Vishay Intertechnology Reports Decreased Net Revenues and Earnings

Today, Vishay Intertechnology has released its 10-K report. Vishay Intertechnology, Inc. manufactures and sells discrete semiconductors and passive electronic components in Asia, Europe, and the Americas. The company operates in six segments: Metal Oxide Semiconductor Field Effect Transistors (MOSFETs), Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors. It serves various end markets including industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical sectors.

In the latest 10-K report, Vishay Intertechnology reported net revenues for the year ended December 31, 2023, at $3.402 billion, compared to $3.497 billion and $3.240 billion for the years ended December 31, 2022 and 2021, respectively. Net earnings attributable to Vishay stockholders for the year ended December 31, 2023, were $323.8 million, or $2.31 per diluted share, compared to $428.8 million, or $2.98 per diluted share, and $298.0 million, or $2.05 per share, for the years ended December 31, 2022 and 2021, respectively.

The company's key financial metrics decreased in the fourth fiscal quarter of 2023 primarily due to the negative impacts of an ongoing distributor inventory correction that resulted in lower orders. Net revenues and margins decreased versus the prior year period primarily due to lower volume. Vishay Intertechnology is focused on enhancing stockholder value by growing its business and improving earnings per share. The company plans to continue growing its business through intensified internal growth supplemented by opportunistic acquisitions, while maintaining a prudent capital structure. To drive growth and optimize stockholder value, it plans to capitalize on the mega trends of e-mobility, sustainability, and connectivity through various initiatives.

In addition, the company announced the acquisition of Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177 million in cash, subject to customary post-closing adjustments. Vishay Intertechnology also adopted a Stockholder Return Policy in 2022, calling for it to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis.

Vishay Intertechnology's growth and company transformation initiatives include expanding capacity to support its highest growth and highest return product lines, positioning itself to be ready for the next phase of megatrends in e-mobility, sustainability, and connectivity, and investing a total of about $1.2 billion between 2023 and 2025. The company is also focused on increasing its technical resources, adding additional customer-facing engineers, and intensifying its channel management.

For more information, read the company's full 10-K submission here.

2018 2019 2020 2021 2022 2023
Revenue (M) $3,035 $2,668 $2,502 $3,240 $3,497 $3,472
Gross Margins 28% 25% 23% 27% 30% 28%
Net Margins 11% 6% 5% 9% 12% 10%
Net Income (M) $346 $164 $123 $298 $429 $345
Net Interest Expense (M) $37 $34 $32 $18 $17 $23
Depreciation & Amort. (M) $162 $164 $166 $167 $164 $177
Diluted Shares (M) 155 145 145 145 144 140
Earnings Per Share $2.24 $1.13 $0.85 $2.05 $2.98 $2.45
EPS Growth n/a -49.55% -24.78% 141.18% 45.37% -17.79%
Avg. Price $18.86 $16.91 $16.2 $21.51 $19.01 $22.3
P/E Ratio 7.89 14.96 19.06 10.49 6.36 9.07
Free Cash Flow (M) $29 $140 $191 $239 $159 $189
CAPEX (M) $230 $157 $124 $218 $325 $337
EV / EBITDA 4.98 6.43 6.68 5.12 4.04 3.96
Total Debt (M) $989 $998 $790 $911 $1,002 $817
Net Debt / EBITDA 0.47 0.71 0.45 0.22 0.5 -0.39
Current Ratio 2.77 3.27 3.02 2.9 2.92 3.4

Vishay Intertechnology, currently priced at $22.18, presents a mixed picture for potential investors. On the positive side, the company is experiencing solid revenue growth at a rate of 4.0%. Additionally, its capital expenditures are increasing at a robust rate of 11.8%, reflecting a commitment to future growth. The firm's operating margins, averaging 13.7% over the last 6 years, are in line with the industry average and are growing at a yearly rate of 4.2%.

However, there are also concerning factors. Vishay Intertechnology's gross margins of 28% are thinner than the industry average of 34.2%, potentially indicating a lack of competitiveness. The firm's use of share buybacks to sustain its earnings per share growth rate, as evidenced by its decrease in the number of shares and stagnation in net income, raises questions about the sustainability of its growth.

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