Item 1. Financial Statements
Item 1. Financial Statements
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
September 28, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
643,771
$
972,719
Short-term investments
13,491
35,808
Accounts receivable, net
428,558
426,674
Inventories:
Finished goods
173,353
167,083
Work in process
290,597
267,339
Raw materials
223,254
213,098
Total inventories
687,204
647,520
Prepaid expenses and other current assets
237,749
214,443
Total current assets
2,010,773
2,297,164
Property and equipment, at cost:
Land
84,851
77,006
Buildings and improvements
769,865
719,387
Machinery and equipment
3,291,983
3,053,868
Construction in progress
295,147
290,593
Allowance for depreciation
( 2,963,103
)
( 2,846,208
)
Property and equipment, net
1,478,743
1,294,646
Right of use assets
125,969
126,829
Deferred income taxes
160,900
137,394
Goodwill
255,323
201,416
Other intangible assets, net
83,427
72,333
Other assets
105,223
110,141
Total assets
$
4,220,358
$
4,239,923
Continues on following page.
4
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(Unaudited - In thousands)
September 28, 2024
December 31, 2023
Liabilities and equity
Current liabilities:
Trade accounts payable
$
209,864
$
191,002
Payroll and related expenses
150,726
161,940
Lease liabilities
27,625
26,485
Other accrued expenses
275,159
239,350
Income taxes
51,052
73,098
Total current liabilities
714,426
691,875
Long-term debt less current portion
820,799
818,188
U.S. transition tax payable
-
47,027
Deferred income taxes
112,110
95,776
Long-term lease liabilities
101,012
102,830
Other liabilities
105,834
87,918
Accrued pension and other postretirement costs
192,614
195,503
Total liabilities
2,046,795
2,039,117
Equity:
Vishay stockholders' equity
Common stock
13,358
13,319
Class B convertible common stock
1,210
1,210
Capital in excess of par value
1,302,335
1,291,499
Retained earnings
1,035,395
1,041,372
Treasury stock (at cost)
( 199,440
)
( 161,656
)
Accumulated other comprehensive income
14,808
10,337
Total Vishay stockholders' equity
2,167,666
2,196,081
Noncontrolling interests
5,897
4,725
Total equity
2,173,563
2,200,806
Total liabilities and equity
$
4,220,358
$
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
September 28, 2024
September 30, 2023
Net revenues
$
735,353
$
853,653
Costs of products sold
584,470
616,010
Gross profit
150,883
237,643
Selling, general, and administrative expenses
128,545
122,513
Restructuring and severance costs
40,614
-
Operating income (loss)
( 18,276
)
115,130
Other income (expense):
Interest expense
( 6,596
)
( 7,153
)
Loss on early extinguishment of debt
-
( 18,874
)
Other
803
7,409
Total other income (expense)
( 5,793
)
( 18,618
)
Income (loss) before taxes
( 24,069
)
96,512
Income tax expense (benefit)
( 5,076
)
30,557
Net earnings (loss)
( 18,993
)
65,955
Less: net earnings (loss) attributable to noncontrolling interests
306
426
Net earnings (loss) attributable to Vishay stockholders
$
( 19,299
)
$
65,529
Basic earnings (loss) per share attributable to Vishay stockholders
$
( 0.14 )
$
0.47
Diluted earnings (loss) per share attributable to Vishay stockholders
$
( 0.14 )
$
0.47
Weighted average shares outstanding - basic
136,793
139,083
Weighted average shares outstanding - diluted
136,793
140,001
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 28, 2024
September 30, 2023
Net earnings (loss)
$
( 18,993
)
$
65,955
Other comprehensive income (loss), net of tax
Pension and other post-retirement actuarial items
511
363
Foreign currency translation adjustment
31,266
( 38,901
)
Other comprehensive income (loss)
31,777
( 38,538
)
Comprehensive income
12,784
27,417
Less: comprehensive income attributable to noncontrolling interests
306
426
Comprehensive income attributable to Vishay stockholders
$
12,478
$
26,991
See accompanying notes.
