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Vishay Reports Results for Third Quarter 2022

Published: 2022-11-02 11:00:00 ET

Revenues Q3 of $925 million.
Gross margin Q3 of 31.3%.
Operating margin Q3 of 19.8%.
EPS Q3 of $0.98; adjusted EPS of $0.93.
Free Cash for trailing 12 months of $193 million.
Total Stockholder Return Q3 of $32.8 million—$14.3 million of dividend payments and $18.5 million of stock repurchases.
Guidance Q4 2022 for revenues of $860 to $900 million and at a gross margin of 30.0% plus/minus 50 basis points at current exchange rates.

MALVERN, Pa., Nov. 02, 2022 (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 October 1, 2022.

Revenues for the fiscal quarter ended October 1, 2022 were $924.8 million, compared to $863.5 million for the fiscal quarter ended July 2, 2022, and $813.7 million for the fiscal quarter ended October 2, 2021. Net earnings attributable to Vishay stockholders for the fiscal quarter ended October 1, 2022 were $140.1 million, or $0.98 per diluted share, compared to $112.4 million, or $0.78 per diluted share for the fiscal quarter ended July 2, 2022, and $96.8 million, or $0.67 per diluted share for the fiscal quarter ended October 2, 2021.

As summarized on the attached reconciliation schedule, all periods presented include items affecting comparability. Adjusted earnings per diluted share, which exclude these unusual items, were $0.93, $0.82, and $0.63 for the fiscal quarters ended October 1, 2022, July 2, 2022, and October 2, 2021, respectively.

Commenting on results for the third quarter 2022, Dr. Gerald Paul, President and Chief Executive Officer stated, “The third quarter represented for Vishay another record in terms of sales; it has been our most successful quarter in the past 20 years. Vishay achieved revenues substantially above the midpoint of our original guidance due to the efforts of our Chinese semiconductor facilities to make up for the COVID shutdowns during the second quarter.“

Commenting on the outlook Dr. Paul stated, “We guide for the fourth quarter 2022 for revenues in the range of $860 to $900 million at a gross margin of 30.0% plus/minus 50 basis points at current exchange rates.”

A conference call to discuss Vishay’s third quarter financial results is scheduled for Wednesday, November 2, 2022 at 9:00 a.m. ET. The dial-in number for the conference call is 877-407-0989 (+1 201-389-0921, if calling from outside the United States) and the access code is 13733054.

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 Wednesday, November 2, 2022, through 11:59 p.m. ET on Wednesday, November 16, 2022. The telephone number for the replay is +1 877-660-6853 (+1 201-612-7415, if calling from outside the United States or Canada) and the access code is 13733054.

About Vishay Vishay manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets. Serving customers worldwide, Vishay is The DNA of tech.™ Vishay Intertechnology, Inc. is a Fortune 1,000 Company listed on the NYSE (VSH). More on Vishay 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 gross margin; 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 gross margin, 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 gross margin, 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 forecasted revenues and margins, 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 “guide,” “will,” “expect,” “anticipate,” 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; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19 or otherwise; 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.

The DNA of tech™ is a trademark of Vishay Intertechnology.

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

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)

	Fiscal quarters ended
	October 1, 2022			July 2, 2022			October 2, 2021

Net revenues	$	924,798		$	863,512		$	813,663
Costs of products sold*		635,260			602,289			587,927
Gross profit		289,538			261,223			225,736
Gross margin		31.3	%		30.3	%		27.7	%

Selling, general, and administrative expenses*		106,436			110,400			102,215
Operating income		183,102			150,823			123,521
Operating margin		19.8	%		17.5	%		15.2	%

Other income (expense):
Interest expense		(4,110	)		(4,307	)		(4,427	)
Other		2,137			1,380			(2,679	)
Total other income (expense) - net		(1,973	)		(2,927	)		(7,106	)

Income before taxes		181,129			147,896			116,415

Income tax expense		40,566			35,127			19,333

Net earnings		140,563			112,769			97,082

Less: net earnings attributable to noncontrolling interests		502			381			262

Net earnings attributable to Vishay stockholders	$	140,061		$	112,388		$	96,820

Basic earnings per share attributable to Vishay stockholders	$	0.98		$	0.78		$	0.67

Diluted earnings per share attributable to Vishay stockholders	$	0.98		$	0.78		$	0.67

Weighted average shares outstanding - basic		142,887			143,996			145,017

Weighted average shares outstanding - diluted		143,447			144,397			145,458

Cash dividends per share	$	0.100		$	0.100		$	0.095

* The fiscal quarter ended July 2, 2022 includes incremental costs of products sold and selling, general, and administrative expenses separable from normal operations directly attributable to the COVID-19 pandemic of $6,661 and $546, respectively.

