Item 1. Financial Statements
Item 1. Financial Statements
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)
September 30, 2023
December 31, 2022
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
1,095,119
$
610,825
Short-term investments
78,994
305,272
Accounts receivable, net
442,646
416,178
Inventories:
Finished goods
165,936
156,234
Work in process
271,107
261,345
Raw materials
206,499
201,300
Total inventories
643,542
618,879
Prepaid expenses and other current assets
179,825
170,056
Total current assets
2,440,126
2,121,210
Property and equipment, at cost:
Land
76,139
75,907
Buildings and improvements
692,037
658,829
Machinery and equipment
2,973,943
2,857,636
Construction in progress
226,460
243,038
Allowance for depreciation
( 2,788,393
)
( 2,704,951
)
Property and equipment, net
1,180,186
1,130,459
Right of use assets
127,992
131,193
Deferred income taxes
128,109
104,667
Goodwill
200,895
201,432
Other intangible assets, net
72,126
77,896
Other assets
91,773
98,796
Total assets
$
4,241,207
$
3,865,653
Continues on following page.
4
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)
September 30, 2023
December 31, 2022
(Unaudited)
Liabilities and equity
Current liabilities:
Trade accounts payable
$
207,440
$
189,099
Payroll and related expenses
162,113
166,079
Lease liabilities
26,097
25,319
Other accrued expenses
238,565
261,606
Income taxes
82,734
84,155
Total current liabilities
716,949
726,258
Long-term debt less current portion
817,257
500,937
U.S. transition tax payable
47,027
83,010
Deferred income taxes
138,628
117,183
Long-term lease liabilities
103,223
108,493
Other liabilities
92,896
92,530
Accrued pension and other postretirement costs
182,704
187,092
Total liabilities
2,098,684
1,815,503
Equity:
Vishay stockholders' equity
Common stock
13,318
13,291
Class B convertible common stock
1,210
1,210
Capital in excess of par value
1,286,568
1,352,321
Retained earnings
1,003,700
773,228
Treasury stock (at cost)
( 140,633
)
( 82,972
)
Accumulated other comprehensive income (loss)
( 25,883
)
( 10,827
)
Total Vishay stockholders' equity
2,138,280
2,046,251
Noncontrolling interests
4,243
3,899
Total equity
2,142,523
2,050,150
Total liabilities and equity
$
4,241,207
$
3,865,653
See accompanying notes.
5
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Fiscal quarters ended
September 30, 2023
October 1, 2022
Net revenues
$
853,653
$
924,798
Costs of products sold
616,010
635,260
Gross profit
237,643
289,538
Selling, general, and administrative expenses
122,513
106,436
Operating income
115,130
183,102
Other income (expense):
Interest expense
( 7,153
)
( 4,110
)
Loss on early extinguishment of debt
( 18,874
)
-
Other
7,409
2,137
Total other income (expense)
( 18,618
)
( 1,973
)
Income before taxes
96,512
181,129
Income tax expense
30,557
40,566
Net earnings
65,955
140,563
Less: net earnings attributable to noncontrolling interests
426
502
Net earnings attributable to Vishay stockholders
$
65,529
$
140,061
Basic earnings per share attributable to Vishay stockholders
$
0.47
$
0.98
Diluted earnings per share attributable to Vishay stockholders
$
0.47
$
0.98
Weighted average shares outstanding - basic
139,083
142,887
Weighted average shares outstanding - diluted
140,001
143,447
Cash dividends per share
$
0.10
$
0.10
See accompanying notes.
6
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)
Fiscal quarters ended
September 30, 2023
October 1, 2022
Net earnings
$
65,955
$
140,563
Other comprehensive income (loss), net of tax
Pension and other post-retirement actuarial items
363
1,321
Foreign currency translation adjustment
( 38,901
)
( 50,070
)
Other comprehensive income (loss)
( 38,538
)
( 48,749
)
Comprehensive income
27,417
91,814
Less: comprehensive income attributable to noncontrolling interests
426
502
Comprehensive income attributable to Vishay stockholders
$
26,991
$
91,312
See accompanying notes.
7
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Nine fiscal months ended
September 30, 2023
October 1, 2022
Net revenues
$
2,616,809
$
2,642,103
Costs of products sold
1,842,980
1,832,234
Gross profit
773,829
809,869
Selling, general, and administrative expenses
365,515
329,691
Operating income
408,314
480,178
Other income (expense):
Interest expense
( 18,677
)
( 12,639
)
Loss on early extinguishment of debt
( 18,874
)
-
Other
15,995
( 2,234
)
Total other income (expense)
( 21,556
)
( 14,873
)
Income before taxes
386,758
465,305
Income tax expense
113,199
108,023
Net earnings
273,559
357,282
Less: net earnings attributable to noncontrolling interests
1,211
1,260
Net earnings attributable to Vishay stockholders
$
272,348
$
356,022
Basic earnings per share attributable to Vishay stockholders
$
1.95
$
2.47
Diluted earnings per share attributable to Vishay stockholders
$
1.94
$
2.46
Weighted average shares outstanding - basic
139,828
143,983
Weighted average shares outstanding - diluted
140,577
144,470
Cash dividends per share
$
0.30
$
0.30
See accompanying notes.
