Vishay Reports Results for Second Quarter 2021

Rhea-AI Summary

Vishay Intertechnology (VSH) reported Q2 revenues of $819 million, surpassing $764.6 million in Q1 and $581.7 million in Q2 2020. Gross margin stood at 28.0% and operating margin at 15.3%. EPS was $0.64, with adjusted EPS at $0.61. Free cash flow over the trailing 12 months reached $230 million. For Q3 2021, Vishay guides revenues between $810 million and $850 million with a gross margin of 28.3%, reflecting strong demand in industrial markets despite capacity constraints.

Positive

• Q2 revenues increased by $54.5 million from Q1 and $237.4 million from Q2 2020.
• Gross margin improved to 28.0%, supporting strong profitability.
• Record sales in industrial markets indicate strong demand.
• Free cash flow of $230 million enhances financial flexibility.
• Positive Q3 guidance showing expected revenues of $810 million to $850 million.

Negative

• Sales are currently limited by capacity constraints.

• Revenues Q2 of $819 million.
  
• Gross margin Q2 of 28.0%.
• Operating margin Q2 of 15.3%.
• EPS Q2 of $0.64; adjusted EPS of $0.61.
• Free Cash for the trailing 12 months Q2 of $230 million.
• Guidance Q3 2021 for revenues of $810 to $850 million and at a gross margin of 28.3% plus/minus 50 basis points at Q2 exchange rates.

MALVERN, Pa., Aug. 10, 2021 (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 3, 2021.

Revenues for the fiscal quarter ended July 3, 2021 were $819.1 million, compared to $764.6 million for the fiscal quarter ended April 3, 2021, and $581.7 million for the fiscal quarter ended July 4, 2020. Net earnings attributable to Vishay stockholders for the fiscal quarter ended July 3, 2021 were $93.2 million, or $0.64 per diluted share, compared to $71.4 million, or $0.49 per diluted share for the fiscal quarter ended April 3, 2021, and $24.7 million, or $0.17 per diluted share for the fiscal quarter ended July 4, 2020.

As summarized on the attached reconciliation schedule, all periods presented include items affecting comparability. Adjusted earnings per diluted share, which exclude certain items net of tax and the unusual tax items, were $0.61, $0.46, and $0.18 for the fiscal quarters ended July 3, 2021, April 3, 2021, and July 4, 2020, respectively.

Commenting on results for the second quarter 2021, Dr. Gerald Paul, President and Chief Executive Officer stated, “In the second quarter of 2021, the steep upturn of our business that began in October of last year continued unbroken. Sales at this time are limited by our capacity. Inventory turns of Vishay’s products at distribution increased again in all regions compared to the previous quarter. Sales to the industrial markets reached record levels.”

Commenting on the outlook Dr. Paul stated, “For the third quarter 2021 we guide for revenues in the range of $810 to $850 million at a gross margin of 28.3% plus/minus 50 basis points at the exchange rates of Q2 2021.”

A conference call to discuss Vishay’s second quarter financial results is scheduled for Tuesday, August 10, 2021 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 access code is 6716307.

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 from 1:00 p.m. ET on Tuesday, August 10, 2021, through 11:59 p.m. ET on Wednesday, August 25, 2021. The telephone number for the replay is 855-859-2056 (+1 404-537-3406, if calling from outside the United States or Canada) and the access code is 6716307.

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 statements with respect to forecasted revenues, margins, inventories, 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 "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; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19; 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)
	July 3, 2021				Fiscal quarters ended April 3, 2021				July 4, 2020
Net revenues	$	819,120			$	764,632			$	581,717
Costs of products sold*		589,848				561,683				451,047
Gross profit		229,272				202,949				130,670
Gross margin		28.0	%			26.5	%			22.5	%
Selling, general, and administrative expenses*		103,900				105,685				89,127
Restructuring and severance costs		-				-				743
Operating income		125,372				97,264				40,800
Operating margin		15.3	%			12.7	%			7.0	%
Other income (expense):
Interest expense		(4,443	)			(4,376	)			(8,430	)
Loss on early extinguishment of debt		-				-				(1,146	)
Other		(3,749	)			(5,731	)			(1,484	)
Total other income (expense) - net		(8,192	)			(10,107	)			(11,060	)
Income before taxes		117,180				87,157				29,740
Income tax expense		23,799				15,514				4,845
Net earnings		93,381				71,643				24,895
Less: net earnings attributable to noncontrolling interests		189				208				242
Net earnings attributable to Vishay stockholders	$	93,192			$	71,435			$	24,653
Basic earnings per share attributable to Vishay stockholders	$	0.64			$	0.49			$	0.17
Diluted earnings per share attributable to Vishay stockholders	$	0.64			$	0.49			$	0.17
Weighted average shares outstanding - basic		145,017				144,968				144,846
Weighted average shares outstanding - diluted		145,445				145,463				145,170
Cash dividends per share	$	0.095			$	0.095			$	0.095
* The fiscal quarter ended July 4, 2020 includes incremental costs of products sold and selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 pandemic of $923 and $(747), respectively.

