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Vishay Reports Results for Fourth Quarter and Year 2016

  • Revenues for Q4 2016 of $571 million and for year 2016 of $2,323 million
  • Operating Margin Q4 of -8.0% and year 2016 of 4.4%
  • Adjusted Operating Margin Q4 of 7.2% and year 2016 of 8.7%
  • EPS Q4 of $(0.33) and year 2016 of $0.32
  • Adjusted EPS Q4 of $0.18 and year 2016 of $0.85
  • Cash from operations for year 2016 of $296 million and capital expenditures of $135 million
  • Guidance for Q1 2017 for revenues of $575 - $615 million and gross margins of 24% - 26%

MALVERN, Pa., Feb. 07, 2017 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc. (NYSE:VSH), one of the world's largest manufacturers of discrete semiconductors and passive components, today announced its results for the year and fiscal quarter ended December 31, 2016.

Revenues for the year ended December 31, 2016 were $2,323.4 million, compared to $2,300.5 million for the year ended December 31, 2015. Net earnings attributable to Vishay stockholders for the year ended December 31, 2016 were $48.8 million, or $0.32 per share, compared to a net loss attributable to Vishay stockholders of $(108.5) million, or $(0.73) per share for the year ended December 31, 2015.

Revenues for the fiscal quarter ended December 31, 2016 were $570.8 million, compared to $555.9 million for the fiscal quarter ended December 31, 2015. Net loss attributable to Vishay stockholders for the fiscal quarter ended December 31, 2016 was $(48.7) million, or $(0.33) per share, compared to a net loss attributable to Vishay stockholders of $(137.8) million, or $(0.93) per share for the fiscal quarter ended December 31, 2015.

Net earnings attributable to Vishay stockholders for the fiscal quarter and year ended December 31, 2016 include a $79.3 million pre-tax non-cash charge recognized in the settlement of the Company’s U.S. qualified pension plan. As summarized on the attached reconciliation schedule, all periods presented include other items affecting comparability. Adjusted earnings per diluted share, which exclude these items net of tax and the unusual tax items, were $0.18 and $0.85 for the fiscal quarter and year ended December 31, 2016, respectively, and $0.14 and $0.72 for the fiscal quarter and year ended December 31, 2015, respectively.

Commenting on the results for the fourth quarter 2016, Dr. Gerald Paul, President and Chief Executive Officer, stated, “Revenues for the quarter came in close to expectations when excluding exchange rate effects. Gross margin was impacted by unfavorable product mix and the effect of an inventory reduction in the quarter, mostly due to the depletion of the safety stock at MOSFETs required for the completed production move. Year over year sales of Vishay products from distribution to end customers increased.”

Dr. Paul stated, commenting on the results for the year 2016, “In a generally friendly economic environment and based on our own efforts, Vishay enjoyed a fairly successful year 2016. Vishay again was able to offset the negative impact of salary increases and general inflation on its fixed costs by cost reduction. At the same time Vishay was able to successfully expand its business in Asia. Its strong cash flow enabled Vishay to increase its cash dividend, to establish a meaningful stock buyback program and to continue to rejuvenate its organization.”

Commenting on the outlook Dr. Paul stated, “For the first quarter, we guide for revenues of $575 to $615 million and gross margins of 24% to 26% at constant exchange rates.”

A conference call to discuss Vishay’s fourth quarter and year-end financial results is scheduled for Tuesday, February 7, 2017 at 9:00 a.m. ET. The dial-in number for the conference call is 877-589-6174 (+1 706-643-1406 if calling from outside the United States or Canada) and the conference ID is 49045451.

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, February 7, 2017 through 11:59 p.m. ET on Tuesday, February 14, 2017. The telephone number for the replay is 800-585-8367 (+1 855-859-2056 or 404-537-3406 if calling from outside the United States or Canada) and the access code is 49045451.

A live audio webcast of the conference call and a PDF copy of the press release and the quarterly presentation can be accessed directly from the Investor Relations section of the Vishay website at http://ir.vishay.com.

About Vishay

Vishay Intertechnology, Inc., a Fortune 1000 Company listed on the NYSE (VSH), is one of the world's largest manufacturers of discrete semiconductors (diodes, MOSFETs, and infrared optoelectronics) and passive electronic components (resistors, inductors, and capacitors). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, power supplies, and medical markets. Vishay’s product innovations, successful acquisition strategy, and "one-stop shop" service have made it a global industry leader. Vishay can be found on the Internet at www.vishay.com.