8
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)
Nine fiscal months ended
September 30, 2023
October 1, 2022
Net earnings
$
273,559
$
357,282
Other comprehensive income (loss), net of tax
Pension and other post-retirement actuarial items
647
4,245
Foreign currency translation adjustment
( 15,703
)
( 113,086
)
Other comprehensive income (loss)
( 15,056
)
( 108,841
)
Comprehensive income
258,503
248,441
Less: comprehensive income attributable to noncontrolling interests
1,211
1,260
Comprehensive income attributable to Vishay stockholders
$
257,292
$
247,181
See accompanying notes.
9
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine fiscal months ended
September 30, 2023
October 1, 2022
Operating activities
Net earnings
$
273,559
$
357,282
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
133,910
121,301
(Gain) loss on disposal of property and equipment
( 495
)
( 372
)
Inventory write-offs for obsolescence
27,469
18,197
Deferred income taxes
20,654
8,843
Stock compensation expense
11,610
5,717
Loss on early extinguishment of debt
18,874
-
Other
7,574
( 1,445
)
Change in U.S. transition tax liability
( 27,670
)
( 14,757
)
Change in repatriation tax liability
-
( 25,201
)
Net change in operating assets and liabilities
( 106,050
)
( 151,773
)
Net cash provided by operating activities
359,435
317,792
Investing activities
Capital expenditures
( 184,079
)
( 172,175
)
Proceeds from sale of property and equipment
1,034
472
Purchase of business, net of cash acquired
( 5,003
)
-
Purchase of short-term investments
( 82,166
)
( 182,079
)
Maturity of short-term investments
308,021
132,892
Other investing activities
( 1,219
)
( 199
)
Net cash provided by (used in) investing activities
36,588
( 221,089
)
Financing activities
Proceeds from long-term borrowings
750,000
-
Repurchase of convertible senior notes due 2025
( 386,745
)
-
Net payments on revolving credit facility
( 42,000
)
-
Debt issuance costs
( 26,547
)
-
Cash paid for capped call
( 94,200
)
-
Dividends paid to common stockholders
( 38,207
)
( 39,433
)
Dividends paid to Class B common stockholders
( 3,629
)
( 3,629
)
Repurchase of common stock held in treasury
( 57,661
)
( 54,671
)
Distributions to noncontrolling interests
( 867
)
( 741
)
Cash withholding taxes paid when shares withheld for vested equity awards
( 3,994
)
( 2,123
)
Net cash provided by (used in) financing activities
96,150
( 100,597
)
Effect of exchange rate changes on cash and cash equivalents
( 7,879
)
( 35,222
)
Net increase (decrease) in cash and cash equivalents
484,294
( 39,116
)
Cash and cash equivalents at beginning of period
610,825
774,108
Cash and cash equivalents at end of period
$
1,095,119
$
734,992
See accompanying notes.
10
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Equity
(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
$
13,271
$
1,210
$
1,347,830
$
401,694
$
-
$
( 20,252
)
$
1,743,753
$
2,967
$
1,746,720
Net earnings
-
-
-
103,573
-
-
103,573
377
103,950
Other comprehensive income (loss)
-
-
-
-
-
( 11,925
)
( 11,925
)
-
( 11,925
)
Issuance of stock and related tax withholdings for vested restricted stock units ( 189,731 shares)
19
-
( 2,142
)
-
-
-
( 2,123
)
-
( 2,123
)
Dividends declared ($ 0.10 per share)
-
-
22
( 14,491
)
-
-
( 14,469
)
-
( 14,469
)
Stock compensation expense
-
-
3,842
-
-
-
3,842
-
3,842
Repurchase of common stock held in treasury ( 513,227 shares)
-
-
-
-
( 9,873
)
-
( 9,873
)
-
( 9,873
)
Balance at April 2, 2022
$
13,290
$
1,210
$
1,349,552
$
490,776
$
( 9,873
)
$
( 32,177
)
$
1,812,778
$
3,344
$
1,816,122
Net earnings
-
-
-
112,388
-
-
112,388
381
112,769
Other comprehensive income
-
-
-
-
-
( 48,167
)
( 48,167
)
-
( 48,167
)
Distributions to noncontrolling interests
-
-
-
-
-
-
-
( 733
)
( 733
)
Issuance of stock and related tax withholdings for vested restricted stock units ( 11,308 shares)
