VISHAY INTERTECHNOLOGY INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
October 1, 2022
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
_______
to
_______
Commission File Number
011-07416
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification Number)
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(Address of Principal Executive Offices)
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(Registrant’s Area Code and Telephone Number)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol
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Name of exchange on which registered
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||
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. ☒
Yes
☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
☒
Yes
☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of October 31, 2022 the registrant had
129,567,743
shares of its common stock (excluding treasury shares) and
12,097,148
shares of its Class B common stock outstanding.
This page intentionally left blank.
2
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q
October 1, 2022
CONTENTS
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Page Number
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||||
3
Consolidated Condensed Balance Sheets
(In thousands)
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October 1, 2022
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December 31, 2021
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|||||||
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(Unaudited)
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||||||||
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Assets
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents
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$
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$
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||||
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Short-term investments
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||||||
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Accounts receivable, net
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||||||
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Inventories:
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||||||||
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Finished goods
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||||||
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Work in process
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||||||
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Raw materials
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||||||
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Total inventories
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||||||
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Prepaid expenses and other current assets
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||||||
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Total current assets
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||||||
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Property and equipment, at cost:
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||||||||
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Land
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||||||
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Buildings and improvements
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||||||
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Machinery and equipment
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||||||
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Construction in progress
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||||||
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Allowance for depreciation
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(
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)
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(
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)
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||||
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Property and equipment, net
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||||||
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Right of use assets
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||||||
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Deferred income taxes
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||||||
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Goodwill
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||||||
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Other intangible assets, net
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||||||
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Other assets
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||||||
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Total assets
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$
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$
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||||
Continues on following page.
4
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
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October 1, 2022
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December 31, 2021
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|||||||
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(Unaudited)
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||||||||
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Liabilities and equity
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||||||||
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Current liabilities:
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||||||||
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Trade accounts payable
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$
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$
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||||
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Payroll and related expenses
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||||||
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Lease liabilities
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||||||
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Other accrued expenses
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||||||
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Income taxes
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||||||
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Total current liabilities
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||||||
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Long-term debt less current portion
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||||||
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U.S. transition tax payable
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||||||
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Deferred income taxes
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Long-term lease liabilities
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Other liabilities
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||||||
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Accrued pension and other postretirement costs
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Total liabilities
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||||||
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Equity:
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||||||||
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Vishay stockholders' equity
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||||||||
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Common stock
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||||||
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Class B convertible common stock
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||||||
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Capital in excess of par value
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Retained earnings
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||||||
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Treasury stock (at cost)
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(
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) |
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|||||
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Accumulated other comprehensive income (loss)
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(
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)
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(
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)
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||||
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Total Vishay stockholders' equity
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||||||
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Noncontrolling interests
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||||||
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Total equity
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||||||
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Total liabilities and equity
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$
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$
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||||
See accompanying notes.
5
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands, except per share amounts)
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Fiscal quarters ended
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||||||||
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October 1, 2022
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October 2, 2021
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|||||||
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Net revenues
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$
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$
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||||
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Costs of products sold
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||||||
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Gross profit
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||||||
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Selling, general, and administrative expenses
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||||||
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Operating income
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||||||
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Other income (expense):
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||||||||
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Interest expense
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(
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)
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(
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)
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||||
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Other
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(
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)
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||||
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Total other income (expense)
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(
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)
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(
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)
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||||
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Income before taxes
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||||||
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Income tax expense
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||||||
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Net earnings
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||||||
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Less: net earnings attributable to noncontrolling interests
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||||||
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Net earnings attributable to Vishay stockholders
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$
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$
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||||
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Basic earnings per share attributable to Vishay stockholders
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$
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$
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||||
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Diluted earnings per share attributable to Vishay stockholders
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$
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$
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||||
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Weighted average shares outstanding - basic
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||||||
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Weighted average shares outstanding - diluted
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||||||
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Cash dividends per share
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$
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$
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||||
See accompanying notes.
6
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands)
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Fiscal quarters ended
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||||||||
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October 1, 2022
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October 2, 2021
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|||||||
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Net earnings
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$
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$
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||||
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Other comprehensive income (loss), net of tax
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||||||||
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Pension and other post-retirement actuarial items
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||||||
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Foreign currency translation adjustment
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(
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)
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(
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)
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||||
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Other comprehensive income (loss)
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(
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)
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(
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)
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||||
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Comprehensive income
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||||||
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Less: comprehensive income attributable to noncontrolling interests
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|
|
||||||
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Comprehensive income attributable to Vishay stockholders
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$
|
|
$
|
|
||||
See accompanying notes.
7
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands, except per share amounts)
|
Nine fiscal months ended
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||||||||
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October 1, 2022
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October 2, 2021
|
|||||||
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Net revenues
|
$
|
|
$
|
|
||||
|
Costs of products sold
|
|
|
||||||
|
Gross profit
|
|
|
||||||
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Selling, general, and administrative expenses
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|
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||||||
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Operating income
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||||||
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Other income (expense):
|
||||||||
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Interest expense
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(
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)
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(
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)
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||||
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Other
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(
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)
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(
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)
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||||
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Total other income (expense)
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(
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)
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(
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)
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||||
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Income before taxes
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||||||
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Income tax expense
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||||||
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Net earnings
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|
|
||||||
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Less: net earnings attributable to noncontrolling interests
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|
|
||||||
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Net earnings attributable to Vishay stockholders
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$
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|
$
|
|
||||
|
Basic earnings per share attributable to Vishay stockholders
|
$
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|
$
|
|
||||
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Diluted earnings per share attributable to Vishay stockholders
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$
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|
$
|
|
||||
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Weighted average shares outstanding - basic
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|
|
||||||
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Weighted average shares outstanding - diluted
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|
|
||||||
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Cash dividends per share
|
$
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|
$
|
|
||||
See accompanying notes.
8
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands)
|
Nine fiscal months ended
|
||||||||
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October 1, 2022
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October 2, 2021
|
|||||||
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Net earnings
|
$
|
|
$
|
|
||||
|
Other comprehensive income (loss), net of tax
|
||||||||
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Pension and other post-retirement actuarial items
|
|
|
||||||
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Foreign currency translation adjustment
|
(
|
)
|
(
|
)
|
||||
|
Other comprehensive income (loss)
|
(
|
)
|
(
|
)
|
||||
|
Comprehensive income
|
|
|
||||||
|
Less: comprehensive income attributable to noncontrolling interests
|
|
|
||||||
|
Comprehensive income attributable to Vishay stockholders
|
$
|
|
$
|
|
||||
See accompanying notes.
9
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands)
|
Nine fiscal months ended
|
||||||||
|
October 1, 2022
|
October 2, 2021
|
|||||||
|
Operating activities
|
||||||||
|
Net earnings
|
$
|
|
$
|
|
||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
|
|
||||||
|
(Gain) loss on disposal of property and equipment
|
(
|
)
|
(
|
)
|
||||
|
Inventory write-offs for obsolescence
|
|
|
||||||
|
Deferred income taxes
|
|
(
|
)
|
|||||
|
Other
|
|
|
||||||
|
Change in U.S. transition tax liability
|
(
|
) |
(
|
) | ||||
|
Change in repatriation tax liability
|
(
|
) |
|
|||||
|
Net change in operating assets and liabilities
|
(
|
)
|
(
|
)
|
||||
|
Net cash provided by operating activities
|
|
|
||||||
|
Investing activities
|
||||||||
|
Capital expenditures
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from sale of property and equipment
|
|
|
||||||
|
Purchase of short-term investments
|
(
|
)
|
(
|
)
|
||||
|
Maturity of short-term investments
|
|
|
||||||
|
Other investing activities
|
(
|
)
|
|
|||||
|
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
|
Financing activities
|
||||||||
|
Repurchase of convertible debt instruments
|
|
(
|
)
|
|||||
|
Dividends paid to common stockholders
|
(
|
)
|
(
|
)
|
||||
|
Dividends paid to Class B common stockholders
|
(
|
)
|
(
|
)
|
||||
|
Repurchase of common stock held in treasury
|
(
|
) |
|
|||||
|
Distributions to noncontrolling interests
|
(
|
) |
(
|
) | ||||
|
Cash withholding taxes paid when shares withheld for vested equity awards
|
(
|
)
|
(
|
)
|
||||
|
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
|
Net increase (decrease) in cash and cash equivalents
|
(
|
)
|
|
|||||
|
Cash and cash equivalents at beginning of period
|
|
|
||||||
|
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
See accompanying notes.
10
VISHAY INTERTECHNOLOGY, INC.
(Unaudited - In thousands, except share and per share amounts)
|
Common
Stock
|
Class B
Convertible
Common
Stock
|
Capital in
Excess of Par
Value
|
Retained
Earnings
(Accumulated
Deficit)
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total Vishay
Stockholders'
Equity
|
Noncontrolling
Interests
|
Total
Equity
|
|||||||||||||||||||||||||
|
Balance at December 31, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
|
Cumulative effect of accounting change for adoption of ASU 2020-06
|
|
|
(
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Net earnings
|
|
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|
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|
||||||||||||||||||||||||
|
Other comprehensive income (loss)
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Issuance of stock and related tax withholdings for vested restricted stock units (
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Balance at April 3, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
|
Net earnings
|
|
|
|
|
|
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|
||||||||||||||||||||||||
|
Other comprehensive income
|
|
|
|
|
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|
|
||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Balance at July 3, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
|
Net earnings
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Other comprehensive income (loss)
|
|
|
|
|
(
|
(
|
|
(
|
||||||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Balance at October 2, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
Continues on following page.
11
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Equity (continued)
(Unaudited - In thousands, except share and per share amounts)
|
Common
Stock
|
Class B
Convertible
Common
Stock
|
Capital in
Excess of Par
Value
|
Retained
Earnings
(Accumulated
Deficit)
|
Treasury Stock
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total Vishay
Stockholders'
Equity
|
Noncontrolling
Interests
|
Total
Equity
|
||||||||||||||||||||||||||||
|
Balance at December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||
|
Net earnings
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Other comprehensive income (loss)
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||
|
Issuance of stock and related tax withholdings for vested restricted stock units
(
|
|
|
(
|
)
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Repurchase of common stock held in treasury (
|
|
|
|
|
(
|
) |
|
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Balance at April 2, 2022
|
$ |
|
|
|
|
(
|
) |
(
|
) |
|
|
|
||||||||||||||||||||||||
|
Net earnings
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Other comprehensive income (loss)
|
|
|
|
|
|
(
|
) |
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
(
|
) |
(
|
) | |||||||||||||||||||||||||
|
Issuance of stock and related tax withholdings for vested restricted stock units
(
|
|
|
(
|
) |
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
) |
|
|
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Repurchase of common stock held in treasury (
|
|
|
|
|
(
|
) |
|
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
| Balance at July 2, 2022 | $ |
|
|
|
|
(
|
) |
(
|
) |
|
|
|
||||||||||||||||||||||||
|
Net earnings
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Other comprehensive income (loss)
|
|
|
|
|
|
(
|
) |
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
(
|
) |
(
|
) | |||||||||||||||||||||||||
|
Dividends declared ($
|
|
|
|
(
|
) |
|
|
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Repurchase of common stock held in treasury (
|
|
|
|
|
(
|
) |
|
(
|
) |
|
(
|
) | ||||||||||||||||||||||||
|
Balance at October 1, 2022
|
$ |
|
|
|
|
(
|
) |
(
|
) |
|
|
|
||||||||||||||||||||||||
See accompanying notes.
12
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Basis of Presentation
The accompanying unaudited consolidated condensed financial statements of Vishay Intertechnology, Inc. (“Vishay” or the “Company”) have been prepared in
accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in
the United States (“GAAP”) for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations,
and cash flows for the interim periods presented. The financial statements should be read in conjunction with the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The
results of operations for the fiscal quarter and nine fiscal months ended October 1, 2022 are not necessarily indicative of the results to be expected for the full year.