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)

	Nine fiscal months ended
	October 1, 2022			October 2, 2021

Net revenues	$	2,642,103		$	2,397,415
Costs of products sold*		1,832,234			1,739,458
Gross profit		809,869			657,957
Gross margin		30.7	%		27.4	%

Selling, general, and administrative expenses*		329,691			311,800
Operating income		480,178			346,157
Operating margin		18.2	%		14.4	%

Other income (expense):
Interest expense		(12,639	)		(13,246	)
Other		(2,234	)		(12,159	)
Total other income (expense) - net		(14,873	)		(25,405	)

Income before taxes		465,305			320,752

Income tax expense		108,023			58,646

Net earnings		357,282			262,106

Less: net earnings attributable to noncontrolling interests		1,260			659

Net earnings attributable to Vishay stockholders	$	356,022		$	261,447

Basic earnings per share attributable to Vishay stockholders	$	2.47		$	1.80

Diluted earnings per share attributable to Vishay stockholders	$	2.46		$	1.80

Weighted average shares outstanding - basic		143,983			145,000

Weighted average shares outstanding - diluted		144,470			145,455

Cash dividends per share	$	0.300		$	0.285

* The nine fiscal months ended October 1, 2022 includes incremental costs of products sold and selling, general, and administrative expenses separable from normal operations directly attributable to the COVID-19 pandemic of $6,661 and $546, respectively.

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)

	October 1, 2022			December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	734,992		$	774,108
Short-term investments		182,646			146,743
Accounts receivable, net		425,630			396,458
Inventories:
Finished goods		164,252			147,293
Work in process		252,492			226,496
Raw materials		199,133			162,711
Total inventories		615,877			536,500

Prepaid expenses and other current assets		151,144			156,689
Total current assets		2,110,289			2,010,498

Property and equipment, at cost:
Land		74,118			74,646
Buildings and improvements		617,784			639,879
Machinery and equipment		2,743,049			2,758,262
Construction in progress		167,336			145,828
Allowance for depreciation		(2,613,506	)		(2,639,136	)
		988,781			979,479

Right of use assets		118,676			117,635
Deferred income taxes		85,288			95,037
Goodwill		163,567			165,269
Other intangible assets, net		59,918			67,714
Other assets		94,027			107,625
Total assets	$	3,620,546		$	3,543,257

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

	October 1, 2022			December 31, 2021
	(Unaudited)

Liabilities and equity
Current liabilities:
Trade accounts payable	$	223,898		$	254,049
Payroll and related expenses		164,303			162,694
Lease liabilities		23,650			23,392
Other accrued expenses		220,542			218,089
Income taxes		84,571			35,443
Total current liabilities		716,964			693,667

Long-term debt less current portion		458,120			455,666
U.S. transition tax payable		83,010			110,681
Deferred income taxes		52,382			69,003
Long-term lease liabilities		95,747			99,987
Other liabilities		84,575			95,861
Accrued pension and other postretirement costs		229,467			271,672
Total liabilities		1,720,265			1,796,537

Equity:
Vishay stockholders' equity
Common stock		13,291			13,271
Class B convertible common stock		1,210			1,210
Capital in excess of par value		1,351,470			1,347,830
Retained earnings		714,588			401,694
Treasury stock (at cost)		(54,671	)		-
Accumulated other comprehensive income (loss)		(129,093	)		(20,252	)
Total Vishay stockholders' equity		1,896,795			1,743,753
Noncontrolling interests		3,486			2,967
Total equity		1,900,281			1,746,720
Total liabilities and equity	$	3,620,546		$	3,543,257

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
	Nine fiscal months ended
	October 1, 2022			October 2, 2021

Operating activities
Net earnings	$	357,282		$	262,106
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		121,301			125,095
(Gain) loss on disposal of property and equipment		(372	)		(254	)
Inventory write-offs for obsolescence		18,197			14,960
Deferred income taxes		8,843			(4,208	)
Other		4,272			8,376
Change in U.S. transition tax liability		(14,757	)		(14,757	)
Change in repatriation tax liability		(25,201	)		-
Changes in operating assets and liabilities		(151,773	)		(80,866	)
Net cash provided by operating activities		317,792			310,452

