VISHAY INTERTECHNOLOGY INC 10-Q

Item 1. Financial Statements VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Balance Sheets (In thousands) March 30, 2024 December 31, 2023 (Unaudited) Assets Current assets: Cash and cash equivalents $ 796,541 $ 972,719 Short-term investments 37,418 35,808 Accounts receivable, net 411,203 426,674 Inventories: Finished goods 166,684 167,083 Work in process 280,536 267,339 Raw materials 218,623 213,098 Total inventories 665,843 647,520 Prepaid expenses and other current assets 232,135 214,443 Total current assets 2,143,140 2,297,164 Property and equipment, at cost: Land 84,302 77,006 Buildings and improvements 744,328 719,387 Machinery and equipment 3,171,593 3,053,868 Construction in progress 300,714 290,593 Allowance for depreciation ( 2,857,344 ) ( 2,846,208 ) Property and equipment, net 1,443,593 1,294,646 Right of use assets 129,346 126,829 Deferred income taxes 135,786 137,394 Goodwill 238,890 201,416 Other intangible assets, net 73,444 72,333 Other assets 99,865 110,141 Total assets $ 4,264,064 $ 4,239,923 Continues on following page. 4 VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Balance Sheets (continued) (In thousands) March 30, 2024 December 31, 2023 (Unaudited) Liabilities and equity Current liabilities: Trade accounts payable $ 197,513 $ 191,002 Payroll and related expenses 153,280 161,940 Lease liabilities 27,760 26,485 Other accrued expenses 258,773 239,350 Income taxes 72,018 73,098 Total current liabilities 709,344 691,875 Long-term debt less current portion 819,407 818,188 U.S. transition tax payable 47,027 47,027 Deferred income taxes 118,389 95,776 Long-term lease liabilities 103,594 102,830 Other liabilities 88,719 87,918 Accrued pension and other postretirement costs 190,356 195,503 Total liabilities 2,076,836 2,039,117 Equity: Vishay stockholders' equity Common stock 13,357 13,319 Class B convertible common stock 1,210 1,210 Capital in excess of par value 1,292,765 1,291,499 Retained earnings 1,058,531 1,041,372 Treasury stock (at cost) ( 174,194 ) ( 161,656 ) Accumulated other comprehensive income (loss) ( 9,685 ) 10,337 Total Vishay stockholders' equity 2,181,984 2,196,081 Noncontrolling interests 5,244 4,725 Total equity 2,187,228 2,200,806 Total liabilities and equity $ 4,264,064 $ 4,239,923 See accompanying notes. 5 VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Statements of Operations (Unaudited - In thousands, except per share amounts) Fiscal quarters ended March 30, 2024 April 1, 2023 Net revenues $ 746,279 $ 871,046 Costs of products sold 575,872 592,333 Gross profit 170,407 278,713 Selling, general, and administrative expenses 127,736 120,145 Operating income 42,671 158,568 Other income (expense): Interest expense ( 6,496 ) ( 5,120 ) Other 8,087 3,329 Total other income (expense) 1,591 ( 1,791 ) Income before taxes 44,262 156,777 Income tax expense 12,819 44,588 Net earnings 31,443 112,189 Less: net earnings attributable to noncontrolling interests 519 408 Net earnings attributable to Vishay stockholders $ 30,924 $ 111,781 Basic earnings per share attributable to Vishay stockholders $ 0.22 $ 0.79 Diluted earnings per share attributable to Vishay stockholders $ 0.22 $ 0.79 Weighted average shares outstanding - basic 137,726 140,636 Weighted average shares outstanding - diluted 138,476 141,251 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 March 30, 2024 April 1, 2023 Net earnings $ 31,443 $ 112,189 Other comprehensive income (loss), net of tax Pension and other post-retirement actuarial items ( 2,196 ) 136 Foreign currency translation adjustment ( 17,826 ) 19,723 Other comprehensive income (loss) ( 20,022 ) 19,859 Comprehensive income 11,421 132,048 Less: comprehensive income attributable to noncontrolling interests 519 408 Comprehensive income attributable to Vishay stockholders $ 10,902 $ 131,640 See accompanying notes. 7 VISHAY INTERTECHNOLOGY, INC. Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands) Three fiscal months ended March 30, 2024 April 1, 2023 Operating activities Net earnings $ 31,443 $ 112,189 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 49,527 43,301 Gain on disposal of property and equipment ( 625 ) ( 64 ) Inventory write-offs for obsolescence 8,179 8,986 Deferred income taxes 4,376 7,329 Stock compensation expense 5,344 2,965 Other 426 ( 2,696 ) Net change in operating assets and liabilities ( 18,459 ) ( 42,117 ) Net cash provided by operating activities 80,211 129,893 Investing activities Capital expenditures ( 53,084 ) ( 45,574 ) Proceeds from sale of property and equipment 751 326 Purchase of business, net of cash acquired ( 168,616 ) - Purchase of short-term investments ( 19,232 ) ( 41 ) Maturity of short-term investments 17,611 121,768 Other investing activities ( 1,219 ) ( 892 ) Net cash provided by (used in) investing activities ( 223,789 ) 75,587 Financing activities Net proceeds on revolving credit facility - 65,000 Dividends paid to common stockholders ( 12,542 ) ( 12,810 ) Dividends paid to Class B common stockholders ( 1,210 ) ( 1,210 ) Repurchase of common stock held in treasury ( 12,538 ) ( 20,173 ) Cash withholding taxes paid when shares withheld for vested equity awards ( 4,053 ) ( 3,653 ) Net cash provided by (used in) financing activities ( 30,343 ) 27,154 Effect of exchange rate changes on cash and cash equivalents ( 2,257 ) 4,075 Net increase (decrease) in cash and cash equivalents ( 176,178 ) 236,709 Cash and cash equivalents at beginning of period 972,719 610,825 Cash and cash equivalents at end of period $ 796,541 $ 847,534 See accompanying notes. 8 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 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 Balance at December 31, 2023 $ 13,319 $ 1,210 $ 1,291,499 $ 1,041,372 $ ( 161,656 ) $ 10,337 $ 2,196,081 $ 4,725 $ 2,200,806 Net earnings - - - 30,924 - - 30,924 519 31,443 Other comprehensive income (loss) - - - - - ( 20,022 ) ( 20,022 ) - ( 20,022 ) Issuance of stock and related tax withholdings for vested restricted stock units and phantom stock units ( 371,055 shares) 38 - ( 4,091 ) - - - ( 4,053 ) - ( 4,053 ) Dividends declared ($ 0.10 per share) - - 13 ( 13,765 ) - - ( 13,752 ) - ( 13,752 ) Stock compensation expense - - 5,344 - - - 5,344 - 5,344 Repurchase of common stock held in treasury ( 565,420 shares) - - - - ( 12,538 ) - ( 12,538 ) - ( 12,538 ) Balance at March 30, 2024 $ 13,357 $ 1,210 $ 1,292,765 $ 1,058,531 $ ( 174,194 ) $ ( 9,685 ) $ 2,181,984 $ 5,244 $ 2,187,228 See accompanying notes. 9 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, 2023. The results of operations for the three fiscal months ended March 30, 2024 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 2024 end on March 30, 2024, June 29, 2024, September 28, 2024, and December 31, 2024, respectively. The four fiscal quarters in 2023 ended on April 1, 2023, July 1, 2023, September 30, 2023, and December 31, 2023, 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. Newport wafer fab On March 5, 2024 , Vishay acquired Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for $ 177,366 in cash, net of cash acquired and subject to customary post-closing adjustments. The transaction included contingent payments of up to $ 15,000 , held in escrow pending receipt of an export license. The wafer fabrication facility is located on 28 acres and is an automotive-certified, 200mm semiconductor wafer fab with capacity to produce more than 30,000 wafers per month. See Note 13 for further discussion on the fair value measurement of the contingent consideration liability. The transaction was funded by Vishay with cash on-hand. To effect the transaction, Vishay acquired 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. Neptune 6 Limited was renamed "Vishay UK Holdings Limited," and Nexperia Newport Limited was renamed "Vishay Newport Limited." Based on an estimate of fair values, the Company allocated the purchase price of the acquisition as follows: Net working deficit (excluding cash and cash equivalents) $ ( 339 ) Property and equipment 153,597 Customer relationships 4,000 Other, net 1,315 Deferred taxes, net ( 18,908 ) Total identified assets and liabilities 139,665 Purchase price, net of cash acquired 177,366 Goodwill $ 37,701 The acquired assets and liabilities are included in the MOSFETs segment. There were no other material changes to goodwill or segment assets since December 31, 2023. The weighted average useful lives for customer relationships is 3 years. The goodwill associated with this transaction is not deductible for income tax purposes. The preliminary purchase price allocation is pending finalization of appraisals for property and equipment and intangible assets and finalization of a working capital adjustment. There can be no assurance that the estimated amounts recorded represent the final purchase price allocation. 