The Company reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscal quarter,
which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31. The four fiscal quarters in 2022 end on April 2, 2022, July 2, 2022, October 1, 2022, and December 31, 2022, respectively. The four fiscal quarters
in 2021 ended on April 3, 2021, July 3, 2021, October 2, 2021, and December 31, 2021, respectively.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current financial statement presentation.
Note 2 - Acquisition Activities
As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition targets include businesses that have established positions
in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects
to further develop and commercialize.
Subsequent Event
On
October 28, 2022
, 2022, Vishay
acquired
MaxPower Semiconductor, Inc.
("MaxPower"), a San Jose, California-based fabless power semiconductor provider dedicated to
delivering innovative and cost-effective technologies that optimize power management solutions. MaxPower's proprietary device structures and process techniques provide leading edge silicon and silicon carbide ("SiC") MOSFET products. Its SiC
product development targets automotive and industrial applications.
Vishay paid cash of $
50,000
, net of cash
acquired, at closing. Related to the transaction, Vishay may also be required to make certain contingent payments of up to $
57,500
,
which would be payable upon the achievement of certain technology milestones and the occurrence of certain non-operating events. The purchase price for U.S. GAAP purposes will include the fair value, as of the acquisition date, of certain future
contingent payments. To the extent contingent payments are deemed compensatory in nature, such payments will be recognized as expense in future periods, and will thus not be included in the U.S. GAAP purchase price.
MaxPower will be incorporated into Vishay’s MOSFETs reportable segment, and the goodwill related to this acquisition will be included in the MOSFETs
reporting unit for goodwill impairment testing.
Note 3 – Impact of COVID-19 Pandemic
The Company's operations in
the People's Republic of China
, particularly in Shanghai, were impacted by COVID-19 government mandated shut-downs of the Company's facilities in the second fiscal quarter of 2022. The Company
incurred incremental costs separable from normal operations that are directly related to the shut-downs, primarily
wages paid to manufacturing employees during the shut-downs, additional wages and hardship allowances for working during
lockdown periods, and temporary housing for employees due to travel restrictions
, which were partially offset by government subsidies. The net impact of the costs and
subsidies are reported as cost of products sold ($
6,661
) and selling, general, and administrative expenses of ($
546
) based on employee function on the consolidated condensed statement of operations for the nine fiscal months ended October 1, 2022.
13
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 4 – Leases
The net right of use assets and lease liabilities recognized on the consolidated condensed balance sheets for the Company's operating leases were as
follows:
|
October 1, 2022
|
December 31, 2021
|
|||||||
|
Right of use assets
|
||||||||
|
Operating Leases
|
||||||||
|
Buildings and improvements
|
$
|
|
$
|
|
||||
|
Machinery and equipment
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
|
Current lease liabilities
|
||||||||
|
Operating Leases
|
||||||||
|
Buildings and improvements
|
$
|
|
$
|
|
||||
|
Machinery and equipment
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
|
Long-term lease liabilities
|
||||||||
|
Operating Leases
|
||||||||
|
Buildings and improvements
|
$
|
|
$
|
|
||||
|
Machinery and equipment
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
|
Total lease liabilities
|
$
|
|
$
|
|
||||
Lease expense is classified in the statements of operations based on asset use. Total lease cost recognized on the consolidated condensed statements of
operations is as follows:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Lease expense
|
||||||||||||||||
|
Operating lease expense
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Short-term lease expense
|
|
|
|
|
||||||||||||
|
Variable lease expense
|
|
|
|
|
||||||||||||
|
Total lease expense
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The Company paid $
18,062
and $
18,000
for its operating leases in the nine
fiscal months ended October 1, 2022 and October 2, 2021, respectively, which are included in operating cash flows on the consolidated condensed statements of cash flows. The weighted-average remaining lease term for the Company's operating leases is
8.4
years and the weighted-average discount rate is
5.4
%
as of October 1, 2022.
The undiscounted future lease payments for the Company's operating lease liabilities are as follows:
|
October 1, 2022
|
||||
|
2022 (excluding the nine fiscal months ended October 1, 2022)
|
$
|
|
||
|
2023
|
|
|||
|
2024
|
|
|||
|
2025
|
|
|||
|
2026
|
|
|||
|
Thereafter
|
|
|||
The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the
noncancellable term. The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities.
14
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes
The provision for income taxes consists of provisions for federal, state, and foreign income taxes. The effective tax rates for the periods ended October 1, 2022 and October 2, 2021
reflect the Company’s expected tax rate on reported income before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States. Accordingly, the
consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates.
The Company recognized tax benefits of $
5,941
in the third fiscal quarter of 2022 for changes in uncertain tax positions following the resolution of a tax audit.
The Company repatriated $
81,243
to the
United States in the second fiscal quarter of 2022 pursuant to the repatriation program initiated in response to a change in Israeli tax law. The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $
25,201
due to the repatriation. Tax expense for the repatriation was recorded in 2021 when the tax law was enacted.
During the nine fiscal months ended October 1, 2022,
the liabilities for unrecognized tax benefits decreased by $
11,489
on a net basis, primarily due to payments, settlements, and currency
translation adjustments, partially offset by accruals for current year tax positions and interest.
Note 6 – Long-Term Debt
Long-term debt consists of the following:
|
October 1, 2022
|
December 31, 2021
|
|||||||
|
Credit facility
|
$
|
|
$
|
|
||||
|
Convertible senior notes, due 2025
|
|
|
||||||
|
Deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
|
|
|||||||
|
Less current portion
|
|
|
||||||
|
$
|
|
$
|
|
|||||
The following table summarizes some key facts and terms regarding the outstanding convertible senior notes due 2025 as of October 1, 2022:
|
Convertible
Senior Notes
Due 2025
|
||||
|
Issuance date
|
|
|||
|
Maturity date
|
|
|||
|
Principal amount as of
October 1, 2022
|
$
|
|
||
|
Cash coupon rate (per annum)
|
|
%
|
||
|
Nonconvertible debt borrowing rate at issuance (per annum)
|
|
%
|
||
|
Conversion rate effective September 8, 2022 (per $1 principal amount)
|
|
|||
|
Effective conversion price effective September 8, 2022 (per share)
|
$
|
|
||
|
130% of the current effective conversion price (per share)
|
$
|
|
||
Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) during
any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches
130
% of the
conversion price for a specified period; (2) the trading price of the notes falls below
98
% of the product of the sale price of Vishay's
common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible senior notes due 2025 are not currently convertible.
Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of
converted notes and settle any additional amounts due in common stock.
The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior
notes due 2025 effective as of the ex-dividend date of each cash dividend. The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $
0.085
per share of common stock.
15
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 7 - Stockholders' Equity
On February 7, 2022, the Company's Board of Directors adopted a Stockholder Return
Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return
such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases.
The following table summarizes activity pursuant to this policy:
|
Fiscal quarter ended
|
Nine fiscal months ended | ||||||
|
October 1, 2022
|
October 1, 2022
|
||||||
|
Dividends paid to stockholders
|
$ |
|
$ |
|
|||
|
Stock repurchases
|
|
|
|||||
|
Total
|
$ |
|
$ |
|
|||
The repurchased shares are being held as treasury stock.
The Company records treasury stock at cost, inclusive of fees, commissions and other expenses,
when outstanding common shares are repurchased.
As of December 31, 2021,
no
shares of common stock were held as treasury stock. As of October 1, 2022,
2,891,604
shares of
common stock are being held as treasury stock.
Note 8 – Revenue Recognition
Sales returns and allowances accrual activity is shown below:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Sales allowances
|
|
|
|
|
||||||||||||
|
Credits issued
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Foreign currency
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Note 9 – Accumulated Other Comprehensive Income (Loss)
The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows:
|
Pension and
other post-
retirement
actuarial
items
|
Currency
translation
adjustment
|
Total
|
||||||||||
|
Balance at January 1, 2022
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
|
Other comprehensive income (loss) before reclassifications
|
|
(
|
)
|
$
|
(
|
)
|
||||||
|
Tax effect
|
|
|
$
|
|
||||||||
|
Other comprehensive income before reclassifications, net of tax
|
|
(
|
)
|
$
|
(
|
)
|
||||||
|
Amounts reclassified out of AOCI
|
|
|
$
|
|
||||||||
|
Tax effect
|
(
|
)
|
|
$
|
(
|
)
|
||||||
|
Amounts reclassified out of AOCI, net of tax
|
|
|
$
|
|
||||||||
|
Net other comprehensive income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Balance at October 1, 2022
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Reclassifications of pension and other post-retirement actuarial items out of AOCI are included in the computation of net periodic benefit cost. See Note
10 for further information.
16
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 10 – Pensions and Other Postretirement Benefits
The Company maintains various retirement benefit plans. The service cost component of net periodic pension cost is classified in costs of products sold or
selling, general, and administrative expenses on the consolidated condensed statements of operations based on the respective employee's function. The other components of net periodic pension cost are classified as other expense on the consolidated
condensed statements of operations.
Defined Benefit Pension Plans
The following table shows the components of the net periodic pension cost for the third fiscal quarters of 2022 and 2021 for the Company’s defined benefit pension plans:
|
Fiscal quarter ended
October 1, 2022
|
Fiscal quarter ended
October 2, 2021
|
|||||||||||||||
|
U.S. Plans
|
Non-U.S.
Plans
|
U.S. Plans
|
Non-U.S.
Plans
|
|||||||||||||
|
Net service cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest cost
|
|
|
|
|
||||||||||||
|
Expected return on plan assets
|
|
(
|
)
|
|
(
|
)
|
||||||||||
|
Amortization of prior service cost
|
|
|
|
|
||||||||||||
|
Amortization of losses
|
|
|
|
|
||||||||||||
|
Curtailment and settlement losses
|
|
|
|
|
||||||||||||
|
Net periodic benefit cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The following table shows the components of the net periodic pension cost for the nine fiscal months ended October 1, 2022 and October 2, 2021 for the Company’s defined benefit pension plans:
|
Nine fiscal months ended
October 1, 2022
|
Nine fiscal months ended
October 2, 2021
|
|||||||||||||||
|
U.S. Plans
|
Non-U.S.
Plans
|
U.S. Plans
|
Non-U.S.
Plans
|
|||||||||||||
|
Net service cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest cost
|
|
|
|
|
||||||||||||
|
Expected return on plan assets
|
|
(
|
)
|
|
(
|
)
|
||||||||||
|
Amortization of prior service cost
|
|
|
|
|
||||||||||||
|
Amortization of losses
|
|
|
|
|
||||||||||||
|
Curtailment and settlement losses
|
|
|
|
|
||||||||||||
|
Net periodic benefit cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
17
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Other Postretirement Benefits
The following table shows the components of the net periodic benefit cost for the third fiscal quarters of 2022 and 2021 for the Company’s other postretirement benefit plans:
|
Fiscal quarter ended
October 1, 2022
|
Fiscal quarter ended
October 2, 2021
|
|||||||||||||||
|
U.S. Plans
|
Non-U.S.
Plans
|
U.S. Plans
|
Non-U.S.
Plans
|
|||||||||||||
|
Service cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest cost
|
|
|
|
|
||||||||||||
|
Amortization of losses
|
|
|
|
|
||||||||||||
|
Net periodic benefit cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The following table shows the components of the net periodic pension cost for the nine fiscal months ended October 1, 2022 and October 2, 2021 for the Company’s other postretirement benefit plans:
|
Nine fiscal months ended
October 1, 2022
|
Nine fiscal months ended
October 2, 2021
|
|||||||||||||||
|
U.S. Plans
|
Non-U.S.
