GlobeNewswire Inc | Aug 4, 2020 07:00AM EDT

August 04, 2020

-- Revenues Q2 of $582 million -- Gross margin Q2 of 22.5%; adjusted gross margin 22.6% -- Operating margin Q2 of 7.0%; adjusted operating margin 7.2% -- EPS Q2 of $0.17; adjusted EPS $0.18 -- Free Cash for the trailing 12 months Q2 of $151 million -- Repurchased $75.8 million principal amount of convertible notes due 2025, at approximately 93% of face value, to provide flexibility to adjust future debt levels as necessary -- Guidance Q3 for revenues of $580 to $620 million at a gross margin of 22.8% plus/minus 70 basis points, assuming a USD/EUR exchange rate of 0.87

MALVERN, Pa., Aug. 04, 2020 (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 4, 2020.

Revenues for the fiscal quarter ended July 4, 2020 were $581.7 million, compared to $612.8 million for the fiscal quarter ended April 4, 2020, and $685.2 million for the fiscal quarter ended June 29, 2019. Net earnings attributable to Vishay stockholders for the fiscal quarter ended July 4, 2020 were $24.7 million, or $0.17 per diluted share, compared to $27.2 million, or $0.19 per diluted share for the fiscal quarter ended April 4, 2020, and $44.5 million, or $0.31 per diluted share for the fiscal quarter ended June 29, 2019.

As summarized on the attached reconciliation schedule, all periods presented include items affecting comparability. Adjusted earnings per diluted share, which exclude these items net of tax and the unusual tax items, were $0.18, $0.21, and $0.36 for the fiscal quarters ended July 4, 2020, April 4, 2020, and June 29, 2019, respectively.

Commenting on results for the second quarter 2020, Dr. Gerald Paul, President and Chief Executive Officer stated, The second quarter has been strongly impacted by the lockdowns in many countries due to COVID-19, in particular the shutdown of automotive plants in Europe and the Americas. Asia, especially China, having gone through a lockdown already in the first quarter, showed a quick recovery whereas revenues in Europe and the Americas were steeply lower. The weakest end market was automotive with revenues lower by 34% compared to the first quarter.

Dr. Paul continued, On the other hand, the second quarter seems to represent the bottom of this cycle and, clearly, the fundamentals for Vishays growth remain intact. Vishay has successfully mastered temporary economic downturns in the past and we are doing so again. We continue to be focused on profitability and cash generation while safeguarding the health and well-being of our employees.

Commenting on the outlook Dr. Paul stated, For the third quarter 2020 we expect lower sales to Vishays distribution partners compensated by recovering sales to our automotive customers, and guide for revenues in the range of $580 to $620 million at a gross margin of 22.8% plus/minus 70 basis points, assuming a USD/EUR exchange rate of 0.87.

A conference call to discuss Vishays second quarter financial results is scheduled for Tuesday, August 4, 2020 at 9:00 a.m. ET. The dial-in number for the conference call is877-589-6174 (+1 706-643-1406, if calling from outside the United States or Canada) and the access code is 6075047.

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 4,2020, through 11:59 p.m. ET on Tuesday, August 12, 2020. The telephone number for the replay is +1 855-859-2056 (+1 404-537-3406, if calling from outside the United States or Canada) and the access code is 6075047.

About VishayVishay 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. Vishays 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 http://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, 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; delays or difficulties in expanding our manufacturing capacities; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19; 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.

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 July 4, 2020 quarters June 29, 2019 ended April 4, 2020Net revenues $ 581,717 $ 612,841 $ 685,240 Costs of products sold* 451,047 465,601 510,639 Gross profit 130,670 147,240 174,601 Gross margin 22.5 % 24.0 % 25.5 %Selling, general, and 89,127 99,832 95,112 administrative expenses**Restructuring and severance 743 - - costsOperating income 40,800 47,408 79,489 Operating margin 7.0 % 7.7 % 11.6 %Other income (expense): Interest expense (8,430 ) (8,552 ) (8,204 )Other (1,484 ) 198 (397 )Loss on early extinguishment of (1,146 ) (2,920 ) - debtTotal other income (expense) - (11,060 ) (11,274 ) (8,601 )netIncome before taxes 29,740 36,134 70,888 Income tax expense (benefit) 4,845 8,750 26,153 Net earnings 24,895 27,384 44,735 Less: net earnings attributable 242 165 258 to noncontrolling interestsNet earnings attributable to $ 24,653 $ 27,219 $ 44,477 Vishay stockholdersBasic earnings per shareattributable to Vishay $ 0.17 $ 0.19 $ 0.31 stockholdersDiluted earnings per shareattributable to Vishay $ 0.17 $ 0.19 $ 0.31 stockholdersWeighted average shares 144,846 144,792 144,621 outstanding - basicWeighted average shares 145,170 145,295 145,023 outstanding - dilutedCash dividends per share $ 0.095 $ 0.095 $ 0.095

* Includes incremental costs of products sold separable from normal operations directly attributable to the COVID-19 outbreak of $923 and $3,130 for the fiscal quarters ended July 4, 2020 and April 4, 2020, respectively.** Includes incremental selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 outbreak of $(747) and $317, for the fiscal quarters ended July 4, 2020 and April 4, 2020, respectively.

