Vishay Reports Results for First Quarter 2017

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| Source: Vishay Intertechnology
  • Revenues for Q1 2017 of $606 million
  • Operating Margin Q1 of 10.7%
  • Adjusted Operating Margin Q1 of 10.9%
  • EPS Q1 of $0.24
  • Adjusted EPS Q1 of $0.28
  • Cash from operations for trailing twelve months Q1 of $319 million and capital expenditures of $132 million
  • Guidance for Q2 2017 for revenues of $610 - $650 million and gross margins of 26% - 28%

MALVERN, Pa., May 03, 2017 (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 ended April 1, 2017.

Revenues for the fiscal quarter ended April 1, 2017 were $606.3 million, compared to $570.8 million for the fiscal quarter ended December 31, 2016 and $570.6 million for the fiscal quarter ended April 2, 2016.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended April 1, 2017 were $36.7 million, or $0.24 per diluted share, compared to a net loss attributable to Vishay stockholders of $48.7 million, or $(0.33) per share for the fiscal quarter ended December 31, 2016, and net earnings attributable to Vishay stockholders of $28.0 million, or $0.19 per diluted share for the fiscal quarter ended April 2, 2016.

Net earnings attributable to Vishay stockholders for the fiscal quarter ended April 1, 2017 include a $7.1 million loss recognized on the disposal of an equity affiliate.  All periods presented include other items affecting comparability. These items are summarized on the attached reconciliation schedule.  Adjusted earnings per diluted share, which exclude these items net of tax and the unusual tax items, were $0.28, $0.18, and $0.19 for the fiscal quarters ended April 1, 2017, December 31, 2016, and April 2, 2016, respectively.

Commenting on the results for the first quarter 2017, Dr. Gerald Paul, President and Chief Executive Officer, stated, “In terms of profitability the first quarter 2017 was our best quarter since five years. Strong orders from distribution, especially from Asia and Europe, resulted in higher than expected revenues. Due to strong sales to end customers, inventories at distribution did not increase quarter over quarter. Partially stretched lead times contributed to seasonally unusual increases of sales from distribution to end customers. Growth in general continues to be driven by the automotive and industrial end markets.”

Dr. Paul continued, “In the first quarter Vishay again was able to offset the negative impact of general inflation and price decline on its contributive margin by cost reduction and innovation.”

Commenting on the outlook Dr. Paul stated, “For the second quarter, we guide for revenues of $610 to $650 million and gross margins of 26% to 28% at constant exchange rates.”

A conference call to discuss Vishay’s first quarter financial results is scheduled for Wednesday, May 3, 2017 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 4383019.

There will be a replay of the conference call from 12:00 p.m. ET on Wednesday, May 3, 2017 through 11:59 p.m. ET on Wednesday, May 10, 2017. 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 4383019.

A live audio webcast of the conference call and a PDF copy of the press release and the quarterly presentation can be accessed 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, cash generation, cost reduction programs and their financial impact, 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; 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 applicable domestic and foreign tax regulations and uncertainty regarding the same;  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 
 April 1, 2017 December 31, 2016 April 2, 2016 
       
Net revenues$606,258  $570,819  $570,606  
Costs of products sold 445,383   438,374   433,297  
Gross profit 160,875   132,445   137,309  
Gross margin 26.5%   23.2%   24.1%  
       
Selling, general, and administrative expenses 94,718   91,532   90,286  
Restructuring and severance costs 1,469   7,060   6,475  
U.S. pension settlement charges -   79,321   -  
Operating income (loss) 64,688   (45,468)  40,548  
Operating margin 10.7%   -8.0%  7.1%  
       
Other income (expense):      
Interest expense (6,790)  (6,722)  (6,466) 
Other (396)  2,061   779  
Loss on disposal of equity affiliate (7,060)  -   -  
Gain on early extinguishment of debt -   -   3,611  
Gain related to Tianjin explosion -   8,809   -  
Total other income (expense) - net (14,246)  4,148   (2,076) 
       
Income (loss) before taxes 50,442   (41,320)  38,472  
       
Income taxes 13,493   7,284   10,320  
       
Net earnings (loss) 36,949   (48,604)  28,152  
       
Less: net earnings attributable to noncontrolling interests 230   144   138  
       
Net earnings (loss) attributable to Vishay stockholders$36,719  $(48,748) $28,014  
       