10 NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) The Company recognized $ 2,984 of acquisition costs classified as a component of selling, general, and administrative expenses. These costs were recognized in the third and fourth fiscal quarters of 2023 and first fiscal quarter of 2024. The results and operations of this acquisition have been included in the MOSFETs segment since March 5, 2024. The inclusion of this acquisition did not have material impact on the MOSFETs segment's or the Company's consolidated results. MaxPower Semiconductor, Inc. In October 2022, the Company acquired all of the outstanding equity interests of MaxPower Semiconductor, Inc. , ("MaxPower"). The Company paid cash of $ 50,000 , net of cash acquired, at closing. The transaction also included possible 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. As of March 30, 2024, the contingent payments upon favorable resolution of certain technology licensing matters with a third party and upon the disposition of MaxPower's investment in an equity affiliate have been resolved. The Company's estimate of the maximum possible contingent payments is $ 17,500 . See Note 13 for further discussion on the fair value measurement of the contingent consideration liability. 11 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: March 30, 2024 December 31, 2023 Right of use assets Operating Leases Buildings and improvements $ 120,508 $ 121,578 Machinery and equipment 8,838 5,251 Total $ 129,346 $ 126,829 Current lease liabilities Operating Leases Buildings and improvements $ 23,561 $ 23,647 Machinery and equipment 4,199 2,838 Total $ 27,760 $ 26,485 Long-term lease liabilities Operating Leases Buildings and improvements $ 99,028 $ 100,489 Machinery and equipment 4,566 2,341 Total $ 103,594 $ 102,830 Total lease liabilities $ 131,354 $ 129,315 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 March 30, 2024 April 1, 2023 Lease expense Operating lease expense $ 7,293 $ 6,881 Short-term lease expense 256 256 Variable lease expense 214 152 Total lease expense $ 7,763 $ 7,289 The Company paid $ 7,540 and $ 7,199 for its operating leases in the three fiscal months ended March 30, 2024 and April 1, 2023, 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 9.0 years and the weighted-average discount rate is 6.4 % as of March 30, 2024. The undiscounted future lease payments for the Company's operating lease liabilities are as follows: March 30, 2024 2024 (excluding the three fiscal months ended March 30, 2024) $ 21,801 2025 26,426 2026 22,372 2027 18,373 2028 15,685 Thereafter 70,159 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. 12 NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) 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 March 30, 2024 and April 1, 2023 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. In December 2021, the Organization for Economic Co-operation and Development (“OECD”) issued model rules for a new global minimum tax (“Pillar Two”). Various jurisdictions around the world have passed, or are in the process of passing, legislation to enact Pillar Two and certain Pillar Two rules take effect in 2024 and 2025 in those jurisdictions. The United States has not adopted Pillar Two. The Company is continuing to monitor the impacts of Pillar Two on its operations and does not anticipate a material increase in income tax expense associated with jurisdictions that have implemented an income inclusion rule. The Company is continuing to monitor and assess the impacts of Pillar Two rules set to take effect in 2025, such as the under-taxed profits rule. During the three fiscal months ended March 30, 2024, the liabilities for unrecognized tax benefits did no t materially change. Note 5 – Long-Term Debt Long-term debt consists of the following: March 30, 2024 December 31, 2023 Credit facility $ - $ - Convertible senior notes, due 2025 95,102 95,102 Convertible senior notes, due 2030 750,000 750,000 Deferred financing costs ( 25,695 ) ( 26,914 ) 819,407 818,188 Less current portion - - $ 819,407 $ 818,188 The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of March 30, 2024: 2025 Notes 2030 Notes Issuance date June 12, 2018 September 12, 2023 Maturity date June 15, 2025 September 15, 2030 Principal amount as of March 30, 2024 $ 95,102 $ 750,000 Cash coupon rate (per annum) 2.25 % 2.25 % Conversion rate (per $1 principal amount) 32.1476 33.1609 Effective conversion price (per share) $ 31.11 $ 30.16 130% of the current effective conversion price (per share) $ 40.44 $ 39.21 Deferred financing costs are recognized as non-cash interest expense. Non-cash interest expense was $ 1,213 and $ 818 for the fiscal quarters ended March 30, 2024 and April 1, 2023, respectively. 