What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 399 added, 299 removed, 422 unchanged (62% of the section changed)

48 unchanged sentences

“Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below.

The key financial metrics were mixed versus the prior fiscal quarter, but mostly lower than the prior year period.

Net revenues and margins decreased versus the

prior year period primarily due to lower sales volume and decreased average selling prices, but orders increased.

Net revenues for the fiscal quarter ended March 29, 2025

The key financial metrics increased versus the prior fiscal quarter, but were mixed versus the prior year period.

Net revenues and margins increased versus the

prior fiscal quarter and net revenues increased versus the prior year quarter, but margins were lower.

The increases are primarily due to increased sales volume.

Net revenues for the fiscal quarter ended June 28, 2025

were $762.3 million, compared to $715.2

million and $746.3 million for the fiscal quarters ended December 31, 2024 and March 30, 2024, respectively.

The net loss attributable

to Vishay stockholders for the fiscal quarter ended March 29, 2025 was $(4.1) million, or $(0.03) per share, compared to a net loss of $(66.3) million, or $(0.49) per share

for the fiscal quarter ended December 31, 2024, and net earnings of $30.9 million, or $0.22 per diluted share for the fiscal quarter ended March 30, 2024.

We define adjusted net earnings as net earnings (loss) determined in accordance with GAAP adjusted for various items that management believes are not indicative of the intrinsic operating

performance of our business.

We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment.

The reconciliations below include certain financial

measures which are not recognized in accordance with GAAP, including adjusted net earnings, adjusted earnings per share, and free cash.

These non-GAAP measures should not be viewed as alternatives to GAAP measures of performance or liquidity.

million and $741.2 million for the fiscal quarters ended March 29, 2025 and June 29, 2024, respectively.

The net earnings attributable to Vishay

stockholders for the fiscal quarter ended June 28, 2025 was $2.0 million, or $0.01 per diluted share, compared to a net loss

of $(4.1) million, or $(0.03)

per share for the fiscal quarter ended March 29, 2025, and net earnings of $23.5 million, or $0.17 per diluted share for the fiscal quarter

ended June 29, 2024.

Net revenues for the six fiscal months

ended June 28, 2025 were $1,477.5

million, compared to $1,487.5 million for the six fiscal months ended June 29, 2024.

The net loss attributable to Vishay

stockholders for the six fiscal months ended June 28, 2025 was $(2.1) million, or $(0.02) per share, compared to net earnings of $54.5 million, or

$0.39 per diluted share for the six

fiscal months ended June 29, 2024.

We define adjusted net earnings as net earnings (loss) determined in accordance with GAAP adjusted for various items that

management believes are not indicative of the intrinsic operating performance of our business.

We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and

The reconciliations below include certain financial measures which are not recognized in accordance with GAAP, including adjusted net earnings, adjusted earnings per share, and free cash.

These non-GAAP measures should not be viewed as

alternatives to GAAP measures of performance or liquidity.

Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, and free cash do not have uniform definitions.

These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies.

These measures, as calculated by Vishay, may not be comparable

to similarly titled measures used by other companies.

Management believes that adjusted net earnings and adjusted earnings per share are meaningful because they provide insight with respect to our intrinsic operating results.

Management believes that free cash is a meaningful measure of our ability

to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends.

Management believes

that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends.

We utilize the free cash metric in defining our Stockholder Return Policy.

2 unchanged sentences

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

GAAP net earnings (loss) attributable to Vishay stockholders

Reconciling items affecting operating income:

Impairment of goodwill

Favorable resolution of contingency

Adjusted net earnings (loss)

1 unchanged sentence

Adjusted earnings (loss) per diluted share

The following table reconciles gross profit by segment to consolidated gross profit ( in thousands ):

The following table

reconciles gross profit by segment to consolidated gross profit ( in thousands ) .

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Optoelectronic Components

3 unchanged sentences

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

Net cash provided by continuing operating activities

June 29, 2024

June 28, 2025

June 29, 2024

Net cash provided by (used in) continuing operating activities

Proceeds from sale of property and equipment

Capital expenditures

For the past several quarters, orders were negatively impacted by a distributor inventory correction and channel inventory that overhung the market, but

there are indicators that the prolonged period of excess inventory digestion is ending.

The long-term outlook for our business remains strong, although our results are weaker than our prior year results.

Recent Developments

The newly announced U.S.

tariffs will impact our future results.

The tariff rates and application

are currently unsettled and any potential demand distraction is not able to be estimated at this time.

Historically, we have charged tariff adders to customers to offset increased costs.

The gross profit impact of the tariffs and tariff adders

is approximately zero, but they negatively impact gross profit margin.

The announcement of the U.S.

tariffs has resulted in significant market volatility.

A decrease in

our common stock price could impact our goodwill impairment assessment if a stock price recovery does not take place.

For the past several quarters, orders were negatively impacted by a distributor inventory correction and channel inventory that overhung the market, but there are indicators that the

prolonged period of excess inventory digestion is ending.

The long-term outlook of our business remains strong, although our results are weaker than our prior year results.