Basic earnings (loss) per share attributable to Vishay stockholders$0.25  $(0.33) $0.19  
       
Diluted earnings (loss) per share attributable to Vishay stockholders$0.24  $(0.33) $0.19  
       
Weighted average shares outstanding - basic 146,274   146,195   147,833  
       
Weighted average shares outstanding - diluted 154,876   146,195   150,628  
       
Cash dividends per share$0.0625  $0.0625  $0.0625  
       

 

VISHAY INTERTECHNOLOGY, INC. 
Consolidated Condensed Balance Sheets 
(In thousands) 
     
 April 1, 2017 December 31, 2016 
 (unaudited)   
Assets    
Current assets:    
Cash and cash equivalents$499,386  $471,781  
Short-term investments 638,884   626,627  
Accounts receivable, net 310,208   274,027  
Inventories:    
Finished goods 116,394   109,075  
Work in process 170,469   162,311  
Raw materials 113,653   109,859  
Total inventories 400,516   381,245  
     
Prepaid expenses and other current assets 104,911   110,792  
Total current assets 1,953,905   1,864,472  
     
Property and equipment, at cost:    
Land 90,151   89,753  
Buildings and improvements 572,047   570,932  
Machinery and equipment 2,312,403   2,283,222  
Construction in progress 57,479   71,777  
Allowance for depreciation (2,196,653)  (2,166,813) 
  835,427   848,871  
     
Goodwill 141,587   141,407  
     
Other intangible assets, net 80,577   84,463  
     
Other assets 138,252   138,588  
Total assets$3,149,748  $3,077,801  
     

 

VISHAY INTERTECHNOLOGY, INC.  
Consolidated Condensed Balance Sheets (continued)  
(In thousands)  
      
 April 1, 2017 December 31, 2016  
 (unaudited)    
Liabilities and stockholders' equity     
Current liabilities:     
Notes payable to banks$11  $3   
Trade accounts payable 170,821   174,107   
Payroll and related expenses 121,048   114,576   
Other accrued expenses 151,377   149,131   
Income taxes 11,846   19,033   
Total current liabilities 455,103   456,850   
      
Long-term debt less current portion 378,652   357,023   
Deferred income taxes 288,511   286,797   
Other liabilities 62,275   59,725   
Accrued pension and other postretirement costs 257,096   257,789   
Total liabilities 1,441,637   1,418,184   
      
Redeemable convertible debentures 88,362   88,659   
      
Equity:     
Vishay stockholders' equity     
Common stock 13,405   13,385   
Class B convertible common stock 1,213   1,213   
Capital in excess of par value 1,953,670   1,952,988   
Retained earnings (accumulated deficit) (279,457)  (307,417)  
Accumulated other comprehensive income (loss) (74,753)  (94,652)  
Total Vishay stockholders' equity 1,614,078   1,565,517   
Noncontrolling interests 5,671   5,441   
Total equity 1,619,749   1,570,958   
Total liabilities, temporary equity, and equity$3,149,748  $3,077,801   
      

 

VISHAY INTERTECHNOLOGY, INC.
 
Consolidated Statements of Cash Flows
 
(Unaudited - In thousands)
 
  
 Fiscal quarters ended 
 April 1, 2017 April 2, 2016* 
     
Operating activities    
Net earnings$36,949  $28,152  
Adjustments to reconcile net earnings (loss) to    
net cash provided by operating activities:    
Depreciation and amortization 40,212   40,017  
(Gain) loss on disposal of property and equipment 60   (22) 
Accretion of interest on convertible debentures 1,211   1,120  
Inventory write-offs for obsolescence 4,834   5,816  
Loss on disposal of equity affiliate 7,060   -  
Gain on early extinguishment of debt -   (3,611) 
Other 6,333   (13,508) 
Changes in operating assets and liabilities,    
net of effects of businesses acquired (52,985)  (37,264) 
Net cash provided by operating activities 43,674   20,700  
     
Investing activities    
Purchase of property and equipment (16,668)  (19,756) 
Proceeds from sale of property and equipment 943   64  
Purchase of short-term investments (151,886)  (24,588) 
Maturity of short-term investments 147,530   117,676  
Other investing activities (5,971)  2,975  
Net cash provided by (used in) investing activities (26,052)  76,371  
     