1
-
( 1
)
-
-
-
-
-
-
Dividends declared ($ 0.10 per share)
-
-
22
( 14,361
)
-
-
( 14,339
)
-
( 14,339
)
Stock compensation expense
-
-
1,047
-
-
-
1,047
-
1,047
Repurchase of common stock held in treasury ( 1,400,039 shares)
-
-
-
-
( 26,288
)
-
( 26,288
)
-
( 26,288
)
Balance at July 2, 2022
$
13,291
$
1,210
$
1,350,620
$
588,803
$
( 36,161
)
$
( 80,344
)
$
1,837,419
$
2,992
$
1,840,411
Net earnings
-
-
-
140,061
-
-
140,061
502
140,563
Other comprehensive income (loss)
-
-
-
-
-
( 48,749
)
( 48,749
)
-
( 48,749
)
Distributions to noncontrolling interests
-
-
-
-
-
-
-
( 8
)
( 8
)
Dividends declared ($ 0.10 per share)
-
-
22
( 14,276
)
-
-
( 14,254
)
-
( 14,254
)
Stock compensation expense
-
-
828
-
-
-
828
-
828
Repurchase of common stock held in treasury ( 978,338 shares)
-
-
-
-
( 18,510
)
-
( 18,510
)
-
( 18,510
)
Balance at October 1, 2022
$
13,291
$
1,210
$
1,351,470
$
714,588
$
( 54,671
)
$
( 129,093
)
$
1,896,795
$
3,486
$
1,900,281
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, 2022
$
13,291
$
1,210
$
1,352,321
$
773,228
$
( 82,972
)
$
( 10,827
)
$
2,046,251
$
3,899
$
2,050,150
Net earnings
-
-
-
111,781
-
-
111,781
408
112,189
Other comprehensive income (loss)
-
-
-
-
-
19,859
19,859
-
19,859
Issuance of stock and related tax withholdings for vested restricted stock units ( 254,513 shares)
25
-
( 3,678
)
-
-
-
( 3,653
)
-
( 3,653
)
Dividends declared ($ 0.10 per share)
-
-
14
( 14,034
)
-
-
( 14,020
)
-
( 14,020
)
Stock compensation expense
-
-
2,965
-
-
-
2,965
-
2,965
Repurchase of common stock held in treasury ( 916,221 shares)
-
-
-
-
( 20,173
)
-
( 20,173
)
-
( 20,173
)
Balance at April 1, 2023
$
13,316
1,210
1,351,622
870,975
( 103,145
)
9,032
2,143,010
4,307
2,147,317
Net earnings
-
-
-
95,038
-
-
95,038
377
95,415
Other comprehensive income (loss)
-
-
-
-
-
3,623
3,623
-
3,623
Distributions to noncontrolling interests
-
-
-
-
-
-
-
( 867
)
( 867
)
Dividends declared ($ 0.10 per share)
-
-
14
( 13,951
)
-
-
( 13,937
)
-
( 13,937
)
Stock compensation expense
-
-
3,117
-
-
-
3,117
-
3,117
Repurchase of common stock held in treasury ( 847,202 shares)
-
-
-
-
( 20,226
)
-
( 20,226
)
-
( 20,226
)
Balance at July 1, 2023
$
13,316
1,210
1,354,753
952,062
( 123,371
)
12,655
2,210,625
3,817
2,214,442
Net earnings
-
-
-
65,529
-
-
65,529
426
65,955
Other comprehensive income (loss)
-
-
-
-
-
( 38,538
)
( 38,538
)
-
( 38,538
)
Issuance of stock and related tax withholdings for vested restricted stock units ( 21,617 shares)
2
-
( 343
)
-
-
-
( 341
)
-
( 341
)
Dividends declared ($ 0.10 per share)
-
-
12
( 13,891
)
-
-
( 13,879
)
-
( 13,879
)
Stock compensation expense
-
-
5,528
-
-
-
5,528
-
5,528
Repurchase of common stock held in treasury ( 630,446 shares)
-
-
-
-
( 17,262
)
-
( 17,262
)
-
( 17,262
)
Capped call transactions, net of tax
-
-
( 73,382
)
-
-
-
( 73,382
)
-
( 73,382
)
Balance at September 30, 2023
$
13,318
1,210
1,286,568
1,003,700
( 140,633
)
( 25,883
)
2,138,280
4,243
2,142,523
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, 2022. The
results of operations for the fiscal quarter and nine fiscal months ended September 30, 2023 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 2023 end on April 1, 2023, July 1, 2023, September 30, 2023, and December 31, 2023, respectively. The four fiscal
quarters in 2022 ended on April 2, 2022, July 2, 2022, October 1, 2022, and December 31, 2022, 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.
MaxPower Semiconductor, Inc.
On October 28, 2022 , the Company
acquired all of the outstanding equity interests of 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. The acquisition of MaxPower will enhance the Company's current and future silicon carbide ("SiC") offerings
for fast-growing markets such as electric vehicles.