Plans
|
U.S. Plans
|
Non-U.S.
Plans
|
|||||||||||||
|
Service cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest cost
|
|
|
|
|
||||||||||||
|
Amortization of losses
|
|
|
|
|
||||||||||||
|
Net periodic benefit cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
18
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Stock-Based Compensation
The following table summarizes stock-based compensation expense recognized:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Restricted stock units
|
$
|
|
$
|
|
$
|
|
|
|||||||||
|
Phantom stock units
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
|
|||||||||
The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at October 1, 2022
(amortization periods in years)
:
|
Unrecognized
Compensation
Cost
|
Weighted
Average
Remaining
Amortization
Periods
|
|||||||
|
Restricted stock units
|
$
|
|
|
|||||
|
Phantom stock units
|
|
n/a
|
||||||
|
Total
|
$
|
|
||||||
The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost for performance-based RSUs
presented in the table above to be recognized.
19
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Restricted Stock Units
RSU activity under the Company's 2007 Stock Incentive Program (the "2007 Program") as of October 1, 2022 and changes during the nine fiscal months then ended are
presented below
(number of RSUs in thousands)
:
|
Number of
RSUs
|
Weighted
Average
Grant-date
Fair Value per
Unit
|
|||||||
|
Outstanding:
|
||||||||
|
January 1, 2022
|
|
$
|
|
|||||
|
Granted
|
|
|
||||||
|
Vested*
|
(
|
)
|
|
|||||
|
Cancelled or forfeited
|
(
|
)
|
|
|||||
|
Outstanding at October 1, 2022
|
|
$
|
|
|||||
|
Expected to vest at October 1, 2022
|
|
|||||||
*
The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.
The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance criteria between the
established target and maximum levels.
RSUs with performance-based vesting criteria are expected to vest as follows
(number
of RSUs in thousands)
:
|
Vesting Date
|
Expected
to Vest
|
Not Expected
to Vest
|
Total
|
|||||||||
|
January 1, 2023
|
|
|
|
|||||||||
|
January 1, 2024
|
|
|
|
|||||||||
|
January 1, 2025
|
|
|
|
|||||||||
Phantom Stock Units
Phantom stock unit activity under the 2007 Program as of October 1, 2022 and changes during the nine fiscal months then ended are presented below
(number of phantom stock units in thousands)
:
|
Number of
units
|
Grant-date
Fair Value per
Unit
|
|||||||
|
Outstanding:
|
||||||||
|
January 1, 2022
|
|
|||||||
|
Granted
|
|
$
|
|
|||||
|
Dividend equivalents issued
|
|
|||||||
|
Outstanding at October 1, 2022
|
|
|||||||
20
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – Segment Information
The following tables set forth business segment information:
|
MOSFETs
|
Diodes
|
Optoelectronic
Components
|
Resistors
|
Inductors
|
Capacitors
|
Corporate / Other*
|
Total
|
|||||||||||||||||||||||||
|
Fiscal quarter ended
October 1, 2022
:
|
||||||||||||||||||||||||||||||||
|
Net revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Segment Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|||||||||||||||
|
Fiscal quarter ended
October 2, 2021
:
|
||||||||||||||||||||||||||||||||
|
Net revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Segment Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Nine fiscal months ended
October 1, 2022
:
|
||||||||||||||||||||||||||||||||
|
Net revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Segment Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
|
Nine fiscal months ended
October 2, 2021
:
|
||||||||||||||||||||||||||||||||
|
Net revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Segment Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
*
Amounts
reported in Corporate/Other above represent unallocated costs directly related to the COVID-19 pandemic, which are reported as costs of products sold on the consolidated condensed statement of operations.
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Reconciliation:
|
||||||||||||||||
|
Segment Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Impact of the COVID-19 Pandemic on Selling, General, and Administrative Expenses
|
|
|
(
|
)
|
|
|||||||||||
|
Unallocated Selling, General, and Administrative Expenses
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Consolidated Operating Income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Unallocated Other Income (Expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Consolidated Income Before Taxes
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
21
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors. The distribution of sales by customer type is
shown below:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Distributors
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
OEMs
|
|
|
|
|
||||||||||||
|
EMS companies
|
|
|
|
|
||||||||||||
|
Total Revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net revenues were attributable to customers in the following regions:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Asia
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Europe
|
|
|
|
|
||||||||||||
|
Americas
|
|
|
|
|
||||||||||||
|
Total Revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, telecommunications, computing,
consumer products, power supplies, military and aerospace, and medical end markets. Sales by end market are presented below:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Automotive
|
|
|
|
|
||||||||||||
|
Telecommunications
|
|
|
|
|
||||||||||||
|
Computing
|
|
|
|
|
||||||||||||
|
Consumer Products
|
|
|
|
|
||||||||||||
|
Power Supplies
|
|
|
|
|
||||||||||||
|
Military and Aerospace
|
|
|
|
|
||||||||||||
|
Medical
|
|
|
|
|
||||||||||||
|
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
22
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 13 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders
(shares in thousands)
:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Numerator:
|
||||||||||||||||
|
Net earnings attributable to Vishay stockholders
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Denominator:
|
||||||||||||||||
|
Denominator for basic earnings per share:
|
||||||||||||||||
|
Weighted average shares
|
|
|
|
|
||||||||||||
|
Outstanding phantom stock units
|
|
|
|
|
||||||||||||
|
Adjusted weighted average shares
|
|
|
|
|
||||||||||||
|
Effect of dilutive securities:
|
||||||||||||||||
|
Convertible debt instruments
|
|
|
|
|
||||||||||||
|
Restricted stock units
|
|
|
|
|
||||||||||||
|
Dilutive potential common shares
|
|
|
|
|
||||||||||||
|
Denominator for diluted earnings per share:
|
||||||||||||||||
|
Adjusted weighted average shares - diluted
|
|
|
|
|
||||||||||||
|
Basic earnings per share attributable to Vishay stockholders
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Diluted earnings per share attributable to Vishay stockholders
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted earnings per share for the periods presented do not reflect the following weighted average potential common shares that would have an antidilutive
effect or have unsatisfied performance conditions
(in thousands)
:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||
|
October 1, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
|||||||||||||
|
Restricted stock units
|
|
|
|
|
||||||||||||
If the average market price of Vishay common stock is less than the effective
conversion price of the convertible senior notes due 2025, no shares are included in the diluted earnings per share computation for the convertible senior notes due 2025. Upon Vishay exercising its existing right to legally amend the indenture
governing the convertible senior notes due 2025,
Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock. Accordingly, the notes are
not anti-dilutive when t
he average market price of Vishay common stock is less than the effective conversion price of the convertible senior notes due 2025.
23
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 14 – Fair Value Measurements
The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis:
|
Total
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
|
October 1, 2022
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Assets held in rabbi trusts
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Available for sale securities
|
$
|
|
|
|
|
|||||||||||
|
Precious metals
|
$
|
|
|
|
|
|||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
December 31, 2021
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Assets held in rabbi trusts
|
$
|
|
$
|
|
|
$
|
|
|||||||||
|
Available for sale securities
|
$
|
|
|
|
|
|||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
There have been no changes in the classification of any financial instruments within the fair value hierarchy in the periods presented.
The Company maintains non-qualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and non-qualified pension plans.
Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale and company-owned life insurance assets. The marketable securities held in the rabbi trusts are valued using quoted market prices on the last business day
of the period. The company-owned life insurance assets are valued in consultation with the Company’s insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the marketable securities held in
the rabbi trust is considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy.
The Company holds investments in debt securities that are intended to fund a portion of its pension and other postretirement benefit obligations outside of
the United States. The investments are valued based on quoted market prices on the last business day of the period. The fair value measurement of the investments is considered a Level 1 measurement within the fair value hierarchy.
From time to time, the Company purchases precious metals bullion in excess of its immediate manufacturing needs to mitigate the risk of supply shortages or
volatile price fluctuations. The metals are valued based on quoted market prices on the last business day of the period. The fair value measurement of the metals are considered a Level 1 measurement within the fair value hierarchy.
The Company has entered into forward contracts with highly-rated financial institutions to mitigate the foreign currency risk associated with intercompany
loans denominated in a currency other than the legal entity's functional currency. The Company had
no
outstanding forward contracts as of
October 1, 2022. The notional amount of the forward contracts was $
100,000
as of December 31, 2021. The forward contracts were short-term in nature and were renewed at the Company's discretion until the intercompany loans were repaid. We did not designate the forward
contracts as hedges for accounting purposes, and as such the change in the fair value of the contracts would be recognized in the consolidated condensed statements of operations as a component of other income (expense). The Company estimates the fair
value of the forward contracts based on applicable and commonly used pricing models using current market information and was considered a Level 2 measurement within the fair value hierarchy. The value of the forward contracts was immaterial as of December 31, 2021. The Company does not utilize derivatives or other financial instruments for trading or other speculative purposes.
The fair value of the long-term debt, excluding the derivative liabilities and deferred financing costs, at October 1, 2022 and December 31, 2021 is approximately $
435,400
and $
485,500
, respectively,
compared to its carrying value, excluding the deferred financing costs, of $
465,344
and $
465,344
, respectively. The Company estimates the fair value of its long-term debt using a combination of quoted market prices for similar financing arrangements and expected
future payments discounted at risk-adjusted rates, which are considered Level 2 inputs.
At October 1, 2022 and December 31, 2021, the Company’s short-term investments were comprised of time deposits with financial institutions that have maturities that exceed 90
days from the date of acquisition; however they all mature within one year from the respective balance sheet dates. The Company's short-term investments are accounted for as held-to-maturity debt instruments, at amortized cost, which approximates
their fair value. The investments are funded with excess cash not expected to be needed for operations prior to maturity; therefore, the Company believes it has the intent and ability to hold the short-term investments until maturity. At each
reporting date, the Company performs an evaluation to determine if any unrealized losses are other-than-temporary.
No
other-than-temporary impairments have been recognized on these securities, and there are
no
unrecognized holding gains or losses for
these securities during the periods presented. There have been
no
transfers to or from the held-to-maturity classification. All
decreases in the account balance are due to returns of principal at the securities’ maturity dates. Interest on the securities is recognized as interest income when earned.
At October 1, 2022 and December 31, 2021, the Company’s cash and cash equivalents were comprised of demand deposits, time deposits with maturities of three months or less when
purchased, and money market funds. The Company estimates the fair value of its cash, cash equivalents, and short-term investments using level 2 inputs. Based on the current interest rates for similar investments with comparable credit risk and time
to maturity, the fair value of the Company's cash, cash equivalents, and held-to-maturity short-term investments approximate the carrying amounts reported in the consolidated condensed balance sheets.
The Company’s financial instruments also include accounts receivable and accounts payable. The carrying amounts for these financial instruments reported
in the consolidated condensed balance sheets approximate their fair values.
24
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
This Management's Discussion and Analysis ("MD&A") is intended to provide an understanding of Vishay's financial condition, results
of operations and cash flows by focusing on changes in certain key measures from period to period. The MD&A should be read in conjunction with our Consolidated Condensed Financial Statements and accompanying Notes included in Item 1. This
discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in
our Annual Report on Form 10-K, particularly in Item 1A. "Risk Factors," filed with the Securities and Exchange Commission on February 23, 2022.
Overview
Vishay Intertechnology, Inc. ("Vishay," "we," "us," or "our") 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.
We operate in six segments based on product functionality: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors.
We are focused on enhancing stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of
growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while at the same time maintaining a prudent capital
structure. To foster intensified internal growth, we have increased our worldwide R&D and engineering technical staff; we are increasing our technical field sales force in Asia to increase our market access to the industrial segment and increase
the design-in of our products in local markets; and we are directing increased funding and focus on developing products to capitalize on the connectivity, mobility, and sustainability growth drivers of our business. We are also investing in
additional capital expenditures to expand key product lines. Over the next few years, we expect to experience higher growth rates than over the last decade. This expectation is based upon accelerated electrification, such as factory automation,
electrical vehicles, and 5G infrastructure.