13 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 March 30, 2024 April 1, 2023 Dividends paid to stockholders $ 13,752 $ 14,020 Stock repurchases 12,538 20,173 Total $ 26,290 $ 34,193 The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 8,101,301 and 7,535,881 as of March 30, 2024 and December 31, 2023, respectively. Note 7 – Revenue Recognition Sales returns and allowances accrual activity is shown below: Fiscal quarters ended March 30, 2024 April 1, 2023 Beginning balance $ 47,760 $ 46,979 Sales allowances 25,276 25,837 Credits issued ( 24,084 ) ( 33,275 ) Foreign currency ( 204 ) ( 1,261 ) Ending balance $ 48,748 $ 38,280 See disaggregated revenue information in Note 11. 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, 2024 $ ( 14,599 ) $ 24,936 $ 10,337 Other comprehensive income (loss) before reclassifications ( 2,574 ) ( 17,826 ) $ ( 20,400 ) Tax effect - - $ - Other comprehensive income before reclassifications, net of tax ( 2,574 ) ( 17,826 ) $ ( 20,400 ) Amounts reclassified out of AOCI 488 - $ 488 Tax effect ( 110 ) - $ ( 110 ) Amounts reclassified out of AOCI, net of tax 378 - $ 378 Net other comprehensive income (loss) $ ( 2,196 ) $ ( 17,826 ) $ ( 20,022 ) Balance at March 30, 2024 $ ( 16,795 ) $ 7,110 $ ( 9,685 ) 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. 14 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 first fiscal quarters of 2024 and 2023 for the Company’s defined benefit pension plans: Fiscal quarter ended March 30, 2024 Fiscal quarter ended April 1, 2023 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Net service cost $ - $ 790 $ - $ 724 Interest cost 381 1,686 499 1,695 Expected return on plan assets - ( 596 ) - ( 570 ) Amortization of prior service cost 16 57 36 55 Amortization of losses (gains) ( 108 ) 457 ( 30 ) 86 Curtailment and settlement losses - 105 - 107 Net periodic benefit cost $ 289 $ 2,499 $ 505 $ 2,097 Other Postretirement Benefits The following table shows the components of the net periodic benefit cost for the first fiscal quarters of 2024 and 2023 for the Company’s other postretirement benefit plans: Fiscal quarter ended March 30, 2024 Fiscal quarter ended April 1, 2023 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 5 $ 60 $ 5 $ 34 Interest cost 53 61 56 31 Amortization of losses (gains) ( 60 ) 21 ( 80 ) 3 Net periodic benefit cost $ ( 2 ) $ 142 $ ( 19 ) $ 68 15 NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 10 – Stock-Based Compensation The following table summarizes stock-based compensation expense recognized: Fiscal quarters ended March 30, 2024 April 1, 2023 Restricted stock units ("RSUs") $ 5,226 $ 2,858 Phantom stock units 118 107 Total $ 5,344 $ 2,965 The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at March 30, 2024 (amortization periods in years) : Unrecognized Compensation Cost Weighted Average Remaining Amortization Periods Restricted stock units $ 19,166 1.9 Phantom stock units - n/a Total $ 19,166 16 NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Restricted Stock Units RSU activity as of March 30, 2024 and changes during the three 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, 2024 1,717 $ 23.03 Granted 544 18.09 Vested* ( 559 ) 23.07 Cancelled or forfeited ( 26 ) 23.96 Outstanding at March 30, 2024 1,676 $ 21.40 Expected to vest at March 30, 2024 1,415 * The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. 