Vishay Intertechnology Reports Fiscal Fourth Quarter and Full Year 2023 Results

Rhea-AI Summary

Vishay Intertechnology, Inc. announced its fiscal fourth quarter and year-end results for 2023, with revenues of $785.2 million and EPS of $0.37 for the fourth quarter. The company returned $34.8 million to stockholders and reported a total stockholder return of $134.3 million for FY 2023. Despite trends in inventory adjustments and softened demand in industrial end markets, Vishay's President and CEO, Joel Smejkal, remains optimistic about the company's future and its ability to invest in capacity and prepare for long-term demand trends. The company expects revenues in the range of $735 million for the first quarter of 2024.

Insights

Financial Analyst

Vishay Intertechnology's fiscal fourth quarter and full year earnings provide a snapshot of the company's financial health and operational efficiency. The reported revenue of $785.2 million and earnings per share (EPS) of $0.37 for the fourth quarter, along with a book-to-bill ratio of 0.75, are critical metrics for investors. The book-to-bill ratio, being below 1, suggests that the company is booking fewer orders than it is billing, which could be indicative of slowing demand for Vishay's products.

Moreover, the backlog of 5.3 months provides insight into future revenue potential, although it also suggests that customers may be taking longer to fulfill orders. The free cash flow of $37.4 million is a key indicator of the company's ability to generate cash after capital expenditures, which is essential for funding operations, reducing debt, or returning value to shareholders through dividends and buybacks, as evidenced by the $34.8 million returned to stockholders.

The outlook for the first quarter of 2024, with expected revenues in the range of $735 million and a gross profit margin of around 24%, offers a forward-looking perspective. This projection is significant for investors as it provides a benchmark against which future performance will be measured.

Market Research Analyst

The semiconductor and electronic components industry is highly cyclical and Vishay's report of softened demand in industrial end markets aligns with broader industry trends. The mention of inventory adjustments and contracting lead times reflects the current state of the supply chain and inventory management challenges facing the industry.

Management's strategy to broaden participation with distribution partners suggests a shift in sales strategy to mitigate the effects of fluctuating demand. This is a strategic move that could position Vishay favorably once the demand rebounds, especially in the anticipated growth areas of e-mobility, sustainability and connectivity.

Investors should note the company's focus on maintaining a strong balance sheet and liquidity, which is crucial for weathering periods of uncertainty and investing in future growth opportunities. The emphasis on a distribution strategy to benefit from an expected demand rebound is also noteworthy, as it could lead to improved market responsiveness and sales performance.

Economist

The financial results reported by Vishay Intertechnology provide insights into the broader economic trends affecting the tech sector. The company's performance, particularly the inventory digestion and softened demand, may be reflective of macroeconomic conditions such as fluctuating consumer demand, global trade tensions and shifts in technology spending.

The capital expenditures of $329.4 million in FY 2023 indicate a significant investment in production capacity, which could have implications for the company's operational leverage and fixed costs. In an environment where demand is softening, high fixed costs can lead to reduced profitability. However, these investments may also enable Vishay to meet long-term demand efficiently, particularly in high-growth sectors like e-mobility and connectivity.

It is important for stakeholders to consider the potential impact of economic cycles on Vishay's business, as periods of inventory adjustment can affect short-term profitability but may also provide opportunities for companies with strong balance sheets to invest in strategic initiatives that will pay off when the economic climate improves.

MALVERN, Pa., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc., (NYSE: VSH), one of the world's largest manufacturers of discrete semiconductors and passive electronic components, today announced results for the fiscal fourth quarter and year ended December 31, 2023.

Highlights

• 4Q 2023 revenues of $785.2 million
• 4Q 2023 EPS of $0.37
• 4Q 2023 book-to-bill of 0.75
• Backlog at quarter end was 5.3 months
• Returned a total of $34.8 million to stockholders
• FY 2023 capex of $329.4 million
• FY 2023 free cash flow of $37.4 million
• FY 2023 total stockholder return of $134.3 million

“For the fourth quarter, the trends in inventory adjustments, contracting lead times and softened demand in industrial end markets became more apparent. While customers continue to digest higher inventory levels, we proceeded to implement our strategy to broaden participation with our distribution partners,” said Joel Smejkal, President and Chief Executive Officer.