In addition to enhancing stockholder value through growing our business, on February 7, 2022, our Board of Directors adopted a Stockholder Return Policy,
which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. See further discussion in “Stockholder Return Policy” below.
Our business and operating results have been and will continue to be impacted
by worldwide economic conditions. Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets. The worldwide economy
and, specifically, our business were and continue to be impacted by the COVID-19 pandemic
.
While the wide-spread economic impact of the COVID-19 pandemic on Vishay
was temporary as evidenced by our revenues since the beginning of 2021, similar disruptions have continued to occur on a more limited scale.
Our
operations in the
People's Republic of China,
particularly in Shanghai, were impacted by COVID-19 government mandated shut-downs in the second fiscal quarter of 2022. These
manufacturing facilities were temporarily closed and some were operating at levels less than full capacity. We incurred incremental costs separable from normal operations that are directly related to the government mandated shut-downs, primarily
wages
paid to manufacturing employees during the shut-downs, additional wages and hardship allowances for working during lockdown periods, and temporary housing for employees due to travel restrictions
, which were partially offset by government subsidies. The net impact of the costs and subsidies are reported as cost of products sold ($6.7
million
) and selling, general, and administrative expenses ($0.5 million) based on employee function on the consolidated condensed statement of operations for the nine fiscal months ended October 1, 2022.
We exclude from the amounts reported above any expenses incurred outside of the
People's Republic of China and all
indirect financial changes from the COVID-19 pandemic such as general macroeconomic
effects and higher shipping costs due to reduced shipping capacity.
In this volatile economic environment, we continue to closely monitor our fixed costs, capital expenditure plans, inventory, and capital resources to respond to changing
conditions and to ensure we have the management, business processes, and resources to meet our future needs. We will react quickly and professionally to changes in demand to minimize manufacturing inefficiencies and excess inventory build in
periods of decline and maximize opportunities in periods of growth. We have
significant liquidity to withstand temporary disruptions in the economic environment.
We utilize several financial metrics, including net revenues, gross profit margin, operating margin, segment operating margin, end-of-period backlog,
book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business. See further discussion in
“Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. Despite ongoing global challenges and further accelerating inflation, net revenues and margins have increased versus the prior fiscal quarter and the prior year
quarter. We continue to maximize manufacturing output at all facilities and increase critical manufacturing capacities. Partially due to the resumption of sales in the third fiscal quarter following government mandated shut-downs, the book-to-bill
ratios and backlogs have decreased. Average selling prices remain stable after broad increases in prior periods.
25
Net revenues for the fiscal quarter ended October 1, 2022
were $924.8 million, compared to $863.5
million and $813.7 million for the fiscal quarters ended July 2, 2022 and October 2, 2021, respectively. The net earnings attributable
to Vishay stockholders for the fiscal quarter ended October 1, 2022 were $140.1 million, or $0.98 per diluted share, compared to $112.4 million, or $0.78 per diluted
share for the fiscal quarter ended July 2, 2022, and $96.8 million, or $0.67 per diluted share for the fiscal quarter ended October 2, 2021.
Net revenues for the nine fiscal months
ended October 1, 2022 were $2,642.1
million, compared to $2,397.4 million for the nine fiscal months ended October 2, 2021. The net earnings attributable to Vishay stockholders for
the nine fiscal months ended October 1, 2022 were $356.0 million, or $2.46 per diluted share, compared to $261.4 million, or $1.80 per diluted share for the nine fiscal months ended October 2, 2021.
We define adjusted net earnings as net earnings determined in accordance with GAAP adjusted for various items that
management believes are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and
equipment. The reconciliations below include certain financial measures which are not recognized in accordance with GAAP, including adjusted net earnings, adjusted earnings per share, and free cash. These non-GAAP measures should not be viewed as
alternatives to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, and free cash 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 adjusted net earnings and adjusted earnings per share are meaningful because they provide insight with respect to our intrinsic operating results. Management believes
that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends. We utilize the free cash metric in defining our Stockholder Return Policy.
The items affecting comparability are (
in thousands,
except per share amounts
):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
GAAP net earnings attributable to Vishay stockholders
|
$
|
140,061
|
$
|
112,388
|
$
|
96,820
|
$
|
356,022
|
$
|
261,447
|
||||||||||
|
Reconciling items affecting gross income:
|
||||||||||||||||||||
|
Impact of COVID-19 pandemic
|
$
|
-
|
$
|
6,661
|
$
|
-
|
$
|
6,661
|
$
|
-
|
||||||||||
|
Other reconciling items affecting operating income:
|
||||||||||||||||||||
|
Impact of COVID-19 pandemic
|
$
|
-
|
$
|
546
|
$
|
-
|
$
|
546
|
$
|
-
|
||||||||||
|
Reconciling items affecting tax expense:
|
||||||||||||||||||||
|
Effects of changes in uncertain tax positions
|
$
|
(5,941) | $ | - |
$
|
- |
$
|
(5,941) |
$
|
- | ||||||||||
| Effects of changes in valuation allowances | - | - | (5,714) | - | (5,714) | |||||||||||||||
|
Changes in tax laws and regulations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(8,276
|
)
|
|||||||||
|
Tax effects of pre-tax items above
|
-
|
(1,802
|
)
|
-
|
(1,802
|
)
|
-
|
|||||||||||||
|
Adjusted net earnings
|
$
|
134,120
|
$
|
117,793
|
$
|
91,106
|
$
|
355,486
|
$
|
247,457
|
||||||||||
|
Adjusted weighted average diluted shares outstanding
|
143,447
|
144,397
|
145,458
|
144,470
|
145,455
|
|||||||||||||||
|
Adjusted earnings per diluted share
|
$
|
0.93
|
$
|
0.82
|
$
|
0.63
|
$
|
2.46
|
$
|
1.70
|
||||||||||
The following table
reconciles gross profit by segment to consolidated gross profit. Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs.
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
MOSFETs
|
$
|
83,121
|
$
|
55,438
|
$
|
53,868
|
$
|
197,305
|
$
|
138,410
|
||||||||||
|
Diodes
|
56,339
|
53,369
|
46,756
|
155,495
|
122,929
|
|||||||||||||||
|
Optoelectronic Components
|
25,959
|
26,430
|
23,810
|
84,820
|
73,958
|
|||||||||||||||
|
Resistors
|
68,461
|
70,532
|
49,729
|
204,015
|
161,631
|
|||||||||||||||
|
Inductors
|
25,692
|
29,690
|
26,857
|
80,231
|
83,288
|
|||||||||||||||
|
Capacitors
|
29,966
|
32,425
|
24,716
|
94,664
|
77,741
|
|||||||||||||||
|
Unallocated gross profit (loss)
|
- |
(6,661
|
)
|
-
|
(6,661
|
)
|
-
|
|||||||||||||
|
Gross profit
|
$
|
289,538
|
$
|
261,223
|
$
|
225,736
|
$
|
809,869
|
|
$
|
657,957
|
|||||||||
26
Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash for the year-to-date period is presented as a line
item on the face of our consolidated condensed statement of cash flows prepared in accordance with GAAP and the quarterly amounts are derived from the year-to-date GAAP statements as of the beginning and end of the respective quarter.
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net cash provided by continuing operating activities
|
$
|
209,480
|
|
$
|
74,727
|
$
|
135,669
|
$
|
317,792
|
|
$
|
310,452
|
||||||||
|
Proceeds from sale of property and equipment
|
95
|
|
305
|
1,023
|
472
|
1,257
|
||||||||||||||
|
Less: Capital expenditures
|
(76,475)
|
(59,791
|
)
|
(57,446
|
)
|
(172,175)
|
(118,156
|
)
|
||||||||||||
|
Free cash
|
$
|
133,100
|
|
$
|
15,241
|
$
|
79,246
|
$
|
146,089
|
|
$
|
193,553
|
||||||||
Our results for the fiscal quarters ended October 1, 2022,
July 2, 2022, and October 2, 2021 represent the continuation of the favorable business conditions that we have been experiencing. Our
percentage of euro-based sales approximates our percentage of euro-based expenses so the foreign currency impact on revenues was substantially offset by the impact on expenses. Our pre-tax results were consistent with expectations based on our
business model.
Our free cash results were significantly impacted by a temporary inventory build
in 2022, the installment payments of the U.S. transition tax of $14.8 million in the second fiscal quarters of 2022 and 2021, and $25.2 million of payments of foreign, withholding, and claw-back cash taxes on foreign earnings in Israel for the net
$81.2 million that was repatriated to the U.S. in the second fiscal quarter of 2022
.
27
Stockholder Return Policy
On February 7, 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of
scheduled principal payments of long-term debt, on an annual basis. We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of stock repurchases.
The following table summarizes activity pursuant to this policy
(in thousands):
| Fiscal quarter ended | Nine fiscal months ended | |||||||
|
October 1, 2022
|
October 1, 2022
|
|||||||
|
Dividends paid to stockholders
|
$
|
14,254
|
$ | 43,062 | ||||
|
Stock repurchases
|
18,510
|
|
54,671 | |||||
|
Total
|
$
|
32,764
|
|
$ | 97,733 | |||
As a direct result of a change in tax law in Israel, we made the determination during the fourth quarter of 2021 that substantially all unremitted
foreign earnings in Israel are no longer permanently reinvested. We intend to primarily utilize these earnings, distributed from Israel to the United States, to initially fund our Stockholder Return Program. We repatriated net $81.2 million
to the United States from Israel during the second fiscal quarter of 2022. The repatriated cash is being used to fund our Stockholder Return Policy.
Over the long-term, we expect to fund the Stockholder Return Policy from our historically strong cash flows from operations. However, because most
of our operating cash flow is typically generated by our non-U.S. subsidiaries, we may in the future need to change our permanent reinvestment assertion on current earnings of certain subsidiaries, which would have the effect of increasing the
effective tax rate. Substantially all of these additional taxes would be withholding and foreign taxes on cash remitted to the U.S., as such dividends are generally not subject to U.S. federal income tax.
The structure of our newly adopted Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our
stockholders. We will continue to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions.
We have paid dividends each quarter since the first quarter of 2014, and t
he
Stockholder Return Policy will remain in effect until such time as the Board votes to amend or rescind the policy.
Implementation of the Stockholder Return Policy is
subject to future declarations of dividends by the Board of Directors, market and business conditions, legal requirements, and other factors. The policy sets forth our intention, but does not obligate us to acquire any shares of common stock
or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations.
28
Financial Metrics
We utilize several financial metrics to evaluate the performance and assess the future direction of our business. These key financial measures and metrics
include net revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, and the book-to-bill ratio. We also monitor changes in inventory turnover and our or publicly available average
selling prices (“ASP”).
Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but
also deducts certain other period costs, particularly losses on purchase commitments and inventory write-downs. Losses on purchase commitments and inventory write-downs have the impact of reducing gross profit margin in the period of the charge, but
result in improved gross profit margins in subsequent periods by reducing costs of products sold as inventory is used. We also regularly evaluate gross profit by segment to assist in the analysis of consolidated gross profit. Gross profit margin
and gross profit margin by segment are clearly a function of net revenues, but also reflect our cost management programs and our ability to contain fixed costs.
Operating margin is computed as gross profit less operating expenses, expressed as a percentage of net revenues. Operating margin is clearly a function of
net revenues, but also reflects our cost management programs and our ability to contain fixed costs.
Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment operating income.