7
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Nine fiscal months ended
September 28, 2024
September 30, 2023
Net revenues
$
2,222,871
$
2,616,809
Costs of products sold
1,738,711
1,842,980
Gross profit
484,160
773,829
Selling, general, and administrative expenses
381,234
365,515
Restructuring and severance costs
40,614
-
Operating income
62,312
408,314
Other income (expense):
Interest expense
( 19,749
)
( 18,677
)
Loss on early extinguishment of debt
-
( 18,874
)
Other
13,901
15,995
Total other income (expense)
( 5,848
)
( 21,556
)
Income before taxes
56,464
386,758
Income tax expense
20,134
113,199
Net earnings
36,330
273,559
Less: net earnings attributable to noncontrolling interests
1,172
1,211
Net earnings attributable to Vishay stockholders
$
35,158
$
272,348
Basic earnings per share attributable to Vishay stockholders
$
0.26
$
1.95
Diluted earnings per share attributable to Vishay stockholders
$
0.25
$
1.94
Weighted average shares outstanding - basic
137,281
139,828
Weighted average shares outstanding - diluted
138,039
140,577
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 28, 2024
September 30, 2023
Net earnings
$
36,330
$
273,559
Other comprehensive income (loss), net of tax
Pension and other post-retirement actuarial items
( 1,297
)
647
Foreign currency translation adjustment
5,768
( 15,703
)
Other comprehensive income (loss)
4,471
( 15,056
)
Comprehensive income
40,801
258,503
Less: comprehensive income attributable to noncontrolling interests
1,172
1,211
Comprehensive income attributable to Vishay stockholders
$
39,629
$
257,292
See accompanying notes.
9
VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine fiscal months ended
September 28, 2024
September 30, 2023
Operating activities
Net earnings
$
36,330
$
273,559
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
155,272
133,910
Gain on disposal of property and equipment
( 1,168
)
( 495
)
Inventory write-offs for obsolescence
27,163
27,469
Deferred income taxes
( 13,667
)
20,654
Stock compensation expense
14,928
11,610
Loss on early extinguishment of debt
-
18,874
Other
14,506
7,574
Change in U.S. transition tax liability
( 37,622
)
( 27,670
)
Change in repatriation tax liability
( 15,000
)
-
Net change in operating assets and liabilities, net of effects of businesses acquired
( 74,696
)
( 106,050
)
Net cash provided by operating activities
106,046
359,435
Investing activities
Capital expenditures
( 175,175
)
( 184,079
)
Proceeds from sale of property and equipment
1,397
1,034
Purchase of businesses, net of cash acquired
( 200,185
)
( 5,003
)
Purchase of short-term investments
( 101,263
)
( 82,166
)
Maturity of short-term investments
123,561
308,021
Other investing activities
( 1,220
)
( 1,219
)
Net cash provided by (used in) investing activities
( 352,885
)
36,588
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 and amendment costs
( 1,062
)
( 26,547
)
Cash paid for capped call
-
( 94,200
)
Dividends paid to common stockholders
( 37,467
)
( 38,207
)
Dividends paid to Class B common stockholders
( 3,629
)
( 3,629
)
Repurchase of common stock held in treasury
( 37,784
)
( 57,661
)
Distributions to noncontrolling interests
-
( 867
)
Cash withholding taxes paid when shares withheld for vested equity awards
( 4,092
)
( 3,994
)
Net cash provided by (used in) financing activities
( 84,034
)
96,150
Effect of exchange rate changes on cash and cash equivalents
1,925
( 7,879
)
Net increase (decrease) in cash and cash equivalents
( 328,948
)
484,294
Cash and cash equivalents at beginning of period
972,719
610,825
Cash and cash equivalents at end of period
$
643,771
$
1,095,119
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
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
-
-
-
-
-
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
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
Treasury Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total Vishay
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
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 ( 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