“Looking ahead, input from our customers and distribution partners suggest we will be dealing with an inventory digestion for the first half of the year, although some end markets are expected to rebound sooner. During this period of inventory adjustment, our strong balance sheet and liquidity gives us the resources to continue investing in incremental capacity and preparing Vishay for the long-term demand trends of e-mobility, sustainability and connectivity. Near term we intend to advance our distribution strategy which positions us to timely benefit from a rebound in demand,” concluded Mr. Smejkal.

1Q 2024 Outlook
For the first quarter of 2024, management expects revenues in the range of $735 million +/- $20 million and a gross profit margin in the range of 24.0% +/- 50 basis points.

Conference Call
A conference call to discuss Vishay’s fourth quarter financial results is scheduled for Wednesday, February 7, 2024 at 9:00 a.m. ET. To participate in the live conference call, please pre-register at https://register.vevent.com/register/BI3f265da18e964024a9221557bd90d469. Upon registering, you will be emailed a dial-in number, and unique PIN.

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 available on the Investor Relations website approximately one hour following the call and will remain available for 30 days.

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, capital investment, capacity expansion, stockholder returns, 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 and expressions such as “intend,” “suggest”, “guide,” “will,” “expect,” 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 (including due to political, economic, and health instability and military conflicts and hostilities); 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; the timing of the Newport wafer fab acquisition; that the Newport wafer fab acquisition may not be consummated, including as a result of any of the conditions precedent (including the failure to obtain any required approvals or consents); global market downturn conditions and volatilities impacting the completion of the acquisition; that the fab will not be integrated successfully into the Company’s overall business; that the expected benefits of the acquisition may not be realized; that the fab’s standards, procedures and controls will not be brought into conformance within the Company’s operation; difficulties in transitioning and retaining fab employees following the acquisition; difficulties in consolidating facilities and transferring processes and know-how; the diversion of our management’s attention from the management of our current business; 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 Henrici
Executive Vice President, Corporate Development
+1-610-644-1300

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended
	December 31, 2023				September 30, 2023				December 31, 2022
Net revenues	$	785,236			$	853,653			$	855,298
Costs of products sold		584,572				616,010				606,178
Gross profit		200,664				237,643				249,120
Gross margin		25.6	%			27.8	%			29.1	%
Selling, general, and administrative expenses		122,834				122,513				113,812
Operating income		77,830				115,130				135,308
Operating margin		9.9	%			13.5	%			15.8	%
Other income (expense):
Interest expense		(6,454	)			(7,153	)			(4,490	)
Loss on early extinguishment of debt		-				(18,874	)			-
Other		9,268				7,409				(2,618	)
Total other income (expense) - net		2,814				(18,618	)			(7,108	)
Income before taxes		80,644				96,512				128,200
Income tax expense		28,690				30,557				54,999
Net earnings		51,954				65,955				73,201
Less: net earnings attributable to noncontrolling interests		482				426				413
Net earnings attributable to Vishay stockholders	$	51,472			$	65,529			$	72,788
Basic earnings per share attributable to Vishay stockholders	$	0.37			$	0.47			$	0.51
Diluted earnings per share attributable to Vishay stockholders	$	0.37			$	0.47			$	0.51
Weighted average shares outstanding - basic		138,318				139,083				141,643
Weighted average shares outstanding - diluted		139,266				140,001				142,247
Cash dividends per share	$	0.10			$	0.10			$	0.10