Only dedicated, direct selling, general, and administrative ("SG&A") expenses of the segments are included in the calculation of segment operating income. We do not allocate certain SG&A expenses that are managed at the regional or corporate
global level to our segments. Accordingly, segment operating income excludes these SG&A expenses that are not directly traceable to the segments. Segment operating income would also exclude costs not routinely used in the management of the
segments in periods when those items are present, such as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability. Segment operating income is clearly a function of net revenues, but
also reflects our cost management programs and our ability to contain fixed costs. Segment operating margin is segment operating income expressed as a percentage of net revenues.
End-of-period backlog is one indicator of future revenues. We include in our backlog only open orders that we expect to ship in the next twelve months. If
demand falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, the
backlog is not necessarily indicative of the results to be expected for future periods.
An important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period as compared
with the product that we ship during that period. A book-to-bill ratio that is greater than one indicates that our backlog is building and that we are likely to see increasing revenues in future periods. Conversely, a book-to-bill ratio that is less
than one is an indicator of declining demand and may foretell declining revenues.
We focus on our inventory turnover as a measure of how well we are managing our inventory. We define inventory turnover for a financial reporting period
as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each fiscal quarter-end balance) for this same period. A higher level of inventory turnover
reflects more efficient use of our capital.
Pricing in our industry can be volatile. Using our and publicly available data, we analyze trends and changes in average selling prices to evaluate likely
future pricing. The erosion of average selling prices of established products is typical for semiconductor products. We attempt to offset this deterioration with ongoing cost reduction activities and new product introductions. Our specialty
passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us.
29
The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following table
shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the third fiscal quarter of 2021 through
the third fiscal quarter of 2022
(dollars in thousands)
:
|
3rd Quarter 2021
|
4th Quarter 2021
|
1st Quarter 2022
|
2nd Quarter 2022
|
3rd Quarter 2022
|
||||||||||||||||
|
Net revenues
|
$
|
813,663
|
$
|
843,072
|
$
|
853,793
|
$
|
863,512
|
$
|
924,798
|
||||||||||
|
Gross profit margin
(1)
|
27.7
|
%
|
27.3
|
%
|
30.3
|
%
|
30.3
|
%
|
31.3
|
%
|
||||||||||
|
Operating margin
(2)
|
15.2
|
%
|
14.4
|
%
|
17.1
|
%
|
17.5
|
%
|
19.8
|
%
|
||||||||||
|
End-of-period backlog
|
$
|
2,243,900
|
$
|
2,306,500
|
$
|
2,416,700
|
$
|
2,425,200
|
$
|
2,261,400
|
||||||||||
|
Book-to-bill ratio
|
1.26
|
1.09
|
1.14
|
1.07
|
0.88
|
|||||||||||||||
|
Inventory turnover
|
4.5
|
4.5
|
4.2
|
3.8
|
4.1
|
|||||||||||||||
|
Change in ASP vs. prior quarter
|
1.3
|
%
|
1.3
|
%
|
2.4
|
%
|
2.9
|
%
|
0.0
|
%
|
||||||||||
_________________________________________
(1) Gross margin for the second fiscal quarter of 2022 includes $6.7 million of expenses directly related to the COVID-19 pandemic (see Note 3 to our consolidated condensed financial statements).
(2) Operating margin for the second fiscal quarter of 2022 includes $7.2 million of expenses directly related to the COVID-19 pandemic (see Note 3 to our consolidated condensed financial statements).
See “Financial Metrics by Segment” below for net revenues, book-to-bill ratio, and gross profit margin broken out by segment.
Revenues increased significantly versus the third fiscal quarter of 2021 primarily due to higher volume and higher average selling prices. Revenues increased slightly versus the prior fiscal quarter primarily due to higher
volume. The increased volume is partially due to operations and sales resuming following the two-month government mandated COVID-19 shut-down of our manufacturing facilities in Shanghai, People's Republic of China that significantly impacted our
semiconductor segments in the second fiscal quarter of 2022. The book-to-bill ratio and backlog were negatively impacted by the catch-up in sales during the third fiscal quarter. We continue to increase manufacturing capacity for critical product
lines. Average selling prices were stable in the third fiscal quarter following broad price increases that we implemented in prior periods across the product portfolio to offset increased materials and transportation costs and accelerating general
inflation.
Gross profit margin increased versus prior fiscal quarter and the second fiscal quarter of 2021. The increase versus the prior fiscal quarter is
primarily due to higher volume. The increase versus the third fiscal quarter of 2021 is primarily due to higher average selling prices and higher volume.
The book-to-bill ratio in the third fiscal quarter of 2022 decreased to 0.88 versus 1.07 in the second fiscal quarter of 2022. The book-to-bill ratio
was negatively impacted by the catch-up in semiconductor sales during the third fiscal quarter. The book-to-bill ratios in the third fiscal quarter of 2022 for distributors and original equipment manufacturers ("OEM") were 0.77 and 1.03,
respectively, versus ratios of 1.05 and 1.11, respectively, during the second fiscal quarter of 2022.
For the fourth fiscal quarter of 2022, we anticipate revenues between $860 million and $900 million at a gross margin of 30.0% plus/minus 50 basis points.
30
Financial Metrics by Segment
The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal
quarters beginning with the third fiscal quarter of 2021 through the third fiscal quarter of 2022
(dollars in thousands)
:
|
3rd Quarter 2021
|
4th Quarter 2021
|
1st Quarter 2022
|
2nd Quarter 2022
|
3rd Quarter 2022
|
||||||||||||||||
|
MOSFETs
|
||||||||||||||||||||
|
Net revenues
|
$
|
175,499
|
$
|
171,339
|
$
|
172,674
|
$
|
158,395
|
$
|
225,186
|
||||||||||
|
Book-to-bill ratio
|
1.19
|
1.01
|
1.28
|
1.14
|
0.78
|
|||||||||||||||
|
Gross profit margin
|
30.7
|
%
|
30.1
|
%
|
34.0
|
%
|
35.0
|
%
|
36.9
|
%
|
||||||||||
|
Segment operating margin
|
24.9
|
%
|
23.5
|
%
|
28.1
|
%
|
28.2
|
%
|
31.9
|
%
|
||||||||||
|
Diodes
|
||||||||||||||||||||
|
Net revenues
|
$
|
185,306
|
$
|
192,117
|
$
|
182,334
|
$
|
192,083
|
$
|
209,012
|
||||||||||
|
Book-to-bill ratio
|
1.31
|
1.10
|
1.16
|
1.10
|
0.79
|
|||||||||||||||
|
Gross profit margin
|
25.2
|
%
|
23.7
|
%
|
25.1
|
%
|
27.8
|
%
|
27.0
|
%
|
||||||||||
|
Segment operating margin
|
22.3
|
%
|
20.6
|
%
|
22.2
|
%
|
25.3
|
%
|
24.6
|
%
|
||||||||||
|
Optoelectronic Components
|
||||||||||||||||||||
|
Net revenues
|
$
|
70,750
|
$
|
78,398
|
$
|
81,016
|
$
|
77,936
|
$
|
73,447
|
||||||||||
|
Book-to-bill ratio
|
1.36
|
1.22
|
0.78
|
0.86
|
0.57
|
|||||||||||||||
|
Gross profit margin
|
33.7
|
%
|
34.2
|
%
|
40.0
|
%
|
33.9
|
%
|
35.3
|
%
|
||||||||||
|
Segment operating margin
|
27.9
|
%
|
27.2
|
%
|
34.8
|
%
|
28.7
|
%
|
30.0
|
%
|
||||||||||
|
Resistors
|
||||||||||||||||||||
|
Net revenues
|
$
|
181,189
|
$
|
190,041
|
$
|
207,032
|
$
|
213,176
|
$
|
207,437
|
||||||||||
|
Book-to-bill ratio
|
1.26
|
1.14
|
1.24
|
1.05
|
1.08
|
|||||||||||||||
|
Gross profit margin
|
27.4
|
%
|
28.5
|
%
|
31.4
|
%
|
33.1
|
%
|
33.0
|
%
|
||||||||||
|
Segment operating margin
|
24.0
|
%
|
25.6
|
%
|
28.1
|
%
|
29.9
|
%
|
29.7
|
%
|
||||||||||
|
Inductors
|
||||||||||||||||||||
|
Net revenues
|
$
|
84,816
|
$
|
81,825
|
$
|
82,777
|
$
|
89,608
|
$
|
83,503
|
||||||||||
|
Book-to-bill ratio
|
1.11
|
1.13
|
1.14
|
0.97
|
1.02
|
|||||||||||||||
|
Gross profit margin
|
31.7
|
%
|
29.4
|
%
|
30.0
|
%
|
33.1
|
%
|
30.8
|
%
|
||||||||||
|
Segment operating margin
|
28.7
|
%
|
26.4
|
%
|
26.8
|
%
|
30.0
|
%
|
27.0
|
%
|
||||||||||
|
Capacitors
|
||||||||||||||||||||
|
Net revenues
|
$
|
116,103
|
$
|
129,352
|
$
|
127,960
|
$
|
132,314
|
$
|
126,213
|
||||||||||
|
Book-to-bill ratio
|
1.37
|
1.04
|
1.02
|
1.17
|
0.95
|
|||||||||||||||
|
Gross profit margin
|
21.3
|
%
|
21.6
|
%
|
25.2
|
%
|
24.5
|
%
|
23.7
|
%
|
||||||||||
|
Segment operating margin
|
17.2
|
%
|
17.7
|
%
|
21.4
|
%
|
20.9
|
%
|
20.1
|
%
|
||||||||||
31
Acquisition Activity
As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition targets include businesses that have
established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which
the Company expects to further develop and commercialize. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes,
depreciation, and amortization (“EBITDA”). For these purposes, we calculate pro forma EBITDA as the adjusted EBITDA of Vishay and the target for Vishay’s four preceding fiscal quarters, with a pro forma adjustment for savings which management
estimates would have been achieved had the target been acquired by Vishay at the beginning of the four fiscal quarter period.
Subsequent Event
On October 28, 2022, we acquired MaxPower Semiconductor, Inc. ("MaxPower"), a San Jose, California-based fabless power semiconductor provider dedicated
to delivering innovative and cost-effective technologies that optimize power management solutions. MaxPower's proprietary device structures and process techniques provide leading edge silicon and silicon carbide ("SiC") MOSFET products. Its SiC
product development targets automotive and industrial applications.
We paid cash of $50.0 million, net of cash acquired, at closing. Related to the transaction, we may also be required to make certain contingent payments
of up to $57.5 million, which would be payable upon the achievement of certain technology milestones and the occurrence of certain non-operating events. The purchase price for U.S. GAAP purposes will include the fair value, as of the acquisition
date, of certain future contingent payments. To the extent contingent payments are deemed compensatory in nature, such payments will be recognized as expense in future periods, and will thus not be included in the U.S. GAAP purchase price.
There is no assurance that we will be able to identify and acquire additional suitable acquisition candidates at price levels and on terms and conditions we
consider acceptable.
