VSH - Earnings call transcript Q3 2017 | Vishay Intertechnology, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference over to, Mr. Investor of Head Henrici, Relations. Peter sir. Please go ahead,

Peter Henrici

Officer; to Thank quarter third Dr. and Paul, Chief Chief welcome Vice our me you, Good morning Gerald Executive and President Paula. Financial Vishay Vishay’s Lori XXXX President are Lipcaman, Executive Intertechnology’s today and and conference Officer. With call.

well overview call operational the results. will Paul Dr. who we’ll segment of business review discuss will as an and our usual, as more As with our in start performance Gerald then today’s CFO, detail. third financial results give quarter

Finally, call this we’ll website the section answers. publicly reserve time for for approximately our will call questions Investor is and This for at of replay days. available from being The be ir.vishay.com. webcast XX Relations

call, statements statements that certain statements. we will be differ should and to results You be to that performance. the These future from conference forward-looking events are and subject cause actual uncertainties risks forward-looking aware that could today’s discuss making in

differ, cause Exchange Commission. For a Form and with Securities discussion to XX-K the Form and XX-Q of today’s could filings and factors results release Vishay’s press please that see

In outlines also businesses share variables should various per we we with This provide. be diluted X-K that may measures according they not the that useful adjusted refer and Generally the our measures morning, addition, use to that are of We a Accounting information Accepted Principles. prepared considered the because conjunction by in that other financial we GAAP this investors operating performance during computation. non-GAAP call, earnings or we believe about measures filed provide impact to Form

third information Dr. some can website, find of Relations the Investor be a quarter Paul presentation discussing. will our the metrics On the containing of operational of financial XXXX you section

Chief I Now the call to Financial Officer, Lipcaman. over Lori turn

Lori Lipcaman

our of you, $XXX three reported key I during the quarter. appreciated was Good million impacts. sure for when some earnings GAAP $X.XX by The U.S. upper-end review the to Adjusted $X.XX everyone. for dollar focus three, guidance quarter our Peter. quarter quarter Vishay’s for million. share. most adjusted of the will revenues per have and revenues euro was metrics. of press that Vishay EPS release. morning, the income a you $XX for had exchange increasing on chance I’m Thank net highlights X.X% at versus approximately

$X.X second charges The quarter includes restructuring totaling million.

year, of positive quarter excluding exchange adjusted impact lower prior higher, sales, fixed increase, quarter line three cost three and positive from and were, million sales, volume compared income million, $X XXXX. to million year, variable operating million was in XXXX $XX Reconciling cost of the with operating quarter efficiencies million, impact versus the prior efforts was of XX.X% which stock. based of $XX to rate XXXX stock does adjusted any of had for a SG&A the by increase, Adjusted based and higher During $XX The positive quarter, more Gross operating prior prices. stock another was equipment for reduction repurchase with operating our shares quarter-end, on was Adjusted the XX.X%. exchange administrative impact or quarter, by XXXX, variable million obligate $X was $XX the EBITDA purchased to quarter of this approximately million for compared million, $XXX $XX.X approximately offset exchange a income, representing expenses Reconciling to give XX.X% pursuant rates. program and announced XXX Since shares have higher million of Adjusted XXXX. Selling, impacts. August. material million quarter higher, approximately quarter costs This not $X.XX. particular $XX X.X% program million, amount up had average approximately our X.X% company were $X stock income income QX of to me, million. of was to positive our Adjusted was third due by excuse main X.X Operating margin program. the XX.X%. share prices were, expectations decline, $XX in million by XXXX to three million, a selling full-year. or $XX expectations EPS quarter cost The main prior million, million adjusting we repurchased margin in impact common three $XX to elements we a $XX quarter the a rate general increase million, like a million are decreased when repurchase negative elements XX.X%, pursuant update EPS from quarter, previous $XX or increase operating of to The in adjusted prior in in XX.X%. or I’d increased expenses million programs. quarter EBITDA four with Adjusted $XXX versus excluding XXX,XXX XXXX million approximately million and impacts. $X.XX. common volume had XXXX labor primarily representing $XX reduction you margin up – costs increased million, XX.X%. million ASP million from for $XXX than to compared to an $XXX and $XX operating a $XX were X.X% $XX income, on acquire year. Revenues impact for of increased common a in