Net earnings
-
-
-
23,533
-
-
23,533
347
23,880
Other comprehensive income (loss)
-
-
-
-
-
( 7,284
)
( 7,284
)
-
( 7,284
)
Issuance of stock and related tax withholdings for vested restricted stock units ( 19,809 shares)
1
-
( 6
)
-
-
-
( 5
)
-
( 5
)
Dividends declared ($ 0.10
per share)
-
-
13
( 13,713
)
-
-
( 13,700
)
-
( 13,700
)
Stock compensation expense
-
-
3,949
-
-
-
3,949
-
3,949
Repurchase of common stock held in treasury ( 554,587 shares)
-
-
-
-
( 12,622
)
-
( 12,622
)
-
( 12,622
)
Balance at June 29, 2024
$
13,358
$
1,210
$
1,296,721
$
1,068,351
$
( 186,816
)
$
( 16,969
)
$
2,175,855
$
5,591
$
2,181,446
Net earnings (loss)
-
-
-
( 19,299
)
-
-
( 19,299
)
306
( 18,993
)
Other comprehensive income (loss)
-
-
-
-
-
31,777
31,777
-
31,777
Issuance of stock and related tax withholdings for vested restricted stock units ( 4,149 shares)
-
-
( 34
)
-
-
-
( 34
)
-
( 34
)
Dividends declared ($ 0.10
per share)
-
-
13
( 13,657
)
-
-
( 13,644
)
-
( 13,644
)
Stock compensation expense
-
-
5,635
-
-
-
5,635
-
5,635
Repurchase of common stock held in treasury ( 577,325 shares)
-
-
-
-
( 12,624
)
-
( 12,624
)
-
( 12,624
)
Balance at September 28, 2024
$
13,358
$
1,210
$
1,302,335
$
1,035,395
$
( 199,440
)
$
14,808
$
2,167,666
$
5,897
$
2,173,563
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, 2023. The
results of operations for the fiscal quarter and nine fiscal months ended September 28, 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 ,
the Company acquired Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for $ 177,457 in cash, net
of cash acquired. 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 15 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
148,109
Customer relationships
4,000
Other, net
1,315
Deferred taxes, net
( 17,704
)
Total identified assets and liabilities
135,381
Purchase price, net of cash acquired
177,457
Goodwill
$
42,076
The acquired assets and liabilities are included in the MOSFETs segment. 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 tax filings. There can be no assurance that the
estimated amounts recorded represent the final purchase price allocation.
13
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.
Ametherm, Inc.
On June 5, 2024 , the Company acquired all of the outstanding equity interests of Ametherm, Inc. , a Carson City, Nevada-based manufacturer of inrush current limiting solutions and power thermistors, for $ 31,478 in cash, net of cash acquired. Based on a preliminary estimate of fair values, the Company allocated $ 17,000 of the purchase price to definite-lived intangible assets. After allocating the purchase price to assets acquired and liabilities assumed based on an estimation of their
fair values at the date of acquisition, the Company recorded goodwill of $ 11,685 related to this acquisition. 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 5, 2024.
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
June 29, 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. Additionally, $ 2,500 has been paid upon the achievement of the first technology milestone. The Company's estimate of the maximum possible contingent payments
remaining is now $ 15,000 . See Note 15 for further discussion on the fair value measurement of the contingent consideration liability.
Subsequent Event
On November 5, 2024 the Company entered into definitive agreements to acquire Birkelbach Kondensatortechnik GmbH and certain
related assets (“Birkelbach”) for approximately € 17,000 ($ 18,500 ). The all-cash transaction is expected to close before December 31, 2024, subject to satisfaction of customary closing conditions.
Based in Erndtebrueck, Germany, Birkelbach is a manufacturer of metalized technical films for capacitor
dielectrics. Vishay is a major customer of Birkelbach, and the acquired business will be vertically integrated into Vishay’s Capacitors segment. The goodwill related to this acquisition will be included in the Capacitors reporting unit for
goodwill impairment testing.