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(In thousands, except per share amounts)
	Years ended
	December 31, 2023				December 31, 2022
	(unaudited)
Net revenues	$	3,402,045			$	3,497,401
Costs of products sold*		2,427,552				2,438,412
Gross profit		974,493				1,058,989
Gross margin		28.6	%			30.3	%
Selling, general, and administrative expenses*		488,349				443,503
Operating income		486,144				615,486
Operating margin		14.3	%			17.6	%
Other income (expense):
Interest expense		(25,131	)			(17,129	)
Loss on early extinguishment of debt		(18,874	)			-
Other		25,263				(4,852	)
Total other income (expense) - net		(18,742	)			(21,981	)
Income before taxes		467,402				593,505
Income tax expense		141,889				163,022
Net earnings		325,513				430,483
Less: net earnings attributable to noncontrolling interests		1,693				1,673
Net earnings attributable to Vishay stockholders	$	323,820			$	428,810
Basic earnings per share attributable to Vishay stockholders	$	2.32			$	2.99
Diluted earnings per share attributable to Vishay stockholders	$	2.31			$	2.98
Weighted average shares outstanding - basic		139,447				143,399
Weighted average shares outstanding - diluted		140,246				143,915
Cash dividends per share	$	0.40			$	0.40
* The year ended December 31, 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)
	December 31, 2023				December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	972,719			$	610,825
Short-term investments		35,808				305,272
Accounts receivable, net		426,674				416,178
Inventories:
Finished goods		167,083				156,234
Work in process		267,339				261,345
Raw materials		213,098				201,300
Total inventories		647,520				618,879
Prepaid expenses and other current assets		214,443				170,056
Total current assets		2,297,164				2,121,210
Property and equipment, at cost:
Land		77,006				75,907
Buildings and improvements		719,387				658,829
Machinery and equipment		3,053,868				2,857,636
Construction in progress		290,593				243,038
Allowance for depreciation		(2,846,208	)			(2,704,951	)
		1,294,646				1,130,459
Right of use assets		126,829				131,193
Deferred income taxes		137,394				104,667
Goodwill		201,416				201,432
Other intangible assets, net		72,333				77,896
Other assets		110,141				98,796
Total assets	$	4,239,923			$	3,865,653

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
	December 31, 2023				December 31, 2022
	(Unaudited)
Liabilities and equity
Current liabilities:
Trade accounts payable	$	191,002			$	189,099
Payroll and related expenses		161,940				166,079
Lease liabilities		26,485				25,319
Other accrued expenses		239,350				261,606
Income taxes		73,098				84,155
Total current liabilities		691,875				726,258
Long-term debt less current portion		818,188				500,937
U.S. transition tax payable		47,027				83,010
Deferred income taxes		95,776				117,183
Long-term lease liabilities		102,830				108,493
Other liabilities		87,918				92,530
Accrued pension and other postretirement costs		195,503				187,092
Total liabilities		2,039,117				1,815,503
Equity:
Vishay stockholders' equity
Common stock		13,319				13,291
Class B convertible common stock		1,210				1,210
Capital in excess of par value		1,291,499				1,352,321
Retained earnings		1,041,372				773,228
Treasury stock (at cost)		(161,656	)			(82,972	)
Accumulated other comprehensive income (loss)		10,337				(10,827	)
Total Vishay stockholders' equity		2,196,081				2,046,251
Noncontrolling interests		4,725				3,899
Total equity		2,200,806				2,050,150
Total liabilities and equity	$	4,239,923			$	3,865,653

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(In thousands)
	Years ended
	December 31, 2023				December 31, 2022
	(unaudited)
Operating activities
Net earnings	$	325,513			$	430,483
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		184,373				163,991
(Gain) loss on disposal of property and equipment		(554	)			(455	)
Inventory write-offs for obsolescence		37,426				26,898
Pensions and other postretirement benefits, net of contributions		(9,559	)			(615	)
Stock compensation expense		16,532				6,545
Loss on early extinguishment of debt		18,874				-
Deferred income taxes		36,783				38,677
Other		9,442				835
Change in U.S. transition tax liability		(27,670	)			(14,757	)
Change in repatriation tax liability		(63,600	)			(25,201	)
Changes in operating assets and liabilities		(161,857	)			(142,113	)
Net cash provided by operating activities		365,703				484,288
Investing activities
Purchase of property and equipment		(329,410	)			(325,308	)
Proceeds from sale of property and equipment		1,156				1,198
Purchase and deposits for businesses, net of cash acquired		(13,753	)			(50,000	)
Purchase of short-term investments		(117,523	)			(285,956	)
Maturity of short-term investments		387,898				132,901
Other investing activities		(1,219	)			(1,766	)
Net cash used in investing activities		(72,851	)			(528,931	)
Financing activities
Proceeds from long-term borrowings		750,000				-
Repurchase of convertible debt instruments		(386,745	)			-
Net proceeds (payments) on revolving credit facility		(42,000	)			42,000
Debt issuance costs		(26,823	)			-
Cash paid for capped call		(94,200	)			-
Dividends paid to common stockholders		(50,787	)			(52,348	)
Dividends paid to Class B common stockholders		(4,839	)			(4,839	)
Repurchase of common stock held in treasury		(78,684	)			(82,972	)
Distributions to noncontrolling interests		(867	)			(741	)
Cash withholding taxes paid when shares withheld for vested equity awards		(3,994	)			(2,123	)
Net cash provided by (used in) financing activities		61,061				(101,023	)
Effect of exchange rate changes on cash and cash equivalents		7,981				(17,617	)
Net increase (decrease) in cash and cash equivalents		361,894				(163,283	)
Cash and cash equivalents at beginning of period		610,825				774,108
Cash and cash equivalents at end of period	$	972,719			$	610,825