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
	Six fiscal months ended
	July 3, 2021				July 4, 2020
Net revenues	$	1,583,752			$	1,194,558
Costs of products sold*		1,151,531				916,648
Gross profit		432,221				277,910
Gross margin		27.3	%			23.3	%
Selling, general, and administrative expenses*		209,585				188,959
Restructuring and severance costs		-				743
Operating income		222,636				88,208
Operating margin		14.1	%			7.4	%
Other income (expense):
Interest expense		(8,819	)			(16,982	)
Loss on early extinguishment of debt		-				(4,066	)
Other		(9,480	)			(1,286	)
Total other income (expense) - net		(18,299	)			(22,334	)
Income before taxes		204,337				65,874
Income tax expense		39,313				13,595
Net earnings		165,024				52,279
Less: net earnings attributable to noncontrolling interests		397				407
Net earnings attributable to Vishay stockholders	$	164,627			$	51,872
Basic earnings per share attributable to Vishay stockholders	$	1.14			$	0.36
Diluted earnings per share attributable to Vishay stockholders	$	1.13			$	0.36
Weighted average shares outstanding - basic		144,992				144,818
Weighted average shares outstanding - diluted		145,453				145,232
Cash dividends per share	$	0.19			$	0.19
* The six fiscal months ended July 4, 2020 includes incremental costs of products sold and selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 pandemic of $4,053 and $(430), respectively.

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
	July 3, 2021				December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	726,759			$	619,874
Short-term investments	129,035				158,476
Accounts receivable, net	398,651				338,632
Inventories:
Finished goods	144,993				120,792
Work in process	218,414				201,259
Raw materials	144,472				126,200
Total inventories	507,879				448,251
Prepaid expenses and other current assets	149,346				132,103
Total current assets	1,911,670				1,697,336
Property and equipment, at cost:
Land	75,547				76,231
Buildings and improvements	636,540				641,041
Machinery and equipment	2,745,465				2,732,771
Construction in progress	91,386				86,520
Allowance for depreciation	(2,633,944		)		(2,593,398		)
	914,994				943,165
Right of use assets	107,426				102,440
Goodwill	157,991				158,183
Other intangible assets, net	61,799				66,795
Other assets	196,903				186,554
Total assets	$	3,350,783			$	3,154,473

 

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
	July 3, 2021				December 31, 2020
	(Unaudited)
Liabilities and equity
Current liabilities:
Trade accounts payable	$	224,226			$	196,203
Payroll and related expenses	151,668				141,034
Lease liabilities	21,542				22,074
Other accrued expenses	210,061				182,642
Income taxes	31,617				20,470
Total current liabilities	639,114				562,423
Long-term debt less current portion	454,031				394,886
U.S. transition tax payable	110,681				125,438
Deferred income taxes	1,869				1,852
Long-term lease liabilities	91,880				86,220
Other liabilities	105,631				104,356
Accrued pension and other postretirement costs	288,159				300,113
Total liabilities	1,691,365				1,575,288
Redeemable convertible debentures	-				170
Equity:
Vishay stockholders' equity
Common stock	13,271				13,256
Class B convertible common stock	1,210				1,210
Capital in excess of par value	1,346,132				1,409,200
Retained earnings	296,629				138,990
Accumulated other comprehensive income (loss)	(221		)		13,559
Total Vishay stockholders' equity	1,657,021				1,576,215
Noncontrolling interests	2,397				2,800
Total equity	1,659,418				1,579,015
Total liabilities, temporary equity, and equity	$	3,350,783			$	3,154,473

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
	Six fiscal months ended
	July 3, 2021				July 4, 2020
Operating activities
Net earnings	$	165,024			$	52,279
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	83,879				82,158
Gain on disposal of property and equipment	(207		)		(43		)
Accretion of interest on convertible debt instruments	-				7,125
Inventory write-offs for obsolescence	9,550				11,587
Loss on early extinguishment of debt	-				4,066
Deferred income taxes	519				(4,370		)
Other	5,758				954
Change in U.S. transition tax liability	(14,757		)		-
Change in repatriation tax liability	-				(16,258		)
Changes in operating assets and liabilities	(74,983		)		(12,589		)
Net cash provided by operating activities	174,783				124,909
Investing activities
Purchase of property and equipment	(60,710		)		(48,832		)
Proceeds from sale of property and equipment	234				230
Purchase of short-term investments	(27,488		)		(157,086		)
Maturity of short-term investments	53,679				108,044
Other investing activities	347				(529		)
Net cash used in investing activities	(33,938		)		(98,173		)
Financing activities
Repurchase of convertible debt instruments	(300		)		(90,525		)
Net changes in short-term borrowings	-				(113		)
Dividends paid to common stockholders	(25,216		)		(25,185		)
Dividends paid to Class B common stockholders	(2,298		)		(2,299		)
Distributions to noncontrolling interests	(800		)		(600		)
Cash withholding taxes paid when shares withheld for vested equity awards	(1,963		)		(2,016		)
Net cash used in financing activities	(30,577		)		(120,738		)
Effect of exchange rate changes on cash and cash equivalents	(3,383		)		(201		)
Net increase (decrease) in cash and cash equivalents	106,885				(94,203		)
Cash and cash equivalents at beginning of period	619,874				694,133
Cash and cash equivalents at end of period	$	726,759			$	599,930