Stockholder Return Policy

2 unchanged sentences

We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of stock repurchases.

The following table summarizes activity pursuant to this policy (in thousands):

Fiscal quarters ended

March 29, 2025

March 30, 2024

Dividends paid to stockholders

Stock repurchases

The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders.

will continue to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions.

We have paid dividends each quarter since the first quarter of 2014, and t he

Stockholder Return Policy will remain in effect until such time as the Board votes to amend or rescind the policy.

Implementation of the Stockholder Return Policy is

subject to future declarations of dividends by the Board of Directors, market and business conditions, legal requirements, and other factors.

The policy sets forth our intention, but does not obligate us to acquire any shares of common stock

or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations.

The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with

applicable laws and regulations.

We expect negative free cash flow for the fiscal year ending December 31, 2025 due to our capacity expansion plans.

As a result, we expect to maintain our dividend and opportunistically repurchase shares based

available liquidity in line with this policy.

We did not repurchase any shares of common stock in the second fiscal quarter.

We expect to be in compliance with our Stockholder Return Policy without repurchasing any additional

shares in 2025.

Tariff Impact

The newly announced U.S.

tariffs will impact our future results.

The tariff rates and application are currently unsettled and any potential demand

distraction is not able to be estimated at this time.

Historically, we have charged tariff adders to customers to offset increased costs.

The gross profit impact of the tariffs and tariff adders is approximately zero, but they negatively

impact gross profit margin.

The net impact of tariffs on gross profit margin in the second fiscal quarter was (40) basis points.

Recent Developments

The announcement of the U.S.

tariffs and recent geopolitical events resulted in significant stock market volatility and uncertainty in the markets

for our products.

A sustained decrease in share price or prolonged deterioration in the general economy could represent indicators of impairment of our goodwill or other long-lived assets.

Financial Metrics

51 unchanged sentences

The following table

shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the first fiscal quarter of 2024 through

the first fiscal quarter of 2025 (dollars in thousands) :

1st Quarter 2024

the second fiscal quarter of 2025 (dollars in thousands) :

2nd Quarter 2024

2 unchanged sentences

1st Quarter 2025

2nd Quarter 2025

Gross profit margin

6 unchanged sentences

_________________________________________

(1) Operating margin for the third fiscal quarter of 2024 includes $40.6 million of restructuring and severance expenses (see Note 2 to our consolidated condensed financial statements).

Operating margin for the

fourth fiscal quarter of 2024 includes $66.5 million of goodwill impairment charges.

(1) Operating margin for the second fiscal quarter of 2025 includes an $11.3 million gain recognized upon the favorable resolution of a contingency.

Operating margin for the third fiscal quarter of 2024 includes

$40.6 million of restructuring and severance expenses (see Note 2 to our consolidated condensed financial statements).

Operating margin for the fourth fiscal quarter of 2024 includes $66.5 million of goodwill impairment charges.

See “Financial Metrics by Segment” below for net revenues, book-to-bill ratio, and gross profit margin broken out by segment.

Revenues increased slightly versus the prior fiscal

quarter, but decreased versus the prior year quarter.

The increase versus the prior fiscal quarter is primarily due to higher sales volume, partially offset by lower average selling prices.

The decrease versus the prior year quarter is

primarily due to lower average selling prices and lower sales volume.

The book-to-bill ratio and backlog increased versus the prior fiscal quarter.

Revenues increased versus the prior fiscal quarter

and prior year quarter.

The increases versus the prior fiscal quarter and prior year quarter are primarily due to higher sales volume and favorable exchange rate impacts.

The book-to-bill ratio remained above 1.0 for the third consecutive

Backlog was relatively flat versus the prior fiscal quarter and prior year fiscal quarter.

We continue to increase capacity for critical product lines.

Average selling prices decreased

versus the prior fiscal quarter and prior year quarter.

Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter primarily due to lower average selling prices and higher fixed

Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year quarter.

The book-to-bill ratio in the first fiscal quarter of 2025 increased to 1.08 versus 1.01 in the fourth fiscal quarter of 2024.

Average selling prices, including tariff adders, were flat versus the prior fiscal

quarter, but decreased versus the prior year fiscal quarter.

Gross profit margin increased versus the prior fiscal quarter, but decreased versus the prior year fiscal quarter.

The increase versus the prior fiscal

quarter is primarily due to higher sales volume and lower fixed costs.

The decrease versus the prior year quarter is primarily due to lower average selling prices and higher fixed costs.

Costs associated with the Newport wafer fab also

contributed to the decrease versus the prior year quarter.