Note 3 – Goodwill and Other Intangible Assets
Goodwill
Goodwill represents the excess of the cost of businesses acquired over the fair value of the related net assets at the date of acquisition. Goodwill is not amortized but
rather is tested for impairment at least annually. These tests are performed more frequently whenever events or changes in circumstances indicate that the assets might be impaired. The Company performs its annual goodwill impairment test as
of the first day of the fourth fiscal quarter. During the third fiscal quarter of 2024, the Company identified the decrease in its share price in combination with the increase in the book value of its assets as a result of its acquisition and
capital spending activities as potential indicators of impairment requiring an interim goodwill impairment test. The interim goodwill impairment test was performed as of September 28, 2024.
Using
level 3 inputs, the Company performed a quantitative assessment of each of its business segments, which represent its reporting units for goodwill impairment testing purposes. The assessment was performed using a weighting of the income and
market approaches to determine fair value. The Company used a discounted cash flow (“DCF”) method, using unobservable inputs, as its income approach. The significant assumptions in the DCF method include projected EBITDA and a discount rate (and
estimates in the discount rate inputs). The Company used comparable company market multiples for its market approach. The resulting estimates of fair value from the income approach and the market approach were then weighted equally in
determining the overall estimated fair value of each reporting unit.
Based on
the evaluation, the estimated fair value of each reporting unit was determined to exceed its carrying value, although the MOSFETs reporting unit’s fair value exceeded its carrying value by less than 10%. No goodwill impairment charges were
recognized, but if the MOSFETs reporting unit is not able to achieve its anticipated results and/or if its discount rate were to increase, its fair value would be adversely affected, which may result in future impairment. There is $ 76,322 of goodwill in this reporting unit as of September 28, 2024. The Company will continue to monitor its reporting units and related goodwill for
any possible future non-cash impairment charges.
14
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 4 – Restructuring and Related Activities
On September 24, 2024, the Company announced the implementation of restructuring actions designed to optimize the Company’s
manufacturing footprint and streamline business decision making.
The restructuring actions will be implemented in phases and include:
●
Selling, general, and administrative functions will be streamlined beginning in the third fiscal quarter of 2024 through the
fourth fiscal quarter of 2025.
●
The closure of three manufacturing facilities. A Diodes segment back-end facility in Shanghai, China is expected to be closed by
the end of 2026 with production transfers completed in phases beginning in the fourth quarter of 2025. In addition, two small facilities in the Resistors segment in Fichtelberg, Germany, and in Milwaukee, Wisconsin, are expected to be
closed in 2026.
●
Various changes in manufacturing operations and production transfers.
The Company recorded restructuring expenses pursuant to on-going benefit arrangements of $ 40,614 during the fiscal quarter ended September 28, 2024, primarily related to expected cash severance costs. Severance benefits are generally paid
in a lump sum at cessation of employment. Payments prior to the end of the fiscal third quarter were not material. The current portion of the liability is $ 23,649 and is included in other accrued expenses in the accompanying consolidated condensed balance sheet. The non-current portion of the liability is $ 16,709 and is included in other liabilities in the accompanying consolidated condensed balance sheet.
15
Note 5 – 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 28, 2024
December 31, 2023
Right of use assets
Operating Leases
Buildings and improvements
$
117,613
$
121,578
Machinery and equipment
8,356
5,251
Total
$
125,969
$
126,829
Current lease liabilities
Operating Leases
Buildings and improvements
$
23,231
$
23,647
Machinery and equipment
4,394
2,838
Total
$
27,625
$
26,485
Long-term lease liabilities
Operating Leases
Buildings and improvements
$
96,945
$
100,489
Machinery and equipment
4,067
2,341
Total
$
101,012
$
102,830
Total lease liabilities
$
128,637
$
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
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Lease expense
Operating lease expense
$
7,553
$
7,035
$
22,312
$
20,803
Short-term lease expense
262
248
738
756
Variable lease expense
120
101
482
412
Total lease expense
$
7,935
$
7,384
$
23,532
$
21,971
The Company paid $ 22,618 and $ 20,912 for its operating leases in the nine
fiscal months ended September 28, 2024 and September 30, 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
8.9 years and the weighted-average discount rate is 6.6 % as of September 28, 2024.