The Company 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, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. The
purchase price for U.S. GAAP purposes includes the fair value, as of the acquisition date, of certain future contingent payments to non-employee equity holders of MaxPower. The estimated fair value of this contingent consideration as of the
acquisition date was $ 6,851 . The contingent consideration liability is included in other accrued expenses and other liabilities in the
accompanying balance sheet and is remeasured each reporting period, with changes reported as selling, general, and administrative expenses on the consolidated condensed statement of operations. See Note 13 for further discussion on the fair
value measurement.
Based on an estimate of their fair values, the Company allocated $ 18,600 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of
acquisition, the Company recorded goodwill of $ 34,246 related to this acquisition. The goodwill related to this acquisition is
included in the MOSFETs reporting unit for goodwill impairment testing.
The results and operations of this acquisition have been included in the MOSFETs segment since October 28, 2022.
Centerline Technologies, LLC
On June 30, 2023 , the Company
acquired substantially all of the assets of Centerline Technologies, LLC ("Centerline"), a Massachusetts-based, privately held
manufacturer of ceramic components used in many custom parts manufactured by certain of Vishay's Resistors businesses, for $ 5,003 .
Based on an estimate of fair values, the Company allocated $ 1,500 of the purchase price to definite-lived intangible assets. After
allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $ 2,213 related to this acquisition. The acquired business will be vertically integrated into the Company's Resistors segment, and the goodwill related to this acquisition is included in
the Resistors reporting unit for goodwill impairment testing. The results and operations of this acquisition have been included in the Resistors segment since June 30, 2023.
13
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 3 – 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:
September 30, 2023
December 31, 2022
Right of use assets
Operating Leases
Buildings and improvements
$
122,781
$
126,933
Machinery and equipment
5,211
4,260
Total
$
127,992
$
131,193
Current lease liabilities
Operating Leases
Buildings and improvements
$
23,405
$
22,926
Machinery and equipment
2,692
2,393
Total
$
26,097
$
25,319
Long-term lease liabilities
Operating Leases
Buildings and improvements
$
100,789
$
106,693
Machinery and equipment
2,434
1,800
Total
$
103,223
$
108,493
Total lease liabilities
$
129,320
$
133,812
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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Lease expense
Operating lease expense
$
7,035
$
6,258
$
20,803
$
19,014
Short-term lease expense
248
212
756
752
Variable lease expense
101
119
412
219
Total lease expense
$
7,384
$
6,589
$
21,971
$
19,985
The Company paid $ 20,912 and $ 18,062 for its operating leases in the nine
fiscal months ended September 30, 2023 and October 1, 2022, 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 9.4 years and the weighted-average discount rate is 6.2 % as of September 30, 2023.
The undiscounted future lease payments for the Company's operating lease liabilities are as follows:
September 30, 2023
2023 (excluding the nine fiscal months ended September 30, 2023)
$
6,872
2024
26,705
2025
23,627
2026
19,195
2027
17,485
Thereafter
79,852
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.
Note 4 – 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 September 30, 2023 and October 1, 2022
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.
During the nine fiscal months ended September 30, 2023,
the liabilities for unrecognized tax benefits decreased by $ 4,483 on a net basis, primarily due to decreases for settlements, partially
offset by increases for current accruals and interest.
14
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Long-Term Debt
Long-term debt consists of the following:
September 30, 2023
December 31, 2022
Credit facility
$
-
$
42,000
Convertible senior notes, due 2025
95,102
465,344
Convertible senior notes, due 2030
750,000
-
Deferred financing costs
( 27,845
)
( 6,407
)
817,257
500,937
Less current portion
-
-
$
817,257
$
500,937
Credit Facility
The Company maintains a credit facility with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders,
which was scheduled to mature on June 5, 2024 (the "Previous Credit Facility"). On May 8, 2023 , the Company entered into an Amendment and Restatement Agreement, which provides an aggregate commitment of $ 750,000 of revolving loans available until May 8, 2028
(the “Amended and Restated Credit Facility”). The maturity date of the Amended and Restated Credit Facility will accelerate if within ninety-one days prior to the maturity of the Company’s convertible senior notes due 2025, the outstanding
principal amount of such notes exceeds a defined liquidity measure as set forth in the Amended and Restated Credit Facility.
U.S. Dollar borrowings under the Amended and Restated Credit Facility bear interest at the Secured Overnight Financing Rate (“SOFR”) plus a credit
spread and an interest margin. The Amended and Restated Credit Facility also allows for borrowings in euro, British sterling, and Japanese yen, subject to a $ 250,000 limit. Borrowings in foreign currency bear interest at a local reference rate plus an interest margin. The applicable interest margin is based on Vishay's total leverage ratio. Based on Vishay's
current total leverage ratio, borrowings bear interest at SOFR plus 1.60 %, including the applicable credit spread. Vishay also
pays a commitment fee, also based on its total leverage ratio, on undrawn amounts. The undrawn commitment fee, based on Vishay's current total leverage ratio, is 0.25 % per annum.