Financial Metrics by Segment

The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal

quarters beginning with the first fiscal quarter of 2024 through the first fiscal quarter of 2025 (dollars in thousands) :

1st Quarter 2024

quarters beginning with the second fiscal quarter of 2024 through the second fiscal quarter of 2025 (dollars in thousands) :

2nd Quarter 2024

2 unchanged sentences

1st Quarter 2025

2nd Quarter 2025

Book-to-bill ratio

20 unchanged sentences

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Cost of products sold

Selling, general & administrative expenses

Operating income (loss)

Operating income

Income (loss) before taxes and noncontrolling interest

3 unchanged sentences

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

The change in net revenues versus the comparable prior periods was as follows (dollars in thousands) :

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in net revenues were attributable to the following:

Prior Quarter

Prior Year Quarter

Change attributable to:

Change in volume

Decrease in average selling prices

Increase in volume

Change in average selling prices

Foreign currency effects

There are indications that the channel inventory that has overhung the market is normalizing and the prolonged period of excess inventory digestion is ending.

The long-term prospects for

our business remain favorable, and we continue to increase manufacturing capacities for critical product lines.

The decrease in net revenues versus the prior year quarter is primarily due to lower average selling prices and decreased sales volume.

There are indications that the channel inventory that has overhung the market is normalizing

and the prolonged period of excess inventory digestion is ending.

The long-term prospects for our business remain favorable, and we continue to increase manufacturing capacities for critical product lines.

The increase in net revenues versus

the prior fiscal quarter and prior year periods are primarily due to sales volume and favorable foreign currency impacts.

Gross Profit Margins

Gross profit margins for the fiscal quarter ended March 29, 2025 were 19.0%, versus 19.9% and 22.8% for the comparable prior fiscal quarter and prior year period,

respectively.

Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter primarily due to lower average selling prices and higher fixed costs.

Costs associated with the Newport wafer fab also contributed to the

decrease versus the prior year quarter.

Gross profit margins for the fiscal quarter ended June 28, 2025 were 19.5%, versus 19.0% and 22.0%, for the comparable prior quarter and prior year quarter, respectively.

profit margins for the six fiscal months ended June 28, 2025 were 19.2%, versus 22.4% for the comparable prior year period.

Gross profit margin increased versus the prior fiscal quarter primarily due to higher sales volume.

The decreases versus the prior

year periods are primarily due to lower average selling prices and higher fixed costs.

Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year-to-date period.

Analysis of revenues and margins for our segments is provided below.

1 unchanged sentence

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

2 unchanged sentences

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in MOSFETs segment net revenues were attributable to the following:

Prior Quarter

Prior Year Quarter

Change attributable to:

2 unchanged sentences

Foreign currency effects

Net revenues of the MOSFETs segment decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to decreased

sales to distribution and OEM customers, automotive and industrial end market customers, and customers in all regions.

An increase in sales to computing end market customers partially offset the decreases versus the prior fiscal quarter and prior

year quarter.

Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to lower average selling prices and higher

Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year quarter.

Segment operating margin decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to gross

profit decreases.

Average selling prices decreased versus the prior fiscal quarter and the prior year quarter.

Net revenues of the MOSFETs segment increased versus the prior fiscal quarter, but decreased versus the prior year periods.

versus the prior fiscal quarter is primarily due to increased sales to distribution customers, power supply end market customers, and customers in the Asia region.

The decreases versus the prior year periods are primarily due to

decreased sales to OEM customers, industrial end market customers, and customers in the Europe region.

Gross profit margin decreased versus the prior fiscal quarter and prior year periods.

The decreases are primarily due to lower average selling prices.

Costs associated with the Newport wafer fab also contributed to the decrease

versus the prior year-to-date period.

Segment operating margin decreased versus the prior fiscal quarter and prior year periods.

The decreases are primarily due to gross profit

Average selling prices decreased versus the prior fiscal quarter and the prior year periods.

We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines.

We are building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing

8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% by 2028 and allow us to balance our in-house and foundry wafer supply.

We are building a 12-inch wafer fab

in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% by 2028 and allow us to balance our in-house and foundry wafer supply.

We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022.

We plan to use the Newport wafer

fabrication facility acquired in the first fiscal quarter of 2024 as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities.

The acquisitions of MaxPower Semiconductor, Inc.

and the Newport wafer fab, as well

as the planned capacity expansions at Itzehoe and Newport, are long-term investments which are not expected to generate significant income or cash flows in the near-term, but should greatly enhance the long-term position of our MOSFETs business.

We plan to use the Newport wafer fabrication facility acquired in the first fiscal quarter of 2024 as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities.

The acquisitions of MaxPower

Semiconductor, Inc.

and the Newport wafer fab, as well as the planned capacity expansions at Itzehoe and Newport, are long-term investments which are not expected to generate significant income or cash flows in the near-term, but should

greatly enhance the long-term position of our MOSFETs business.

We remain committed to these long-term projects.

1 unchanged sentence

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

Segment operating margin

The change in net revenues versus the comparable prior periods was as follows (dollars

in thousands) :

The change in net revenues versus the comparable prior periods was as follows (dollars in thousands) :

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in Diodes segment net revenues were attributable to the following:

Prior Quarter

Prior Year Quarter

Change attributable to:

2 unchanged sentences

Foreign currency effects

Net revenues of the Diodes segment decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to decreased

sales to OEM customers, automotive end market customers, and customers in the Asia and Americas regions.