32
Results of Operations
Statements of operations’ captions as a percentage of net revenues and the effective tax rates were as follows:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Cost of products sold
|
68.7
|
%
|
69.7
|
%
|
72.3
|
%
|
69.3
|
%
|
72.6
|
%
|
||||||||||
|
Gross profit
|
31.3
|
%
|
30.3
|
%
|
27.7
|
%
|
30.7
|
%
|
27.4
|
%
|
||||||||||
|
Selling, general & administrative expenses
|
11.5
|
%
|
12.8
|
%
|
12.6
|
%
|
12.5
|
%
|
13.0
|
%
|
||||||||||
|
Operating income
|
19.8
|
%
|
17.5
|
%
|
15.2
|
%
|
18.2
|
%
|
14.4
|
%
|
||||||||||
|
Income before taxes and noncontrolling interest
|
19.6
|
%
|
17.1
|
%
|
14.3
|
%
|
17.6
|
%
|
13.4
|
%
|
||||||||||
|
Net earnings attributable to Vishay stockholders
|
15.1
|
%
|
13.0
|
%
|
11.9
|
%
|
13.5
|
%
|
10.9
|
%
|
||||||||||
|
________
|
||||||||||||||||||||
|
Effective tax rate
|
22.4
|
%
|
23.8
|
%
|
16.6
|
%
|
23.2
|
%
|
18.3
|
%
|
||||||||||
Net Revenues
Net revenues were as follows
(dollars in thousands)
:
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
924,798
|
$
|
863,512
|
$
|
813,663
|
$
|
2,642,103
|
$
|
2,397,415
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net
revenues
|
% change
|
Change in net
revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
61,286
|
|
7.1
|
%
|
n/a |
n/a
|
|||||||||
|
October 2, 2021
|
$
|
111,135
|
13.7
|
%
|
$
|
244,688
|
10.2
|
%
|
||||||||
Changes in net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Increase in volume
|
9.1
|
%
|
10.1
|
%
|
6.1
|
%
|
||||||
|
Change in average selling prices
|
0.0
|
%
|
8.0
|
%
|
7.4
|
%
|
||||||
|
Foreign currency effects
|
-1.7
|
%
|
-5.4
|
%
|
-4.1
|
%
|
||||||
|
Acquisition
|
0.0
|
%
|
0.3
|
%
|
0.4
|
%
|
||||||
|
Other
|
-0.3
|
%
|
0.7
|
%
|
0.4
|
%
|
||||||
|
Net change
|
7.1
|
%
|
13.7
|
%
|
10.2
|
%
|
||||||
We continue to experience good economic conditions while we continue to increase critical manufacturing capacities. Average
selling prices were stable in the third fiscal quarter following broad price increases implemented across the product portfolio in prior periods. Net revenues increased significantly versus the prior fiscal quarter and the prior year periods
primarily due to increases in volume and increases in average selling prices versus the prior year periods.
Volume in the third fiscal quarter of 2022 was positively impacted by the resumption of operations and
sales following a two-month government mandated shut-down of two facilities in Shanghai, People's Republic of China, in response to the COVID-19 pandemic in the second fiscal quarter.
Gross Profit Margins
Gross profit margins for the fiscal quarter ended October 1, 2022 were 31.3%, versus 30.3% and 27.7%, for the comparable prior quarter and prior year period,
respectively. Gross profit margins for the nine fiscal months ended October 1, 2022 were 30.7%, versus 27.4% for the comparable prior year period. The increases versus the prior year periods are primarily due to higher average selling prices and increased volume, partially
offset by inflationary impacts, particularly increased metals and transportation costs, and negative exchange rate impacts. The gross profit margin increased versus the prior fiscal quarter primarily due to increased volume, partially offset by
inflationary impacts, particularly increased metals and transportation costs and the negative impact of an inventory decrease.
33
Segments
Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
MOSFETs
Net revenues, gross profit margins, and segment operating margins of the MOSFETs segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
225,186
|
$ |
158,395
|
$
|
175,499
|
$
|
556,255
|
$
|
496,659
|
||||||||||
|
Gross profit margin
|
36.9
|
%
|
35.0
|
%
|
30.7
|
%
|
35.5
|
%
|
27.9
|
%
|
||||||||||
|
Segment operating margin
|
31.9
|
%
|
28.2
|
%
|
24.9
|
%
|
29.7
|
%
|
21.8
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
66,791
|
|
42.2
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
49,687
|
|
28.3
|
%
|
$
|
59,596
|
|
12.0
|
%
|
||||||
Changes in MOSFETs segment net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Increase in volume
|
44.9
|
%
|
18.2
|
%
|
2.8
|
%
|
||||||
|
Increase in average selling prices
|
0.1
|
%
|
10.9
|
%
|
11.3
|
%
|
||||||
|
Foreign currency effects
|
-1.3
|
%
|
-3.7
|
%
|
-2.4
|
%
|
||||||
|
Other
|
-1.5
|
%
|
2.9
|
%
|
0.3
|
%
|
||||||
|
Net change
|
42.2
|
%
|
28.3
|
%
|
12.0
|
%
|
||||||
The MOSFET segment net revenues increased significantly versus the prior fiscal quarter and the prior year periods. The increases versus the prior
fiscal quarter and prior year quarter are primarily due to increased volume as operations and sales resumed following the two-month government mandated COVID-19 shut-down in Shanghai, People's Republic of China that required an almost complete
closure of our main manufacturing facility in the second fiscal quarter of 2022. Increased average selling prices are the primary factor for the increase versus the prior year-to-date period and also contributed to the increase versus the
prior year quarter. All regions and sales channels, particularly distribution customers in the Americas region, contributed to the increased revenue.
Gross profit margin increased versus the prior fiscal quarter and especially versus the prior year periods. The increase versus the prior fiscal
quarter was primarily due to increased sales volume, partially offset by the negative impact of an inventory decrease following the resumption of operations and sales in Shanghai, People's Republic of China in the third fiscal quarter. The
increases versus the prior year periods were primarily due to increased average selling prices, increased sales volume, and a positive change in the sales mix toward more profitable products such as ICs.
The segment operating margin increased
versus the prior fiscal quarter and prior year periods. The increases are
primarily due to increased gross profit.
Increased segment SG&A expenses primarily due to increased R&D activity limited the increases.
Average selling prices were flat versus the prior fiscal quarter, but increased versus the prior year periods due to the strategic price increases implemented in
prior periods.
We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines. We
have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 3-4 years and allow us to balance our in-house and
foundry wafer supply.
34
Diodes
Net revenues, gross profit margins, and segment operating margins of the Diodes segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
209,012
|
$
|
192,083
|
$
|
185,306
|
$
|
583,429
|
$
|
517,299
|
||||||||||
|
Gross profit margin
|
27.0
|
%
|
27.8
|
%
|
25.2
|
%
|
26.7
|
%
|
23.8
|
%
|
||||||||||
|
Segment operating margin
|
24.6
|
%
|
25.3
|
%
|
22.3
|
%
|
24.0
|
%
|
20.5
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
16,929
|
|
8.8
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
23,706
|
|
12.8
|
%
|
$
|
66,130
|
|
12.8
|
%
|
||||||
Changes in Diodes segment net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Increase in volume
|
10.6
|
%
|
6.5
|
%
|
4.9
|
%
|
||||||
|
Change in average selling prices
|
-0.1
|
%
|
10.7
|
%
|
11.0
|
%
|
||||||
|
Foreign currency effects
|
-1.6
|
%
|
-4.9
|
%
|
-3.7
|
%
|
||||||
|
Other
|
-0.1
|
%
|
0.5
|
%
|
0.6
|
%
|
||||||
|
Net change
|
8.8
|
%
|
12.8
|
%
|
12.8
|
%
|
||||||
Net revenues of the Diodes segment increased significantly versus the prior fiscal quarter and the prior year periods. Most end markets and customer
channels contributed to the increases. The increase versus the prior fiscal quarter is also due to increased volume as operations and sales resumed following extended government mandated COVID-19 shut-downs of our manufacturing facilities in
the People's Republic of China, particularly Shanghai, in the second fiscal quarter. The increases were negatively impacted by increased inventory at distribution customers in Asia.
Gross profit margin decreased versus the prior fiscal quarter, but increased versus the prior year periods. The decrease versus the prior fiscal
quarter is due to the negative impact of an inventory decrease following the resumption of operations and sales in Shanghai, People's Republic of China in the third fiscal quarter and cost inflation, partially offset by increased sales
volume. The increases versus the prior year periods are primarily due to increased average selling prices, our cost reduction measures, and increases in sales volume, partially offset by significant cost inflation.
The segment operating margin decreased versus the prior fiscal quarter, but increased versus the prior year periods. The fluctuations are primarily
due to gross profit fluctuations. The impact of a weaker euro decreased segment SG&A expenses, particularly versus the prior year periods.
Average selling prices decreased versus the prior fiscal quarter, but remain significantly higher than the prior year periods due to the strategic price
increases implemented across the product portfolio in prior periods.
35
Optoelectronic Components
Net revenues, gross profit margins, and segment operating margins of the Optoelectronic Components segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
$ 73,447
|
$
|
$ 77,936
|
$
|
$ 70,750
|
$
|
232,399
|
$
|
224,316
|
||||||||||
|
Gross profit margin
|
35.3
|
%
|
33.9
|
%
|
33.7
|
%
|
36.5
|
%
|
33.0
|
%
|
||||||||||
|
Segment operating margin
|
30.0
|
%
|
28.7
|
%
|
27.9
|
%
|
31.2
|
%
|
27.2
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
-4,489
|
|
-5.8
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
2,697
|
|
3.8
|
%
|
8,083
|
|
3.6
|
%
|
|||||||
Changes in Optoelectronic Components segment net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Change in volume
|
-3.0
|
%
|
5.2
|
%
|
1.1
|
%
|
||||||
|
Change in average selling prices
|
-0.5
|
%
|
5.7
|
%
|
7.6
|
%
|
||||||
|
Foreign currency effects
|
-1.9
|
%
|
-6.4
|
%
|
-4.8
|
%
|
||||||
|
Other
|
-0.4
|
%
|
-0.7
|
%
|
-0.3
|
%
|
||||||
|
Net change
|
-5.8
|
%
|
3.8
|
%
|
3.6
|
%
|
||||||
Net revenues of our Optoelectronic Components segment decreased versus the prior fiscal quarter, but increased moderately versus the prior year
periods. The decrease versus the prior fiscal quarter is primarily due to decreased sales to customers in the Asia and Europe regions, particularly distributor customers, partially offset by increased sales to customers in the Americas region,
particularly distributor customers. The increases versus the prior year periods were due to a significant increase in sales to customers in the Americas and Europe regions, partially offset by significant decrease in sales to customers in the
Asia region. The increases versus the prior year periods were primarily due to increased average selling prices and volume, partially offset by negative foreign currency impacts.
Gross profit margin increased versus the prior fiscal quarter and the prior year periods. The increase versus the prior fiscal quarter is primarily
due to the positive impact of an inventory increase. The increases versus the prior year periods are primarily due to higher average selling prices, a more profitable product mix, and our cost reduction measures, partially offset by cost
inflation.
The segment operating margin increased versus the prior fiscal quarter and the prior year periods. The fluctuations are primarily due to fluctuations in
gross profit margin. Decreased segment SG&A expenses, primarily due to the weaker euro, positively impacted the segment operating margin.
Average selling prices decreased versus the prior fiscal quarter, but remain higher than the prior year periods due to the strategic price increases
implemented across the product portfolio in prior periods.
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany.
36
Resistors
Net revenues, gross profit margins, and segment operating margins of the Resistors segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
207,437
|
$
|
213,176
|
$
|
181,189
|
$
|
627,645
|
$
|
562,513
|
||||||||||
|
Gross profit margin
|
33.0
|
%
|
33.1
|
%
|
27.4
|
%
|
32.5
|
%
|
28.7
|
%
|
||||||||||
|
Segment operating margin
|
29.7
|
%
|
29.9
|
%
|
24.0
|
%
|
29.2
|
%
|
25.3
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
-5,739
|
|
-2.7
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
26,248
|
|
14.5
|
%
|
$
|
65,132
|
|
11.6
|
%
|
||||||
Changes in Resistors segment net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Change in volume
|
-1.4
|
%
|
12.5
|
%
|
10.7
|
%
|
||||||
|
Increase in average selling prices
|
0.8
|
%
|
7.7
|
%
|
4.7
|
%
|
||||||
|
Foreign currency effects
|
-2.1
|
%
|
-7.6
|
%
|
-5.7
|
%
|
||||||
|
Acquisition
|
0.0
|
%
|
1.4
|
%
|
1.7
|
%
|
||||||
|
Other
|
0.0
|
%
|
0.5
|
%
|
0.2
|
%
|
||||||
|
Net change
|
-2.7
|
%
|
14.5
|
%
|
11.6
|
%
|
||||||
Net revenues of the Resistors segment decreased slightly versus the prior fiscal quarter, but increased significantly versus the prior year periods.