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended											Years ended
	December 31, 2023			September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
GAAP net earnings attributable to Vishay stockholders	$	51,472		$	65,529			$	72,788			$	323,820			$	428,810
Reconciling items affecting gross profit:
Impact of the COVID-19 pandemic	$	-		$	-			$	-			$	-			$	6,661
Other reconciling items affecting operating income:
Impact of the COVID-19 pandemic	$	-		$	-			$	-			$	-			$	546
Reconciling items affecting other income (expense):
Loss on early extinguishment of debt	$	-		$	18,874			$	-			$	18,874			$	-
Reconciling items affecting tax expense (benefit):
Effect of changes in uncertain tax positions	$	-		$	-			$	-			$	-			$	(5,941	)
Effects of changes in valuation allowances		-			-				(33,669	)			-				(33,669	)
Effect of change in indefinite reversal assertion		-			-				59,642				-				59,642
Tax effects of pre-tax items above		-			(498	)			-				(498	)			(1,802	)
Adjusted net earnings	$	51,472		$	83,905			$	98,761			$	342,196			$	454,247
Adjusted weighted average diluted shares outstanding		139,266			140,001				142,247				140,246				143,915
Adjusted earnings per diluted share	$	0.37		$	0.60			$	0.69			$	2.44			$	3.16

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
	Fiscal quarters ended												Years ended
	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Net cash provided by operating activities	$	6,268			$	122,303				166,496			$	365,703			$	484,288
Proceeds from sale of property and equipment		122				21				726				1,156				1,198
Less: Capital expenditures		(145,331	)			(66,829	)			(153,133	)			(329,410	)			(325,308	)
Free cash	$	(138,941	)		$	55,495			$	14,089			$	37,449			$	160,178

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended												Years ended
	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
GAAP net earnings attributable to Vishay stockholders	$	51,472			$	65,529			$	72,788			$	323,820			$	428,810
Net earnings attributable to noncontrolling interests		482				426				413				1,693				1,673
Net earnings	$	51,954			$	65,955			$	73,201			$	325,513			$	430,483
Interest expense	$	6,454			$	7,153			$	4,490			$	25,131			$	17,129
Interest income		(9,934	)			(9,183	)			(4,374	)			(31,353	)			(7,560	)
Income taxes		28,690				30,557				54,999				141,889				163,022
Depreciation and amortization		50,463				46,216				42,690				184,373				163,991
EBITDA	$	127,627			$	140,698			$	171,006			$	645,553			$	767,065
Reconciling items
Impact of the COVID-19 pandemic	$	-			$	-			$	-			$	-			$	7,207
Loss on early extinguishment of debt		-				18,874				-				18,874				-
Adjusted EBITDA	$	127,627			$	159,572			$	171,006			$	664,427			$	774,272
Adjusted EBITDA margin**		16.3	%			18.7	%			20.0	%			19.5	%			22.1	%
** Adjusted EBITDA as a percentage of net revenues

FAQ

What were Vishay Intertechnology's revenues for the fiscal fourth quarter of 2023?

Vishay Intertechnology reported revenues of $785.2 million for the fiscal fourth quarter of 2023.

What was the EPS for Vishay Intertechnology in the fourth quarter of 2023?

Vishay Intertechnology's EPS for the fourth quarter of 2023 was $0.37.

What was the total stockholder return for Vishay Intertechnology in FY 2023?

Vishay Intertechnology reported a total stockholder return of $134.3 million for FY 2023.

What is Vishay Intertechnology's revenue outlook for the first quarter of 2024?

Vishay Intertechnology expects revenues in the range of $735 million for the first quarter of 2024.