Increases in sales to distribution customers and customers in the Europe region partially offset the decrease versus the prior fiscal

Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to lower average selling prices.

Segment operating margin decreased versus the prior fiscal quarter and prior year quarter.

The decreases are primarily due

to decreased gross profit.

Average selling prices decreased versus the prior fiscal quarter and prior year quarter.

O ptoelectronic Components

Net revenues of the Diodes segment increased versus the prior fiscal quarter and the prior year quarter, but decreased versus the prior year-to-date

The increases versus the prior fiscal quarter and prior year quarter are primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Asia region.

The decrease versus the prior

year-to-date period is primarily due to decreased sales to OEM customers, automotive end market customers, and customers in the Americas region.

Gross profit margin increased slightly versus the prior fiscal quarter, but decreased versus the prior year periods.

The increase versus the prior

fiscal quarter is primarily due to higher sales volume.

The decreases versus the prior year periods is primarily due to lower average selling prices.

Segment operating margin was flat versus the prior fiscal quarter, but decreased versus the prior year periods.

The decreases versus the prior year

periods are primarily due to decreased gross profit.

Average selling prices decreased versus the prior fiscal quarter and prior year periods.

Optoelectronic Components

Net revenues, gross profit margins, and segment operating margins of the Optoelectronic Components segment were as follows (dollars in thousands):

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

Segment operating margin

The change in net revenues versus the comparable prior periods was as follows (dollars

in thousands) :

The change in net revenues versus the comparable prior periods was as follows (dollars in thousands) :

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in Optoelectronic Components segment net revenues were attributable to the following:

Prior Quarter

Prior Year Quarter

Change attributable to:

Increase in volume

Change in average selling prices

Decrease in average selling prices

Foreign currency effects

Net revenues of our Optoelectronic Components segment increased versus the prior fiscal quarter and the prior year quarter.

The increases are primarily due to increased sales to distribution customers and industrial end market customers.

Sales to customers in all regions increased versus the prior fiscal quarter

and in the Asia and Americas regions versus the prior year quarter.

Gross profit margin increased versus the prior fiscal quarter and the prior year quarter.

The increases are primarily due to higher sales volume.

Higher average selling prices also contributed to the increase versus the prior fiscal quarter.

Segment operating margin increased versus the prior fiscal quarter and the prior year quarter.

The increases are primarily due to gross profit increases.

Average selling prices increased versus the prior fiscal quarter.

Net revenues of the Optoelectronic Components segment increased versus the prior fiscal quarter and prior year periods.

The increase versus the

prior fiscal quarter is primarily due to increased sales to OEM and distribution customers, industrial and consumer end market customers, and customers in the Europe region.

The increase versus the prior year quarter is primarily due to

increased sales to OEM customers, automotive and industrial end market customers, and customers in the Europe region.

The increase versus the prior year-to-date period is primarily due to increased sales to distribution customers, industrial

end market customers, and customers in the Asia region.

Gross margin increased versus the prior fiscal quarter and prior year-to-date period, but decreased versus the prior year quarter.

The increases

versus the prior fiscal quarter and prior year-to-date period are primarily due to higher sales volume and lower utility costs.

The decrease versus the prior year quarter is primarily due to lower average selling prices and higher metals and

Segment operating margin increased versus the prior fiscal quarter and prior year-to-date period, but decreased versus the prior year quarter.

changes are primarily due to changes in gross profit.

Average selling prices decreased versus the prior fiscal quarter and prior year periods.

Net revenues, gross profit margins, and segment operating margins of the Resistors segment were as follows (dollars in thousands):

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

2 unchanged sentences

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in Resistors segment net revenues were attributable to the following:

Prior Quarter

Prior Year Quarter

Change attributable to:

Change in volume

Decrease in average selling prices

Increase in volume

Change in average selling prices

Foreign currency effects

Net revenues of the Resistors segment increased versus the prior fiscal quarter, but decreased versus the prior year quarter.

The increase versus the

prior fiscal quarter is primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Asia and Europe regions.

The decrease versus the prior year quarter is primarily due to decreased sales to

OEM customers, industrial and automotive end market customers, and customers in the Europe region, partially offset by increased sales to distribution customers and customers in the Asia region.

Gross profit margin increased versus the prior fiscal quarter, but decreased versus the prior year quarter.

The increase versus the prior fiscal quarter is primarily

due to higher sales volume.

The decrease versus the prior year quarter is primarily due to lower average selling prices.

Segment operating margin increased versus the prior fiscal quarter, but decreased versus the prior year quarter.

The changes are primarily due to fluctuations in gross profit.

Average selling prices decreased versus the prior fiscal quarter and the prior year quarter.

Net revenues of the Resistors segment increased versus the prior fiscal quarter and prior year periods.

The increases versus the prior fiscal

quarter and prior year quarter are primarily due to increased sales to distribution and OEM customers, industrial and automotive end market customers, and customers in all regions.

The increase versus the prior year-to-date period is primarily

due to increased sales to distribution customers, military and aerospace end market customers, and customers in the Asia and Americas regions.