Similar to the Previous Credit Facility, the Amended and Restated Credit Facility requires the maintenance of financial covenant ratios. For
compliance purposes, pursuant to the Amended and Restated Credit Facility, the leverage ratio is computed on a net basis, reducing the measure of outstanding debt by up to $ 250,000 of unrestricted cash. The Company must maintain a net leverage ratio of at least 3.25 to 1.00. Permitted investments and restricted payments are also subject to a pro forma net leverage ratio ( 2.75
to 1.00 and 2.50 to 1.00, respectively).
Other terms and conditions of the Amended and Restated Credit Facility are substantially similar to the Previous Credit Facility.
Convertible Debt Instruments
Convertible Senior Notes due 2030
In September 2023, the Company issued $ 750,000
aggregate principal amount of 2.25% convertible senior notes due 2030 (the “2030 Notes”) to qualified institutional buyers pursuant to an exemption from registration provided by Rule 144A under the Securities Act. The Company used the net
proceeds from this offering to repurchase $ 370,242 principal amount of its outstanding 2.25% convertible senior notes due 2025
(the “2025 Notes”) (as further described below), to reduce the outstanding balance of its Amended and Restated Credit Facility, to enter into capped call transactions (as further described below), and for other general corporate purposes.
The 2030 Notes bear interest at a rate of 2.25 %
per year payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2024. The 2030 Notes mature on September 15, 2030 , unless earlier repurchased or converted.
The 2030 Notes are convertible into shares of Vishay common stock at an initial conversion rate of 33.1609 shares of common stock per $1 principal amount of the notes, subject to adjustment. This initial conversion price represents a premium of 20% to the closing
price of Vishay's common stock on September 7, 2023, which was $ 25.13 per share. This represents an initial effective conversion
price of approximately $ 30.16 per share. The conversion rate of the 2030 Notes is not adjusted for quarterly cash dividends
equal to or less than $ 0.10 per share of common stock. Pursuant to the indenture governing the 2030 Notes, the Company is
required to satisfy its conversion obligations by paying cash equal to the principal amount of notes and settle any additional value in cash and/or shares at its discretion. Vishay must provide additional shares upon conversion if there is
a "fundamental change" in the business as defined in the indenture governing the notes.
15
NOTES TO THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in
thousands, except per share amounts)
The Company may not redeem the 2030 Notes prior to September 20, 2027 . The Company may redeem for cash all or part of the 2030 Notes, at its option, on or after September 20, 2027, if the sale price of Vishay’s common stock has been at least 130 % of the conversion price for a specified period at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid
interest. If the Company elects to redeem fewer than all of the outstanding 2030 Notes, at least $ 100,000 aggregate principal amount
of 2030 Notes must be outstanding and not subject to redemption.
Prior to March 15, 2030 , the holders of
the 2030 Notes may convert their notes only under the following conditions: (1) the sale price of Vishay common stock reaches 130 % of
the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2023; (2) the trading price of the notes falls below 98 % of the product of the last reported sale price of Vishay’s common stock and the conversion rate for a specified period; (3) the Company calls any or all of the 2030 Notes
for redemption; or (4) upon the occurrence of specified corporate transactions.
Capped Call Transactions
In September 2023, in connection with the pricing and initial
purchasers’ exercise in full of their option to purchase additional 2030 Notes, the Company entered into separate base and additional privately negotiated capped call transactions with an affiliate of an initial purchaser and certain other
financial institutions. The capped call will initially cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the 2030 Notes. The Company used $ 94,200 of the net proceeds from the 2030 Notes to pay the cost of the capped call transactions. The cap price of the capped call will initially
be $ 43.98 per share , which represents a premium of approximately 75% over the last reported sale price of the Company’s
common stock on September 7, 2023, and is subject to certain adjustments under the terms of the capped call.
The capped call transactions are separate transactions entered into by the Company with each of the capped call counterparties, are not part of the
terms of the 2030 Notes, and do not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes do not have any rights with respect to the capped call. The capped call is classified within stockholders’ equity on the
consolidated condensed balance sheet.
Convertible Senior Notes due 2025
The Company used $ 386,745 of the net
proceeds from the offering of the 2030 Notes to repurchase $ 370,242 principal amount of its outstanding 2025 Notes. As a result, the
Company recognized a loss on early extinguishment of the 2025 Notes of $ 18,874 , including the write-off of a portion of unamortized
debt issuance costs.
Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1)
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.
The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of September 30, 2023:
2025 Notes
2030 Notes
Issuance date
June 12, 2018
September 12, 2023
Maturity date
June 15, 2025
September 15, 2030
Principal amount as of September 30, 2023
$
95,102
$
750,000
Cash coupon rate (per annum)
2.25
%
2.25
%
Conversion rate (per $1 principal amount)
32.1062
33.1609
Effective conversion price (per share)
$
31.15
$
30.16
130% of the current effective conversion price (per share)
$
40.50
$
39.21
16
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 6 – Stockholders' Equity
In 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 quarters ended
Nine fiscal months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Dividends paid to stockholders
$
13,879
$
14,254
$
41,836
$
43,062
Stock repurchases
17,262
18,510
57,661
54,671
Total
$
31,141
$
32,764
$
99,497
$
97,733
The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 6,634,442 and 4,240,573 as of September 30, 2023 and December 31, 2022, respectively.