Investing activities
Purchase of property and equipment		(172,175	)		(118,156	)
Proceeds from sale of property and equipment		472			1,257
Purchase of short-term investments		(182,079	)		(55,491	)
Maturity of short-term investments		132,892			126,171
Other investing activities		(199	)		347
Net cash used in investing activities		(221,089	)		(45,872	)

Financing activities
Repurchase of convertible debt instruments		-			(300	)
Dividends paid to common stockholders		(39,433	)		(37,823	)
Dividends paid to Class B common stockholders		(3,629	)		(3,448	)
Repurchase of common stock held in treasury		(54,671	)		-
Distributions to noncontrolling interests		(741	)		(800	)
Cash withholding taxes paid when shares withheld for vested equity awards		(2,123	)		(1,963	)
Net cash used in financing activities		(100,597	)		(44,334	)
Effect of exchange rate changes on cash and cash equivalents		(35,222	)		(8,360	)

Net increase (decrease) in cash and cash equivalents		(39,116	)		211,886

Cash and cash equivalents at beginning of period		774,108			619,874
Cash and cash equivalents at end of period	$	734,992		$	831,760

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended									Nine fiscal months ended
	October 1, 2022			July 2, 2022			October 2, 2021			October 1, 2022			October 2, 2021

GAAP net earnings attributable to Vishay stockholders	$	140,061		$	112,388		$	96,820		$	356,022		$	261,447

Reconciling items affecting gross profit:
Impact of the COVID-19 pandemic	$	-		$	6,661		$	-		$	6,661		$	-

Other reconciling items affecting operating income:
Impact of the COVID-19 pandemic	$	-		$	546		$	-		$	546		$	-

Reconciling items affecting tax expense (benefit):
Effects of changes in uncertain tax positions	$	(5,941	)	$	-		$	-		$	(5,941	)	$	-
Effects of changes in valuation allowances		-			-			(5,714	)		-			(5,714	)
Changes in tax laws and regulations		-			-			-			-			(8,276	)
Tax effects of pre-tax items above		-			(1,802	)		-			(1,802	)		-


Adjusted net earnings	$	134,120		$	117,793		$	91,106		$	355,486		$	247,457

Adjusted weighted average diluted shares outstanding		143,447			144,397			145,458			144,470			145,455

Adjusted earnings per diluted share	$	0.93		$	0.82		$	0.63		$	2.46		$	1.70

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
	Fiscal quarters ended									Nine fiscal months ended
	October 1, 2022			July 2, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Net cash provided by operating activities	$	209,480		$	74,727		$	135,669		$	317,792		$	310,452
Proceeds from sale of property and equipment		95			305			1,023			472			1,257
Less: Capital expenditures		(76,475	)		(59,791	)		(57,446	)		(172,175	)		(118,156	)
Free cash	$	133,100		$	15,241		$	79,246		$	146,089		$	193,553

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended									Nine fiscal months ended
	October 1, 2022			July 2, 2022			October 2, 2021			October 1, 2022			October 2, 2021

GAAP net earnings attributable to Vishay stockholders	$	140,061		$	112,388		$	96,820		$	356,022		$	261,447
Net earnings attributable to noncontrolling interests		502			381			262			1,260			659
Net earnings	$	140,563		$	112,769		$	97,082		$	357,282		$	262,106

Interest expense	$	4,110		$	4,307		$	4,427		$	12,639		$	13,246
Interest income		(1,836	)		(789	)		(295	)		(3,186	)		(907	)
Income taxes		40,566			35,127			19,333			108,023			58,646
Depreciation and amortization		40,334			40,317			41,216			121,301			125,095
EBITDA	$	223,737		$	191,731		$	161,763		$	596,059		$	458,186

Reconciling items
Impact of the COVID-19 pandemic	$	-		$	7,207		$	-		$	7,207		$	-

Adjusted EBITDA	$	223,737		$	198,938		$	161,763		$	603,266		$	458,186

Adjusted EBITDA margin**		24.2	%		23.0	%		19.9	%		22.8	%		19.1	%

** Adjusted EBITDA as a percentage of net revenues

Source: Vishay Intertechnology, Inc.

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