Gross profit margin increased versus the prior fiscal quarter, but decreased versus the prior year periods.

The increase versus the prior fiscal

quarter is primarily due to higher sales volume.

The decrease versus the prior year periods is primarily due to lower average selling prices.

Segment operating margin increased versus the prior fiscal quarter, but decreased versus the prior year periods.

The changes are primarily due to

changes in gross profit.

Average selling prices, including tariff adders, increased versus the prior fiscal quarter and decreased versus the prior year periods.

We are increasing critical manufacturing capacities for certain product lines.

3 unchanged sentences

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

2 unchanged sentences

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in Inductors segment net revenues were attributable to the following:

3 unchanged sentences

Change in volume

Decrease in average selling prices

Increase in average selling prices

Foreign currency effects

Net revenues of the Inductors segment increased versus the prior fiscal quarter, but decreased versus the prior year quarter.

The increase versus the

prior fiscal quarter is primarily due to increased sales to OEM customers, automotive end market customers, and customers in the Europe region, partially offset by decreased sales to EMS customers and customers in the Asia region.

versus the prior year quarter is primarily due to decreased sales to OEM customers, automotive and military and aerospace end market customers, and customers in all regions, partially offset by increased sales to medical end market customers.

Gross profit margin decreased versus the prior fiscal quarter and prior year quarter.

The decreases are primarily due to lower average selling prices,

higher variable costs, and manufacturing inefficiencies.

Lower sales volume also contributed to the decrease versus the prior year quarter.

Segment operating margin decreased versus the prior fiscal quarter and prior year quarter.

The decreases are primarily due to gross profit decreases.

Average selling prices decreased versus the prior fiscal quarter and prior year quarter.

We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating acquisition

opportunities, particularly of specialty businesses.

Net revenues of the Inductors segment increased versus the prior fiscal quarter and prior year quarter, but decreased versus the prior year-to-date period.

The increase versus the prior fiscal quarter is

primarily due to increased sales to distribution and OEM customers, automotive and industrial end market customers, and customers in all regions.

The increase versus the prior year quarter is primarily due to increased sales to distribution

customers, industrial end market customers, and customers in the Asia region.

The decrease versus the prior year-to-date period is primarily due to decreased sales to OEM customers, automotive and military and aerospace end market customers, and

customers in the Americas region, partially offset by increased sales to distribution customers and customers in the Asia region.

Gross profit margin increased significantly versus the prior fiscal quarter, but decreased versus the prior year periods.

The increase versus the prior fiscal quarter is primarily due to higher sales volume and manufacturing efficiencies.

The decreases versus the prior year periods are primarily due to lower sales volume.

Segment operating margin increased significantly versus the prior fiscal quarter, but decreased versus the prior year periods.

The changes are primarily due to changes in gross profit.

Average selling prices, including tariff adders, increased versus the prior fiscal quarter and prior year periods.

We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating

acquisition opportunities, particularly of specialty businesses.

Net revenues, gross profit margins, and segment operating margins of the Capacitors segment were as follows (dollars in thousands):

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Gross profit margin

2 unchanged sentences

Fiscal quarter ended

March 29, 2025

June 28, 2025

Six fiscal months ended

June 28, 2025

Change in net revenues

December 31, 2024

Change in net revenues

March 29, 2025

June 29, 2024

Changes in Capacitors segment net revenues were attributable to the following:

Prior Year Quarter

Change attributable to:

Change in volume

Decrease in average selling prices

Increase in average selling prices

Foreign currency effects

Net revenues of the Capacitors segment decreased versus the prior fiscal quarter and the prior year quarter.

The decreases are primarily due to decreased

sales to military and aerospace end market customers and customers in the Americas region, partially offset by increased sales to customers in the Europe region.

Decreased sales to OEM customers also contributed to the decrease versus the prior

fiscal quarter, while increased sales to distribution customers partially offset the decrease.

Decreased sales to customers in the Asia region also contributed to the decrease versus the prior year quarter, while increased sales to industrial market

end customers partially offset the decrease.

Gross profit margin decreased versus the prior fiscal quarter and prior year quarter.

The decreases are primarily due to lower average selling prices, higher fixed

costs, and negative foreign currency exchange rate fluctuations.

Segment operating margin decreased versus the prior fiscal quarter and prior year quarter.

The fluctuations are primarily due to gross profit decreases.

Average selling prices decreased versus the prior fiscal quarter and prior year quarter.

Net revenues of the Capacitors segment increased versus the prior fiscal quarter and prior year periods.

The increase versus the prior fiscal

quarter is primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Asia region, partially offset by decreased sales to customers in the Europe region.

The increase versus the prior year

quarter is primarily due to increased sales to OEM customers, industrial and telecommunications end market customers, and customers in the Asia region.

The increase versus the prior year-to-date period is primarily due to increased sales to

OEM customers, industrial and telecommunications end market customers, and customers in the Europe region, partially offset by decreased sales to military and aerospace end market customers and customers in the Americas region.

Gross profit margin decreased versus the prior fiscal quarter and prior year periods.