Note 7 – Revenue Recognition
Sales returns and allowances accrual activity is shown below:
Fiscal quarters ended
Nine fiscal months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Beginning balance
$
49,350
$
40,775
$
46,979
$
39,759
Sales allowances
27,554
33,015
79,688
79,432
Credits issued
( 31,034
)
( 32,202
)
( 81,162
)
( 76,497
)
Foreign currency
( 696
)
( 849
)
( 331
)
( 1,955
)
Ending balance
$
45,174
$
40,739
$
45,174
$
40,739
Note 8 – 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, 2023
$
( 7,598
)
$
( 3,229
)
$
( 10,827
)
Other comprehensive income (loss) before reclassifications
-
( 15,703
)
$
( 15,703
)
Tax effect
-
-
$
-
Other comprehensive income before reclassifications, net of tax
-
( 15,703
)
$
( 15,703
)
Amounts reclassified out of AOCI
1,017
-
$
1,017
Tax effect
( 370
)
-
$
( 370
)
Amounts reclassified out of AOCI, net of tax
647
-
$
647
Net other comprehensive income (loss)
$
647
$
( 15,703
)
$
( 15,056
)
Balance at September 30, 2023
$
( 6,951
)
$
( 18,932
)
$
( 25,883
)
Reclassifications of pension and other post-retirement actuarial items out of AOCI are included in the computation of net periodic benefit cost. See Note
9 for further information.
17
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 9 – 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 2023 and 2022 for the Company’s defined benefit pension plans:
Fiscal quarter ended
September 30, 2023
Fiscal quarter ended
October 1, 2022
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Net service cost
$
-
$
717
$
-
$
1,010
Interest cost
499
1,708
280
768
Expected return on plan assets
-
( 568
)
-
( 418
)
Amortization of prior service cost
36
56
36
50
Amortization of losses (gains)
( 30
)
575
427
1,140
Curtailment and settlement losses
-
102
-
257
Net periodic benefit cost
$
505
$
2,590
$
743
$
2,807
The following table shows the components of the net periodic pension cost for the nine fiscal months ended September 30, 2023 and October 1, 2022 for the Company’s defined benefit pension plans:
Nine fiscal months ended
September 30, 2023
Nine fiscal months ended
October 1, 2022
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Net service cost
$
-
$
2,164
$
-
$
3,195
Interest cost
1,498
5,114
841
2,433
Expected return on plan assets
-
( 1,708
)
-
( 1,318
)
Amortization of prior service cost
108
167
108
159
Amortization of losses (gains)
( 90
)
748
1,280
3,616
Curtailment and settlement losses
-
315
-
801
Net periodic benefit cost
$
1,516
$
6,800
$
2,229
$
8,886
18
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 2023 and 2022 for the Company’s other postretirement benefit plans:
Fiscal quarter ended
September 30, 2023
Fiscal quarter ended
October 1, 2022
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Service cost
$
5
$
34
$
10
$
57
Interest cost
56
32
45
13
Amortization of losses (gains)
( 80
)
3
86
20
Net periodic benefit cost
$
( 19
)
$
69
$
141
$
90
The following table shows the components of the net periodic pension cost for the nine fiscal months ended September 30, 2023 and October 1, 2022 for the Company’s other postretirement benefit plans:
Nine fiscal months ended
September 30, 2023
Nine fiscal months ended
October 1, 2022
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Service cost
$
16
$
102
$
29
$
180
Interest cost
168
94
134
42
Amortization of losses (gains)
( 241
)
10
257
64
Net periodic benefit cost
$
( 57
)
$
206
$
420
$
286
19
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 10 – Stock-Based Compensation
2023 Long-Term Incentive Plan
The Company implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") after receiving stockholder approval at its 2023 Annual Meeting of
Stockholders on May 23, 2023. The 2023 Plan allows the Company to grant up to 6,000,000 shares (subject to certain adjustments
described in the 2023 Plan) of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, phantom stock units, and other cash-based awards to employees, directors, consultants, and other service
providers of the Company and its affiliates. Such instruments are available for grant until March 24, 2033 . The Company has granted
approximately 740,000 time-vested restricted stock units to employees pursuant to the 2023 Plan.
2007 Stock Incentive Program
Under the Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, certain executive officers and board members of the Company were granted
restricted stock units. No further awards will be granted pursuant to the 2007 Program. Pursuant to the terms of the 2023 Plan, any shares of common stock that are subject to outstanding awards granted pursuant to the 2007 Program that
subsequently cease to be subject to such awards as a result of the termination, expiration, cancellation, or forfeiture of such awards and any shares of common stock withheld in settlement of tax withholding obligations associated with outstanding
awards granted pursuant to the 2007 Program may become available for issuance under the 2023 Plan. A total of 1,294,546 shares of
common stock were subject to awards granted pursuant to the 2007 Program as of May 23, 2023.