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended												Six fiscal months ended
	July 3, 2021				April 3, 2021				July 4, 2020				July 3, 2021				July 4, 2020
GAAP net earnings attributable to Vishay stockholders	$	93,192			$	71,435			$	24,653			$	164,627			$	51,872
Reconciling items affecting gross profit:
Impact of the COVID-19 pandemic	$	-			$	-			$	923			$	-			$	4,053
Other reconciling items affecting operating income:
Restructuring and severance costs	$	-			$	-			$	743			$	-			$	743
Impact of the COVID-19 pandemic	$	-			$	-			$	(747	)			-			(430		)
Reconciling items affecting other income (expense):
Loss on early extinguishment of debt	$	-			$	-			$	1,146			$	-			$	4,066
Reconciling items affecting tax expense (benefit):
Changes in tax regulation	$	(3,881	)		$	(4,395	)		$	-			$	(8,276	)		$	-
Change in deferred taxes due to early extinguishment of debt	-				-				-				-				(1,346		)
Effects of cash repatriation program	-				-				(190		)		-				(190		)
Tax effects of pre-tax items above	-				-				(589		)		-				(2,071		)
Adjusted net earnings	$	89,311			$	67,040			$	25,939			$	156,351			$	56,697
Adjusted weighted average diluted shares outstanding	145,445				145,463				145,170				145,453				145,232
Adjusted earnings per diluted share	$	0.61			$	0.46			$	0.18			$	1.07			$	0.39

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
	Fiscal quarters ended												Six fiscal months ended
	July 3, 2021				April 3, 2021				July 4, 2020				July 3, 2021				July 4, 2020
Net cash provided by operating activities	$	117,461			$	57,322			$	90,431			$	174,783			$	124,909
Proceeds from sale of property and equipment	34				200				177				234				230
Less: Capital expenditures	(32,183		)		(28,527		)		(24,504		)		(60,710		)		(48,832		)
Free cash	$	85,312			$	28,995			$	66,104			$	114,307			$	76,307

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended												Six fiscal months ended
	July 3, 2021				April 3, 2021				July 4, 2020				July 3, 2021				July 4, 2020
GAAP net earnings attributable to Vishay stockholders	$	93,192			$	71,435			$	24,653			$	164,627			$	51,872
Net earnings attributable to noncontrolling interests	189				208				242				397				407
Net earnings	$	93,381			$	71,643			$	24,895			$	165,024			$	52,279
Interest expense	$	4,443			$	4,376			$	8,430			$	8,819			$	16,982
Interest income	(325		)		(287		)		(956		)		(612		)		(2,810		)
Income taxes	23,799				15,514				4,845				39,313				13,595
Depreciation and amortization	41,733				42,146				40,638				83,879				82,158
EBITDA	$	163,031			$	133,392			$	77,852			$	296,423			$	162,204
Reconciling items
Impact of the COVID-19 pandemic	$	-			$	-			$	176			$	-			$	3,623
Restructuring and severance costs	-				-				743				-				743
Loss on early extinguishment of debt	-				-				1,146				-				4,066
Adjusted EBITDA	$	163,031			$	133,392			$	79,917			$	296,423			$	170,636
Adjusted EBITDA margin**	19.9		%		17.4		%		13.7		%		18.7		%		14.3		%
** Adjusted EBITDA as a percentage of net revenues

FAQ

What were Vishay's Q2 2021 revenue figures?

Vishay reported Q2 2021 revenues of $819 million.

What is Vishay's EPS for Q2 2021?

The EPS for Q2 2021 was $0.64, with an adjusted EPS of $0.61.

What does Vishay forecast for Q3 2021 revenues?

Vishay forecasts Q3 2021 revenues between $810 million and $850 million.

What gross margin did Vishay achieve in Q2 2021?

Vishay achieved a gross margin of 28.0% in Q2 2021.

How much free cash flow did Vishay generate over the past 12 months?

Vishay generated $230 million in free cash flow over the trailing 12 months.