The decrease versus the prior fiscal quarter is primarily due

to lower sales volume.

The decreases versus the prior year periods are primarily due to higher fixed costs.

Lower sales volume also contributed to the decrease versus the prior fiscal quarter.

Segment operating margin decreased versus the prior fiscal quarter and prior year periods.

The changes are primarily due to gross profit decreases.

Average selling prices, including tariff adders, increased versus the prior fiscal quarter and prior year periods.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses are summarized as follows (dollars in thousands):

Selling, general, and administrative (“SG&A”) expenses are summarized as follows (dollars in thousands):

Fiscal quarters ended

March 29, 2025

December 31, 2024

Six fiscal months ended

June 28, 2025

March 29, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Total SG&A expenses

as a percentage of revenues

The sequential increase in SG&A expenses is primarily attributable to increased incentive compensation accruals.

The sequential decrease in SG&A expenses is primarily attributable to an $11.3 million gain recognized upon the favorable resolution of a contingency.

Excluding the one-time benefit, the sequential increase is primarily due to exchange

rate impacts.

SG&A expenses increased versus the prior year periods due to higher stock-based compensation expense, general cost inflation, and exchange rate impacts.

Other Income (Expense)

Interest expense for the fiscal quarter ended March 29, 2025 increased by $1.1 million versus the fiscal quarter ended December 31, 2024 and increased by $2.3 million versus the fiscal quarter ended March 30, 2024.

The increases versus the prior fiscal quarter and the prior year quarter are due to higher outstanding balances on our revolving credit facility.

Interest expense for the fiscal quarter ended June 28, 2025

increased $1.8 million versus the fiscal quarter ended March 29, 2025 and increased $3.9 million versus the fiscal quarter ended June 29, 2024.

Interest expense for the six

fiscal months ended June 28, 2025 increased by $6.2 million versus the six fiscal months ended June 29, 2024.

The increases versus the prior fiscal quarter and the prior year periods are due to higher average outstanding balances on our revolving

credit facility.

In the second fiscal quarter of 2025, we entered into a forward contract with a highly-rated financial institution to mitigate the foreign currency risk

associated with an intercompany loan denominated in a currency other than the legal entity's functional currency.

The notional amount of the forward contract was $25 million as of June 28, 2025.

We have not designated the forward contract as a

hedge for accounting purposes, and as such the change in the fair value of the contract is recognized in the consolidated condensed statements of operations as a component of other income (expense).

Due to the timing of the forward contract, the

value of the forward contract was immaterial as of June 28, 2025.

The following tables analyze the components of the line “Other” on the consolidated condensed statements of operations (in thousands):

Fiscal quarters ended

March 29, 2025

December 31, 2024

Foreign exchange gain

June 28, 2025

June 29, 2024

Foreign exchange gain (loss)

Interest income

Other components of other periodic pension cost

Other components of net periodic pension expense

Investment income (expense)

Fiscal quarters ended

March 29, 2025

June 28, 2025

March 29, 2025

Foreign exchange gain

Foreign exchange gain (loss)

Interest income

Other components of other periodic pension cost

Other components of net periodic pension expense

Investment income (expense)

For the fiscal quarter ended March 29, 2025,

our effective tax rate was 3.2%, as compared to (12.3)% and 29.0% for the fiscal quarters ended December 31, 2024 and March 30, 2024,

respectively.

We expect that our effective tax rate will be higher than the U.S.

statutory rate, excluding unusual transactions, at higher levels of pre-tax income.

During the three fiscal months ended March 29, 2025, the liabilities for unrecognized

tax benefits decreased by $1.0 million on a net basis, primarily due to the settlement of tax audits, partially offset by accruals for the current period.

Six fiscal months ended

June 28, 2025

June 29, 2024

Foreign exchange gain (loss)

Interest income

Other components of net periodic pension expense

Investment income (expense)

For the fiscal quarter ended June 28, 2025, our effective tax rate was 83.7%, as

compared to 3.2% and 34.2%

for the fiscal quarters ended March 29, 2025 and June 29, 2024, respectively.

For the six fiscal months ended June 28, 2025, our effective tax rate was 125.9%,

as compared to 31.3% for the six

fiscal months ended June 29, 2024.

effective tax rate is not indicative of expected future tax rates due to relatively small items having a disproportionate impact on the current effective tax rate.

When pre-tax earnings increase, we expect that our effective tax rate will be

higher than the U.S.

statutory rate, excluding unusual transactions.

During the six fiscal months ended June 28, 2025, the liabilities for unrecognized tax benefits decreased $0.7 million on a net basis, primarily due to statute expirations, settlements, and payments, partially offset by accruals for the current period.

On July 4, 2025, H.R.

1 (“the Act”), a tax reconciliation act, was enacted into law in the United States.

GAAP (specifically, Accounting Standards Codification Topic 740), the effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the new legislation is enacted.

Accordingly, we will account for the

Act in the third fiscal quarter.

We are evaluating the Act’s provisions, but are not currently able to estimate the impact of the Act on our deferred tax balances and future income tax expense.

