VSH - Earnings call transcript Q3 2018 | Vishay Intertechnology, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Q3 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. Thank you. conference Mr. the turn now over to I'll Peter go ahead. Henrici, please

Peter Henrici

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

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

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

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

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

measures be prepared In by Principles. to useful call, addition, refer not may adjusted we Generally considered conjunction other the operating provide. believe that about GAAP during information also businesses financial measures, are should that investors Accepted our we or Accounting because non-GAAP and We measures provide use to we this according they with of performance in

for quarter Additional described factors of XXXX. earnings are our third in release

as the morning, various that a assumptions, statements per the or variables X-K the required no computation. except forward-looking to earnings results, assumes obligation outlines that changed Company reflect Our change, factors This Form to impact share we law. by and diluted estimates may filed update other actual

you a the CEO information the be find Investor of our CFO third specific XXXX and section on call. can presentation that the quarter Web site, will Relations of On discussing

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

Lori Lipcaman

everyone. I EPS morning, you chance Vishay Good was adjusted $XXX the most the $X.XX release. Thank I highlight a you, am focus quarter revenues reported review and of quarter. metrics; have three will some of Peter. quarter; for had $X.XX press that was million; EPS to for on earnings for sure our key

All impacting between adjusted due permitted as SEC related, of to GAAP of accounting items were reform the are tax gross our staff reconciling operating or tax and continuing for EPS There margin. margin EPS reconciling bulletin the items U.S. primarily no XXX. accounting evolution by

margin; costs rate impact of volume contribution; with $X increase; fixed impact ASP expenses. in positive had on a the have We these $XXX $X of QX with a $XX of excluding impact increased $XX the and transactions million United to to three operating Operating XX.X%; quarter of of elements to million; amounts expenses volume these arrive quarter XXXX in a for in adjusted flow was were; a a XX.X% quarter, Versus reflected taxes had impact X.X% been average selling representing million. was million adjusted items year; reconciling a year: income XXXX. $X compared taxes rates were of lower adjusted volume; exchange-rate EPS and elaborate costs increased Reconciling increase prices a cash few reconciling legal main will cash elements QX. versus $XX the negative tax $XX $X on Selling, to to QX million $XXX the higher payment increase, I million earnings in The quarter prior The increased in The in the exchange in for to reform. in year, quarter by the statement our by quarter positive million arrive of of $X X.X% $XX a UltraSource XXXX. EPS $XXX we based selling XXXX quarter, was QX than second general, sales million previous other million, increased ASP quarter to QX adjusted These positive of the negative effects. U.S. to is resulted at $X.XX; $XX during from on Revenues as by quarter; cost compared of million million, no increase; the increased and expected tax XXXX. taxes foreign impact $X.XX; a were $XXX million operating of equivalent million, increases, to to from XX.X%. million, no positive at flows. operating negative compensation, had million, impact up income in higher QX impact were enactment including from to million, million prior margin were; up income with of impacts: other X.X% EBITDA transactions the XXX lower operating was main or and There variable continued other exchange acquisitions $XXX and paid withholding variable During or exchange-rates positive excluding primarily repatriate program million of compared a prices Gross in $XX phase were to prior transactions reform top The legal increased accrued X.X% XXXX of a representing income representing average wage XX.X%. moments. U.S. fees, million; fixed repatriation the EBITDA. payment increased based with impacts, and $XX the to completed million in $XXX was prior with execute fees. three $XX income adjusted and XX.X% on impact operating some due to due million of higher, States. prior an XXXX on items at in $XX the operating or sales, incentive response There income the of million, by operating R&D foreign operating our margin administrative