The following table summarizes stock-based compensation expense recognized:
Fiscal quarters ended
Nine fiscal months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Restricted stock units
$
5,528
$
828
$
11,503
5,495
Phantom stock units
-
-
107
222
Total
$
5,528
$
828
$
11,610
5,717
The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at September 30, 2023 (amortization periods in years) :
Unrecognized
Compensation
Cost
Weighted
Average
Remaining
Amortization
Periods
Restricted stock units
$
19,929
1.6
Phantom stock units
-
n/a
Total
$
19,929
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.
20
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Restricted Stock Units
RSU activity under the Company's stock incentive programs as of September 30, 2023
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, 2023
894
$
19.73
Granted*
1,159
24.35
Vested**
( 342
)
18.86
Cancelled or forfeited
( 1
)
24.83
Outstanding at September 30, 2023
1,710
$
23.03
Expected to vest at September 30, 2023
1,759
* Employees in certain countries are granted equity-linked awards that will be settled in cash and are accounted for as liability
awards. The liability awards are not material. The number of RSUs granted excludes these awards.
** The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.
In addition to RSUs that vest based upon satisfaction of service or performance conditions, in 2023, the Company granted RSUs that vest based upon
achievement of market conditions to certain executive officers. For RSUs with market conditions, the Company estimates the grant date fair value using a Monte Carlo valuation model and recognizes the expense for the awards over the period in which
the condition is assessed regardless of whether the market condition is ultimately achieved. The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance and market criteria
between the established target and maximum levels. RSUs with performance-based and market-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, 2024
165
-
165
January 1, 2025
168
-
168
January 1, 2026
221
-
221
Phantom Stock Units
Phantom stock unit activity as of September 30, 2023
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, 2023
226
Granted
5
$
21.48
Dividend equivalents issued
2
Redeemed for common stock*
( 113
)
Outstanding at September 30, 2023
120
* The number of phantom stock units redeemed for common stock includes shares that the Company withheld on
behalf of employees to satisfy the statutory tax withholding requirements.
21
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Segment Information
The following tables set forth business segment information:
MOSFETs
Diodes
Optoelectronic
Components
Resistors
Inductors
Capacitors
Corporate / Other*
Total
Fiscal quarter ended September 30, 2023 :
Net revenues
$
205,027
$
176,788
$
64,441
$
199,877
$
89,947
$
117,573
$
-
$
853,653
Segment Operating Income
$
52,755
$
41,552
$
13,087
$
41,849
$
25,078
$
20,533
$
-
$
194,854
Fiscal quarter ended October 1, 2022 :
Net revenues
$
225,186
$
209,012
$
73,447
$
207,437
$
83,503
$
126,213
$
-
$
924,798
Segment Operating Income
$
71,867
$
51,368
$
22,021
$
61,621
$
22,585
$
25,310
$
-
$
254,772
Nine fiscal months ended September 30, 2023 :
Net revenues
$
610,596
$
527,216
$
189,293
$
645,450
$
259,524
$
384,730
$
-
$
2,616,809
Segment Operating Income
$
167,544
$
119,348
$
41,136
$
165,911
$
73,642
$
81,706
$
-
$
649,287
Nine fiscal months ended October 1, 2022 :
Net revenues
$
556,255
$
583,429
$
232,399
$
627,645
$
255,888
$
386,487
$
-
$
2,642,103
Segment Operating Income
$
164,993
$
140,307
$
72,575
$
183,414
$
71,698
$
80,330
$
( 6,661
)
$
706,656
* 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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Reconciliation:
Segment Operating Income
$
194,854
$
254,772
$
649,287
$
706,656
Impact of the COVID-19 Pandemic on Selling, General, and Administrative Expenses
-
-
-
( 546
)
Unallocated Selling, General, and Administrative Expenses
( 79,724
)
( 71,670
)
( 240,973
)
( 225,932
)
Consolidated Operating Income
$
115,130
$
183,102
$
408,314
$
480,178
Unallocated Other Income (Expense)
( 18,618
)
( 1,973
)
( 21,556
)
( 14,873
)
Consolidated Income Before Taxes
$
96,512
$
181,129
$
386,758
$
465,305
22
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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Distributors
$
438,126
$
536,289
$
1,396,021
$
1,549,872
OEMs
358,791
322,260
1,044,039
908,384
EMS companies
56,736
66,249
176,749
183,847
Total Revenue
$
853,653
$
924,798
$
2,616,809
$
2,642,103
Net revenues were attributable to customers in the following regions:
Fiscal quarters ended
Nine fiscal months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Asia
$
323,750
$
352,160
$
957,706
$
1,040,942
Europe
315,264
296,779
968,286
862,728
Americas
214,639
275,859
690,817
738,433
Total Revenue
$
853,653
$
924,798
$
2,616,809
$
2,642,103
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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Industrial
$
297,506
$
362,380
$
951,422
$
1,050,704
Automotive
316,043
286,331
910,775
799,504
Computing
40,816
52,206
125,068
177,172
Military and Aerospace
67,623
56,861
198,489
159,062
Consumer Products
42,155
50,235
130,305
132,090
Power Supplies
38,897
50,822
127,684
132,248
Medical
34,447
33,675