Certain provisions of the Act, particularly the

international tax provisions, may have a material impact on our deferred tax balances and future income tax expense.

We operate in a global environment with significant operations in various locations outside the United States.

Accordingly, the consolidated income tax rate is a composite rate reflecting our earnings and the applicable tax rates in the various

locations where we operate.

Part of our historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations to countries where we can take advantage of lower labor costs and available tax and other

government-sponsored incentives.

Accordingly, the consolidated income tax

rate is a composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate.

Part of our historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations

to countries where we can take advantage of lower labor costs and available tax and other government-sponsored incentives.

Additional information about income taxes is included in Note 4 to our consolidated condensed financial statements.

Financial Condition, Liquidity, and Capital Resources

Our financial condition as of March 29, 2025 continued to be strong.

Our financial condition as of June 28, 2025 continued to be strong.

We have historically been a strong

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See "Overview" above for "free cash" definition and reconciliation to GAAP.

Cash flows provided by operating activities were $16.1 million

for the three fiscal months ended March 29, 2025, as compared to cash flows provided by operations of $80.2 million for the three fiscal months ended March 30, 2024.

Cash flows provided by operating activities were $7.3 million for

the six fiscal months ended June 28, 2025, as compared to cash flows provided by operations of $55.5 million for the six fiscal months ended June 29, 2024.

In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle.

The following table presents the components of our

cash conversion cycle during the five fiscal quarters beginning with the first fiscal quarter of 2024 through the first fiscal quarter of 2025:

cash conversion cycle during the five fiscal quarters beginning with the second fiscal quarter of 2024 through the second fiscal quarter of 2025:

Fiscal quarters ended

1st Quarter 2024

2nd Quarter 2024

2 unchanged sentences

1st Quarter 2025

2nd Quarter 2025

Days sales outstanding ("DSO") (a)

11 unchanged sentences

by dividing the average accounts payable by the average cost of goods sold per day for the respective fiscal quarter.

Cash paid for property and equipment for the three

fiscal months ended March 29, 2025 was $61.6

million, as compared to $53.1 million for the three fiscal months ended March 30, 2024.

To be well positioned to service our customers and to

fully participate in growing markets, we have increased and expect to maintain a relatively high level of capital expenditures for expansion in the mid-term.

We remain committed to our long-term plan of increasing Vishay's capacity, to assure our

customers of reliable volume as they scale.

While we plan to advance our capacity expansion projects, we have and will continue to modulate spending in response to order flow and the timing of customer demand and qualifications.

The decreased

lead time for equipment and the increased subcontractor capacity are also variables that allow us to adjust our capacity spending.

For 2025, we plan to spend between $300 million to $350 million for capital expenditures, at least 70% of which will

be invested in capacity expansion projects for high growth product lines, including our wafer fab expansions.

Free cash flow for the three fiscal months ended March 29, 2025 decreased versus the three fiscal months ended March 30, 2024 primarily due to decreased net earnings.

We expect that free cash flow

will be negatively impacted by the expected high level of capital expenditures for expansion in 2023 - 2025 after which we expect to generate increasingly higher levels of free cash.

There is no assurance, however, that we will be able to continue

to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens.

Cash paid for property and equipment for the six

fiscal months ended June 28, 2025 was $126.2

million, as compared to $115.6 million for the six fiscal months ended June 29, 2024.

To be well positioned to service our

customers and to fully participate in growing markets, we have increased and expect to maintain a relatively high level of capital expenditures for expansion in the mid-term.

We remain committed to our long-term plan of increasing Vishay's

capacity, to assure our customers of reliable volume as they scale.

While we plan to advance our capacity expansion projects, we have and will continue to modulate spending in response to order flow and the timing of customer demand and

qualifications.

The decreased lead time for equipment and the increased subcontractor capacity are also variables that allow us to adjust our capacity spending.

For 2025, we plan to spend between $300 million to $350 million for capital

expenditures, at least 70% of which will be invested in capacity expansion projects for high growth product lines, including our wafer fab expansions.

Free cash flow for the six fiscal months ended June 28, 2025 decreased versus the six

fiscal months ended June 29, 2024 primarily due to decreased net earnings.

We expect that free cash flow will be negatively impacted by

the expected high level of capital expenditures for expansion after which we expect to generate increasingly higher levels of free cash.

There is no assurance, however, that we will be able to continue to generate cash flows from operations and free

cash at our historical levels, or at all, going forward if the economic environment worsens.

In 2022, our 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.

“Stockholder Return Policy” above for additional information.

The following table summarizes the components of net cash and short-term investments (debt) at March 29, 2025 and December 31, 2024 (in thousands) :

March 29, 2025

The following table summarizes the components of net cash and short-term investments (debt) at June 28, 2025 and December 31, 2024 (in thousands) :

June 28, 2025

December 31, 2024

24 unchanged sentences

The capital allocated to our business is further allocated between our subsidiaries to meet local operating cash needs, to fund capital expenditures as part of our growth plan, and to meet corporate funding needs while also aiming to minimize our

As of March 29, 2025, $12.7 million of our cash and cash equivalents and short-term investments were held by our U.S.