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

As process my longer to and U.S. to continued taxes, taxes are of cash remarks, quarter, during income foreign they that mentioned state to in subject no the U.S. the taxes. such repatriation third are we and Recall the withholding some opening other while amounts federal subject

about the of taxes we In U.S. $X.X XXXX. total, on repatriation, available reform facility approved year-to-date million of million of enactment tax of foreign United intercompany was balance the of quarter million have certain eventual on billion accrued We We of zero for fourth in which to for repay approximately and approximately reduce quarter earnings our credit States. these received to $XXX $XXX approximately indebtedness. of and most to the outstanding $XXX amounts the in much utilized

we of result approximately for a quarter three withholding year-to-date transactions, these other million taxes. As paid million $XXX and foreign $XX and of

the available Additionally, explaining for operating paid transition about are first tax million. installment Thus, $XXX These $XX statement cash for cash This of on cash negative of in we tax leaves flows. of accrued. U.S. QX, of our the as cash free with the payments taxes year-to-date. repatriation flows million reflected

and to of $X.X there do end. repatriation, facility. of amounts short-term time total XXXX. $XXX the at such and it our evaluating outstanding still billion are quarter $X.X are expect not investments Cash liquidity billion but on million in be We We comprised credit no a had

cash end At our For of the above, and of years, described cash States. and the several equivalents the all States. approximately such outside cash of by subsidiaries the investments have and United these short-term in cash transactions, following $XXX cash short-term of equivalents substantially, and repatriation were investments of we held uses United million QX,

evaluate needs. remaining The repatriated the and company U.S. and the of future operating to financing utilization cash. subsidiaries U.S. operating cash continuing are parent have significant our We

would repurchase market or authorization Our certain authorized marketing through debt transactions discussion us with time and in business Such privately and amount terminated requirements does Directors factors. legal convertible Board particular have laws or and accordance in acquire instruments debt suspended of applicable of any other not instruments convertible to open any repurchases, to to our at obligate subject negotiated at conditions, it regulations. us be

debentures. million three to in fund through net carrying $XXX amount and tranches million under million in of of costs remaining the our 'XX respectively; hand, of The is 'XX credit million due in value the of value $XXX discounts, of cash to unamortized notes, the totaled to The net discounts of if $XX million $XXX repatriated principal $XXX notes $XXX due million; any and and convertible facility. unamortized cash converts necessary, on revolving related million new the repurchases $XXX debt borrowings expect of or net our and debentures and issuance convertible the issued including includes the of face We the remaining XXXX. years related new of 'XX, and unamortized

amounts revolving had No no Now, outstanding our QX. the end principal are until due this XXXX. payments of facility on at

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

we’ve our the approximately SEC jurisdictions million approximately subject taxes accounting on analysis by As related an and tax as finalization $XX considered transition tax for and expense the obligations. million of to continue tax of accrual adjustment bulletin U.S. an permitted third foreign we of income repatriation taxes related in XXX adjustment reform. incremental These enactment evaluate of impact permitted to enactment. in the Based an still SEC additional enactment million completed to provisional by staff the to withholding This the related to recorded $X $X reform be to the quarter, to includes XXX, plans QX. additional amounts should payable foreign tax to

amounts effects. periods A year-to-date. been a re-measure occur That expense GAAP the similar repatriation, adjustment until foreign the to benefit with and quarterly from related our currency quarter to quarter expense Additionally, $X for such the taxes payable $X repatriated. foreign million will million incremental represents have adjustments liability U.S. those third tax such and for about tax year-to-date deferred re-measurement re-measurement include of as

primarily is items recorded XX%. to was period This year-to-date Our approximately for XX% GAAP the due unusual yields tax and QX, approximately rate a for mathematically QX. in QX tax of rate

Our mathematically tax the normalized for quarter XX% effective period. approximately a three. rate unusual items, of tax yields excludes rate, which year-to-date XX% was This for the

effective We normalized to expect be about tax for our the XX%. rate year

and the of to tax, be GILTI by our new of expense. new impacted BIT continue interest We on some limitation the deductibility tax, the