VISHAY INTERTECHNOLOGY, INC.Summary of Operations(Unaudited - In thousands, except per share amounts) Six fiscal months ended July 4, 2020 June 29, 2019

Net revenues $ 1,194,558 $ 1,430,399 Costs of products sold* 916,648 1,044,639 Gross profit 277,910 385,760 Gross margin 23.3 % 27.0 % Selling, general, and administrative 188,959 198,536 expenses*Restructuring and severance costs 743 - Operating income 88,208 187,224 Operating margin 7.4 % 13.1 % Other income (expense): Interest expense (16,982 ) (16,596 )Other (1,286 ) 1,515 Loss on early extinguishment of debt (4,066 ) (1,307 )Total other income (expense) - net (22,334 ) (16,388 )Income before taxes 65,874 170,836 Income tax expense 13,595 50,460 Net earnings 52,279 120,376 Less: net earnings attributable to 407 440 noncontrolling interestsNet earnings attributable to Vishay $ 51,872 $ 119,936 stockholdersBasic earnings per share attributable to $ 0.36 $ 0.83 Vishay stockholdersDiluted earnings per share attributable to $ 0.36 $ 0.83 Vishay stockholdersWeighted average shares outstanding - basic 144,818 144,589 Weighted average shares outstanding - 145,232 145,158 dilutedCash dividends per share $ 0.19 $ 0.18

* Includes incremental costs of products sold and selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 outbreak of $4,053 and $(430), respectively.

VISHAY INTERTECHNOLOGY, INC.Consolidated Condensed Balance Sheets(In thousands) July 4, 2020 December 31, 2019Assets (Unaudited) Current assets: Cash and cash equivalents $ 599,930 $ 694,133 Short-term investments 157,246 108,822 Accounts receivable, net 285,529 328,187 Inventories: Finished goods 125,177 122,466 Work in process 196,846 187,354 Raw materials 127,165 121,860 Total inventories 449,188 431,680 Prepaid expenses and other current assets 131,125 141,294 Total current assets 1,623,018 1,704,116 Property and equipment, at cost: Land 74,985 75,011 Buildings and improvements 596,942 585,064 Machinery and equipment 2,623,774 2,606,355 Construction in progress 99,932 110,722 Allowance for depreciation (2,474,456 ) (2,425,627 ) 921,177 951,525 Right of use assets 103,153 93,162 Goodwill 150,641 150,642 Other intangible assets, net 58,583 60,659 Other assets 168,274 160,671 Total assets $ 3,024,846 $ 3,120,775

VISHAY INTERTECHNOLOGY, INC.Consolidated Condensed Balance Sheets (continued)(In thousands) July 4, 2020 December 31, 2019 (Unaudited) Liabilities and equity Current liabilities: Notes payable to banks $ 1 $ 2 Trade accounts payable 148,727 173,915 Payroll and related expenses 126,302 122,100 Lease liabilities 21,443 20,217 Other accrued expenses 166,261 186,463 Income taxes 40,642 17,731 Total current liabilities 503,376 520,428 Long-term debt less current portion 438,494 499,147 U.S. transition tax payable 125,438 140,196 Deferred income taxes 4,231 22,021 Long-term lease liabilities 85,714 78,511 Other liabilities 98,134 100,207 Accrued pension and other postretirement 270,735 272,402 costsTotal liabilities 1,526,122 1,632,912 Redeemable convertible debentures - 174 Equity: Vishay stockholders' equity Common stock 13,256 13,235 Class B convertible common stock 1,210 1,210 Capital in excess of par value 1,412,775 1,425,170 Retained earnings 95,462 72,180 Accumulated other comprehensive income (26,326 ) (26,646 )(loss)Total Vishay stockholders' equity 1,496,377 1,485,149 Noncontrolling interests 2,347 2,540 Total equity 1,498,724 1,487,689 Total liabilities, temporary equity, and $ 3,024,846 $ 3,120,775 equity