This press release includes certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted net earnings; adjusted earnings per share; adjusted operating margin; free cash; earnings before interest, taxes, depreciation and amortization (“EBITDA”); adjusted EBITDA; and adjusted EBITDA margin; which are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. These non-GAAP measures supplement our GAAP measures of performance or liquidity and should not be viewed as an alternative to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, adjusted operating margin, free cash, EBITDA, adjusted EBITDA, and adjusted EBITDA margin do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that such measures are meaningful to investors because they provide insight with respect to intrinsic operating results of the Company. Although the terms “free cash” and "EBITDA" are not defined in GAAP, the measures are derived using various line items measured in accordance with GAAP. Reconciling items to arrive at adjusted net earnings represent significant charges or credits that are important to understanding the Company's intrinsic operations. Reconciling items to calculate adjusted operating margin and adjusted EBITDA represent those same items used in computing adjusted net earnings, as relevant. Furthermore, the presented calculation of adjusted EBITDA is substantially similar to, but not identical to, a measure used in the calculation of financial ratios required for covenant compliance under Vishay’s revolving credit facility. These reconciling items are indicated on the accompanying reconciliation schedules and are more fully described in the Company's financial statements presented in its annual report on Form 10-K and its quarterly reports presented on Forms 10-Q.

Statements contained herein that relate to the Company's future performance, including statements with respect to forecasted revenues, margins, cash generation, repatriation of foreign earnings, cost reduction programs and their financial impact, facility locations, and the performance of the economy in general, are forward-looking statements within the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should,” or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements may vary materially from those anticipated, estimated or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; delays or difficulties in implementing our cost reduction strategies; 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; and other factors affecting our operations that are set forth in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(In thousands, except per share amounts)
Years ended
December 31, 2016 December 31, 2015
(Unaudited)
Net revenues$ 2,323,431 $ 2,300,488
Costs of products sold 1,753,648 1,758,268
Gross profit 569,783 542,220
Gross margin 24.5% 23.6%
Selling, general, and administrative expenses 367,987 362,226
Restructuring and severance costs 19,199 19,215
Impairment of intangible assets 1,559 57,600
Impairment of goodwill - 5,380
U.S. pension settlement charges 79,321 -
Operating income 101,717 97,799
Operating margin 4.4% 4.3%
Other income (expense):
Interest expense (25,623) (25,685)
Other 4,716 7,976
Gain on early extinguishment of debt 4,597 -
Gain (loss) related to Tianjin explosion 8,809 (5,350)
Total other income (expense) - net (7,501) (23,059)
Income before taxes 94,216 74,740
Income taxes 44,843 182,473
Net earnings (loss) 49,373 (107,733)
Less: net earnings attributable to noncontrolling interests 581 781
Net earnings (loss) attributable to Vishay stockholders$ 48,792 $ (108,514)
Basic earnings (loss) per share attributable to Vishay stockholders$ 0.33 $ (0.73)
Diluted earnings (loss) per share attributable to Vishay stockholders$ 0.32 $ (0.73)
Weighted average shares outstanding - basic 147,152 147,700
Weighted average shares outstanding - diluted 150,697 147,700
Cash dividends per share$ 0.25 $ 0.24

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended
December 31, 2016 October 1, 2016 December 31, 2015
Net revenues$ 570,819 $ 591,955 $ 555,928
Costs of products sold 438,374 438,054 430,372
Gross profit 132,445 153,901 125,556
Gross margin 23.2% 26.0% 22.6%
Selling, general, and administrative expenses 91,532 93,916 85,509
Restructuring and severance costs 7,060 1,197 9,821
Impairment of intangible assets - 1,559 -
U.S. pension settlement charges 79,321 - -
Operating income (loss) (45,468) 57,229 30,226
Operating margin -8.0% 9.7% 5.4%
Other income (expense):
Interest expense (6,722) (6,165) (5,911)
Other 2,061 (380) 116
Gain (loss) related to Tianjin explosion 8,809 - -
Total other income (expense) - net 4,148 (6,545) (5,795)
Income (loss) before taxes (41,320) 50,684 24,431
Income taxes (benefit) 7,284 14,088 162,057
Net earnings (loss) (48,604) 36,596 (137,626)
Less: net earnings attributable to noncontrolling interests 144 156 189
Net earnings (loss) attributable to Vishay stockholders$ (48,748) $ 36,440 $ (137,815)
Basic earnings (loss) per share attributable to Vishay stockholders$ (0.33) $ 0.25 $ (0.93)
Diluted earnings (loss) per share attributable to Vishay stockholders$ (0.33) $ 0.24 $ (0.93)
Weighted average shares outstanding - basic 146,195 146,924 147,702
Weighted average shares outstanding - diluted 146,195 149,894 147,702
Cash dividends per share$ 0.0625 $ 0.0625 $ 0.0600