116,688
99,139
Telecommunications
16,166
32,288
56,378
92,184
Total Revenue
$
853,653
$
924,798
$
2,616,809
$
2,642,103
23
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – 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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Numerator:
Net earnings attributable to Vishay stockholders
$
65,529
$
140,061
$
272,348
$
356,022
Denominator:
Denominator for basic earnings per share:
Weighted average shares
138,964
142,663
139,696
143,760
Outstanding phantom stock units
119
224
132
223
Adjusted weighted average shares
139,083
142,887
139,828
143,983
Effect of dilutive securities:
Restricted stock units
918
560
749
487
Dilutive potential common shares
918
560
749
487
Denominator for diluted earnings per share:
Adjusted weighted average shares - diluted
140,001
143,447
140,577
144,470
Basic earnings per share attributable to Vishay stockholders
$
0.47
$
0.98
$
1.95
$
2.47
Diluted earnings per share attributable to Vishay stockholders
$
0.47
$
0.98
$
1.94
$
2.46
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
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Restricted stock units
3
168
107
278
If the average market price of Vishay common stock is less than the effective
conversion prices of the convertible senior notes due 2025 and due 2030, respectively, no shares are included in the diluted earnings per share computation for the convertible senior notes due 2025 and due 2030. 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. Pursuant to the indenture governing the convertible senior notes due 2030, Vishay will satisfy its conversion obligations by paying $1 cash per $1
principal amount of converted notes and settle any additional amounts due in cash and/or common stock. Accordingly, the convertible senior notes due 2025 and due 2030 are not anti-dilutive when t he average market price of Vishay common stock is less than the respective effective conversion prices of the convertible senior notes due 2025 and due 2030.
In connection with the issuance of the convertible senior notes due 2030, the Company entered into capped call transactions (see Note 5), which were not
included in the calculation of diluted earnings per share as their effect would have been anti-dilutive. The capped calls are intended to reduce the potential dilution to the Company's common stock in the event that at the time of conversion of the convertible senior notes due 2030 the Company's common stock price exceeds the conversion price of the convertible senior notes due 2030.
24
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 13 – 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
September 30, 2023
Assets:
Assets held in rabbi trusts
$
46,240
$
22,250
$
23,990
$
-
Available for sale securities
$
3,674
3,674
-
-
$
49,914
$
25,924
$
23,990
$
-
Liability:
MaxPower acquisition contingent consideration
$
6,955
$
-
$
-
$
6,955
December 31, 2022
Assets:
Assets held in rabbi trusts
$
50,173
$
27,168
$
23,005
$
-
Available for sale securities
$
3,677
3,677
-
-
Precious metals
$
1,252
1,252
-
-
$
55,102
$
32,097
$
23,005
$
-
Liability:
MaxPower acquisition contingent consideration
$
6,870
$
-
$
-
$
6,870
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 is considered a Level 1 measurement within the fair value hierarchy. The inventory of
precious metals bullion in excess of its immediate manufacturing needs was not material at September 30, 2023.
The Company may be required to make certain contingent payments to non-employee equity holders of MaxPower pursuant to the acquisition agreement, which
would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. The fair value
of these contingent consideration payments is determined by estimating the net present value of the expected cash flows based on the probability of expected payments. The fair value measurement of the contingent consideration is considered a Level
3 measurement within the fair value hierarchy.
The fair value of the long-term debt, excluding the derivative liabilities and deferred financing costs, at September 30, 2023 and December 31, 2022 is approximately $ 831,400 and $ 491,100 , respectively,
compared to its carrying value, excluding the deferred financing costs, of $ 845,102 and $ 507,344 , 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.
25
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
At September 30, 2023 and December 31, 2022, 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 September 30, 2023 and December 31, 2022, 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.
Note 14 - Subsequent Events
On November 8, 2023 , Vishay and Nexperia
BV announced that they have entered into an agreement whereby Vishay will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K.
for approximately $ 177,000 in cash, subject to customary post-closing adjustments.
To effect the transaction, Vishay will acquire a 100 %
interest in the legal entity Neptune 6 Limited , and its wholly-owned operating subsidiary, Nexperia Newport Limited, which owns and
operates the Newport facility.
The closing of the transaction is subject to U.K. government review, the purchase rights of a third party, and customary closing conditions, and is expected
to occur in the first quarter of 2024.
26
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.