Vishay Reports Results for Second Quarter 2020

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

MALVERN, Pa., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Vishay Intertechnology, Inc. (NYSE: VSH), one of the world's largest manufacturers of discrete semiconductors and passive components, today announced its results for the fiscal quarter and six fiscal months ended July 4, 2020.

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

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

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

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

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

A conference call to discuss Vishay’s second quarter financial results is scheduled for Tuesday, August 4, 2020 at 9:00 a.m. ET. The dial-in number for the conference call is 877-589-6174 ([phone], if calling from outside the United States or Canada) and the access code is 6075047.

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

There will be a replay of the conference call from 12:00 p.m. ET on Tuesday, August 4, 2020, through 11:59 p.m. ET on Tuesday, August 12, 2020. The telephone number for the replay is [phone] ([phone], if calling from outside the United States or Canada) and the access code is 6075047.

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 http://www.vishay.com.

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

Statements contained herein that relate to the Company's future performance, including statements with respect to forecasted revenues, margins, inventories, product demand, anticipated areas of growth, market segment performance, and the performance of the economy in general, are forward-looking statements within the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should," or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements may vary materially from those anticipated, estimated or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; delays or difficulties in implementing our cost reduction strategies; delays or difficulties in expanding our manufacturing capacities; manufacturing or supply chain interruptions or changes in customer demand because of COVID-19; an inability to attract and retain highly qualified personnel; changes in foreign currency exchange rates; uncertainty related to the effects of changes in foreign currency exchange rates; competition and technological changes in our industries; difficulties in new product development; difficulties in identifying suitable acquisition candidates, consummating a transaction on terms which we consider acceptable, and integration and performance of acquired businesses; changes in U.S. and foreign trade regulations and tariffs, and uncertainty regarding the same; changes in applicable domestic and foreign tax regulations, and uncertainty regarding the same; changes in applicable accounting standards and other factors affecting our operations that are set forth in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Vishay Intertechnology, Inc. Peter Henrici
Senior Vice President, Corporate Communications
[phone]

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

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

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)
	Six fiscal months ended
	July 4, 2020				June 29, 2019
Net revenues	$	1,194,558			$	1,430,399
Costs of products sold*		916,648				1,044,639
Gross profit		277,910				385,760
Gross margin		23.3	%			27.0	%
Selling, general, and administrative expenses*		188,959				198,536
Restructuring and severance costs		743				-
Operating income		88,208				187,224
Operating margin		7.4	%			13.1	%
Other income (expense):
Interest expense		(16,982	)			(16,596	)
Other		(1,286	)			1,515
Loss on early extinguishment of debt		(4,066	)			(1,307	)
Total other income (expense) - net		(22,334	)			(16,388	)
Income before taxes		65,874				170,836
Income tax expense		13,595				50,460
Net earnings		52,279				120,376
Less: net earnings attributable to noncontrolling interests		407				440
Net earnings attributable to Vishay stockholders	$	51,872			$	119,936
Basic earnings per share attributable to Vishay stockholders	$	0.36			$	0.83
Diluted earnings per share attributable to Vishay stockholders	$	0.36			$	0.83
Weighted average shares outstanding - basic		144,818				144,589
Weighted average shares outstanding - diluted		145,232				145,158
Cash dividends per share	$	0.19			$	0.18

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

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

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

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

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended												Six fiscal months ended
	July 4, 2020				April 4, 2020				June 29, 2019				July 4, 2020				June 29, 2019
GAAP net earnings attributable to Vishay stockholders	$	24,653			$	27,219			$	44,477			$	51,872			$	119,936
Reconciling items affecting gross profit:
Impact of the COVID-19 outbreak	$	923			$	3,130			$	-			$	4,053			$	-
Other reconciling items affecting operating income:
Restructuring and severance costs	$	743			$	-			$	-			$	743			$	-
Impact of the COVID-19 outbreak		(747	)			317				-				(430	)			-
Reconciling items affecting other income (expense):
Loss on early extinguishment of debt	$	1,146			$	2,920			$	-			$	4,066			$	1,307
Reconciling items affecting tax expense (benefit):
Change in deferred taxes due to early extinguishment of debt	$	-			$	(1,346	)		$	-			$	(1,346	)		$	(1,312	)
Effects of tax-basis foreign exchange gain		-				-				7,554				-				7,554
Effects of cash repatriation program		(190	)			-				(48	)			(190	)			(633	)
Tax effects of pre-tax items above		(589	)			(1,482	)			-				(2,071	)			(290	)
Adjusted net earnings	$	25,939			$	30,758			$	51,983			$	56,697			$	126,562
Adjusted weighted average diluted shares outstanding		145,170				145,295				145,023				145,232				145,158
Adjusted earnings per diluted share	$	0.18			$	0.21			$	0.36			$	0.39			$	0.87

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

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended												Six fiscal months ended
	July 4, 2020				April 4, 2020				June 29, 2019				July 4, 2020				June 29, 2019
GAAP net earnings attributable to Vishay stockholders	$	24,653			$	27,219			$	44,477			$	51,872			$	119,936
Net earnings attributable to noncontrolling interests		242				165				258				407				440
Net earnings	$	24,895			$	27,384			$	44,735			$	52,279			$	120,376
Interest expense	$	8,430			$	8,552			$	8,204			$	16,982			$	16,596
Interest income		(956	)			(1,854	)			(2,147	)			(2,810	)			(4,346	)
Income taxes		4,845				8,750				26,153				13,595				50,460
Depreciation and amortization		40,638				41,520				40,918				82,158				81,346
EBITDA	$	77,852			$	84,352			$	117,863			$	162,204			$	264,432
Reconciling items
Impact of the COVID-19 outbreak	$	176			$	3,447			$	-			$	3,623			$	-
Restructuring and severance costs		743				-				-				743				-
Loss on early extinguishment of debt		1,146				2,920				-				4,066				1,307
Adjusted EBITDA	$	79,917			$	90,719			$	117,863			$	170,636			$	265,739
Adjusted EBITDA margin**		13.7	%			14.8	%			17.2	%			14.3	%			18.6	%
** Adjusted EBITDA as a percentage of net revenues