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

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

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

$XX quarter million. and was XX U.S. Both payables the the cycle cash repatriation. days $XX from flow the outstanding each in cash resulting equipment million. $XXX $XXX taxes maintenance and for for and Backlog XX of generation last at for outstanding cash months, days. the trailing were trailing $X For past for $XXX Vishay approximately, quarter consistently impacts. expenditures days XX sales $X.XXX has XX years. million; were excluding years days, months the were in Days inventory of by significant and of sales. related three XX greater the million; property than X.X million, XX days; XX or exchange cash business, conversion split include million cash million of reduction, million; at million. excess for $XXX $XXX was of a XX cash the of Capital the outstanding million end of $XX trailing Proceeds reform months. months the of for trailing months from XX was were rate the XX the Inventories quarter tax generated of Free expansion, quarter-over-quarter sales to for increased from of operations in for were cost $XX operations days; quarter billion

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

Gerald Paul

Lori good in third show there tangible signs virtually slowdown business quarter, in and a Vishay, continued the no per industry. XX% earnings margin enjoy in further the Inventories of achieved efficiencies of adjusted substantial to Vishay, in Thank third our share you, supported margin chain, sales, share also $X.XX. are XX% quarter, its morning conditions GAAP all sales, everybody. but good general, of of earnings of operating markets. of supply some increases excellent and of per in volume and the gross Record profitability. increase and of $X.XX revenues of in

of to a reliable We cash. continue be generator free

However, by approximately million the be related to cash XXXX will year $XXX of cash burdened repatriation. our announced foreign taxes

economic in market mainly clean up remained in general. also Let to lead continued regions, quarter, still friendly. as long, key in be of to particular, said, all the industrial, quarter, Coming third have do regions talk to markets, catch I environment to demand, and to started about The In to well. In in third up output very the economic general, automotive Vishay's Growth industrial manufacturing the some the environment. Asia. in to supplier times do market. the the X%, the Europe strong but quarter. but seeing backlogs me particular inventories continued of some and new starts economic very was continue Distributors conditions by well. an continues distribution The robust still to is the in and There strong normal build segments. major third slight industrial Asia show strong and very of we by Americas increase POS exceptionally tariffs. Worldwide market year-over-year. concerns industrial in increase the automotive of driven in automotive are related another starting seasonality. There’re in XX% U.S. also quarter-over-quarter markets,

substantially increased very bill likely a quarter, is enjoy remains X.X to in with as book to strong. order in healthy to Distributors above POS rates distributors prior compared year. inventory inventory of X% distributors reduced high So to prior X.X and the by X; still X.X% turns situation. continue this quarter; at to in But

XG year; and in regions; in the X.X inventory year; by our vis-à-vis were Asia in to Americas, the growth quarter in and the X.X and to the after remain electrification X.X industry, recovery, segments, wide Coming starting in growth continued after across the of main all X.X details second vehicle markets X.X of Some turns positive hand supported medical X.X telecom driver of programs the driving to showed on to XXXX sectors. a X.X year. some Also, look regions Europe, expected automotive PCs in projects. continues beyond. be and in and QX other last be new in several with weak. relatively turns, range external industrial industry AMS product terms prior X.X segments. remained X.X phones steady in with Fixed and by strong prior of and signs across for mobile

impacts, rate midpoint sales quarter. excluding million achieved our $XXX business million Let on million prior comment $XXX in third guidance. exchange We came $XXX in in in and QX, Sales our of prior the at versus development the year. quarter me in of

quarter quarter sales were by effects, in versus versus prior the X.X%, XX.X%. million up million year Excluding by prior $XX and or by exchange $XXX or up third rate

after X.XX; Backlog by the and normalize which of for times very X.XX backlogs products. other X.XX the of Asia be the situation X.XX in X.XX after after normal for X.XX. seen second been mainly twice, at We the quarter; to on for third X.XX second in to Europe practically of There book a to the X.XX; X.XX Asian the after level six strong. for for started semi-conductive high in distribution distributors Orders actives X.XX after X.XX bill quarter; X.XX X.XX after Americas in historically. after for passives is OEMs OEMs still X.XX quarter; second for X.XX the quarter; ratio continue in have second steady months, X hand but cleanup a from has a for the is quarter;

months prior plus continue and have versus X.X X.X% X.X in grow passives. We prior actives X.X% in months and our, in versus prices year. general, quarter Selling to

actives, plus prior year. And passives X.X% X.X% the prior plus and see versus year. For we versus versus quarter X.X% and versus the X.X% plus prior quarter for plus prior