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, 2025 168 - 168 January 1, 2026 - 167 167 January 1, 2027 140 94 234 Phantom Stock Units The following table summarizes the Company's phantom stock units activity (number of phantom stock units in thousands) : Number of units Grant-date Fair Value per Unit Outstanding: January 1, 2024 120 Granted 5 $ 23.51 Dividend equivalents issued 1 Outstanding at March 30, 2024 126 17 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 Total Fiscal quarter ended March 30, 2024 : Net revenues $ 153,173 $ 149,130 $ 49,199 $ 188,196 $ 88,651 $ 117,930 $ 746,279 Segment operating income $ 8,047 $ 26,011 $ 1,493 $ 38,173 $ 23,181 $ 26,529 $ 123,434 Fiscal quarter ended April 1, 2023: Net revenues $ 198,181 $ 175,693 $ 60,403 $ 223,140 $ 80,338 $ 133,291 $ 871,046 Segment operating income $ 58,017 $ 42,686 $ 17,300 $ 66,699 $ 20,979 $ 32,996 $ 238,677 Fiscal quarters ended March 30, 2024 April 1, 2023 Reconciliation: Segment Operating Income $ 123,434 $ 238,677 Unallocated Selling, General, and Administrative Expenses ( 80,763 ) ( 80,109 ) Consolidated Operating Income $ 42,671 $ 158,568 Unallocated Other Income (Expense) 1,591 ( 1,791 ) Consolidated Income Before Taxes $ 44,262 $ 156,777 18 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 March 30, 2024 April 1, 2023 Distributors $ 382,480 $ 470,788 OEMs 313,827 340,428 EMS companies 49,972 59,830 Total Revenue $ 746,279 $ 871,046 Net revenues were attributable to customers in the following regions: Fiscal quarters ended March 30, 2024 April 1, 2023 Asia $ 284,007 $ 310,429 Europe 271,734 326,561 Americas 190,538 234,056 Total Revenue $ 746,279 $ 871,046 The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, computing, military and aerospace, consumer products, power supplies, medical, and telecommunications end markets. Sales by end market are presented below: Fiscal quarters ended March 30, 2024 April 1, 2023 Industrial $ 248,128 $ 325,960 Automotive 287,302 284,499 Military and Aerospace 83,356 62,125 Medical 34,389 42,103 Other* 93,104 156,359 Total Revenue $ 746,279 $ 871,046 *Power supplies, telecommunications, consumer products, and computing. 19 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 March 30, 2024 April 1, 2023 Numerator: Net earnings attributable to Vishay stockholders $ 30,924 $ 111,781 Denominator: Denominator for basic earnings per share: Weighted average shares 137,601 140,496 Outstanding phantom stock units 125 140 Adjusted weighted average shares - basic 137,726 140,636 Effect of dilutive securities: Restricted stock units 750 615 Dilutive potential common shares 750 615 Denominator for diluted earnings per share: Adjusted weighted average shares - diluted 138,476 141,251 Basic earnings per share attributable to Vishay stockholders $ 0.22 $ 0.79 Diluted earnings per share attributable to Vishay stockholders $ 0.22 $ 0.79 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 March 30, 2024 April 1, 2023 Restricted stock units 127 - 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 the 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, 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 . 20 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 March 30, 2024 Assets: Assets held in rabbi trusts $ 51,061 $ 23,448 $ 27,613 $ - Available for sale securities $ 4,023 4,023 - - $ 55,084 $ 27,471 $ 27,613 $ - Liability: Acquisitions contingent consideration $ 15,938 $ - $ - $ 15,938 December 31, 2023 Assets: Assets held in rabbi trusts $ 50,378 $ 24,343 $ 26,035 $ - Available for sale securities $ 4,115 4,115 - - $ 54,493 $ 28,458 $ 26,035 $ - Liability: Acquisitions contingent consideration $ 938 $ - $ - $ 938 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. The Company may be required to make certain contingent payments to non-employee equity holders of MaxPower pursuant to the acquisition agreement, which will be payable upon the achievement of certain technology milestones. The Company may be required to make certain contingent payments upon the receipt of an export license pursuant to the Newport wafer fab acquisition agreement. 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 March 30, 2024 and December 31, 2023 is approximately $ 816,900 and $ 836,200 , respectively, compared to its carrying value, excluding the deferred financing costs, of $ 845,102 and $ 845,102 , 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. At March 30, 2024 and December 31, 2023, 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 March 30, 2024 and December 31, 2023, 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. 21