The decrease versus the prior fiscal quarter is primarily due to decreased sales to customers in all regions, particularly the Europe region, and military and aerospace, industrial, and distributor customers, which was partially offset by
increased sales to EMS customers. The increase versus the prior year periods is primarily due to increased sales to customers in all regions, particularly the Americas region, distributor and EMS customers, partially offset by decreased sales to
automotive end market customers. Increased sales to industrial end market customers also contributed to the increase versus the prior year-to-date period. The acquisition of Barry Industries also contributed to the increase in net revenues
versus the prior year periods.
The gross profit margin decreased slightly versus the prior fiscal quarter, but increased versus the prior year periods. The slight decrease versus the
prior fiscal quarter is primarily due to wage inflation, negative foreign currency exchange rate impacts, and higher fixed costs, mostly offset by increased average selling prices, lower metal prices, and improved efficiencies. The increases
versus the prior year periods are primarily due to increased sales volume, higher average selling prices, cost reductions, and greater efficiencies, partially offset by fixed cost increases, metal price increases, increased material procurement
costs, increased labor costs, and negative foreign currency exchange rate impacts.
The segment operating margin decreased slightly versus the prior fiscal quarter, but increased versus the prior year periods. The fluctuations are primarily due to fluctuations in gross profit.
Average selling prices increased versus the prior fiscal quarter and prior year periods.
We are increasing critical manufacturing capacities for certain product lines. We continue to broaden our business with targeted acquisitions of specialty
resistors businesses, such as Barry Industries.
37
Inductors
Net revenues, gross profit margins, and segment operating margins of the Inductors segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
83,503
|
$
|
89,608
|
$
|
84,816
|
$
|
255,888
|
$
|
253,813
|
||||||||||
|
Gross profit margin
|
30.8
|
%
|
33.1
|
%
|
31.7
|
%
|
31.4
|
%
|
32.8
|
%
|
||||||||||
|
Segment operating margin
|
27.0
|
%
|
30.0
|
%
|
28.7
|
%
|
28.0
|
%
|
29.9
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
-6,105
|
|
-6.8
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
-1,313
|
|
-1.5
|
%
|
$
|
2,075
|
|
0.8
|
%
|
||||||
Changes in net revenues were attributable to the following:
|
vs. Prior Quarter
|
vs. Prior Year Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Change in volume
|
-6.1
|
%
|
-0.8
|
%
|
1.1
|
%
|
||||||
|
Change in average selling prices
|
-0.1
|
%
|
1.6
|
%
|
1.5
|
%
|
||||||
|
Foreign currency effects
|
-0.8
|
%
|
-2.2
|
%
|
-1.8
|
%
|
||||||
|
Other
|
0.2
|
%
|
-0.1
|
%
|
0.0
|
%
|
||||||
|
Net change
|
-6.8
|
%
|
-1.5
|
%
|
0.8
|
%
|
||||||
Net revenues of the Inductors segment decreased versus the prior fiscal quarter and the prior year quarter, but increased versus the prior year-to-date period. The decrease versus the prior fiscal quarter is
primarily due to decreased sales to customers in all regions, particularly the Europe region, and decreased sales to distributor customers, partially offset by increased sales to EMS customers. The decrease versus the prior year quarter is
primarily due to decreased sales to customers in the Asia region and distribution customers, partially offset by increased sales to customers in the Americas and Europe regions and increased sales to EMS customers and industrial end market
customers. The increase versus the prior year-to-date period is primarily due to increased sales to customers in the Americas and Europe regions, EMS customers and military and aerospace and automotive end market customers. The increase versus
the prior year-to-date period is also due to increased sales to distributor and EMS customers, and military and aerospace end market customers, partially offset by decreased sales to customers in the Asia region, decreased sales to distributor
customers, and decreased sales to automotive and industrial end market customers.
The gross profit margin decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter is primarily due to lower sales volume, inefficiencies, and increased
material prices, partially offset by lower logistics costs and other cost savings measures. The decrease versus the prior year quarter is primarily due to increased labor and material costs, inefficiencies, and negative foreign currency exchange
rate impacts, partially offset by increased average selling prices. The decrease versus the prior year-to-date period is primarily due to increased logistics, labor, and material costs, inefficiencies, and negative foreign currency exchange rate
impacts, partially offset by higher sales volume, increased average selling prices. and other cost reduction measures.
The segment operating margin decreased versus the prior fiscal quarter and the prior year periods. The decreases are primarily due to gross profit decreases.
Average selling prices decreased versus the prior fiscal quarter, but increased versus the prior year periods.
We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating acquisition opportunities, particularly of specialty businesses.
38
Capacitors
Net revenues, gross profit margins, and segment operating margins of the Capacitors segment were as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Net revenues
|
$
|
126,213
|
$
|
132,314
|
$
|
116,103
|
$
|
386,487
|
$
|
342,815
|
||||||||||
|
Gross profit margin
|
23.7
|
%
|
24.5
|
%
|
21.3
|
%
|
24.5
|
%
|
22.7
|
%
|
||||||||||
|
Segment operating margin
|
20.1
|
%
|
20.9
|
%
|
17.2
|
%
|
20.8
|
%
|
18.2
|
%
|
||||||||||
The change in net revenues versus the comparable prior periods was as follows
(dollars in thousands)
:
|
Fiscal quarter ended
October 1, 2022
|
Nine fiscal months ended
October 1, 2022
|
|||||||||||||||
|
Change in net revenues
|
% change
|
Change in net revenues
|
% change
|
|||||||||||||
|
July 2, 2022
|
$
|
-6,101
|
|
-4.6
|
%
|
n/a
|
n/a
|
|||||||||
|
October 2, 2021
|
$
|
10,110
|
|
8.7
|
%
|
$
|
43,672
|
|
12.7
|
%
|
||||||
Changes in Capacitors segment net revenues were attributable to the following:
|
vs. Prior
Quarter
|
vs. Prior Year
Quarter
|
vs. Prior
Year-to-Date
|
||||||||||
|
Change attributable to:
|
||||||||||||
|
Change in volume
|
-1.7
|
%
|
10.3
|
%
|
13.1
|
%
|
||||||
|
Change in average selling prices
|
-1.2
|
%
|
5.5
|
%
|
5.2
|
%
|
||||||
|
Foreign currency effects
|
-2.1
|
%
|
-7.2
|
%
|
-5.7
|
%
|
||||||
|
Other
|
0.4
|
%
|
0.1
|
%
|
0.1
|
%
|
||||||
|
Net change
|
-4.6
|
%
|
8.7
|
%
|
12.7
|
%
|
||||||
Net revenues of the Capacitors segment decreased versus the prior fiscal quarter, but increased significantly versus the prior year periods. The
decrease versus the prior fiscal quarter is primarily due to decreased sales to customers in all regions, distributor customers, and industrial end market customers, partially offset by increased sales to automotive end market customers. The
increase versus the prior year quarter is primarily due to increased sales to customers in the Americas and Asia regions, EMS customers, and industrial end market customers, partially offset by decreased sales to customers in the Europe region.
The increase versus the prior year-to-date period is primarily due to increased sales to customers in all regions, particularly the Americas region, distributor and EMS customers, and industrial end market customers, partially offset by decreased
sales to automotive end market customers.
The gross profit margin decreased versus the prior fiscal quarter, but increased versus the prior year periods. The decrease versus the prior fiscal quarter is
primarily due to lower sales volume, decreased average selling prices, and increased materials and utilities costs, partially offset by favorable product mix and decreased metals costs.
The increases versus the prior year periods are
primarily due to higher sales volume, increased average selling prices, and favorable product mix, partially offset by increased materials and labor costs, higher fixed costs, and manufacturing inefficiencies.
The segment operating margin decreased versus the prior fiscal quarter, but increased versus the prior year periods. The fluctuations are primarily due to
gross profit fluctuations.
Average selling prices decreased versus the prior fiscal quarter, but increased versus the prior year periods.
39
Selling, General, and Administrative Expenses
Selling, general, and administrative (“SG&A”) expenses are summarized as follows
(dollars in thousands):
|
Fiscal quarters ended
|
Nine fiscal months ended
|
|||||||||||||||||||
|
October 1, 2022
|
July 2, 2022
|
October 2, 2021
|
October 1, 2022
|
October 2, 2021
|
||||||||||||||||
|
Total SG&A expenses
|
$
|
106,436
|
$
|
110,400
|
$
|
102,215
|
$
|
329,691
|
$
|
311,800
|
||||||||||
|
as a percentage of revenues
|
11.5
|
%
|
12.8
|
%
|
12.6
|
%
|
12.5
|
%
|
13.0
|
%
|
||||||||||
The sequential decrease in SG&A expenses is primarily attributable to foreign currency exchange impacts. SG&A expenses increased versus the prior
year periods due to cost inflation.
Other Income (Expense)
Interest expense for the fiscal quarter ended October 1, 2022 decreased $0.2 million versus the fiscal quarter ended July 2, 2022 and decreased $0.3 million versus the fiscal quarter ended October 2, 2021. Interest expense for the nine
fiscal months ended October 1, 2022 decreased by $0.6 million versus the nine fiscal months ended October 2, 2021.
The following tables analyze the components of the line “Other” on the consolidated condensed statements of operations
(in thousands):
|
Fiscal quarters ended
|
||||||||||||
|
October 1, 2022
|
October 2, 2021
|
Change
|
||||||||||
|
Foreign exchange gain (loss)
|
$
|
4,462
|
$
|
325
|
$
|
4,137
|
||||||
|
Interest income
|
1,836
|
295
|
1,541
|
|||||||||
|
Other components of net periodic pension expense
|
(2,704
|
)
|
(3,257
|
)
|
553
|
|||||||
|
Investment income
|
(1,462
|
)
|
(41
|
)
|
(1,421
|
)
|
||||||
|
Other
|
5
|
(1
|
)
|
6
|
||||||||
|
$
|
2,137
|
$
|
(2,679
|
)
|
$
|
4,816
|
||||||
|
Fiscal quarters ended
|
||||||||||||
|
October 1, 2022
|
July 2, 2022
|
Change
|
||||||||||
|
Foreign exchange gain (loss)
|
$
|
4,462
|
$
|
6,514
|
$
|
(2,052
|
)
|
|||||
|
Interest income
|
1,836
|
789
|
1,047
|
|||||||||
|
Other components of net periodic pension expense
|
(2,704
|
)
|
(2,803
|
)
|
99
|
|||||||
|
Investment income (expense)
|
(1,462
|
)
|
(2,858
|
)
|
1,396
|
|||||||
|
Other
|
5
|
(262
|
)
|
267
|
||||||||
|
$
|
2,137
|
$
|
1,380
|
$
|
757
|
|||||||
|
Nine fiscal months ended
|
||||||||||||
|
October 1, 2022
|
October 2, 2021
|
Change
|
||||||||||
|
Foreign exchange gain (loss)
|
$
|
10,695
|
$
|
(2,110
|
)
|
$
|
12,805
|
|||||
|
Interest income
|
3,186
|
907
|
2,279
|
|||||||||
|
Other components of net periodic pension expense
|
(8,417
|
)
|
(9,864
|
)
|
1,447
|
|||||||
|
Investment income (expense)
|
(7,436
|
)
|
(1,107
|
)
|
(6,329
|
)
|
||||||
|
Other
|
(262
|
)
|
15
|
(277
|
)
|
|||||||
|
$
|
(2,234
|
)
|
$
|
(12,159
|
)
|
$
|
9,925
|
|||||
40
Income Taxes
For the fiscal quarter ended October 1, 2022, our effective tax rate was 22.4%, as
compared to 23.8% and 16.6%
for the fiscal quarters ended July 2, 2022 and October 2, 2021, respectively. For the nine fiscal months ended October 1, 2022, our effective tax rate was 23.2%,
as compared to 18.3% for the nine
fiscal months ended October 2, 2021.
