Vishay Reports Results for Second Quarter 2022

Rhea-AI Summary

Vishay Intertechnology (NYSE: VSH) reported Q2 2022 revenues of $864 million, up from $854 million in Q1 2022 and $819 million in Q2 2021. Net earnings reached $112.4 million or $0.78 per diluted share, increasing from $103.6 million ($0.71/share) in Q1 2022. The adjusted EPS was $0.82. The company declared $40.6 million in stockholder returns through dividends and stock buybacks. For Q3 2022, it projects revenues between $860 million and $900 million, with a gross margin of 29.0% plus/minus 50 basis points.

Positive

• Q2 2022 revenues increased to $864 million, exceeding Q1 2022 figures of $854 million.
• Net earnings rose to $112.4 million in Q2 2022, compared to $103.6 million in Q1 2022.
• Adjusted EPS increased to $0.82 in Q2 2022, up from $0.71 in Q1 2022.
• Total stockholder return for Q2 2022 was $40.6 million, including $14.3 million in dividends.

Negative

• Gross margin for Q2 2022 was lower at 30.3% compared to previous periods.
• Projected gross margin for Q3 2022 is expected to decrease to 29.0%.

• Revenues Q2 of $864 million.
• Gross margin Q2 of 30.3%; adjusted gross margin of 31.0%
• Operating margin Q2 of 17.5%; adjusted operating margin of 18.3%.
• EPS Q2 of $0.78; adjusted EPS of $0.82.
• Free Cash for the trailing 12 months of $139 million.
• Total Stockholder Return Q2 of $40.6 million--$14.3 million of dividend payments and $26.3 million of stock repurchases.
• Guidance Q3 2022 for revenues of $860 to $900 million and at a gross margin of 29.0% plus/minus 50 basis points at an exchange rate USD/EUR of 0.98.
  

MALVERN, Pa., Aug. 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 six fiscal months ended July 2, 2022.

Revenues for the fiscal quarter ended July 2, 2022 were $863.5 million, compared to $853.8 million for the fiscal quarter ended April 2, 2022, and $819.1 million for the fiscal quarter ended July 3, 2021.  Net earnings attributable to Vishay stockholders for the fiscal quarter ended July 2, 2022 were $112.4 million, or $0.78 per diluted share, compared to $103.6 million, or $0.71 per diluted share for the fiscal quarter ended April 2, 2022, and $93.2 million, or $0.64 per diluted share for the fiscal quarter ended July 3, 2021.

As summarized on the attached reconciliation schedule, certain periods presented include items affecting comparability.  Adjusted earnings per diluted share, which exclude these unusual items, were $0.82, $0.71, and $0.61 for the fiscal quarters ended July 2, 2022, April 2, 2022, and July 3, 2021, respectively.

Commenting on results for the second quarter 2022, Dr. Gerald Paul, President and Chief Executive Officer stated, “Despite a stronger US dollar and prolonged COVID related shutdowns in Shanghai, revenues came in at the high end of our guidance. Margins were positively impacted by a temporary inventory build, which we anticipate normalizing in the second half of the year. Turns of the inventory of our products at distribution were at a good level of 3.6.”

Commenting on the outlook Dr. Paul stated, “We guide for the third quarter 2022 for revenues in the range of $860 to $900 million at a gross margin of 29.0% plus/minus 50 basis points, assuming an exchange rate of the US dollar to the Euro of 0.98.”

A conference call to discuss Vishay’s second quarter financial results is scheduled for Tuesday, August 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 13730764. 

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 Tuesday, August 2, 2022 through 11:59 p.m. ET on Tuesday, August 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 13730764. 

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, margins, product pricing, product demand, anticipated areas of growth, market segment performance, capital expenditures, 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 Henrici  
Senior Vice President, Corporate Communications  
+1-610-644-1300