The undiscounted future lease payments for the Company's operating lease liabilities are as follows:
September 28, 2024
2024 (excluding the nine fiscal months ended September 28, 2024)
$
7,281
2025
27,615
2026
23,680
2027
18,814
2028
16,035
Thereafter
77,221
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.
16
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 6 – 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 28, 2024 and September 30, 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.
The Company repatriated $ 120,000 of
accumulated earnings to the United States in the second fiscal quarter of 2024 and paid withholding taxes, in Israel, of $ 15,000 . The
withholding tax expense for the repatriation was recorded in prior years.
During the nine fiscal months ended September 28, 2024,
the liabilities for unrecognized tax benefits decreased $ 170 on a net basis, primarily due to statute expirations, partially offset by
accruals for the current period.
Note 7 – Long-Term Debt
Long-term debt consists of the following:
September 28, 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
( 24,303
)
( 26,914
)
820,799
818,188
Less current portion
-
-
$
820,799
$
818,188
The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of September 28, 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 September 28, 2024
$
95,102
$
750,000
Cash coupon rate (per annum)
2.25
%
2.25
%
Conversion rate (per $1 principal amount)
32.1955
33.1609
Effective conversion price (per share)
$
31.06
$
30.16
130 %
of the current effective conversion price (per share)
$
40.38
$
39.21
*As the Company has the intent and ability to refinance its convertible senior notes due 2025 (the "2025 Notes") upon maturity using its revolving credit
facility, the 2025 Notes remain classified as long-term liabilities.
On August 15, 2024 , the Company entered into an amendment to its credit agreement with a consortium of
banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other parties thereto (the "Credit Facility").
The amendment redefines the Interest Coverage Ratio to remove Capital Expenditures from the calculation, increases the minimum
Interest Coverage Ratio to 3.25 to 1.00, increases the threshold of Indebtedness of Foreign Subsidiaries to the greater of $ 300,000 and 15% of Consolidated Tangible Net Worth as of the last day of the fiscal quarter for which financial statements are delivered, and
increases the threshold of Investments of Subsidiaries that are not Loan Parties to $ 300,000 .
Other significant terms and conditions of the Credit Facility have not been modified.
Deferred
financing costs are recognized as non-cash interest expense. Non-cash interest expense was $ 1,249 and $ 3,675 for the fiscal quarter and nine fiscal months ended September 28, 2024, respectively, and $ 883 and $ 2,521 for the fiscal quarter and nine fiscal months
ended September 30, 2023, respectively.
Subsequent
to the end of the third fiscal quarter of 2024, the Company repurchased $ 40,684 principal amount of 2025 Notes. The repurchase was
funded with a draw on the Credit Facility.
17
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 8 – 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 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Dividends paid to stockholders
$
13,644
$
13,879
$
41,096
$
41,836
Stock repurchases
12,624
17,262
37,784
57,661
Total
$
26,268
$
31,141
$
78,880
$
99,497
The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 9,233,213 and 7,535,881 as of September 28, 2024 and December 31, 2023, respectively.
Note 9 – Revenue Recognition
Sales returns and allowances accrual activity is shown below:
Fiscal quarters ended
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Beginning balance
$
44,493
$
49,350
$
47,760
$
46,979
Sales allowances
21,969
27,554
68,200
79,688
Credits issued
( 24,448
)
( 31,034
)
( 73,635
)
( 81,162
)
Foreign currency
456
( 696
)
145
( 331
)
Ending balance
$
42,470
$
45,174
$
42,470
$
45,174
Note 10 – 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
)
5,768
$
3,194
Tax effect
-
-
$
-
Other comprehensive income before reclassifications, net of tax
( 2,574
)
5,768
$
3,194
Amounts reclassified out of AOCI
1,458
-
$
1,458
Tax effect
( 181
)
-
$
( 181
)
Amounts reclassified out of AOCI, net of tax
1,277
-
$
1,277
Net other comprehensive income (loss)
$
( 1,297
)
$
5,768
$
4,471
Balance at September 28, 2024
$
( 15,896
)
$
30,704
$
14,808
Reclassifications of pension and other post-retirement actuarial items out of AOCI are included in the computation of net periodic benefit cost. See Note
11 for further information.