Financing activities    
Principal payments on long-term debt and capital lease obligations -   (22,595) 
Net proceeds (payments) on revolving credit lines 20,000   (12,000) 
Net changes in short-term borrowings 8   (719) 
Dividends paid to common stockholders (8,378)  (8,473) 
Dividends paid to Class B common stockholders (758)  (758) 
Cash withholding taxes paid when shares withheld for vested equity awards (1,971)  (442) 
Other financing activities (1,255)  -  
Net cash provided by (used in) financing activities 7,646   (44,987) 
Effect of exchange rate changes on cash and cash equivalents 2,337   3,705  
     
Net increase in cash and cash equivalents 27,605   55,789  
     
Cash and cash equivalents at beginning of period 471,781   475,507  
Cash and cash equivalents at end of period$499,386  $531,296  
     
* recast for the retrospective adoption of ASU 2016-09.    
     

 

VISHAY INTERTECHNOLOGY, INC.
     
Reconciliation of Adjusted Earnings Per Share
     
(Unaudited - In thousands, except per share amounts)
     
      
 Fiscal quarters ended     
 April 1, 2017 December 31, 2016 April 2, 2016     
           
GAAP net earnings (loss) attributable to Vishay stockholders$36,719  $(48,748) $28,014      
           
Reconciling items affecting operating income (loss):          
Restructuring and severance costs$1,469  $7,060  $6,475      
U.S. pension settlement charges -   79,321   -      
           
Reconciling items affecting other income (expense):          
Loss on disposal of equity affiliate$7,060  $-  $-      
Gain on early extinguishment of debt -   -   (3,611)     
Loss (gain) related to Tianjin explosion -   (8,809)  -      
           
Reconciling items affecting tax expense (benefit):          
Effects of cash repatriation program$(968) $(165) $(769)     
Additional tax expense from AOCI - pension plan -   34,853   -      
Effects of changes in uncertain tax positions -   (8,704)  -      
Tax effects of pre-tax items above (441)  (27,465)  (887)     
           
Adjusted net earnings$43,839  $27,343  $29,222      
           
Adjusted weighted average diluted shares outstanding 154,876   152,408   150,628      
           
Adjusted earnings per diluted share*$0.28  $0.18  $0.19      
           
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.
     
           

 

VISHAY INTERTECHNOLOGY, INC.
 
Reconciliation of Free Cash
 
(Unaudited - In thousands)
 
  
 Fiscal quarters ended 
 April 1, 2017 December 31, 2016 April 2, 2016 
Net cash provided by operating activities$43,674  $83,439  $20,700  
Proceeds from sale of property and equipment 943   4,460   64  
Less: Capital expenditures (16,668)  (53,289)  (19,756) 
Free cash$27,949  $34,610  $1,008  
       

 

VISHAY INTERTECHNOLOGY, INC.
 
Reconciliation of EBITDA and Adjusted EBITDA
 
(Unaudited - In thousands) 
 
  
 Fiscal quarters ended 
 April 1, 2017 December 31, 2016 April 2, 2016 
       
GAAP net earnings (loss) attributable to Vishay stockholders$36,719  $(48,748) $28,014  
Net earnings (loss) attributable to noncontrolling interests 230   144   138  
Net earnings (loss)$36,949  $(48,604) $28,152  
       
Interest expense$6,790  $6,722  $6,466  
Interest income (1,263)  (1,064)  (1,133) 
Income taxes 13,493   7,284   10,320  
Depreciation and amortization 40,212   40,220   40,017  
EBITDA$96,181  $4,558  $83,822  
       
Reconciling items      
Restructuring and severance costs$1,469  $7,060  $6,475  
Loss on disposal of equity affiliate 7,060   -   -  
U.S. pension settlement charges -   79,321   -  
Gain on early extinguishment of debt -   -   (3,611) 
Loss (gain) related to Tianjin explosion -   (8,809)  -  
       
Adjusted EBITDA$104,710  $82,130  $86,686  
       
Adjusted EBITDA margin** 17.3%  14.4%  15.2% 
       
** Adjusted EBITDA as a percentage of net revenues  


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