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended
	July 2, 2022				April 2, 2022				July 3, 2021
Net revenues	$	863,512			$	853,793			$	819,120
Costs of products sold*		602,289				594,685				589,848
Gross profit		261,223				259,108				229,272
Gross margin		30.3	%			30.3	%			28.0	%
Selling, general, and administrative expenses*		110,400				112,855				103,900
Operating income		150,823				146,253				125,372
Operating margin		17.5	%			17.1	%			15.3	%
Other income (expense):
Interest expense		(4,307	)			(4,222	)			(4,443	)
Other		1,380				(5,751	)			(3,749	)
Total other income (expense) - net		(2,927	)			(9,973	)			(8,192	)
Income before taxes		147,896				136,280				117,180
Income tax expense		35,127				32,330				23,799
Net earnings		112,769				103,950				93,381
Less: net earnings attributable to noncontrolling interests		381				377				189
Net earnings attributable to Vishay stockholders	$	112,388			$	103,573			$	93,192
Basic earnings per share attributable to Vishay stockholders	$	0.78			$	0.71			$	0.64
Diluted earnings per share attributable to Vishay stockholders	$	0.78			$	0.71			$	0.64
Weighted average shares outstanding - basic		143,996				145,053				145,017
Weighted average shares outstanding - diluted		144,397				145,553				145,445
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)
	Six fiscal months ended
	July 2, 2022				July 3, 2021
Net revenues	$	1,717,305			$	1,583,752
Costs of products sold*		1,196,974				1,151,531
Gross profit		520,331				432,221
Gross margin		30.3	%			27.3	%
Selling, general, and administrative expenses*		223,255				209,585
Operating income		297,076				222,636
Operating margin		17.3	%			14.1	%
Other income (expense):
Interest expense		(8,529	)			(8,819	)
Other		(4,371	)			(9,480	)
Total other income (expense) - net		(12,900	)			(18,299	)
Income before taxes		284,176				204,337
Income tax expense		67,457				39,313
Net earnings		216,719				165,024
Less: net earnings attributable to noncontrolling interests		758				397
Net earnings attributable to Vishay stockholders	$	215,961			$	164,627
Basic earnings per share attributable to Vishay stockholders	$	1.49			$	1.14
Diluted earnings per share attributable to Vishay stockholders	$	1.49			$	1.13
Weighted average shares outstanding - basic		144,527				144,992
Weighted average shares outstanding - diluted		144,978				145,453
Cash dividends per share	$	0.20			$	0.19
* The six fiscal months 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.
Consolidated Condensed Balance Sheets
(In thousands)
	July 2, 2022				December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	765,593			$	774,108
Short-term investments		81,112				146,743
Accounts receivable, net		429,778				396,458
Inventories:
Finished goods		172,796				147,293
Work in process		264,123				226,496
Raw materials		196,929				162,711
Total inventories		633,848				536,500
Prepaid expenses and other current assets		160,089				156,689
Total current assets		2,070,420				2,010,498
Property and equipment, at cost:
Land		73,047				74,646
Buildings and improvements		629,015				639,879
Machinery and equipment		2,750,175				2,758,262
Construction in progress		147,345				145,828
Allowance for depreciation		(2,629,014	)			(2,639,136	)
		970,568				979,479
Right of use assets		111,881				117,635
Deferred income taxes		89,181				95,037
Goodwill		164,295				165,269
Other intangible assets, net		62,698				67,714
Other assets		94,550				107,625
Total assets	$	3,563,593			$	3,543,257

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
	July 2, 2022				December 31, 2021
	(Unaudited)
Liabilities and equity
Current liabilities:
Trade accounts payable	$	243,496			$	254,049
Payroll and related expenses		160,415				162,694
Lease liabilities		22,734				23,392
Other accrued expenses		214,865				218,089
Income taxes		62,592				35,443
Total current liabilities		704,102				693,667
Long-term debt less current portion		463,302				455,666
U.S. transition tax payable		83,010				110,681
Deferred income taxes		49,542				69,003
Long-term lease liabilities		92,208				99,987
Other liabilities		88,554				95,861
Accrued pension and other postretirement costs		242,464				271,672
Total liabilities		1,723,182				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		1,350,620				1,347,830
Retained earnings		588,803				401,694
Treasury stock (at cost)		(36,161	)			-
Accumulated other comprehensive income (loss)		(80,344	)			(20,252	)
Total Vishay stockholders' equity		1,837,419				1,743,753
Noncontrolling interests		2,992				2,967
Total equity		1,840,411				1,746,720
Total liabilities and equity	$	3,563,593			$	3,543,257