QX, highlights reduction contributive the due at Manufacturing in negative of quarter and also of exchange of quarter margin to we the in by people, expectations capacities Also, lower of was impact Some prior XX,XXX than offset inflation $XX than increasing costs the of Total end our SG&A the X.X% the innovation. came for also fixed quarter the most by quarter rate and lower our cost due on million, in rate up exchange consequence third at were able $XXX impacts. operations. in employment cost times. to to were the product expectations million, further actually, effects. from

Excluding prior reduction inventory million. materials for million Capital million raw and by for by $XX the million versus X.X $XX the of prior cost of million $X level quarter $XX in maintenance for quarter. the in $XX million year, spending and expansion, million, after X.X quarter was exchange million, third inventories XX in business. $XX quarter and satisfactory the remains in this very the $X finished impacts, increase, Despite in increased inventory a process goods inventory at rate by turns

$XXX Cash flow, the from million $XXX of quarter, the we For repatriation CapEx prior in up third very X.X% and prior year. year. trailing third versus months $XX the versus the increases expect continue plus excellent a down third in in generated burdened in driven by lines, Sales margin third X.X% cash prior of by of basis excluding million. $XXX inductors, generation third by quarter With of were was $XX operations the of operations industrial, XX million, and the at a high we level million quarter a in profitable quite XX We year. Gross mill, trailing We quarter basis. months by strong turns X.X we, XX taxes Backlog and quarter level million. cash Book cash a in taxes steadily. first. to $XXX in from were very $XX XXXX, the of million and versus cash worldwide. quarter, plus million cash versus XX% burdened in on up was X.XX Coming very Vishay's X% paid. in resistors cash $XXX by years, the remained by the by million million $XX approximately XX generated prior of impacts. trailing up on bill sales. million $XXX basis to on $XX medical auto, the traditional, generation prior to our at of on to prior in Concerning quarter of operations $XX month most related product month from was year was Free versus rate in XX%, Inventory position was of generated was generated, basis. prior $X prior quarter segments million after in quarter and quarter cash year a the at resistors cash Free the a were stable and on burdened from inductors by since generation third We satisfactory million. grew X.XX business in or enjoy $XX were trailing price slightly versus generation There free market paid X.X. Cash exchange the million quarter. quarter months. X.X, million. a

resistor invest to power as of chips, film We MELF film manufacturing and capacities Resistor. in well strip resistors inductors, thin continue metal as

XX%. of acquisition, new Our a to and margin profitable at capacitors. solid gross Coming UltraSource, was

Book-to-bill healthy quarter months by impacts. range year. of situation for excludes enjoy above Backlog in in quite and to XX% technologies of American in versus European of of X.X% XX% of quarter in The increased Moderate Gross to prior X% business Book-to-bill backlog view prior excludes in year. quarter X.X. opportunities, level quarter Our quarter. for business was X.X% fields the X.X% in Sales prior expect decreased opportunities Asia, X.XX And based going were quarter were niches. applications. quarter X.X of from X.XX and exchange do after sensors margin Inventory X.X XX% well cars, as at sales excellent opportunities XX% were sales prior in strong $XXX of rate was in in receivers, power minus in products. keeps well in automotive prior a namely X% X% a the in supplier X.XX portfolio. rate largest Diodes is remain in quarter and complete started quarter and million, prior all spike the The and level X% Opto above quarter a of as the exchange after backlog price three which of from of diodes. to the capacitors and capacitors of LEDs year, in Inventory for in segments, the profitably in increasing prices particular, the increasing the years. the Coming emitters, rate Opto a quarter to Selling the Book electric in with level million, satisfactory of forward. and Asia. quarter has represents quarter. since a were at versus prior was position effects. quarter. above of further record. and with X.XX% Vishay's The seen infrared with XX% QX, consisted million, versus versus to XX% future in a automotive previous broad quarter were China. for very prior diodes in the third X.XX, business at and the in Vishay months. above we in sensors, above prior on here. turns We in transmission prior $XXX as turns strong X.X% year, Sales quarter growing We were products couplers, prior confident offers after product high we position $XX quarter in exchange stable excluding after effects. at industrial especially its year, increasing margin the a market and worldwide. broad X.X decline of virtually again where Sales minus market X.XX% as we’ve second which most Gross Vishay growing technologies, X.X the increased quarter. normalize. business steadily in are the quarter. months above second in prior the bill has to and commodity

