VSH 8-K

Vishay Intertechnology Inc (VSH)

8-K 2020-11-03 For: 2020-11-03

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Delaware	1-7416	38-1686453
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)


63 Lancaster Avenue Malvern, PA	19355-2143
(Address of Principal Executive Offices)	Zip Code

Registrant's telephone number, including area code 610-644-1300

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading symbol	Name of exchange on which registered
Common stock, par value $0.10 per share	VSH	New York Stock Exchange

•	The Company has approximately 145 million shares issued and outstanding, including shares of common stock and class B common stock.

•	The number of shares included in diluted EPS related to restricted stock units does not vary significantly and is generally less than 1 million incremental shares.

•	The Company's Convertible Senior Debentures due 2040 are convertible at a conversion price of $12.28 per $1,000 principal amount, equivalent to 81.4200 shares per $1,000 principal amount. There is $0.3 million principal amount of the debentures outstanding. The number of shares of common stock that Vishay will include in its diluted earnings per share computation, assuming an average market price for Vishay common stock in excess of the conversion price, will be determined in accordance with the following formula:

	S = $300,000 / $1000 * [(P - $12.28) * 81.4200] / P

	where

	S = the number of shares to be included in diluted EPS, and
	P = the average market price of Vishay common stock for the quarter.

	If the average market price is less than $12.28, no shares will be included in the diluted earnings per share computation.

•	The Company's Convertible Senior Debentures due 2041 are convertible at a conversion price of $16.83 per $1,000 principal amount, equivalent to 59.4161 shares per $1,000 principal amount. There is $2.6 million principal amount of the debentures outstanding. The number of shares of common stock that Vishay will include in its diluted earnings per share computation, assuming an average market price for Vishay common stock in excess of the conversion price, will be determined in accordance with the following formula:

	S = [$2,640,000 / $1000] * [(P - $16.83) * 59.4161] / P

	where

	S = the number of shares to be included in diluted EPS, and
	P = the average market price of Vishay common stock for the quarter.

	If the average market price is less than $16.83, no shares will be included in the diluted earnings per share computation.

•	The Company's Convertible Senior Notes due 2025 are convertible at a conversion price of $31.38 per $1,000 principal amount, equivalent to 31.8674 shares per $1,000 principal amount. There is $465.3 million principal amount of the notes outstanding. The number of shares of common stock that Vishay will include in its diluted earnings per share computation, assuming an average market price for Vishay common stock in excess of the conversion price, will be determined in accordance with the following formula:

	S = [$465,344,000 / $1000] * [(P - $31.38) * 31.8674] / P

	where

	S = the number of shares to be included in diluted EPS, and
	P = the average market price of Vishay common stock for the quarter.

	If the average market price is less than $31.38, no shares will be included in the diluted earnings per share computation.

	Date of Report (date of earliest event reported) November 3, 2020

Average Stock Price		Projected Diluted Shares
$	<32.00		145
$	32.00 - 33.00		146
$	>33.00		147

Exhibit No.		Description

	99.1	Press release dated November 3, 2020
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

	Name:	Lori Lipcaman
	Title:	Executive Vice President and
		Chief Financial Officer

VISHAY INTERTECHNOLOGY, INC.
Summary of Operations
(Unaudited - In thousands, except per share amounts)

	Fiscal quarters ended
	October 3, 2020			July 4, 2020			September 28, 2019

Net revenues	$	640,160		$	581,717		$	628,329
Costs of products sold*		488,451			451,047			478,250
Gross profit		151,709			130,670			150,079
Gross margin		23.7	%		22.5	%		23.9	%

Selling, general, and administrative expenses**		90,219			89,127			91,796
Restructuring and severance costs		-			743			7,255
Operating income		61,490			40,800			51,028
Operating margin		9.6	%		7.0	%		8.1	%

Other income (expense):
Interest expense		(7,414	)		(8,430	)		(8,564	)
Other		(4,898	)		(1,484	)		1,718
Loss on early extinguishment of debt		(3,454	)		(1,146	)		-
Total other income (expense) - net		(15,766	)		(11,060	)		(6,846	)