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
	Six fiscal months ended
	July 2, 2022				July 3, 2021
Operating activities
Net earnings	$	216,719			$	165,024
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		80,967				83,879
(Gain) loss on disposal of property and equipment		(293	)			(207	)
Inventory write-offs for obsolescence		10,777				9,550
Deferred income taxes		5,922				519
Other		6,733				5,758
Change in U.S. transition tax liability		(14,757	)			(14,757	)
Change in repatriation tax liability		(25,201	)			-
Changes in operating assets and liabilities		(172,555	)			(74,983	)
Net cash provided by operating activities		108,312				174,783
Investing activities
Purchase of property and equipment		(95,700	)			(60,710	)
Proceeds from sale of property and equipment		377				234
Purchase of short-term investments		(7,769	)			(27,488	)
Maturity of short-term investments		66,763				53,679
Other investing activities		(199	)			347
Net cash used in investing activities		(36,528	)			(33,938	)
Financing activities
Repurchase of convertible debt instruments		-				(300	)
Net proceeds (payments) on revolving credit lines		6,000				-
Dividends paid to common stockholders		(26,389	)			(25,216	)
Dividends paid to Class B common stockholders		(2,419	)			(2,298	)
Repurchase of common stock held in treasury		(36,161	)			-
Distributions to noncontrolling interests		(733	)			(800	)
Cash withholding taxes paid when shares withheld for vested equity awards		(2,123	)			(1,963	)
Net cash used in financing activities		(61,825	)			(30,577	)
Effect of exchange rate changes on cash and cash equivalents		(18,474	)			(3,383	)
Net increase (decrease) in cash and cash equivalents		(8,515	)			106,885
Cash and cash equivalents at beginning of period		774,108				619,874
Cash and cash equivalents at end of period	$	765,593			$	726,759

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended											Six fiscal months ended
	July 2, 2022				April 2, 2022			July 3, 2021				July 2, 2022				July 3, 2021
GAAP net earnings attributable to Vishay stockholders	$	112,388			$	103,573		$	93,192			$	215,961			$	164,627
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):
Changes in tax laws and regulations	$	-			$	-		$	(3,881	)		$	-			$	(8,276	)
Tax effects of pre-tax items above		(1,802	)			-			-				(1,802	)			-
Adjusted net earnings	$	117,793			$	103,573		$	89,311			$	221,366			$	156,351
Adjusted weighted average diluted shares outstanding		144,397				145,553			145,445				144,978				145,453
Adjusted earnings per diluted share	$	0.82			$	0.71		$	0.61			$	1.53			$	1.07

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
	Fiscal quarters ended												Six fiscal months ended
	July 2, 2022				April 2, 2022				July 3, 2021				July 2, 2022				July 3, 2021
Net cash provided by operating activities	$	74,727			$	33,585			$	117,461			$	108,312			$	174,783
Proceeds from sale of property and equipment		305				72				34				377				234
Less: Capital expenditures		(59,791	)			(35,909	)			(32,183	)			(95,700	)			(60,710	)
Free cash	$	15,241			$	(2,252	)		$	85,312			$	12,989			$	114,307

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended												Six fiscal months ended
	July 2, 2022				April 2, 2022				July 3, 2021				July 2, 2022				July 3, 2021
GAAP net earnings attributable to Vishay stockholders	$	112,388			$	103,573			$	93,192			$	215,961			$	164,627
Net earnings attributable to noncontrolling interests		381				377				189				758				397
Net earnings	$	112,769			$	103,950			$	93,381			$	216,719			$	165,024
Interest expense	$	4,307			$	4,222			$	4,443			$	8,529			$	8,819
Interest income		(789	)			(560	)			(325	)			(1,349	)			(612	)
Income taxes		35,127				32,330				23,799				67,457				39,313
Depreciation and amortization		40,317				40,650				41,733				80,967				83,879
EBITDA	$	191,731			$	180,592			$	163,031			$	372,323			$	296,423
Reconciling items
Impact of the COVID-19 pandemic	$	7,207			$	-			$	-			$	7,207			$	-
Adjusted EBITDA	$	198,938			$	180,592			$	163,031			$	379,530			$	296,423
Adjusted EBITDA margin**		23.0	%			21.2	%			19.9	%			22.1	%			18.7	%
** Adjusted EBITDA as a percentage of net revenues

FAQ

What were the Q2 2022 earnings for Vishay Intertechnology (VSH)?

Vishay reported Q2 2022 net earnings of $112.4 million, or $0.78 per diluted share.

How much revenue did Vishay Intertechnology generate in Q2 2022?

Vishay generated revenues of $864 million in Q2 2022.

What is the guidance for Q3 2022 revenues for Vishay (VSH)?

Vishay projects Q3 2022 revenues between $860 million and $900 million.

What was the total stockholder return for Vishay in Q2 2022?

The total stockholder return in Q2 2022 was $40.6 million.

How did the adjusted EPS change from Q1 to Q2 2022 for Vishay?

The adjusted EPS increased from $0.71 in Q1 2022 to $0.82 in Q2 2022.