18
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – 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 2024 and 2023 for the Company’s defined benefit pension plans:
Fiscal quarter ended
September 28, 2024
Fiscal quarter ended
September 30, 2023
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Net service cost
$
-
$
783
$
-
$
717
Interest cost
381
1,688
499
1,708
Expected return on plan assets
-
( 586
)
-
( 568
)
Amortization of prior service cost
16
57
36
56
Amortization of losses (gains)
( 108
)
463
( 30
)
575
Curtailment and settlement losses
-
102
-
102
Net periodic benefit cost
$
289
$
2,507
$
505
$
2,590
The following table shows the components of the net periodic pension cost for the nine fiscal months ended September 28, 2024 and September 30, 2023 for the Company’s defined benefit pension plans:
Nine fiscal months ended
September 28, 2024
Nine fiscal months ended
September 30, 2023
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Net service cost
$
-
$
2,349
$
-
$
2,164
Interest cost
1,144
5,038
1,498
5,114
Expected return on plan assets
-
( 1,764
)
-
( 1,708
)
Amortization of prior service cost
49
171
108
167
Amortization of losses (gains)
( 325
)
1,373
( 90
)
748
Curtailment and settlement losses
-
308
-
315
Net periodic benefit cost
$
868
$
7,475
$
1,516
$
6,800
19
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 2024 and 2023 for the Company’s other postretirement benefit plans:
Fiscal quarter ended
September 28, 2024
Fiscal quarter ended
September 30, 2023
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Service cost
$
6
$
61
$
5
$
34
Interest cost
53
62
56
32
Amortization of losses (gains)
( 60
)
21
( 80
)
3
Net periodic benefit cost
$
( 1
)
$
144
$
( 19
)
$
69
The following table shows the components of the net periodic pension cost for the nine fiscal months ended September 28, 2024 and September 30, 2023 for the Company’s other postretirement benefit plans:
Nine fiscal months ended
September 28, 2024
Nine fiscal months ended
September 30, 2023
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Service cost
$
16
$
181
$
16
$
102
Interest cost
158
184
168
94
Amortization of losses (gains)
( 180
)
62
( 241
)
10
Net periodic benefit cost
$
( 6
)
$
427
$
( 57
)
$
206
20
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – Stock-Based Compensation
The following table summarizes stock-based compensation expense recognized:
Fiscal quarters ended
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Restricted stock units ("RSUs")
$
5,635
$
5,528
$
14,810
11,503
Phantom stock units
-
-
118
107
Total
$
5,635
$
5,528
$
14,928
11,610
The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at September 28, 2024 (amortization periods in years) :
Unrecognized
Compensation
Cost
Weighted
Average
Remaining
Amortization
Periods
Restricted stock units
$
31,130
2.2
Phantom stock units
-
n/a
Total
$
31,130
21
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 28, 2024
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, 2024
1,717
$
23.03
Granted*
1,641
20.47
Vested**
( 587
)
23.05
Cancelled or forfeited
( 125
)
23.18
Outstanding at September 28, 2024
2,646
$
21.43
Expected to vest at September 28, 2024
1,900
* 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.
