Segment Information | Note 10 – Segment Information Vishay is a global manufacturer and supplier of electronic components. Vishay operates, and its chief operating decision maker makes strategic and operating decisions with regards to assessing performance and allocating resources based on, five reporting segments: MOSFETs, Diodes, Optoelectronic Components, Resistors & Inductors, and Capacitors. These segments represent groupings of product lines based on their functionality: ● Metal oxide semiconductor field-effect transistors ("MOSFETs") function as solid-state switches to control power. ● Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering. ● Optoelectronic components emit light, detect light, or do both. ● Resistors and inductors both impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. ● Capacitors store energy and discharge it when needed. Vishay's reporting segments generate substantially all of their revenue from product sales to the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets. A small portion of revenues is from royalties. The Company evaluates business segment performance on operating income, exclusive of certain items ("segment operating income"). Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income. The Company's calculation of segment operating income excludes such selling, general, and administrative costs as global operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severance costs, goodwill and long-lived asset impairment charges, and other items. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. These items represent reconciling items between segment operating income and consolidated operating income. Business segment assets are the owned or allocated assets used by each business. The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit. The Company considers segment operating income to be the more important metric because it more fully captures the business operations of the segments. The following tables set forth business segment information: MOSFETs Diodes Optoelectronic Components Resistors & Inductors Capacitors Total Fiscal quarter ended September 29, 2018: Product Sales $ 144,227 $ 186,492 $ 76,443 $ 257,330 $ 116,447 $ 780,939 Royalty Revenues 33 - - - - $ 33 Total Revenue $ 144,260 $ 186,492 $ 76,443 $ 257,330 $ 116,447 $ 780,972 Gross Profit $ 38,991 $ 54,690 $ 27,653 $ 88,213 $ 26,749 $ 236,296 Segment Operating Income $ 29,502 $ 49,561 $ 23,144 $ 80,042 $ 21,655 $ 203,904 Fiscal quarter ended September 30, 2017:* Product Sales $ 126,522 $ 160,562 $ 77,145 $ 217,489 $ 96,215 $ 677,933 Royalty Revenues - - - 8 - $ 8 Total Revenue $ 126,522 $ 160,562 $ 77,145 $ 217,497 $ 96,215 $ 677,941 Gross Profit $ 32,349 $ 43,575 $ 29,042 $ 65,586 $ 19,595 $ 190,147 Segment Operating Income $ 23,434 $ 38,694 $ 25,214 $ 58,328 $ 14,705 $ 160,375 Nine fiscal months ended September 29, 2018: Product Sales $ 408,280 $ 535,975 $ 224,110 $ 755,262 $ 335,064 $ 2,258,691 Royalty Revenues 45 - - 61 - $ 106 Total Revenue $ 408,325 $ 535,975 $ 224,110 $ 755,323 $ 335,064 $ 2,258,797 Gross Profit $ 109,440 $ 150,298 $ 81,290 $ 251,712 $ 76,094 $ 668,834 Segment Operating Income $ 80,577 $ 134,592 $ 68,103 $ 226,292 $ 60,258 $ 569,822 Nine fiscal months ended September 30, 2017:* Product Sales $ 345,399 $ 460,492 $ 215,040 $ 626,684 $ 278,241 $ 1,925,856 Royalty Revenues - - - 50 - $ 50 Total Revenue $ 345,399 $ 460,492 $ 215,040 $ 626,734 $ 278,241 $ 1,925,906 Gross Profit $ 78,423 $ 123,499 $ 77,091 $ 188,936 $ 57,784 $ 525,733 Segment Operating Income $ 51,917 $ 109,014 $ 64,007 $ 167,035 $ 43,041 $ 435,014 *Recast for the retrospective adoption of ASUs 2014-09 and 2017-07. See Note 1. Fiscal quarters ended Nine fiscal months ended September 29, 2018 September 30, 2017*** September 29, 2018 September 30, 2017*** Reconciliation: Segment Operating Income $ 203,904 $ 160,375 $ 569,822 $ 435,014 Restructuring and Severance Costs - (3,244 ) - (5,194 ) Unallocated Selling, General, and Administrative Expenses (65,806 ) (61,715 ) (204,369 ) (181,821 ) Consolidated Operating Income $ 138,098 $ 95,416 $ 365,453 $ 247,999 Unallocated Other Income (Expense) (11,290 ) (9,228 ) (49,067 ) (35,660 ) Consolidated Income Before Taxes $ 126,808 $ 86,188 $ 316,386 $ 212,339 ***Recast for the adoption of ASU 2017-07. See Note 1. The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors. The distribution of sales by customer type is shown below: Fiscal quarters ended Nine fiscal months ended Years Ended December 31, September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 2017 2016 Distributors $ 452,051 $ 383,727 $ 1,302,127 $ 1,102,232 $ 1,484,276 $ 1,280,060 OEMs 276,299 247,551 803,128 685,565 931,291 861,322 EMS companies 52,622 46,663 153,542 138,109 183,801 175,946 Total Revenue $ 780,972 $ 677,941 $ 2,258,797 $ 1,925,906 $ 2,599,368 $ 2,317,328 Net revenues were attributable to customers in the following regions: Fiscal quarters ended Nine fiscal months ended Years Ended December 31, September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 2017 2016 Asia $ 315,701 $ 282,416 $ 904,047 $ 811,987 $ 1,091,107 $ 948,195 Europe 269,518 237,874 809,501 665,049 902,357 810,543 Americas 195,753 157,651 545,249 448,870 605,904 558,590 Total Revenue $ 780,972 $ 677,941 $ 2,258,797 $ 1,925,906 $ 2,599,368 $ 2,317,328 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 Years Ended December 31, September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 2017 2016 Industrial $ 283,134 $ 242,038 $ 858,963 $ 691,678 $ 934,631 $ 796,031 Automotive 224,041 185,781 642,293 537,008 727,220 640,767 Telecommunications 51,935 50,710 144,326 143,828 190,682 193,456 Computing 62,774 55,380 163,862 143,948 198,850 172,481 Consumer Products 48,583 40,155 126,781 108,711 145,243 150,741 Power Supplies 34,899 44,327 110,468 120,223 160,038 132,555 Military and Aerospace 41,881 33,029 117,355 98,753 132,898 128,523 Medical 33,725 26,521 94,749 81,757 109,806 102,774 Total revenue $ 780,972 $ 677,941 2,258,797 1,925,906 $ 2,599,368 $ 2,317,328 |