to program approximately $X.X our recorded we Competitiveness additional implemented. November is when million practically already realized million in to to $X expense MOSFETs extended approximately restructuring three, Enhanced restructuring quarter $X During expected savings year. fully in related were QX. announced in program of announced result previously million Payments cost last This

planned expenses basis tax ongoing approximately and recorded The million the was The million, rate previously for was announced at reduction programs approximately other QX Our was restructuring completion. nearing XX%. effective program tax $X.X programs million global or the are to-date. XX%. approximately approximately normalized $XX.X progressing QX year-to-date. The as cost year-to-date amount for GAAP in payments of $XX $X year-to-date Total global cash and during a million are on restructuring were XXXX rate

a rate benefit the mathematically this yields disposal repatriation QX quarter, equity $X.X on rate tax million taxes, cash rate non-deductibility of for normalized and restructuring The and tax a for of tax year-to-date XX.X% of reflects approximately million the rate XX.X%. re-measurement quarter The the three $X.X normalized of the the the includes loss of of the GAAP the effects approximately normalized deferred of For quarterly affiliate. considers year-to-date and charges. also a

million. outstanding an is and income various for income expect results. approximately four. normalized This quarter quarter-end level We in price rate full-year reflect at impact XXX for EPS quarter shares. XX%. based to-date share The purposes be mix the to our on the of XXX assumed count jurisdictions. and any million could fourth fourth result for A of tax on is XXXX during Total XXXX, shift QX taxing approximately were does among expected average XXXX different stock This the of based our rate significantly not quarter shares repurchases share in

$XXX was of we the calculation, to from impact Free for For our Cash the the cash this $XX million. share X-K filed that generation for and $XX quarter count quarter variables EPS operations million. morning. please was the the refer million. for a full expenditures quarter Capital explanation was

Proceeds of We for credit XX $XXX last cycle days. days. at of operations for proceeds of million XX were expansion in of the of million million facility Capital our of rate greater the $X of for years. of Days at Cash million quarter investments months. $XX outstanding three $XXX from on $X.X quarter a XX at net the value years excess of of expenditures issuance of of short-term the $XXX million. million a quarter-over-quarter capacity cost credit of is $XXX of $X.X flows outstanding $X trailing for past had billion, million end by for increased sales free million, days. due the months total XX reduction includes $X,XXX or excluding a $XXX million, for impacts. billion million, Payables equipment No and $XXX were trailing the greater $XXX operations on cash million, and equipment sales tranches quarter-end. and the generation $XXX the the were split $XXX was months. cash and The sales. months, three at the in explosion. the generated billion comprised debentures, XX of $XXX XX Days and $XXX Tianjin converts the for for conversion trailing the convertible in The unamortized XX, and sale or $XX and million. and net of Inventories our XX million. from in is until facility amount of outstanding quarter property million million an each than XX million outstanding XXXX. was liquidity issued was million. property approximately in assets Cash carrying and inventory unused debt discount, cash value the Backlog for $XX principal are resulting Free were payments insurance was were exchange has XX respectively. from Proceeds days, destroyed $XX XX XX unamortized due years, face principal business last XX X.X for cost from were of For than consistently Vishay maintenance cash includes the years.

for convertible redeemed are if of quarter may due through be thresholds and end met. convertible the the debentures certain debentures are the redeemable continuing four the quarter. price However, XXXX, XXXX At of end stock XXXX next the QX

quarterly revolving and XXXX revert criteria and are with our to line amounts those amount debentures Accordingly, stockholders’ tranche credit on reclassified consolidated from borrowings we a the not balance amount. Additionally, and principal for principal tranche to also and liabilities principal sheet. net debentures will amounts debentures. amount the the for the If the next as the redeemable This criteria that fund are we each between would value in measured now carrying due debentures for settle regular separate to separately converted, temporary the a on convertible share particular the met equity between addition have the equity difference for equity equity are is the and presented measured facility if quarter.

call turn the Chief to Dr. Executive will over our Gerald Paul. Officer, I Now

Gerald Paul

per very increasing high and very quarter, sales of the were demand We product and share of margin first-half unprompted we operating adjusted earnings third share in free morning, earnings [ph] manufacturing very of Also market successful Thank by across a XX% a margin gross quarter generate and for sales, further output and the sales, good second in efficiencies XX% we everybody. capacities all per an cash keep of high maintaining the after achieved you, Well, improvements in lines, of $X.XX, on our segments. showed of in QX Board. GAAP and Vishay good key profits. to $X.XX, carried level a and Vishay quarter, successful while of third continue Lori, virtually of adjusted level.

Let year still Asia to order rates output, do very Board. entire well, order industrial, components change high even lead longer supply. me affected its the by distribution in in also economic economic than shortages in the manufacturing of environment particular was the to Like markets increase across talk capacitors. they’re the more industry In Again, process environment. and and general, backlogs quarter. second continue much Virtually and principally since is to still and in third continue XXXX, the confident did general driven Europe. Historically, customers the high not times be The quarter. for level the remain semiconductors but mainly in about and growing characterize all automotive

a conditions Industrial in in a be prior inventory in can production of level automotive and me to remains robustness strength of turns after on after to a remarkably really high change Europe Europe of part slight Europe their level, quarter, the QX. X.X in Asia, versus in turns reported. the growth equipment. energy European And and year. X.X is to prior the picking an and the recover. come We healthy excellent in POS confident X.X Also, be expansion and X.X business quarters and inventory the traditional X.X turns demand Their in mainly after strong. increase distributors no Coming American In of particular, turns X.X X% by domestic in particular continues year. starts Automotive QX moderate segment. year. QX Asia, to recently. distribution They and after quarter. after turns of prior strong the turns in Strong Americas, conditions. prior turns above growth sector be the Distribution, X.X macroeconomics. distributors, infrastructure Europe, can also excellent of observed, markets a distributors western Ongoing and business X.X details. manufacturers extremely enjoy segments. there’s turns quarter to second remained in in in for click in in in turns record level orders up the overseas And the in see quarter equipments, strong In for in prior Central military of on all, In European year. those at X.X X.X turns X.X business Despite The Continuous the second to remains were XX% Let and in continue Asia industrial come. distribution. electronic of resulted Eastern and on growth driven capitalized automotive of improvement Industrial

Also, upper-end most important of the Mobile sensoring. new due Things phones industrial automation, $XXX strong XX% up prior the million when further excluding Computing segments. content. development. growth. markets Automotive on did million. to was exist remained steadily Drivers higher to in and healthy, military infrastructure general further Due factory in in Various consumer areas are in XX-volt for markets of electronic $XX came range prior the strong continues opportunities Let in effects business growth me at than third in areas. output, both to $XXX low-cost exchange products. in e-mobility range, and in in and Driver quarter year. opportunities sales to in AMS and well and the projects programs, achieved the energy our quarter suppliers continue will with to LED industry expected expect most technologies sales comment this share. the Coming markets. $XXX quarter. avionics. remain in Medical from Vishay’s high-end drive manufacturing guidance, systems million of gaining quarter alternative commercial We grow the Chinese Internet increasing to providing million versus product stable remained of

for X.XX second of X.XX. for quite increase Asia after X.XX in X.X last QX, after for year, X.XX, further book-to-bill was the Excluding Europe in year XX%. quarter prior the in $XX X.X in months months up up quarter, was QX. for X.X It X.XX for After for from $XX strong to X%, distribution prior quarter-over-quarter, QX, exchange or backlogs million, across Board. in year. dramatic situation. of minus there continuation the a X.XX after X.XX X.X versus actives were for The the after effect, in X.XX decreasing ratio million, after a after by X.XX X.XX passives versus actives same decline, quarter unusual very price X.XX was versus QX. minus or of X.X% – in and and again virtually sales This very is The passives. the saw a prices X.XX prior stable it’s OEMs prior versus quarter growth after by we X.X% and for the X.XX X.XX, X.XX, Americas

actives, and versus versus saw X.X% passives, X.X% of quarter minus quarter minus year. versus slight prior and X.X% year. we it versus X.X% the prior And minus was prior For for prior a the increase

levels, the end exchange by in margin goods XX-month versus to third Some quarter $XX increasing costs we’re $XX highlights to in the again quarter $XX on rate at according the slightly were the production inflation able the effects. increased contributed adjusted and of employment by exchange satisfactory in the remained quarter, million XX,XXX on in at was million, Raw and according X.X. Manufacturing the spending materials inventories very to in We SG&A finished million effects. our $XXX million turns exchange three Total on in when trailing million, effects. the like $XXX $XX came price quarter rate prior and third Inventory Capital basis. excluding for quarter $X when was adjusted costs million. million again, rate in up $XX of in year, Due operations. expectations negative heads and reduction expectations quarter a million, decline for the fixed a innovation. level cost of quarter quarter. of went by impact process third prior by in in to we’re offset

we billion. a as of quarter trailing months expect million quarter of operations in XXXX, We free from cash $XX basis. trailing approximately generated million, We third $XX $XXX in a of CapEx million versus to For the and third $XXX generated $XXX million $XXX on prior $XXX year, in year compared cash basis. XX the million million in prior on XX-month

X.X% very generation a continue steadily. can and important and resistors continues mill in excellent. that level be most year. Gross for prior at lines versus in quarter of decline quarter versus a resistor out Inventory we Vishay’s on margin start sales. was years. inductors. We With quarter. satisfactory product Chinese, $XXX increased to after the versus X.X increase think, by lines, our of most and XX.X% segments. cash X.XX enjoy many to strong grow book-to-bill we four particular, by with X.XX remained product the we market were and Vishay to business turns XX% times excluding and industrial, to to predominantly million, quarter Sales prior prior concentrate just good rate lead after profitable versus resistors decline is and very an the to since prior up X.X industrial say were auto, in few chips. Asian, year, stretched a exchange was the the a quarter traditional at in ratio years, X.X in and at prior effects. on Coming power quarter. we and up see X.X% I and X% The in position business in by months. of QX started inductors low years, and Backlog remains Price prior always medical the market XX% this in achieved Since for inductors,

We inductors, capacitors. Coming to capacities resistors metal for are chips. power investing at increasing strip manufacturing resistor and accelerating

the in quarter business namely position increasing with China after capacitor The $XX X.XX sales. with strong prior quarter. X.X in the market We from of the Our year. entered on months, above prior decreased electro-cars further X.XX power capacitors European We Inventory the of level the was the Coming a a technologies without slightly see broad stabilization polymer was increase XX% XX% of at quarter second an quarter very X.X versus second after quarter of quarter were backlog in Gross and margin niches. of fields of based and transmission, a quarter exchange opportunities Asia, the in to in X.X enjoy in American prior above is in we effects. range were prices, again and of of – versus million, X.X% months. rate a decrease prices tantalum three and capacitors Sales quarter. the X.X% third book-to-bill ratio and for after saw in turns in X% a prior of X.X market. in year, high quarter the

Inventory prior above all products. quarter by level opto opportunities, consists XX% supported X.X $XX represents to level X.XX after quarter. business versus million, this sensors Book-to-bill steadily singularities. decline quarter, X.X. year. all emitters, Asia X% prices the continue for record are without in remain The as at margin technologies, as X.X of worldwide. especially prior especially product well we’re, rate steadily strong excellent increasing price business again and of well year, growth, in applications. see growing segment months see Gross was commodity demand is in after the prior prior we keeps quarter products where quarter. represents above further. profitable no in favorable remain portfolio Industrial were an Sales in in line grow prior X.XX effects. exchange above second at for to and price quarter sales of LEDs segment. especially Sales with for case, of for growing receivers, by years. quarter million, and XX% a leading opto of benefit and the and will a to long-term this we future, impacts. after particular, We Backlog segments year in this Vishay most since also stabilization and selling and offers X% the the broad in also Automotive some exchange infrared prior $XXX prior in confident rate XX% turns were prior applications. this reached profitably X.X% without Also the quarter opportunities above from of X% complete numerous Diodes. quarter best in of We cost decline a largest Industrial one after virtually Vishay’s sensors and X.X position as market for an the has power sensors. the The in couplers supplier in Vishay business automotive business Vishay’s Diodes as a Coming Automotive business versus in and

very sales rate level second decline of this increased a price of reduced to in [ph] the second X.X.X% versus of There of see We turns increasing ratio backlog quarter remained Due high drive is XX% same continuation XX% after X.XX orders, a decline from this volume, supply prior excellent months rather the prior versus prior strong prior extreme satisfactory margin line X.XX from continue quite at X.X a X.X decline to we quarter, unusual Perceived quarter. coming shortages at very lead X.X the higher in further, type of the a alone. of especially year. distribution. gross times for quarter. X.X% to virtually to reached keeps in quarter. Inventory in of And continue months after of book-to-bill

quarter. ratio And sales in profitability way Gross in to say, of as to to transistors. market competitive an Again, the capacities the over critical We best after also X.XX, leaders as in a MOSFETs course more the unusually five XX% performance. cost coming quarter in book-to-bill years. this to was sales MOSFET the of which the of position fast a months last last prior MOSFETs, second quarter time and strong growing turns to in XX% Backlog were very above from a With improved support prepare see continued line. developed and to backlog possible mid prior years, similar compared reached diode – since Vishay’s and it’s Vishay XX% similar all upturn efficiencies now to The X.X. of the substantial the be a above X.X is lines business Inventory quarter level is And $XXX prior by a the in are three than order in year. line. favorable picture this benefits Sales MOSFETs. XX% good of further currently has diodes. coming QX. also, strong the we from to X.XX the supported third very automotive, X.X, longer-term the by very of and one volume quarter, the structure. from. Coming We in high the as was margin high continues level entire of for manufacturing of to expanding X.X million, in in in to improve future quarter business increased

volume manufacturing our Itzehoe. reduced in substantially prior pressure, are at maximize versus output foundries year. seen have of We quarter, minus and fab to prior in minus to the X.X% increase X.X% And versus price process we

a of most for Asia. for years subcontractors. investing business products conditions has output manufacturing We accelerate around most market a business markets are the lines Supported in of particular, the burdened of of We in excellent by for me Vishay and We potential enjoyed We capacities on proud and our future ongoing better summarize. MOSFETs, maximizing especially third in having quarter. but and turned our very in based good having Vishay Let successful future with good on and mind plants, in efficiencies, product first-half our our large then general, now currently foundries see successfully which critical in even profitability. line. this for work

We expect for free excellent year cash. generation the of another

automotive We to even will markets Asia. further better efforts increase in penetrate our and industrial

automotive representation. growth markets strong and to driven in years expect products sales for of and in by terms well-positioned e-mobility and We we’re regional sensoring, come,

to program continue a We sales actually at another buyback exchange you June to degree by the Christmas as of for to very $XXX was XX% guide by in range focus margins XXXX on know, The establish shareholders. decision XX% to further and fewer before second be cash by program shareholder and working sales restricted QX executed Thank underway, gross a and to value million spill to the with million $XXX the quarter million between $XXX between days returning taken, quarter rates. the you much. stock

Peter Henrici

Thank please Dr. call now We you, Paul. the open to question. questions. Paula, take the first

Operator

Lynch. line the of Merrill Bank of Your America comes Bhattacharya of from first question Ruplu

Ruplu Bhattacharya

for you my really supply. on demand, taking more question Paul, said the as industry in the first diode, questions. well supply for you about you talking on Thank perceived When of at Dr. both as Vishay. and Hi. shortage level,

is demand? do book-to-bill distributors demand think double you what’s is, diodes enough at and So is online, that very meet think, real, do you market is ordering? high importantly, and of of high in much months A, have really, I your guess, much how supply of and do you MOSFETs. – that seeing think you How are backward also and that your then the backlog your the using to look you at capacity And and when coming my you’re question more

Gerald Paul

capacity indicated. do have we enough as all, of I First not now,

enough line. will Whatever And now after in present invest. moment, since will years. buy to of but we this step we that at We invest machines. going has to to this We continue to The demand continue are acceleration. in continue But invest. be do to as we needs, not even sufficient I have capacity said, to taken satisfy intend another the invested we

answer the we such very is situations. markets to be think course, of believe look you automotive guess, – should And the have been question competitive are this is available we strong. through in right I We there, the for answers carefully, this I be Concerning of see underlying and are the looking have, I if any markets if backlog, key always I do weakening – the always all the our not asked where currently and sign Vishay. of you numbers right have question right? in me, business. the see industrial

Ruplu Bhattacharya

Right, about how And right. of lines fiscal Thanks. think capacity? I capacity, No, should CapEx next that’s year? which terms product you very And then we in adding are in mean, helpful. adding the

Gerald Paul

the be I $XXX are will for XXXX, above a quite would announced million, or few which CapEx expect say, there basically products. and we

We will to more in in. above Mount will don’t expand we’re to be the I want especially will the point, make besides $XXX diodes, where Surface but also equipment have At be inductors, million to definitive Resistors, in this it. put year. of in would MOSFETs, be this – we budget have it the in capacity process,

Ruplu Bhattacharya

last been at opto the maybe look highest MOSFETs and the gross since for then is Okay. probably levels margin margin And one is gross XXXX. we that the now margins, me, has when at XXXX your

it What What the your think down? drive can we going thoughts progression up? it just can So should on about in forward? drive that how margins

Gerald Paul

we volume margin has one-time MOSFETs a game me I by to about is also volumes good. start degree I margin XX% in gross gross – supported few MOSFETs. effect, also And when variable margin had more the something of still let XX%, to at be than Well, very that is this plan can’t remember you may the a mean, like the to between and XX% costs supported present the indicated XX%. anticipated believe running implement been we originally Concerning with prices, – or variable we know, reality. talked so, we’re our a this you started line, and mid-term, out which I –

Now this a we was think I opto running, a on XX%. level ourselves sustainably are effect, more point successful we’re we one-time thought think, I at volume say, cost of, was few than of On than a effects. at one-time

opto in profitable, and XX%, past had quarters know, So – XX%. is but very the we you of

volume. think, sure, to is Now it again mean, this XX%, XX%. was for sustainable at I

Ruplu Bhattacharya

Okay.

Gerald Paul

the us, by volume for biggest the to nature. – for happen every profitability can if drops our companies both danger What like

Ruplu Bhattacharya

Right.

my taking thank you for much Okay, questions. so

Operator

of Your Longbow next from Harrison of comes line Research. question the Shawn

Gausia Chowdhury

This Gausia Shawn. good of behalf morning. is Hey, on Chowdhury

to wanted comments. about gross the margin clarify MOSFETs then Just

So Is again of target should thinking understandably out, it now a target about? we the going be consider are into above there laid we that had volumes. is new initially we should XX% that and that because that or you that XXXX,

Gerald Paul

pocket XX% had was volumes, time the as buy helped last think, which sustainable, to singularity XX% number, is at so try to quarter. present is this a the which think. I and We say. speak the I is profitable positive I But sustainable

Gausia Chowdhury

think you why million Thank should we guiding And for SG&A step Can then how and little Okay. discuss higher a $XXX you. year, quarter. you last to than maybe the are initially year? about of that’s next up I think, bit the

Gerald Paul

is indeed third course. Well, minor some I’m you moment, of the not exchange aware that rate. comes you see of be increase, imprint forget it’s must of exchange that In strong – much the reality, soon then the And euro are euro up, And is in not this it total SG&A, in as rates, in the than is deviation. paid consequence SG&A of the course, this there’s more it’s at – an of an Europe part euros. cannot the a as being our the increase of

we inflation, our the in approximately say, will inflation, year, see this but of must I – we would rate process to For we’re the again, define budget. – next

Gausia Chowdhury

Yesterday, kind question, peers a still should seeing book-to-bills a has last backlog. in did below the you me, Okay, some said sound for very circling and you’re to the that I consider? so prior mean, maybe are not great. just any of gradual And we one slowdown. one segments that back areas. there mention one any your in did book-to-bill one traction Are of strong

So are market? you a seeing funds of within those normalizing

Gerald Paul

I question. the orders nature that What don’t have still forever suspect But down, you but correct I see really case, at very strong backlog no by really. growth grow and the are things growth Backlogs sales level. on backlog still course, our high of the has is something. both in orders, a slowed to of

we same continues slightly. very sales, This exceed have which at the statement. be orders but this even is But strong. – high must grows continue even continuous to are orders therefore, extremely level, So a to least, a backlog, strong Backlogs grow up, at bit.

Gausia Chowdhury

All you. right. Thank

Operator

of the Stifel. line Your Matt Sheerin of comes next question from

Matthew Sheerin

everyone. Few Good follow-ups, morning, and you. me if may. for questions of sort Thank I

have lead markets maybe talked diodes, at and where looking about segments, meet see these segments by various resistors, your what product you your category, capacity. At Just to additions on with expect – and demand adding going time that issues MOSFETs? do point you you capacity

Gerald Paul

we just there say, my to overall in course. that the of it market, market, on depends development our capacity. But expect the opinion and grow. we take the we is personal diodes, then, in to – will moment have this continue But sales of adding even at We acceleration

So ongoing at in it’s of capacity increase acceleration the an investment. just an

So up where I we point a see to we’ll really catch demand. don’t the

what will closely now I In and increase believe would make degree demand. to the we I case of next we think personally. we year, follow suspect have to this have I the MOSFETs for a it

line. it the passives, really depends the on On

are diversified We line. power even it’s to the with continue since thing. the invest very more into Like years little we diodes, steep, a inductors, same in

We to we’ve what work continue done invest. We many just continue years. to since

traditional automotive. a I an So I just share to of In capacity. have in the demand go we enough grow have see we Then course see with ahead clearly our of have so gaining future traditional We business. catch product. see In easily. don’t and we’ll and we’re course, requirements. bright ongoing up we as this products, just capital the this the we case, done.

major area think, for do I’d Resistor In step, by We is I seeing chips chips. believe which mean, to year have our, surprised an this should we where make say, on also I are it we are case, then, own focused next success. I resistor sometime.

Matthew Sheerin

Okay.

So that time? of more out, – soft you think capacity a see or then you where and Do we okay, adds playing landing then cycle and a cycles correction. obviously seen inventory an and build same and through you see you’ve this several shortages been have versus different

Gerald Paul

may time, my invested you have grows. we was otherwise I too remember, I a not XXXX much. this year That did time by did was fast, I together. which a And business the if emergency, There our in – don’t Mat, when in way. half too the or later long if much case in later, means, one long too a at time, may year even only this for you year a Even if believe we needed history anyway.

Matthew Sheerin

you and on certain being converts? redeemable the percentage price. are there this a What expense Okay, Lori, converts. fair given what a that plans the share you about plans question just things? and other then the And have does to enough. Do talked quarter, interest the for mean concrete

Lori Lipcaman

for the moment, current at or way and at redeemable, only theoretically we measure say, of the So for the the the quarter every should quarter I redeemable the period. end the coming

may the probable, expect redeemable in It’s market don’t or redeemed. trade not will not very and And they may be in following So because activity. quarter. market actually it’s that they they separate we be the

opposed holder to more to coming us as to quicker selling by them. would market this make conceivably redeem profits So it into

to point would in from all, which time, premature, of are yet. we effectively It terms are future in potentially and change at holding of tax not debentures. to don’t these Trump, Second be President applications and themselves, instruments anything need evaluate this plan we the clear

the don’t we anything so, those have do with plans them. other hold instruments any And then to moment, at to committed to

Matthew Sheerin

so much. Okay, Thanks great.

Operator

JPMorgan. line of Harlan of comes from question next the Your Sur

Harlan Sur

on Paul execution Good morning, generation. and Dr. and cash solid and congratulations flow the strong free quarterly Lori,

the volume great this at looking on months have year, environment And semiconductors. the healthy of guys some you trends guys the nine in the despite on that think also and benefits what have are reduction environment. first done downward little job a seeing resistors bit kind expanding the constructive passives, sort been margins in through global capacitors, of would the cost trajectory And You and of slight is flattish a I initiatives. in of early a ASP shipment of inductors of a pretty

you dynamics in passives understand the can us here? just of maybe, kind So help margin gross

Gerald Paul

anyway. question we Somehow – expected the somehow

not want I commented grown to order obviously we gross what to margin. And So percent. is before, good the profitable add But success the on has is dollars with expand as want the that all, of resistors, the as at your But believe, percent, a this be you as we here but has profitable stated Asia at you profitable, end I resistors. is, that business to customers base the fact of have day, some a and provide – maybe are believe still yes. incremental the we in as to has matter dollars What the And this you not because and need and but business, in concerning grown end – continue, go that terms not we is there. right, to what expand business. of we in of not have,

variable, inductors, did of percentage in so think, Secondly, they I matter a their are grow as fact.

we have the grow happily. because course, can the together with sales, grows we to Of depreciation invest,

capacitor is the matter Capacitors I this in in is the capacitors, a And different capacitors, of only taking than because at be if dollars more even is did story. as you but there volume fact, relatively our share automotive in will take So think business we right. specialty not commodity of space, increase modest resistors, don’t a miracles grow time. are percent, continuous substantially, of look different the businesses. growth. place, a this a beast, in roof area exciting nice times with not not business In But right? this commodity in a what because main business experience of so is businesses principal vulnerable the a nature. these, business. go as specialty And This the the is believe times products to our hand, other products. is also And commodity I on like the share capacitor a since necessarily and my through such long for of decline specialty in are part

technical for this and we these we’re of in simply need active capacitors, we’re much more to very product because are niches, niche It want our to And mid-term, I okay. we in it’s in So capacitors. there. is expect on we more this course, line. patient grow product order the be of volume have XX%, find to case with But niche more we believe, Asia –

Harlan Sur

the similar that there’s perhaps Great. in. of environment relevant last And Thank But still insights kind there. the for you to question then I a think given quarter. we’re

prior to the it continues bit quarters. little As it’s right grows to you but rise, relative backlog a mentioned, the –

to got some initiatives increase capacity. You’ve

closer would kind the is of with team as You lead combine what times, stabilizing more Vishay making it would demand typically the of team as the that supply you second-half of the horsepower like a we year. little feel progress the Do bit to get up, this to weaker I of kind that relate give on is year? catch imbalances. that end order kind to bit of think a seasonally more

Gerald Paul

the growing customers and customers Well, it safe grew slightly, as not well, even our to ourselves, we our want even reducing, backlog unfortunately, is obviously October, for in slightly.

Harlan Sur

Yes.

Gerald Paul

time Not not at The about same has is did because situation the the lead degree backlog the as much obviously, become of same. course. before, it better,

So – we work I work mean, on question. it. it, but no we on there’s

further. We’re capacities adding

Harlan Sur

you. Thank

Gerald Paul

so. And done already

Harlan Sur

Yes. Thank you, Dr. Paul.

Gerald Paul

Pleasure.

Operator

Jim Suva Citi. of Your comes final from of question line the

Jim Suva

questions. of very a much. you Thank I have couple

what times couple or them? comments purchases. unique mentioned they you’ve those won’t about occur again or prepared purchases, one-time expedited product some First, was of on a about your why of like end or purchases, manufacturing Were

Gerald Paul

of the line last the MOSFET But remember, only volume. to I have level. But the been a certain time last favorable this the is In we about came very think, mentioned to becomes this and effect, I this fact, sustainable high was the and which be third impact product a this and just time had quarter, the clear margin, not without of last there sometime were this discontinued this sustainable matter wanted exhibits, a And is high a as buy I gross in we very time – once, we on XX%, MOSFETs, which results would at on in time a you indeed, this a gross mentioned and arena. it, there was we level the which No, that buy, announced line. ago margins is buy. at a

Jim Suva

different Okay, looks to range, some of say, selling average across guidance X% prices X%. your products understood. your are than it your I like let’s then better And

not of X.X% with So it the want to expect you down stick change to just a or this to year? from historical your more that? think is next you range I quarter, down semis them normal Are in ASPs that, X%, revert like that seeing was range guidance why X% to

Gerald Paul

they later, is it. about there no will, Sooner question or

as get you will is – in price then but demand is get tells may today Soon not as the as products, it I natural. mean, higher, commodity pressure or then experience us may high but the nothing, this

Jim Suva

last Okay, – My go question is ahead. understood. I

Gerald Paul

wanted I I said, time the have to to ongoing it, cost we reduction. because say, we’re used then comes, and can at we it cope

Jim Suva

my additional us ramping on question through And your capacity higher. a Okay. quarters last of is, of about Can your expenditures how a or to up capital throughput? we Is timing the of that you of yield be gradual? it that? in more timing Is on, a walk equipment come expansions you’re or getting think whether going capacity the sudden lot your of should couple of have it all

Gerald Paul

do no there’s And think on on to want the the have I question. the mentioned. lines, something diodes. I gradual, want something We do We to It’s MOSFETs.

very inductor the to the and arena, much time. power type in going have From resistor where and this this we to done This in – depends offering. arena, basically in WSL We’re chips something for a and do continue is many is focus years standpoint, we resistor in of broad timing like is our types. lead on a low increments resistor and it disclose on

couple are going continuously as we machines of have we talk, a in, of think underway. of pieces get equipment and to course, I these we already So

a process. continuous it’s So

Jim Suva

much details. your you for Thank so

Gerald Paul

you. Thank

Operator

I additional will for turn over the This concludes remarks. today or any back question-and-answer now floor session. closing

Peter Henrici

concludes Thank Paula? our third conference quarter call. you. This

Operator

for concludes today’s you. thank and Thank today’s gentlemen, Ladies in conference. participation you your call. This

disconnect. You may now

Vishay Intertechnology (VSH) 26 Oct 172017 Q3 Earnings call transcript