VISHAY INTERTECHNOLOGY, INC.Consolidated Condensed Statements of Cash Flows(Unaudited - In thousands) Six fiscal months ended July 4, 2020 June 29, 2019Operating activities Net earnings $ 52,279 $ 120,376 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 82,158 81,346 (Gain) loss on disposal of property and (43 ) (162 )equipmentAccretion of interest on convertible debt 7,125 6,985 instrumentsInventory write-offs for obsolescence 11,587 12,643 Loss on early extinguishment of debt 4,066 1,307 Deferred income taxes (4,370 ) (5,601 )Other 954 4,283 Change in U.S. transition tax liability - (14,757 )Change in repatriation tax liability (16,258 ) (20,479 )Changes in operating assets and liabilities, (12,589 ) (50,122 )net of effects of businesses acquiredNet cash provided by operating activities 124,909 135,819 Investing activities Purchase of property and equipment (48,832 ) (70,148 )Proceeds from sale of property and equipment 230 464 Purchase of businesses, net of cash acquired - (11,862 )Purchase of short-term investments (157,086 ) (1,970 )Maturity of short-term investments 108,044 79,694 Other investing activities (529 ) 2,893 Net cash used in investing activities (98,173 ) (929 ) Financing activities Issuance costs - (5,394 )Repurchase of convertible debt instruments (90,525 ) (22,695 )Net proceeds (payments) on revolving credit - 28,000 linesNet changes in short-term borrowings (113 ) 22 Dividends paid to common stockholders (25,185 ) (23,822 )Dividends paid to Class B common stockholders (2,299 ) (2,178 )Distributions to noncontrolling interests (600 ) (600 )Cash withholding taxes paid when shares (2,016 ) (2,708 )withheld for vested equity awardsNet cash used in financing activities (120,738 ) (29,375 )Effect of exchange rate changes on cash and (201 ) (641 )cash equivalents Net increase (decrease) in cash and cash (94,203 ) 104,874 equivalentsCash and cash equivalents at beginning of 694,133 686,032 periodCash and cash equivalents at end of period $ 599,930 $ 790,906

VISHAY INTERTECHNOLOGY, INC.Reconciliation of Adjusted Earnings Per Share(Unaudited - In thousands, except per share amounts)

Fiscal quarters ended Six fiscal months ended July 4, 2020 April 4, 2020 June 29, 2019 July 4, 2020 June 29, 2019 GAAP netearningsattributable $ 24,653 $ 27,219 $ 44,477 $ 51,872 $ 119,936 to Vishaystockholders Reconcilingitems affectinggross profit:Impact of theCOVID-19 $ 923 $ 3,130 $ - $ 4,053 $ - outbreak Otherreconcilingitems affectingoperatingincome:Restructuringand severance $ 743 $ - $ - $ 743 $ - costsImpact of theCOVID-19 (747 ) 317 - (430 ) - outbreak Reconcilingitemsaffecting other income(expense):Loss on earlyextinguishment $ 1,146 $ 2,920 $ - $ 4,066 $ 1,307 of debt Reconcilingitemsaffecting tax expense(benefit):Change indeferred taxesdue to early $ - $ (1,346 ) $ - $ (1,346 ) $ (1,312 )extinguishmentof debtEffects oftax-basis - - 7,554 - 7,554 foreignexchange gainEffects ofcash (190 ) - (48 ) (190 ) (633 )repatriationprogramTax effects ofpre-tax items (589 ) (1,482 ) - (2,071 ) (290 )above Adjusted net $ 25,939 $ 30,758 $ 51,983 $ 56,697 $ 126,562 earnings Adjustedweightedaverage 145,170 145,295 145,023 145,232 145,158 diluted sharesoutstanding Adjustedearnings per $ 0.18 $ 0.21 $ 0.36 $ 0.39 $ 0.87 diluted share

VISHAY INTERTECHNOLOGY, INC.Reconciliation of Free Cash(Unaudited - In thousands) Fiscal quarters ended Six fiscal months ended July 4, 2020 April 4, 2020 June 29, 2019 July 4, 2020 June 29, 2019 Net cashprovided by $ 90,431 $ 34,478 $ 56,301 $ $ 135,819 operating 124,909activitiesProceedsfrom sale of 177 53 69 230 464 property andequipmentLess:Capital (24,504 ) (24,328 ) (33,781 ) (48,832 ) (70,148 )expendituresFree cash $ 66,104 $ 10,203 $ 22,589 $ $ 66,135 76,307

VISHAY INTERTECHNOLOGY, INC.Reconciliation of EBITDA and Adjusted EBITDA(Unaudited - In thousands) Fiscal quarters ended Six fiscal months ended July 4, 2020 April 4, June 29, 2019 July 4, 2020 June 29, 2019 2020 GAAP netearningsattributable $ 24,653 $ 27,219 $ 44,477 $ 51,872 $ 119,936 to VishaystockholdersNet earningsattributableto 242 165 258 407 440 noncontrollinginterestsNet earnings $ 24,895 $ 27,384 $ 44,735 $ 52,279 $ 120,376 Interest $ 8,430 $ 8,552 $ 8,204 $ 16,982 $ 16,596 expenseInterest (956 ) (1,854 ) (2,147 ) (2,810 ) (4,346 )incomeIncome taxes 4,845 8,750 26,153 13,595 50,460 Depreciationand 40,638 41,520 40,918 82,158 81,346 amortizationEBITDA $ 77,852 $ 84,352 $ 117,863 $ 162,204 $ 264,432 Reconciling itemsImpact of theCOVID-19 $ 176 $ 3,447 $ - $ 3,623 $ - outbreakRestructuringand severance 743 - - 743 - costsLoss on earlyextinguishment 1,146 2,920 - 4,066 1,307 of debt Adjusted $ 79,917 $ 90,719 $ 117,863 $ 170,636 $ 265,739 EBITDA AdjustedEBITDA 13.7 % 14.8 % 17.2 % 14.3 % 18.6 %margin** ** AdjustedEBITDA as a percentage ofnet revenues