With the
reduction in the U.S. statutory rate to 21% beginning January 1, 2018, we expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions. Discrete tax items of $(5.9) million (tax benefits) and
$(5.7) million (tax benefits)
impacted our effective tax rate for the fiscal quarters ended October 1, 2022 and October 2, 2021, respectively.
Discrete tax items of $(5.9) million (tax benefits)
and $(14.0) million (tax benefits) impacted our effective tax rate for the nine fiscal months ended October 1, 2022 and
October 2, 2021, respectively.
We recognized tax benefits of $5.9 million in the third fiscal quarter of 2022 for changes in uncertain tax positions following the resolution of a tax
audit.
We repatriated $81.2 million to the United States in the second fiscal quarter of 2022 pursuant to the repatriation program initiated in response to a
change in Israeli tax law. We paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25.2 million due to the repatriation. Tax expense for the repatriation was recorded in 2021 when the tax law was enacted.
During the nine fiscal months ended October 1, 2022, the liabilities for unrecognized tax benefits decreased by $11.5 million on a net basis, primarily
due to payments, settlements, and currency translation adjustments, partially offset by accruals for current year tax positions and interest.
We operate in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate
is a composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of our historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations to
countries where we can take advantage of lower labor costs and available tax and other government-sponsored incentives.
Additional information about income taxes is included in Note 5 to our consolidated condensed financial statements.
41
Financial Condition, Liquidity, and Capital Resources
Our financial condition as of October 1, 2022 continued to be strong. Cash and short-term investments
exceed our long-term debt balances, and we have historically been a strong generator of operating cash flows. The cash generated from operations is used to fund our capital expenditure plans, and cash in excess of our capital expenditure needs is
available to fund our acquisition strategy, to reduce debt levels, and to pay dividends and repurchase stock. We have generated cash flows from operations in excess of $200 million in each of the last 20 years, and cash flows from operations in
excess of $100 million in each of the last 27 years.
Management uses a non-GAAP measure, "free cash," to evaluate our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or
dividends. See "Overview" above for "free cash" definition and reconciliation to GAAP. Vishay has generated positive "free cash" in each of the past 25 years, and "free cash" in excess of $80 million in each of the last 20 years. In this volatile
economic environment, we continue to focus on the generation of free cash, including an emphasis on cost controls.
Cash flows provided by operating activities were $317.8 million
for the nine fiscal months ended October 1, 2022, as compared to cash flows provided by operations of $310.5 million for the nine fiscal months ended October 2, 2021.
Cash paid for property and equipment for the nine fiscal months
ended October 1, 2022 was $172.2
million, as compared to $118.2 million for the nine fiscal months ended October 2, 2021. To be well positioned to service our customers and to
fully participate in growing markets, we intend to increase our capital expenditures for expansion in the mid-term. For the year 2022, we expect to invest approximately $325 million in capital expenditures.
Free cash flow for the nine fiscal months ended October 1, 2022 was negatively impacted by working capital changes, higher than usual capital expenditures, and cash taxes paid for repatriation. We
expect our business to continue to be a reliable generator of free cash. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the
economic environment worsens. The COVID-19 pandemic and the mitigation efforts by governments to control its spread have not had a significant impact on our financial condition, liquidity, or capital resources.
On February 7, 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. See
“Stockholder Return Policy” above for additional information.
The following table summarizes the components of net cash and short-term investments (debt) at October 1, 2022 and December 31, 2021
(in thousands)
:
|
October 1, 2022
|
December 31, 2021
|
|||||||
|
Credit facility
|
$
|
-
|
$
|
-
|
||||
|
Convertible senior notes, due 2025
|
465,344
|
465,344
|
||||||
|
Deferred financing costs
|
(7,224
|
)
|
(9,678
|
)
|
||||
|
Total debt
|
458,120
|
455,666
|
||||||
|
Cash and cash equivalents
|
734,992
|
774,108
|
||||||
|
Short-term investments
|
182,646
|
146,743
|
||||||
|
Net cash and short-term investments (debt)
|
$
|
459,518
|
$
|
465,185
|
||||
"Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP. This measure should not be
viewed as an alternative to GAAP measures of performance or liquidity. However, management believes that an analysis of "net cash and short-term investments (debt)" assists investors in understanding aspects of our cash and debt management. The
measure, as calculated by us, may not be comparable to similarly titled measures used by other companies.
We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we
classify as short-term investments on our consolidated balance sheets. As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation
of net cash and short-term investments (debt).
The interest rates on our short-term investments vary by location. Transactions related to these investments are classified as investing activities on our
consolidated condensed statements of cash flows.
42
As of October 1, 2022, substantially all
of our cash and cash equivalents and short-term investment were held in countries outside of the United States. Cash dividends to stockholders, share repurchases, and principal and interest payments on our debt instruments need to be paid by the
U.S. parent company, Vishay Intertechnology, Inc. Our U.S. subsidiaries also have cash operating needs. The distribution of earnings from Israel to the United States will initially be used to fund our Stockholder Return Policy. We expect that cash
on-hand and cash flows from operations will be sufficient to meet our longer-term financing needs related to normal operating requirements, regular dividend payments, share repurchases pursuant to our Stockholder Return Policy, and our research and
development and capital expenditure plans. Our substantially undrawn credit facility provides us with significant operating liquidity in the United States.
Our revolving credit facility provides an aggregate commitment of $750 million of revolving loans available until June 5, 2024. The maximum amount
available on the revolving credit facility is restricted by the financial covenants described below. The credit facility also provides us the ability to request up to $300 million of incremental facilities, subject to the satisfaction of certain
conditions, which could take the form of additional revolving commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt.
We had no amounts outstanding on our revolving credit facility at December 31, 2021 and October 1, 2022. We borrowed $558 million and repaid $558 million on the revolving credit facility during the nine fiscal months ended October 1, 2022. The average
outstanding balance on our revolving credit facility calculated at fiscal month-ends was $47.9 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $124 million during the nine fiscal months ended October 1, 2022.
The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making
investments and acquisitions (assuming our pro forma leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma leverage ratio is greater than 2.50 to
1.00), and requires us to comply with other covenants, including the maintenance of specific financial ratios.
The financial maintenance covenants include (a) an interest coverage ratio of not less than 2.00 to 1; and (b) a leverage ratio of not more than 3.25 to 1
(and a pro forma ratio of 3.00 to 1 on the date of incurrence of additional debt). The computation of these ratios is prescribed in Article VI of the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which has been
filed with the SEC as Exhibit 10.1 to our current report on Form 8-K filed June 5, 2019.
We were in compliance with all financial covenants under the credit facility at October 1, 2022. Our interest coverage ratio and leverage ratio were 36.01 to 1 and 0.61 to 1, respectively. We expect to continue to be in compliance with these covenants
based on current projections.
If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and any amounts then
outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2025 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is
accelerated.
Borrowings under the credit facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on our leverage ratio. We
also pay a commitment fee, also based on our leverage ratio, on undrawn amounts. Based on our current leverage ratio, any new borrowings will bear interest at LIBOR plus 1.50%, and the undrawn commitment fee is 0.25% per annum.
The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and
equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United
States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant
subsidiaries.
We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our revolving credit
facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs. Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments may
require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due before 2025 and our revolving credit facility expires in June 2024.
The convertible senior notes due 2025 are not currently convertible. Pursuant to the indenture governing the convertible senior notes due 2025 and the
amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in shares of our common stock. We intend to finance the principal
amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date.
43
Safe Harbor Statement
From time to time, information provided by us, including but not limited to statements in this report, or other statements made by or on our behalf, may
contain “forward-looking” information within the meaning of the 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 or otherwise;
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 applicable domestic and foreign tax regulations and uncertainty regarding the same; changes in U.S. and foreign trade regulations and tariffs and uncertainty regarding the same; changes in applicable accounting standards and
other factors affecting our operations, markets, capacity to meet demand, products, services, and prices that are set forth in our filings with the SEC, 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.
Our 2021 Annual Report on Form 10-K listed various important factors that could cause actual results to differ materially from projected and historic
results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them in Part I, Item 1A, of that filing under the heading “Risk Factors.” You should understand that it is not
possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, 2021,
filed with the SEC on February 23, 2022, describes our exposure to market risks. There have been no material changes to our market risks since December 31, 2021.
| Item 4. |
Controls and Procedures
|
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report to ensure that information required to be disclosed in
reports that we file or submit under the Exchange Act are: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to our management, including our CEO and
CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
44
| Item 1. |
Legal Proceedings
|
Item 3 of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 23, 2022 describes certain of our
legal proceedings. Except as described below, there have been no material developments to the legal proceedings previously disclosed.
Regarding the matter first disclosed by the Company in its Form 10-Q that was filed with the SEC for the quarterly period ended October
3, 2020, on September 12, 2022, the United States District Court for the Eastern District of New York dismissed all third-party complaints commenced by Island Transportation Corp. against nineteen third-party defendants including
Vishay GSI, Inc. (“VGSI”), a wholly owned subsidiary of the Company.
| Item 1A. |
Risk Factors
|
There have been no material changes to the risk factors we previously disclosed under Item 1A of Part I of our Annual Report on Form 10-K for the year
ended December 31, 2021, filed with the SEC on February 23, 2022.
| Item 2. |
Unregistered
Sales of Equity Securities and Use of Proceeds
|
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended October 1, 2022:
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share (including commission)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Total Dollar Amount Purchased Under the Program
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||||||||||||
|
July 3 - July 30
|
318,186
|
$
|
18.35
|
318,186
|
$
|
5,839,285
|
|
5,681,814
|
||||||||||||
|
July 31 - August 27
|
143,888
|
$
|
20.78
|
143,888
|
$
|
2,990,168
|
|
5,537,926
|
||||||||||||
|
August 28 - October 1
|
516,264
|
$
|
18.75
|
516,264
|
$
|
9,681,200
|
|
5,021,662
|
||||||||||||
|
Total
|
978,338
|
$
|
18.92
|
978,338
|
$
|
18,510,653
|
|
5,021,662
|
||||||||||||
| Item 6. |
Exhibits
|
____________
46
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
VISHAY INTERTECHNOLOGY, INC.
|
||
|
/s/ Lori Lipcaman
|
||
|
Lori Lipcaman
|
||
|
Executive Vice President and Chief Financial Officer
|
||
|
(as a duly authorized officer and principal financial and
|
||
|
accounting officer)
|
||
Date: November 2, 2022
TABLE OF CONTENTS
Part I - Financial InformationItem 1. Financial StatementsNote 1 Basis Of PresentationNote 2 - Acquisition ActivitiesNote 3 Impact Of Covid-19 PandemicNote 4 LeasesNote 5 Income TaxesNote 6 Long-term DebtNote 7 - Stockholders' EquityNote 8 Revenue RecognitionNote 9 Accumulated Other Comprehensive Income (loss)Note 10 Pensions and Other Postretirement BenefitsNote 11 Stock-based CompensationNote 12 Segment InformationNote 13 Earnings Per ShareNote 14 Fair Value MeasurementsItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II - Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior Securities Not ApplicableItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety Disclosures Not ApplicableItem 4. Mine Safety DisclosuresItem 5. Other Information Not Applicable. 45Item 5. Other InformationItem 6. Exhibits