book-to-bill and defended QX we months and very quarter still margin Gross X.X down seen sales. level above be X% X.X one like second million, for increasing excluding Vishay prior the like leaders rate versus the quarter versus three The is in in but And at down backlogs in a X.XX% diodes, and normalization a prior X its months remained in prior in the which over last years, for expand quarter months Sales diodes up X.X X.XX% was the quarter growing satisfactory transistors. and for of were quarter, MOSFETs, in quarter. X.X exchange year, to still position in from the diodes are continue effects. coming further XX% builds. versus turns at high above increase, prices in manufacturing Gross we the do MOSFETs also plus X.X% strong a fast slightly $XXX up Inventory margin XX% also the was the prior see quarter for reason of inventory continues at extremely now not second high. record critical the we prior continuing satisfactory quarter X.X% very since record quarter XX% of quarter the have We level there the developed Inventory X.X% year. automotive. of least, market its in in months, MOSFETs. continue turns capacities. And versus backlog. of were prior Selling quarter XX% to year. no and X.X% MOSFET to levels X.X Last of the of prior sales, prior turns. below was prices plus after very

are to house and We in process manufacturing capacities foundries. in expand at

me normal POS summarize. strong Let distributors. first most which commodity product products, our OEMs demands. backlogs for continued starts by a enjoys and up Carried a demand supplies see is year. enormously Vishay broad lines, of inflated strong signs successful of normalization presently and very of of another We catch but overall, nothing thus consumption when important, to its Most so for of

the order critical careful to costs. fixed operational trend while Even of markets, in automotive of adding In to mid continue strong solid free and and we capital financially we manufacturing generator normal of cash, and enterprise, be expenditures, be innovative on to maintains remaining times be successful, and the For an remain selling promising products markets. prepared, competitive All-in-all, Vishay structure. our optimization growth a capital of and also a than long-term, our higher we industrial. accelerated predictable key trust in in to growing working capacities

XX.X% quarter fourth exchange of Peter? million, a for For million XX.X% we third rates. the between $X.XX sales you net of sales much. range very gross the and margins $X.XX Thank to at quarter, guide

Peter Henrici

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

Operator

Research. of the Harrison from Shawn Longbow comes question with first Our line

Gausia Chowdhury

Shawn This is Gausia Chowdhury for Harrison. on

distribution at first it's So all, is at look you with if X.XX, surprising weaker. not X.XX at of that bill, Asia sales and the book to guidance

dynamic, not fourth this we be more the for in much to is So first just should maybe versus it seeing consider maybe you’re seasonal quarter and more how there’s risk quarter? the

Gerald Paul

This say high, XX a since now. time this no has taking long may it always to place keeping, the unheard backlog. distributor, book normalization, some the We even was the and expected some side we And watch weeks is Well, not. I extremely backlog yet, really the on of. shippable impact of if say,

were a for we which some of don’t corrections, see So, change situation except the expected. major

Gausia Chowdhury

you’re of can any end of color within If specifically. you any us give the And then there’s what on China markets, weakness concern more area? or seeing any pockets in or

