investing activities        
Purchase of property and equipment   (229,899 )     (170,432 )  
Proceeds from sale of property and equipment   55,561       1,685    
Purchase of businesses, net of cash acquired   (14,880 )        
Purchase of short-term investments   (175,403 )     (749,600 )  
Maturity of short-term investments   636,108       887,729    
Other investing activities   (2,058 )     (4,189 )  
Net cash provided by (used in) investing activities   269,429       (34,807 )  
         
Financing activities        
Proceeds from long-term borrowings   600,000          
Issuance costs   (15,621 )        
Repurchase of convertible debentures   (960,995 )        
Net proceeds (payments) on revolving credit lines   (150,000 )     7,000    
Common stock repurchases         (39,944 )  
Net changes in short-term borrowings   15       1    
Dividends paid to common stockholders   (42,608 )     (33,956 )  
Dividends paid to Class B common stockholders   (3,901 )     (3,093 )  
Proceeds from stock options exercised         1,260    
Distributions to noncontrolling interests   (525 )     (1,140 )  
Acquisition of noncontrolling interests         (4,100 )  
Cash withholding taxes paid when shares withheld for vested equity awards   (2,297 )     (1,971 )  
Other financing activities         (1,255 )  
Net cash used in financing activities   (575,932 )     (77,198 )  
Effect of exchange rate changes on cash and cash equivalents   (14,003 )     19,479    
         
Net increase (decrease) in cash and cash equivalents   (62,000 )     276,251    
         
Cash and cash equivalents at beginning of period   748,032       471,781    
Cash and cash equivalents at end of period $ 686,032     $ 748,032    
         

 

VISHAY INTERTECHNOLOGY, INC.                  
Reconciliation of Adjusted Earnings Per Share                  
(Unaudited – In thousands, except per share amounts)                  
  Fiscal quarters ended   Years ended
  December 31, 2018   September 29, 2018   December 31, 2017   December 31, 2018   December 31, 2017
                   
GAAP net earnings (loss) attributable to Vishay stockholders $ 102,419     $ 77,876   $ (177,657 )   $ 345,758     $ (20,344 )
                   
Reconciling items affecting operating income:                  
Restructuring and severance costs $     $   $ 6,079     $     $ 11,273  
                   
Reconciling items affecting other income (expense):                  
Loss on early extinguishment of debt $ 9,274     $   $     $ 26,583     $  
Loss (gain) on disposal of equity affiliate             (948 )           6,112  
                   
Reconciling items affecting tax expense (benefit):                  
Enactment of TCJA $     $ 13,496   $ 234,855     $ 25,496     $ 234,855  
Effects of cash repatriation program   (3,037 )     680     (2,702 )     (10,047 )     (5,802 )
Change in deferred taxes due to early extinguishment of debt   (20,914 )               (54,877 )      
Effects of changes in uncertain tax positions             2,369             1,565  
Tax effects of pre-tax items above   (2,028 )         (2,060 )     (5,812 )     (3,331 )
                   
                   
Adjusted net earnings $ 85,714     $ 92,052   $ 59,936     $ 327,101     $ 224,328  
                   
Adjusted weighted average diluted shares outstanding   148,378       152,946     161,177       154,622       157,010  
                   
Adjusted earnings per diluted share $ 0.58     $ 0.60   $ 0.37     $ 2.12     $ 1.43  
                   

 

VISHAY INTERTECHNOLOGY, INC.                  
Reconciliation of Free Cash                  
(Unaudited – In thousands)                  
  Fiscal quarters ended   Years ended
  December 31, 2018   September 29, 2018   December 31, 2017   December 31, 2018   December 31, 2017
Net cash provided by operating activities $ 149,615     $ 70,721     $ 122,932     $ 258,506     $ 368,777  
Proceeds from sale of property and equipment   47,106       77       201       55,561       1,685  
Less: Capital expenditures   (103,508 )     (49,745 )     (85,642 )     (229,899 )     (170,432 )
Free cash $ 93,213     $ 21,053     $ 37,491     $ 84,168     $ 200,030  
                   

 

VISHAY INTERTECHNOLOGY, INC.                  
Reconciliation of EBITDA and Adjusted EBITDA                  
(Unaudited – In thousands)                  
  Fiscal quarters ended   Years ended
  December 31, 2018   September 29, 2018   December 31, 2017   December 31, 2018   December 31, 2017
                   
GAAP net earnings (loss) attributable to Vishay stockholders $ 102,419     $ 77,876     $ (177,657 )   $ 345,758     $ (20,344 )
Net earnings attributable to noncontrolling interests   240       195       156       779       784  
Net earnings (loss) $ 102,659     $ 78,071     $ (177,501 )   $ 346,537     $ (19,560 )
                   
Interest expense $ 9,818     $ 10,813     $ 7,046     $ 36,680     $ 27,850  
Interest income   (3,638 )     (3,504 )     (1,883 )     (11,940 )     (6,482 )
Income taxes   (2,269 )     48,737       244,526       70,239       298,924  
Depreciation and amortization   39,975       40,714       41,827       161,863       163,146  
EBITDA $ 146,545     $ 174,831     $ 114,015     $ 603,379     $ 463,878  
                   
Reconciling items                  
Restructuring and severance costs $     $     $ 6,079     $     $ 11,273  
Loss on early extinguishment of debt   9,274                   26,583        
Loss (gain) on disposal of equity affiliate               (948 )           6,112  
                   
Adjusted EBITDA $ 155,819     $ 174,831     $ 119,146     $ 629,962     $ 481,263  
                   
Adjusted EBITDA margin**   20.1 %     22.4 %     17.7 %     20.8 %     18.5 %
                   
** Adjusted EBITDA as a percentage of net revenues