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
December 31, 2016 December 31, 2015
(unaudited)
Assets
Current assets:
Cash and cash equivalents$ 471,781 $ 475,507
Short-term investments 626,627 619,040
Accounts receivable, net 274,027 272,559
Inventories:
Finished goods 109,075 108,869
Work in process 162,311 201,045
Raw materials 109,859 110,657
Total inventories 381,245 420,571
Prepaid expenses and other current assets 110,792 99,815
Total current assets 1,864,472 1,887,492
Property and equipment, at cost:
Land 89,753 89,593
Buildings and improvements 570,932 562,171
Machinery and equipment 2,283,222 2,380,299
Construction in progress 71,777 79,910
Allowance for depreciation (2,166,813) (2,246,677)
848,871 865,296
Goodwill 141,407 138,244
Other intangible assets, net 84,463 103,258
Other assets 138,588 158,696
Total assets$ 3,077,801 $ 3,152,986

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
December 31, 2016 December 31, 2015
(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks$ 3 $ 4
Trade accounts payable 174,107 157,210
Payroll and related expenses 114,576 113,976
Other accrued expenses 149,131 164,336
Income taxes 19,033 22,198
Total current liabilities 456,850 457,724
Long-term debt less current portion 357,023 436,738
Deferred income taxes 286,797 305,413
Other liabilities 59,725 60,450
Accrued pension and other postretirement costs 257,789 264,618
Total liabilities 1,418,184 1,524,943
Redeemable convertible debentures 88,659 -
Equity:
Vishay stockholders' equity
Common stock 13,385 13,546
Class B convertible common stock 1,213 1,213
Capital in excess of par value 1,952,988 2,058,492
Retained earnings (accumulated deficit) (307,417) (319,448)
Accumulated other comprehensive income (loss) (94,652) (131,327)
Total Vishay stockholders' equity 1,565,517 1,622,476
Noncontrolling interests 5,441 5,567
Total equity 1,570,958 1,628,043
Total liabilities, temporary equity, and equity$ 3,077,801 $ 3,152,986

VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Cash Flows
(In thousands)
Years ended
December 31, 2016 December 31, 2015
(unaudited)
Operating activities
Net earnings$ 49,373 $ (107,733)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization 159,363 176,169
(Gain) loss on disposal of property and equipment (4,054) (86)
Accretion of interest on convertible debentures 4,610 4,264
Inventory write-offs for obsolescence 22,619 21,384
Impairment of goodwill and intangible assets 1,559 62,980
U.S. pension settlement charges 79,321 -
Pensions and other postretirement benefits, net of contributions (3,282) (3,543)
Deferred income taxes (2,519) 118,447
Gain on early extinguishment of debt (4,597) -
Other (2,220) 698
Changes in operating assets and liabilities, net of effects of businesses acquired (4,206) (27,249)
Net cash provided by operating activities 295,967 245,331
Investing activities
Purchase of property and equipment (134,635) (147,142)
Proceeds from sale of property and equipment 5,701 2,049
Purchase and deposits for businesses, net of cash acquired - (6,750)
Purchase of short-term investments (555,250) (486,949)
Maturity of short-term investments 532,601 345,397
Sale of short-term investments - 503
Sale of other investments - 400
Other investing activities 2,942 (4,884)
Net cash provided by (used in) investing activities (148,641) (297,376)
Financing activities
Debt issuance costs - (3,693)
Principal payments on long-term debt and capital lease obligations (34,044) -
Net proceeds (payments) on revolving credit lines (47,000) (10,000)
Net changes in short-term borrowings (723) (14)
Common stock repurchases (23,159) -
Dividends paid to common stockholders (33,693) (32,506)
Dividends paid to Class B common stockholders (3,032) (2,911)
Excess tax benefit from RSUs vested - 21
Proceeds from stock options exercised 356 -
Distributions to noncontrolling interests (707) (725)
Net cash provided by (used in) financing activities (142,002) (49,828)
Effect of exchange rate changes on cash and cash equivalents (9,050) (14,792)
Net increase (decrease) in cash and cash equivalents (3,726) (116,665)
Cash and cash equivalents at beginning of period 475,507 592,172
Cash and cash equivalents at end of period$ 471,781 $ 475,507