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
-
579
579
March 1, 2029
175
-
175
Phantom Stock Units
Phantom stock unit activity as of September 28, 2024
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, 2024
120
Granted
5
$
23.51
Dividend equivalents issued
2
Outstanding at September 28, 2024
127
22
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 13 – Segment Information
The following tables set forth business segment information:
MOSFETs
Diodes
Optoelectronic
Components
Resistors
Inductors
Capacitors
Total
Fiscal quarter ended September 28, 2024 :
Net revenues
$
147,134
$
145,183
$
63,227
$
180,889
$
90,253
$
108,667
$
735,353
Segment Operating Income (Loss)
$
( 4,265
)
$
22,748
$
6,153
$
32,305
$
23,649
$
18,917
$
99,507
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
Nine fiscal months ended September 28, 2024 :
Net revenues
$
455,360
$
440,578
$
165,436
$
548,583
$
272,965
$
339,949
$
2,222,871
Segment Operating Income
$
5,616
$
73,173
$
16,339
$
103,337
$
71,377
$
66,412
$
336,254
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
Fiscal quarters ended
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Reconciliation:
Segment Operating Income
$
99,507
$
194,854
$
336,254
$
649,287
Restructuring and Severance Costs
( 40,614
)
-
( 40,614
)
-
Unallocated Selling, General, and Administrative Expenses
( 77,169
)
( 79,724
)
( 233,328
)
( 240,973
)
Consolidated Operating Income (Loss)
$
( 18,276
)
$
115,130
$
62,312
$
408,314
Unallocated Other Income (Expense)
( 5,793
)
( 18,618
)
( 5,848
)
( 21,556
)
Consolidated Income (Loss) Before Taxes
$
( 24,069
)
$
96,512
$
56,464
$
386,758
23
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 original equipment manufacturers ("OEMs"), electronic manufacturing services ("EMS") companies,
and independent distributors. The distribution of sales by channel is shown below:
Fiscal quarters ended
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Distributors
$
406,468
$
438,126
$
1,200,456
$
1,396,021
OEMs
278,801
358,791
871,739
1,044,039
EMS companies
50,084
56,736
150,676
176,749
Total Revenue
$
735,353
$
853,653
$
2,222,871
$
2,616,809
Net revenues were attributable to customers in the following regions:
Fiscal quarters ended
Nine fiscal months ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Asia
$
289,577
$
323,750
$
857,073
$
957,706
Europe
256,296
315,264
793,183
968,286
Americas
189,480
214,639
572,615
690,817
Total Revenue
$
735,353
$
853,653
$
2,222,871
$
2,616,809
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 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Industrial
$
243,610
$
297,506
$
753,872
$
951,422
Automotive
279,597
316,043
834,998
910,775
Military and Aerospace
81,264
67,623
245,189
198,489
Medical
37,010
34,447
110,855
116,688
Other
93,872
138,034
277,957
439,435
Total Revenue
$
735,353
$
853,653
$
2,222,871
$
2,616,809
24
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 14 – 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 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Numerator:
Net earnings (loss) attributable to Vishay stockholders
$
( 19,299
)
$
65,529
$
35,158
$
272,348
Denominator:
Denominator for basic earnings (loss) per share:
Weighted average shares
136,667
138,964
137,155
139,696
Outstanding phantom stock units
126
119
126
132
Adjusted weighted average shares
136,793
139,083
137,281
139,828
Effect of dilutive securities:
Restricted stock units
-
918
758
749
Dilutive potential common shares
-
918
758
749
Denominator for diluted earnings (loss) per share:
Adjusted weighted average shares - diluted
136,793
140,001
138,039
140,577
Basic earnings (loss) per share attributable to Vishay stockholders
$
( 0.14 )
$
0.47
$
0.26
$
1.95
Diluted earnings (loss) per share attributable to Vishay stockholders
$
( 0.14 )
$
0.47
$
0.25
$
1.94
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 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Restricted stock units
2,646
3
243
107
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 (loss) 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.
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.
25
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 15 – 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 28, 2024
Assets:
Assets held in rabbi trusts
$
54,943
$
25,654
$
29,289
$
-
Available for sale securities
$
4,298
4,298
-
-
$
59,241
$
29,952
$
29,289
$
-
Liability:
Acquisitions contingent consideration
$
15,674
$
-
$
-
$
15,674
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:
MaxPower acquisition 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.
During the third fiscal quarter, the Company performed an interim goodwill impairment test in which the fair value of the Company's reporting units was calculated. See additional information on the impairment test in
Note 3.
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 September 28, 2024 and December 31, 2023 is approximately $ 789,100 and $ 836,200 , respectively,
compared to its carrying value, excluding the deferred financing costs, of $ 845,102 . 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.
26
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
At September 28, 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 September 28, 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.
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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.