In 2010, Vishay Intertechnology, Inc. ("Vishay" or "the Company") issued $275,000,000 aggregate principal amount of 2.25% Convertible Senior Debentures due 2040 (the "Convertible Senior Debentures due 2040"). The Convertible Senior Debentures due 2040 were governed by an Indenture, dated as of November 9, 2010 (the "Indenture"), between Vishay and Wilmington Trust Company, as trustee.
In a series of transactions in 2018 and 2019, Vishay repurchased most of the outstanding Convertible Senior Debentures due 2040 in open market repurchases or through individually negotiated agreements with holders.
On February 4, 2021, Vishay redeemed all of the remaining $300,000 principal amount of its Convertible Senior Debentures due 2040 pursuant to the Company’s option set forth in the Indenture, as further described in the Company Notice delivered to holders on January 5, 2021.
On February 5, 2021, Wilmington Trust Company, as trustee, confirmed that Vishay has satisfied and discharged its obligations under the Indenture.
Item 2.02 – Results of Operations and Financial Condition
On February 9, 2021, the Company issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2020. A copy of the press release is attached as Exhibit 99.1 to this report.
Item 7.01 – Regulation FD Disclosure
Computational Guidance on Earnings Per Share Estimates
The Company frequently receives questions from analysts and stockholders regarding its diluted earnings per share ("EPS") computation. The information furnished in this Form 8-K provides additional information on the impact of key variables on the EPS computation, particularly as they relate to the first fiscal quarter of 2021.
Accounting principles require that EPS be computed based on the weighted average shares outstanding ("basic"), and also assuming the issuance of potentially issuable shares (such as those subject to equity awards and convertible debt) if those potentially issuable shares would reduce EPS ("diluted").
Upon adoption of Accounting Standards Update ("ASU") No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), on January 1, 2021, the number of shares includable in the calculation of diluted EPS in respect of convertible or exchangeable securities is based on the "If Converted Method" prescribed in Financial Accounting Standards Board ("FASB") ASC Topic 260, Earnings Per Share ("FASB ASC Topic 260"). This method assumes the conversion or exchange of these securities for shares of common stock. In determining if convertible or exchangeable securities are dilutive, the interest savings (net of tax) subsequent to an assumed conversion are added back to net earnings. The shares related to a convertible or exchangeable security are included in diluted EPS only if EPS as otherwise calculated is greater than the interest savings, net of tax, divided by the shares issuable upon exercise or conversion of the instrument ("incremental earnings per share"). Accordingly, the calculation of diluted EPS for these instruments is dependent on the level of net earnings. Each series of convertible or exchangeable securities is considered individually and in sequence, starting with the series having the lowest incremental earnings per share, to determine if its effect is dilutive or anti-dilutive.
Pursuant to the indenture governing Vishay's 2.25% Convertible Senior Notes due 2025 and the amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, Vishay will cash-settle the principal amount of $1,000 per note and share-settle any excess amounts. Pursuant to FASB ASC Topic 260, the diluted earnings per share calculation will not add back to net earnings the interest savings (net of tax) subsequent to an assumed conversion and the number of shares of common stock will only increase to the extent that the average market price of Vishay common stock during the period exceeds the conversion price of the Convertible Senior Notes due 2025. Accordingly, the calculation of diluted EPS for Vishay's 2.25% Convertible Senior Notes due 2025 is dependent on the average market price of Vishay common stock during the period and not on the level of net earnings.