We repatriated $75 million of accumulated earnings to the United States in the second fiscal quarter of 2025 and paid withholding taxes, in Israel, of $9.4 million.

of June 28, 2025, $26.5 million of our cash and cash equivalents and short-term investments were held by our U.S.

subsidiaries.

As of March 29,

2025, we are in a net borrowing position in the U.S.

and we expect to continue to be at least throughout 2025, primarily due to Newport expansion funding requirements.

As of March 29, 2025, we have approximately $535.8 million of German and

Israeli earnings that are deemed not indefinitely reinvested.

Based on the expected timing of future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $79.8 million, which has been

accrued, but will only be paid upon repatriation of the unremitted earnings.

Repatriating these unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense.

We also have amounts of unremitted

foreign earnings held by subsidiaries in countries other than Israel and Germany, which continue to be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions

that would be incurred to repatriate these amounts.

Certain of these subsidiaries are located in countries with restrictive regulations and high tax rates for repatriating cash.

Due to the uncertainties associated with the ability, timing, and

method to repatriate these unremitted earnings and other complexities associated with its hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but

could be significant.

Our undrawn credit facility provides us with adequate operating liquidity in the United States.

As of June 28, 2025, we are in a net borrowing position in the U.S.

and we expect to continue to be at least

throughout 2025, primarily due to Newport expansion funding requirements.

As of June 28, 2025, we have approximately $491.1 million of German and Israeli earnings that are deemed not indefinitely reinvested.

Based on the expected timing of

future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $75.3 million, which has been accrued, but will only be paid upon repatriation of the unremitted earnings.

Repatriating these

unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense.

We also have amounts of unremitted foreign earnings held by subsidiaries in countries other than Israel and Germany, which continue to

be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions that would be incurred to repatriate these amounts.

Certain of these subsidiaries are located in

countries with restrictive regulations and high tax rates for repatriating cash.

Due to the uncertainties associated with the ability, timing, and method to repatriate these unremitted earnings and other complexities associated with its

hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but could be significant.

Our undrawn credit facility provides us with adequate operating

liquidity in the United States.

Upon successful completion of our growth plan, we expect to generate increasingly higher levels of free cash that will be sufficient to meet our

13 unchanged sentences

and acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00).

We were in compliance with all financial covenants under the credit facility at March 29, 2025.

We were in compliance with all financial covenants under the credit facility at June 28, 2025.

Our interest coverage ratio and net leverage ratio were

21 unchanged sentences

and are guaranteed by certain significant subsidiaries.

We had $136 million outstanding on our revolving credit facility at December 31, 2024 and $218 million outstanding at March 29, 2025.

$123 million and repaid $41 million on the revolving credit facility during the three fiscal months ended March 29, 2025.

We had $136 million outstanding on our revolving credit facility at December 31, 2024 and $185 million outstanding at June 28, 2025.

$420 million and repaid $371 million on the revolving credit facility during the six fiscal months ended June 28, 2025.

The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $223 million and the

highest amount outstanding at a fiscal month end was $218 million during the three fiscal months ended March 29, 2025.

highest amount outstanding at a fiscal month end was $309 million during the six fiscal months ended June 28, 2025.

We expect, at least initially, to fund certain future obligations required to be paid by the U.S.

parent company by

borrowing under our credit facility.

parent company by borrowing

under our credit facility.

We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs.

Additional acquisition activity, convertible debt repurchases, or conversion of our

convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt.

Except for the maturity of $41.9 million of convertible senior notes due 2025, which will be funded

by the revolving credit facility, no principal amounts of our debt are due until 2028.

The convertible senior notes due 2025 became convertible on December 15, 2024 and will remain convertible until maturity.

The convertible senior

notes due 2030 are not currently convertible.

Pursuant to the indenture governing the convertible senior notes due 2030, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or shares of our

common stock.

Pursuant to the indenture governing the convertible senior notes due 2025 and the amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, we will cash-settle the principal amount of $1,000 per note

and settle any additional amounts in shares of our common stock.

Additional acquisition activity, convertible debt repurchases, or conversion of our convertible

debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt.

No principal payments on our debt are due until 2028.

The convertible senior notes due 2030 are not currently convertible.

Pursuant to the indenture governing the convertible senior notes due 2030, we

will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or shares of our common stock.

We intend to finance the principal amount of any converted notes using borrowings under our credit facility.

No conversions have occurred to date.

We have the intent and

ability to finance the principal amount of the convertible senior notes due 2025 using borrowings under our credit facility upon maturity of the notes.

conversions have occurred to date.

The convertible senior notes due 2025 matured on June 15, 2025.

Pursuant to the indenture governing the convertible senior notes due 2025 and the

amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, we cash-settled the $41.9 million aggregate principal amount outstanding as of June 15, 2025.

The settlement was funded using borrowings under our credit

No shares were issued to settle the convertible senior notes due 2025.

Safe Harbor Statement

33 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis