VSH - Earnings call transcript Q1 2018 | Vishay Intertechnology, Inc.

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Operator

Good morning, my name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vishay Intertechnology First Quarter 2018 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Peter Henrici, Senior Vice President Corporate Communications. Sir, you may now begin.

Peter Henrici

Thank you, Regina. to First welcome Call. XXXX and morning, Vishay Quarter Intertechnology's Conference Good me are With Dr. today President Vishay's Lipcaman, and Vice Paul, Chief our President Officer. Financial Gerald Chief and Executive Lori Executive Officer; and

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

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

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

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

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

the Dr. will Sector of Vandoorn, June Conference Technical Cross XXXX Deputy information, a of Executive On Officer quarter presentation President, the XXXX Investor metrics XX, the financial Relations will find Paul Chief section of some Stifel Vice the CEO, On present Boston. website, our to in discussing. Johan can at you the and be containing first operational

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

Lori Lipcaman

we XXXX quarter the release. earnings to Good am income and have Peter. GAAP There film I when Thank film thin the U.S.-based and per X revenues sure circuit quarter. adjusted increase are to morning, between of million chance these recent various and a our for standards The tables which on press our interconnect of we EPS exchange financial XXXX, of or periods substantially was UltraSource quarterly accounting million, release. the which of metrics. be is X, a of for the XX% operations shows applicable new Form margin $X.XX for year's EPS statements $X.XX commitment included and Recast and and EPS filed. the of items. the each required gross several most items. guidance, Vishay quarter calculations. prior the to $X discussion detailed Yesterday, Inc., XXXX tax our are cash quarterly and will demonstrates and Vishay the in was though no end of significant the new thin some full related strength slightly to and accounting standards contributed changed $XX film capital individual annualized. EPS stockholders was assets million on you, impact the new by it new circuit earnings XX-Q, are about More review February, have acquisition. impacts The within acquired manufacturer, pretax of impact operating impacted thin standards. In quarter, to difference highlights included XXXX the of on $X.XXX accounting quarter. quarter adjusted before will of Vishay's Where revenues had of historical at the press items, $X.XX key report all line our new a you the not of $XXX for I focus standards. material, reconciling of to an recast margin ongoing everyone. reflect Effective in that for first when of for upper standards taxes adopted the dividend flows. our the standards, reported of retrospectively return been XXXX confidence Vishay's share increase announced adjusted The impact in income of these January of

The stock, to quarter to Gross EPS and There year. EBITDA was first by we margin. does Operating There was previous obligate no repurchase XX.X%. was up XXX program our by of arrive prior from XXX we Revenues were was repurchase in open to items common During X.X% were at items the purchase common arrive not million amount quarter, reconciling have any EPS acquire operating Adjusted though company any $X.XX. up not million, stock. shares quarter the authorization. XX.X%. the XX.X% margin open reconciling $X.XX. were an currently compared particular of adjusted adjusted did was stock margin or EBITDA. no XX.X%. to at

increases and of metal million impacts which million. and contribution; wage Inventory X.X% XX $XX year, impacts. working increased higher, for rate UltraSource of fixed positive cost due decreased incentive to Adjusted main quarter Let X $XXX based decline; volume, year, million X.X% had increased with or due elements representing QX positive XX compared to were: prices; prices volume a had The in exchange $XX increased increase in prior $X operating XX.X% of prices ASP million XXXX XX million to the in incomes million to XXXX income the of a me impact representing of income higher, adjusted to exchange positive rate Adjusted the increases, sales to from a impacts. million volume quarter. increase, days. Reconciling than operating ASP were: $XX income on $XXX million, average million, impact XXXX impact cost excluding effect and equivalent X, selling $XX million operating higher representing negative a based a main negative QX includes with impact quarter, wage a increased and again, X, impact XXXX. on reductions, decreased QX including million, compensation by impact prior in cost prior with million million, metal adjusted increased variable million more million positive negative prices. X.X% by manufacturing for and prior of sales labor a million primarily reconcile cost, again X to contribution; higher Adjusted million, operating reductions, million. $X decline; operating XX to compensation. excluding Inventory offset to of the XXXX in versus in primarily income impacts a Selling, million, had increases average UltraSource million of manufacturing and administrative negative were due cost positive QX $XXX The a of $X versus million. impact and more than due increases X materials incentive a a quarter had impact which XX from in quarter materials for more costs, of elements general expenses cost which XXX the variable increased negative offset impact cost X with labor a Fixed compared $X efficiencies XXXX. selling the to or efficiencies

our the of when Our impacts adjusting exchange guidance guidance new increase primarily and would $XX for incentive accounting million rate the to been million of was adoption $XXX SG&A compensation. The in standards. have due versus actual

$XXX are SG&A year XXXX, constant our rates. $XXX For expectations quarter expenses X, for million of approximately at the approximately exchange million and full

continue We reform U.S. on effect of to evaluate the tax Vishay.

on new for quarter the Our as approximately XX%. U.S. This of tax deductibility includes our for U.S. GAAP the amounts of was foreign limitation interest known income and some X tax on certain rate expense. GILTI,

accrued, disclosed billion key which have at at year-end unremitted accrued current those we amounts is approximately $X.X incremental Even actual of at the the repatriation taxes we though repatriate changed reinvestment our to regarding those As exchange rates a assertion in XXXX, appropriate totaled foreign earnings certain expected be amounts. to measured countries, pace. permanent and taxes

for upon tax tax due repatriated. repatriation, of currency $X.X an this the such similar GAAP remeasurement A amounts foreign until quarter primarily quarterly to incremental related have includes foreign to of will adjustment U.S. Our the for recur the payable taxes remeasurement expense million first liability, effects. deferred been

this XX% of our rate. expected effective for interest on limitation effective increase X, is increase tax tax year. the higher effective anticipated, than This on a The our primarily due tax reform remeasurement excludes our approximately an tax U.S. for some which tax is is expense. the of normalized deferred GILTI Our quarter and liability and the deductibility rate to net of was rate normalized impact of

U.S. We reduce provisions our our the structure continue of law. and tax rate. effective may, tax to the to capital adjust evaluate new financial prospectively, We

quarter shift A the at based assumed level XXX income quarter different for first expected million. The tax shares in same taxing results. were effective second XXX of consolidated purposes jurisdictions. result in various the is rate Our among outstanding and end -- approximately income on million Total at quarter price quarter, the significantly our EPS count shares. mix as stock XXXX, could based on average is share the for

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

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

However, may the to liabilities for and due tranches, thresholds XXXX, the not sheet. with between a in be equity debentures carrying next amount amount net principal we for If equity fund on separately for are the between debentures each principal At XXXX revert difference temporary measured value debentures. are if and would and from criteria share QX, have those addition tranche stock for to end will consolidated borrowings are redeemed revolving we the the of if reclassified convertible the amount. and stockholders the line presented redeemable are facility This separate the is price that on regular the XXXX our the settled debentures amounts particular met credit quarterly measured equity equity to as and our tranche quarter. the met. converted, balance the convertible and certain principal amount of Accordingly, criteria

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

Dr. Gerald Paul

efficiencies good and to further continues good Lori, profitability. and everybody. morning, the you, its of conditions supported Record in virtually Thank all increase enjoy very excellent Vishay substantial of business markets. volume

and to $XXX not and strong compared The in prior by We all see X.X about in electronic new as product sales, million results first Worldwide continued Talking in achieved industry, markets, steady robotics, EPS by first first and Asia, We after an of in and X.X year. first adjusted of of generation. margin a and positive, versus to distribution, enjoyed million does margin increase to Talking operating segments manufacturing inventory with also softening The driver a opportunities the mainly exchange of million seasonality on the capacities. to in $X.XX quarters the after continue segments. of smartphones in turns quarter quarter and of increased growing distributors business strong in In industry automotive look the business. the be XXXX. of outlook turns of XX% range the industrial industrial X.X of Many and signs X.X to XXXX the in end UltraSource, aspects. quarter, an automotive acquisition, and allows Asia. quarter-over-quarter to X% $XXX achieved industrial recently. Commenting healthy Vishay's equipment. enjoy sectors. capacities manufacturing Vishay in Europe, to to In prior inventory the environment. of QX GAAP in year. general in continue new growth. in Asian remainder prior medical No favorable several X.X year and critical continues to increase continues distribution in the sales gross No Despite is the equipment, shows with X.X for guidance. be shortages the quarter conditions. an regions. of the quarter, very supply. prior year. as quarters. continue the oil prior year. in to in some cash leading in and sales, the operating across quarter year. main The looks markets, stable prior particular, Fixed prior fast. In like automotive strong of our year quite -- of in unchanged. remain weaken Americas, to do and markets. X.X excellent strong high industrial, Automotive and XX% versus X.X about $X.XX. High well. driven of XX% recent and Commenting do quarter for of distribution. the X.X of quarter the gas programs business excluding segments, in another be be of confidence very the and pricing. areas, in order very business product POS continuing general regions, Americas, In market in in to metering In remains recovery. in X.X at distributors economic driven and The year-over-year. in some our were Economic more are friendly across expected available QX rate terms turns environment the environment year after euro sales, growth EPS levels X.X for electrification margin growth the development XX% excellent energy in sales, AMS by XXXX Also, driving Economic change in also expected Concerning in to the of quarter $XXX fourth our impacts and defied by first strong normal also demand to had is industrial XX% quarter, of And the vehicle of of continues key X.X segments. We economic be seen. prior infrastructure our all and came level regions telecom to for seem markets changes an expand to of regions particularly strengthening on all growth to wide all prior to first energy, major the and in remains The the this Market strong be lighting rebounds. creates exceed to to keep several XXXX. European

for by in the board. the quarter the in QX. in see X.XX for prior fourth million by The versus million X.X rate quarter in X.X OEMs and versus contributed exchange Book-to-Bill in negative X in high passives currently or months, X.X million in the sales by or versus quarter level year We after QX Backlog the of were prior and Europe Excluding after effects, X.XX prior XX X.XX X.X%, X.XX. was for and acquisition, distribution quarter. up after X.XX. X.X% after for up X.XX. coming XX UltraSource, further quarter the in for X.X% X.XX quarter. X.X decline, after after X.XX X.XX again versus X.XX of in X.XX. an in for QX. the to first Asia strong for quarter, after X.XX prior across very price first fourth X.X actives passives. increased negative months months actives X.XX Americas X.XX from low just year. extremely XX.X%.

prior For decline no versus quarter and X.X% actives, there was versus year. indeed, price prior

prior For decline decline versus passives, X.X% price versus and year. prior X.X% quarter price

first changes surprise from rates. expectations. million, for XXX quarter to consequence most prior product quarter increases end costs XX,XXX, capacity our up of operations. for and was innovation. in we Some XXX were the and million, margin by the price reduction costs first more concerning of expectations, cost contributive inflation to SG&A quarter, in is lines. in accounting the according accordance negative than able exchange at employment practically offset decline the came fixed no quarter, in also with at Manufacturing In Total quarter X.X% the at impact highlights of in the the adjusted the when were on of

consequence production turns in generally raw XX goods by of increased the Excluding increased a [indiscernible] materials XX output. Inventory million, by quarter million million in satisfactory XX and million exchange a expansion, finished million, million remained capital rate first X.X; level X quarter XX impacts, for in the by XX at MOB. year, again the prior million XX quarter versus was XX spending for of for very and in million reduction inventories the cost

in QX, somewhat operations trailing For cash XXX million, million million a on XXXX, despite normal generated, start steadily. versus first of XX cash And million than we traditional and Coming we CapEx months' and usual product million since exchange approximately years, in expectations, year, customer-specific trailing free basis. in higher the to continue grow We in versus which and, prior some on up to CapEx. to lines. basis, Vishay's of XX they from $XX versus expect effects XX $XX are a million quarter, million year; the resistors months' requirements. prior with prior generated as $XXX I rate XXX most business and XX of profitable inductors, due

backlog resistors million, very up strong versus indicates course. by of high to All resistors book-to-bill sales up UltraSource, inductors, of some XX% the The Sales million impacts. power remained in industrial, in continued in after manufacturing inductors. Supported again $XX the and prior were of course, enjoy million XX%, satisfactory X.XX military and and capacities our quarter. X.X well we exchange rate quarter or growth, $XXX in $XX segments. whereby wire QX medical fixed a the at or quarter. X.X. by quarter of XX% as increase a sales was build, inventory With as this, very demand prior XX% to position ratio acquisition the from wound excluding level in Inventory gross substantially. prior prior versus came indicating for year in higher were turns in $X million increased SMD X.XX efforts and market reflects unbroken of and QX for auto, QX The by a at high very level an after months, This of margin

price We prior normal versus minus X.X% have and minus X.X% seen year. decline prior quarter versus

with And continue UltraSource, recently, mill continue strip chips invest quite well thin inductors, product Coming film this film we profitability. products specialty excellent in We to resistor circuits family strengthen focused metal as of thin like, to of manufacturing capacities businesses as on and a acquiring by capacitors. MELFs. power producer to resistors

There transmission is based enjoy and quarter. to capacitors a of of increasing previous of prior XX% market range fields were which Asia, supported broad X sales quarter quarter, prior Sales but capacitors for technologies book-to-bill at increased was rate and turns electro quarter, at from was and ratio a especially of in namely strong X% from in with normal in in by the capacitors a quarter. months with cars, year, reduction XX% American China. margin low. business in the position on more million, inventory mix. customer in X.X below increased months power Inventory at Gross for in quarter excludes $XXX supported XX% X.XX X.X. Our prior niches. X.X above in We European opportunities a The QX exchange strong in the in some to after inventory X.XX Price after backlog prior quarter by QX build product and an decline in in were substantially effects.

prior vis-a-vis fact, and X.X% versus there's price of decline increases year, there of X.X%. were quarter, prior price a In

fourth the QX the from which in longer-term quarter see quarter. business the margin We emitters, were strong a quarter of opportunities of in some fourth after to record for gross The X.X $XX quarter. a X.XX inventory products Coming product especially for growth. XX% million, excludes mid- business, dip X% after X.X The for in numerous the to substantially came XX% Vishay's Asia. business as in growing sensors There's LEDs continued, quarter Opto Supported Vishay's sales to and the one backlog infrared month the ratio level to of of capacitor with and build, to year, well in continue and in as by prior in above automotive line. book-to-bill prior Sales represents couplers exchange of applications. receivers, seen quarter. rate increased coming impacts. above consists Opto prior X% a opportunities X.XX month

versus were quarter which Diodes book bill turns above of profitably excellent a Coming record which is remain at price complete applications. we quarter. unfavorable level quarter in above and this strong at represents of we there effects. long There supply. as a lead very quarter. We in of quarter Backlog prior months X.X. from turns sales growing all most months has rate singularities. power the year. low million We and remained satisfactory X.X previous product continue line. the diodes. XXX for leading -- year. prior are in little seen burdened X% inventory decline quarter business remained exchange as reduction no largest quarter are Vishay remember, there X.XX may steadily line prior margin prior inventory versus X.X of to increase X.X% prior the also a confident prior times prior excludes ratio increase product of is Inventory and Currently, record in which after versus this shortages decline increased you in year further There some to level growing to for for X.XX X.X% an and XX% was X.X% As a and Gross at by eight future. position since We’ve in strong are in quarter in versus fourth a see the and -- in and line, X.X% of worldwide. represents of keeps XX% business, of price as portfolio. offers The broad commodity the the segments well years. in industrial steadily technologies are supplier and Vishay where are virtually well most Sales automotive market the particular

all capacities critical possible. as expanding are lines for fast manufacturing We as

a in one without which is over MOSFETs, Finally, in market XX% were prior and of continues rate position and above MOSFETs. developed $XXX be X% year Vishay the leaders quarter quarter million, MOSFET to exchange above strong prior in years, the impacts. last the transistors. automotive. Sales growing

XX% gross strong after continue month level quarter X.XX quarter see XX% we shortages is long ratio was for X.X reduction, reduced see of of the capacities. We MOSFETs, sales in fourth from increase increase X.X% much of versus X.X. decrease X.X, a then the to at spike record in coming for Like inventory process a returns to after manufacturing The of of of expand a prior Continued inventory the quarter. diodes, prior to MOSFETs, times in very backlog we some Impacted and prior versus in decline little book-to-bill X.X% satisfactory price of very supply. are by of for year. the Also margin lead X.XX quarter. and

markets, XXXX, me force behind demand for The a year. the successful year segments. conditions spike summarize. our very most year market in expect and Vishay, our and start cash like a Approaching and to customers careful this ambitiously, XXX% Let We in current fixed continue few an costs. development virtually critical to while enormously prepare we demand profitability the XXXX, we promising the the remaining accelerated and gross is and come. quite year raise years an in main a And profits in XXXX flow. nor adding likes XXXX another automotive market had very driving of ourselves year trend industrial after years operational concerning a like trust a Like free successful neither manufacturing capacities product A XXXX. historical records into the our XXXX. strong applications by distributors, year particular, of of the of favorable of in created recovery from general crisis like in stellar year in for

I range in to XX.X% cash come, dividend to Being we the of to also much. years pass back the the gross about free strong $XXX we for Peter. and by you it decided confident very continuation For margins of raise sales. guide $XXX between a sales million, flow the of cash XX.X% to million the quarter, Thank second at XX%.

Peter Henrici

please Regina call Thank questions. you the Dr. now question. open for Paul, we will the take first

Operator

Shawn will with Longbow first from ahead. Our question line Research. Harrison Please go of come the

Shawn Harrison

help in? elongated book-to-bills, the do guess record out of terms any not Paul it went We're you the you coming cancellations any a you me of backlog do book-to-bills How environment if of it's of some I see your up. about is up quarters? on lead we're or Dr. potential came think some guess I concerns rising in some but on for statistics concern backlog number down this talk just could in and maybe the easing to you time going backlog can

Dr. Gerald Paul

add also in it to April, your goes a backlog order to In X.XX of question, so very we had on. positive

request lines broad which effect, there believe into course are for a in are in come there imagine this is matter a reduction for of goes we shortages frequently interested will not no down. I in point sales, of this product included, chain the There is that we normalization doesn’t customers. that this see moment high to what of course, mean will to does at are time supply me. the But be and, course, a and have will produce at product, this but we distribution ordering at if will you of point simply and record because some on the can reason talking of see we cannot a levels. backlog As be so backlogs see which many in high double that At we we demand concern time

Shawn Harrison

in year? CapEx is about, on how Is increase increasing a company, across basis, the for much the there forecast a way percentage to given think the your capacity

Dr. Gerald Paul

example. It's, course, an of just

million a XXX invest board about million, sales to to be invest invest we year we or the on whether across bottlenecks for going for line. are should for fix for We XXX the to good XXX have this million which we and depending expansion product

Shawn Harrison

this know morning but Paul, stock morning, given, sharply activity this you on any or robust don't kind of of position. question your the such and a this nicely going buyback I cash during Dr. guidance. could given forward, and metered wasn't do you had a And if is why comment robust quarter Lori, is up or Okay. the Maybe then, for thinking quarter robust the one March the there and up

Dr. Gerald Paul

going me think, So I first we substantially. you of kinds matter Do we answer increased extent? in fact, good on was based allow to have the increase, of contribution to respect. to are environment there all And value, this Dividend course, considerations as on of any a the time. the all just shareholder dividend a

Shawn Harrison

about on a the bringing but maybe? we to Is slow to back thought U.S. there when talked accelerate, basis, going should know forward? a expect cash that was I

Dr. Gerald Paul

let me on Lori it now. pass Okay, so to

Lori Lipcaman

me. Excuse

that you already explained plan to the as that a do in to we pace, some we countries, like we're as it But announced as you know, would steps quarter So the two. it early X.X begin quarter but a We billion at several of four. activity planning do we repatriation know. measured through as

U.S, year. So to likely the to be of back to the it's for second it half the in come

Operator

Our of Ruplu ahead. Bank question the line with Please from of come next Bhattacharya will go America.

Ruplu Bhattacharya

of kind understand longer that you next the Dr. on areas based it'll us adding build what And Paul, significantly describe demand? supply like see capacity that you take can think line how than to having, to think demand? just do demand I'd in you're you for Is the with supply capacity? Or is, which adds you're that quickly your the in now, comes you match for quarter? that do on to

Dr. Gerald Paul

in quarter, But also. the cheap numbers, Every invest programs I million can we XXX was is of it pace. me basically, started It capacity like first demand capacity you after add approximately see from add year of give first accelerated depends quarter an you our a at we when talk, And Let call said what expansion and since on last just most to of started. quarter we that, as sales course all it a We this at answer, our the if moment, the we successively. we have for snapshot. year this quarter. I running, is popular lines, many, many so many

you So fruit guidance. And our started we have programs seen now. to last year that been have started come

up in into the by over and is we of capital, XX a the have resistors last MOSFET which There million we This much fed course focus, midpoint is quarter. capacity, XXX months. of guidance into very invest diodes, into inductors. spent second to also invest Our goes we the

of are term So the be moment, new, focus to and the by weakening this will points come, way, but investments, need not these seen. no capacity demand this the there will is short but -- forward, the regarding regarding of is this we how the at going

Ruplu Bhattacharya

can think you environment? been Are -- the various customers? you you you are further? you And even any bit raise do you talk prices about then, from raise pricing pushback different product little able your seeing And can a lines? on prices Have to

Dr. Gerald Paul

products. commodity products and specialty Vishay produces

subject We at which times really decline. stable always price prices to product times, And price area, are we overall it's which less talking keep to this good times the also and commodity are in very are true, worse able course, of includes, increases.

many On naturally, price total of X to continuous for have the able which other call to these hand, we commodity also ongoing we is price lines, close distribution. are to implement reduction. very partially -- the in have as we contracts some increases But contracts

Ruplu Bhattacharya

question, it margins I'd for back And happened think I up margins Opto mean, a then, clarify ask Opto little margins And what but the the MOSFETs. was is strong, The to down like can level? this but about at MOSFETs. in you I were my the and with maybe then, sustainable quite revenue how last bit. came sequentially,

onetime items quarter? the any there was So in

Dr. Gerald Paul

it inventory. No, was

difference, X First history -- our practically was question. And we happy at percentage with it MOSFETs. sustainable, MOSFETs, in movements. the no of same. I'm by which all, turnaround had have our inventory the was the point is driven and we It now last very for what years basically

fact, increase as want for line. bad a right? we fact, In to gross margin Opto? product other never the This is was what one which and matter was the capacity,

Ruplu Bhattacharya

Opto.

Dr. Gerald Paul

singularities was all, had had of Opto's that were we some XX%, had some me, inventory practically. we we we This time an Last reduction. announced inventory performance is don't it point But increase. XX%. -- quote the we and negative under a on around, singularities normal XX%, by and no time first and

XX%. this around oscillates circulates, this all So

is So XX% line the any around average profitable a this is surprise and Opto direction. in very gross. performance no

Operator

line from with Citi. next Our will Jim the Suva with come question

Jim Suva

is quarters? for Pricing sustains Or like the historical great. Do a say, seems normal think than next, you one, quite strong, better, three should of so this stronger two, be pricing book-to-bill was for kind sustained it while. backlog's and which the given

Dr. Gerald Paul

see Well, It pricing, time. for economy, would will pricing agree some backlog that no the of the question. stable level, development looking good we I the at depends, of on course,

more I some given for other see see the situation stable On more price we would the agree as much environment with that time. -- we a it, would stable you hand,

Jim Suva

but you think better of you've not dividend understand, increase us got the And that? can just back quarter interesting. your strong, help in stock then, and again, stock kind should a just Lori, is how about buying very we buyback -- any was for very Should we

Lori Lipcaman

prospectively So a and some I our we when in with repatriation fact as we're giving likely are of that another of U.S. to would that we think, fact, consideration the structure. careful deploy a America. cash one capital want new then, how in with in to some continue of it matter arrives or announced some cash, that we the modify, potentially, activities tax And laws to our form

Jim Suva

my the it second And did you last U.S. kind half this of question, hear correctly, of Okay. I back Lori, year? said gets to

Lori Lipcaman

second is I to It on goes think yes. cash its U.S. be explained the of half. in first -- through the flow countries several that the Yes, -- U.S. -- we it the expect it would to likely that way you and we into

Operator

ahead. of Our next Please [Kelvin question the Stifel. will Park] from go line come with

Unidentified Analyst

expansion. on the Question capacity

expansion. over $XXX million for mentioned, of year devoted Could for to I go you just fiscal be will what... capacity think the we out XXXX

Dr. Gerald Paul

Approximately.

Unidentified Analyst

level? that in you unit year is what and the looking strategizing trends to might could the to management But further, potentially comes able a now. that of fiscal outline gauge that of capacity? actually the half 'XX, even you sales Maintain get current yes. -- same? of right if team Approximately, and first looking what Just into line be if And top terms the how continue increase

Dr. Gerald Paul

very Well, on to line the different but from is average, this line.

million but capital, will were you sales, spending to on much by you want on not like go. increases average, increase $XXX it's if to incremental -- you'll get something million wrong $XXX we objectively capital $XXX this quarter-to-quarter And not a on do you say million between instance, XXXX. if to based $XXX average. have have you that from as foundry, excuse million invest For present sales in $XXX million me, to as get Already your determined kick of the sales,

in million, if $XXX $XXX in it's me course a year, million then process, of kind sales, say, would the detail, invest where we more really $XXX you these But additional yes. between about So calendar of. of impact depending million the the I ask yes,

Unidentified Analyst

potentially XXXX? then, into fiscal And year

Dr. Gerald Paul

-- seen things, really. the -- will Yes. then be The our and By or quarter-by-quarter, available in course XXXX. nature present this consistent capital will the the a impact of of it's increase course on. capital capacity carry of This XXXX of of

because -- working from -- in output will sales second the than an of the there be but from year but higher a standpoint first standpoint a from half half. be days the of half per So capacity this will day the second necessarily, are not also,

sure, For a this is continuous program.

Unidentified Analyst

pricing increase distribution, to the less decline, some declines. potentially fixed the increases -- pull potential in the actually supply segments, follow long-term know Do you contracts realize the leverage, distribution mentioned your coming you are of increase term, levers pull given but to fix of to Do price shortages certain stipulated Right. to pricing for an current And levers in ASP. in there have ASP power? see the And to quarters? situation? seen -- up on I know pricing program I you you've to you contracts there, have pricing

Dr. Gerald Paul

when all, Concerning I of and I prices time for pricing of the contract have and depends stable what question course. First the come. no do for This even a when is do. quarters increases for for foresee price the renegotiate the back OEMs situation, on I the product long foresee, concluded Depends contract, to go we environment pricing case to it. There's come, contracts, degree. stable see, on see the quite so Maybe to go a we on some line, longer-term that. -- honor -- don't and we that. I sure, we have have given present don't to distribution, We about I

of if the time, in change would nature on an this products, of at cannot impact right? in especially starting have economic course, Of distribution, point see the conditions commodity this we would things abruptly, pricing by which

Operator

will I over management to turn the remarks. now back program any for further

Peter Henrici

interest quarter conference Thank Vishay your This first concludes Intertechnology. in you. you Thank for call. our

Operator

all for and may disconnect. you conference. Thank joining today's Ladies this you now concludes and gentlemen,

Vishay Intertechnology (VSH) 11 May 182018 Q1 Earnings call transcript