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended Years ended
December 31, 2016 October 1, 2016 December 31, 2015 December 31, 2016 December 31, 2015
GAAP net earnings (loss) attributable to Vishay stockholders$ (48,748) $ 36,440 $ (137,815) $ 48,792 $ (108,514)
Reconciling items affecting operating margin:
Restructuring and severance costs$ 7,060 $ 1,197 $ 9,821 $ 19,199 $ 19,215
Impairment of intangible assets - 1,559 - 1,559 57,600
Impairment of goodwill - - - - 5,380
U.S. pension settlement charges 79,321 - - 79,321 -
Reconciling items other income (expense):
Gain on early extinguishment of debt$ - $ - $ - $ (4,597) $ -
Loss (gain) related to Tianjin explosion (8,809) - - (8,809) 5,350
Reconciling items affecting tax expense (benefit):
Effects of cash repatriation program$ (165) $ (1,402) $ 163,954 $ (3,553) $ 163,954
Additional tax expense from AOCI - pension plan 34,853 - - 34,853 -
Effects of tax law changes - - - - -
Effects of changes in valuation allowances - - (8,888) - (8,888)
Effects of changes in uncertain tax positions (8,704) - (2,629) (8,704) (2,629)
Tax effects of pre-tax items above (27,465) (441) (3,141) (29,901) (22,468)
Adjusted net earnings$ 27,343 $ 37,353 $ 21,302 $ 128,160 $ 109,000
Adjusted weighted average diluted shares outstanding 152,408 149,894 150,497 150,697 151,329
Adjusted earnings per diluted share*$ 0.18 $ 0.25 $ 0.14 $ 0.85 $ 0.72
* Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
Fiscal quarters ended Years ended
December 31, 2016 October 1, 2016 December 31, 2015 December 31, 2016 December 31, 2015
Net cash provided by operating activities$ 83,339 $ 117,657 $ 91,762 $ 295,967 $ 245,331
Proceeds from sale of property and equipment 4,460 1,048 60 5,701 2,049
Less: Capital expenditures (53,289) (30,273) (60,375) (134,635) (147,142)
Free cash$ 34,510 $ 88,432 $ 31,447 $ 167,033 $ 100,238

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
Fiscal quarters ended Years ended
December 31, 2016 October 1, 2016 December 31, 2015 December 31, 2016 December 31, 2015
GAAP net earnings (loss) attributable to Vishay stockholders$ (48,748) $ 36,440 $ (137,815) $ 48,792 $ (108,514)
Net earnings (loss) attributable to noncontrolling interests 144 156 189 581 781
Net earnings (loss)$ (48,604) $ 36,596 $ (137,626) $ 49,373 $ (107,733)
Interest expense$ 6,722 $ 6,165 $ 5,911 $ 25,623 $ 25,685
Interest income (1,064) (1,033) (1,057) (4,264) (4,397)
Income taxes 7,284 14,088 162,057 44,843 182,473
Depreciation and amortization 40,220 40,026 41,888 159,363 176,169
EBITDA$ 4,558 $ 95,842 $ 71,173 $ 274,938 $ 272,197
Reconciling items
Restructuring and severance costs$ 7,060 $ 1,197 $ 9,821 $ 19,199 $ 19,215
Impairment of intangible assets - 1,559 - 1,559 57,600
Impairment of goodwill - - - - 5,380
U.S. pension settlement charges 79,321 - - 79,321 -
Gain on early extinguishment of debt - - - (4,597) -
Loss (gain) related to Tianjin explosion (8,809) - - (8,809) 5,350
Adjusted EBITDA$ 82,130 $ 98,598 $ 80,994 $ 361,611 $ 359,742
Adjusted EBITDA margin** 14.4% 16.7% 14.6% 15.6% 15.6%
** Adjusted EBITDA as a percentage of net revenues

Contact: Vishay Intertechnology, Inc. Peter Henrici Senior Vice President, Corporate Communications +1-610-644-1300

Source:Vishay Intertechnology