Income before taxes		45,724			29,740			44,182

Income tax expense		12,063			4,845			13,917

Net earnings		33,661			24,895			30,265

Less: net earnings attributable to noncontrolling interests		177			242			227

Net earnings attributable to Vishay stockholders	$	33,484		$	24,653		$	30,038

Basic earnings per share attributable to Vishay stockholders	$	0.23		$	0.17		$	0.21

Diluted earnings per share attributable to Vishay stockholders	$	0.23		$	0.17		$	0.21

Weighted average shares outstanding - basic		144,854			144,846			144,628

Weighted average shares outstanding - diluted		145,197			145,170			145,027

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 $242 and $923 for the fiscal quarters ended October 3, 2020 and July 4, 2020, respectively.
** Includes incremental selling, general, and administrative expenses (benefits) separable from normal operations directly attributable to the COVID-19 outbreak of $(441) and $(747), for the fiscal quarters ended October 3, 2020 and July 4, 2020, respectively.

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)

	October 3, 2020			December 31, 2019
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	682,422		$	694,133
Short-term investments		29,538			108,822
Accounts receivable, net		342,691			328,187
Inventories:
Finished goods		119,221			122,466
Work in process		197,806			187,354
Raw materials		123,176			121,860
Total inventories		440,203			431,680

Prepaid expenses and other current assets		120,490			141,294
Total current assets		1,615,344			1,704,116

Property and equipment, at cost:
Land		75,335			75,011
Buildings and improvements		619,228			585,064
Machinery and equipment		2,678,629			2,606,355
Construction in progress		78,059			110,722
Allowance for depreciation		(2,534,027	)		(2,425,627	)
		917,224			951,525

Right of use assets		103,235			93,162

Goodwill		157,406			150,642

Other intangible assets, net		67,839			60,659

Other assets		172,785			160,671
Total assets	$	3,033,833		$	3,120,775

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

	October 3, 2020			December 31, 2019
	(Unaudited)

Liabilities and equity
Current liabilities:
Notes payable to banks	$	4		$	2
Trade accounts payable		159,016			173,915
Payroll and related expenses		130,252			122,100
Lease liabilities		21,924			20,217
Other accrued expenses		169,379			186,463
Income taxes		22,699			17,731
Total current liabilities		503,274			520,428

Long-term debt less current portion		392,290			499,147
U.S. transition tax payable		125,438			140,196
Deferred income taxes		8,670			22,021
Long-term lease liabilities		86,043			78,511
Other liabilities		101,191			100,207
Accrued pension and other postretirement costs		277,758			272,402
Total liabilities		1,494,664			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		1,410,335			1,425,170
Retained earnings		115,184			72,180
Accumulated other comprehensive income (loss)		(3,340	)		(26,646	)
Total Vishay stockholders' equity		1,536,645			1,485,149
Noncontrolling interests		2,524			2,540
Total equity		1,539,169			1,487,689
Total liabilities, temporary equity, and equity	$	3,033,833		$	3,120,775

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
	Nine fiscal months ended
	October 3, 2020			September 28, 2019

Operating activities
Net earnings	$	85,940		$	150,641
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization		123,776			122,302
(Gain) loss on disposal of property and equipment		257			(168	)
Accretion of interest on convertible debt instruments		10,232			10,558
Inventory write-offs for obsolescence		17,891			19,214
Loss on early extinguishment of debt		7,520			1,307
Deferred income taxes		(1,142	)		(4,481	)
Other		3,188			9,029
Change in U.S. transition tax liability		(14,757	)		(14,757	)
Change in repatriation tax liability		(16,258	)		(38,814	)
Changes in operating assets and liabilities, net of effects of businesses acquired		(27,408	)		(42,810	)
Net cash provided by operating activities		189,239			212,021

Investing activities
Purchase of property and equipment		(70,801	)		(100,267	)
Proceeds from sale of property and equipment		293			486
Purchase of businesses, net of cash acquired		(25,852	)		(11,862	)
Purchase of short-term investments		(157,177	)		(59,440	)
Maturity of short-term investments		241,016			79,765
Other investing activities		(529	)		4,021
Net cash used in investing activities		(13,050	)		(87,297	)

Financing activities
Issuance costs		-			(5,394	)
Repurchase of convertible debt instruments		(148,177	)		(22,695	)
Net changes in short-term borrowings		(110	)		(12	)
Dividends paid to common stockholders		(37,779	)		(36,396	)
Dividends paid to Class B common stockholders		(3,448	)		(3,327	)
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		(192,130	)		(71,132	)
Effect of exchange rate changes on cash and cash equivalents		4,230			(8,141	)

Net increase (decrease) in cash and cash equivalents		(11,711	)		45,451

Cash and cash equivalents at beginning of period		694,133			686,032
Cash and cash equivalents at end of period	$	682,422		$	731,483

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Adjusted Earnings Per Share
(Unaudited - In thousands, except per share amounts)
	Fiscal quarters ended									Nine fiscal months ended
	October 3, 2020			July 4, 2020			September 28, 2019			October 3, 2020			September 28, 2019

GAAP net earnings attributable to Vishay stockholders	$	33,484		$	24,653		$	30,038		$	85,356		$	149,974

Reconciling items affecting gross profit:
Impact of the COVID-19 outbreak	$	242		$	923		$	-		$	4,295		$	-

Other reconciling items affecting operating income:
Restructuring and severance costs	$	-		$	743		$	7,255		$	743		$	7,255
Impact of the COVID-19 outbreak		(441	)		(747	)		-			(871	)		-

Reconciling items affecting other income (expense):
Loss on early extinguishment of debt	$	3,454		$	1,146		$	-		$	7,520		$	1,307

Reconciling items affecting tax expense (benefit):
Change in deferred taxes due to early extinguishment of debt	$	-		$	-		$	-		$	(1,346	)	$	(1,312	)
Effects of tax-basis foreign exchange gain		-			-			-			-			7,554
Effects of cash repatriation program		-			(190	)		2,604			(190	)		1,971
Tax effects of pre-tax items above		(716	)		(589	)		(1,644	)		(2,787	)		(1,934	)

Adjusted net earnings	$	36,023		$	25,939		$	38,253		$	92,720		$	164,815

Adjusted weighted average diluted shares outstanding		145,197			145,170			145,027			145,221			145,114

Adjusted earnings per diluted share	$	0.25		$	0.18		$	0.26		$	0.64		$	1.14

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of Free Cash
(Unaudited - In thousands)
	Fiscal quarters ended									Nine fiscal months ended
	October 3, 2020			July 4, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Net cash provided by operating activities	$	64,330		$	90,431			76,202		$	189,239		$	212,021
Proceeds from sale of property and equipment		63			177			22			293			486
Less: Capital expenditures		(21,969	)		(24,504	)		(30,119	)		(70,801	)		(100,267	)
Free cash	$	42,424		$	66,104		$	46,105		$	118,731		$	112,240

VISHAY INTERTECHNOLOGY, INC.
Reconciliation of EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
	Fiscal quarters ended									Nine fiscal months ended
	October 3, 2020			July 4, 2020			September 28, 2019			October 3, 2020			September 28, 2019

GAAP net earnings attributable to Vishay stockholders	$	33,484		$	24,653		$	30,038		$	85,356		$	149,974
Net earnings attributable to noncontrolling interests		177			242			227			584			667
Net earnings	$	33,661		$	24,895		$	30,265		$	85,940		$	150,641

Interest expense	$	7,414		$	8,430		$	8,564		$	24,396		$	25,160
Interest income		(514	)		(956	)		(2,365	)		(3,324	)		(6,711	)
Income taxes		12,063			4,845			13,917			25,658			64,377
Depreciation and amortization		41,618			40,638			40,956			123,776			122,302
EBITDA	$	94,242		$	77,852		$	91,337		$	256,446		$	355,769

Reconciling items
Impact of the COVID-19 outbreak	$	(199	)	$	176		$	-		$	3,424		$	-
Restructuring and severance costs		-			743			7,255			743			7,255
Loss on early extinguishment of debt		3,454			1,146			-			7,520			1,307

Adjusted EBITDA	$	97,497		$	79,917		$	98,592		$	268,133		$	364,331

Adjusted EBITDA margin**		15.2	%		13.7	%		15.7	%		14.6	%		17.7	%

** Adjusted EBITDA as a percentage of net revenues