Gerald Paul

Well, new there’s concerning But U.S. this come -- which there. seen. say, to lead tariffs if that’s you’ve to automotive, right also China, some concerns may some slowdown in in the

in is the other auto, On the hand, of cars. slowdown of pieces

automotive On we see other customers, increasing in the there’s decline of electrification cover China. the in cars all hand, demands the an no our and at which also

of of increase a this going reduction normalize operation which major customers moment car cars, for as fact. doesn’t not the -- of obviously, takes in backlogs the We matter on, electrification some distributors mean is the that their at And the end trend. and new sets all this. us see at this in again, So, changes do of

Gausia Chowdhury

from that you’ve said that then more they me the pretty stable. times, change about in they And you just one think seen pockets of Are are are areas? any there lead any I increasing or

Gerald Paul

lead problems with imagine. come they’re point a because decreasing, The even down, that said, the still we our different Customers times increased very certain keen to broad I’ve capacity. get portfolio us, to that to you can as have In general, products. in we situation has are no still certain are the do as very customers, question, times cases of and answer because have but in for different portfolio. Not very lead easy is we give high, segments the

do the long still add to-date, It’s customers hand, in do seen a overall, we this even concerning my I and why have to it long we continue have feeling times. haven’t so. we such as capacity fulfill situation -- lead I other in array On the is I career say, not would

Operator

[Operator America with our comes of of line Bank question the Instructions] Merrill And from Ruplu next Lynch. Bhattacharya

Ruplu Bhattacharya

to I margins. at margins. And Paul, high by the you're start the about on margins going at a level resistors, that of wanted margins were even margins XX%. same for forward Dr. is were high XX% asking resistors based demand sustainable this you Opto seeing? very think Do pretty

can your on you that? if thoughts So give us just

Gerald Paul

way, all It quite And holds resistors, depends the nor for hold and volume. value. also often margins looks on this as So, this for neither it to say We margin. inductors the this that is frankly. at the the volume margin we were will level long as Opto

It's again, very XX% we were not it’s a this resistors XX%, that, also XX%. for Opto, around we there were good often were Resistors spike. And game. question. no above we know is for was So, a And but -- XX%. volume at a always margin

So it's if is the that answer Yes, these not spike we a volume in can holds, hold margins. the sense.

Ruplu Bhattacharya

competitors talked adding terms in overall capacity. up balance normalization demand, on supply demand of in industry then what about market? Overall, think capacity, and demand you're When the you you into think I seeing do with and the comes backlog. And of supply adding are have catching you're based supply

Gerald Paul

do I our strong. not are and electronic see of Hard automotive are for the ball. I end in are have the happens And as of in of course but industrial. I key slow in exactly we what a sure, strong But know prediction, the see the slow process process we the they market, don’t in it. because at a process crystal component for the makers, in don’t normalization, markets it’s markets And a decline least standpoint

In fact, year. major are we midst in up customers with the goes automotive negotiations demand for next of the as

there's to optimistic will that nearly good we and situation trying two So, between now years continue. choice are

is I later, which or true. slow of think Sooner be demand, it’s process. a that’s not But course, there will no fulfilled,

Ruplu Bhattacharya

about can fiscal Do think the CapEx guidance capacity? in terms than you're it in adding, then or that how this year? And areas higher should any 'XX. be getting which us will on lower you you of give And if think we are capacity you

Gerald Paul

Opto. exactly we the million expand the absolutely also and $XXX million, to the the expand not at -- But diodes which expand we start somewhat really like million requirements required of to between $XXX customers, in fact. MOSFETs, not have moment. will matter $XXX to as too it and certain resistors, lower, is $XXX It'll I'll be $XXX much million see later. our and have as to be we lines below fulfill million a put but between have we we of with And

a go will broad me expansion we it’s not believe So, but overboard.

Ruplu Bhattacharya

question Is certain repurchase? for your can amount last Is convert dollar the a for that authorization With there there limit? And you me. to respect a repurchase.

Gerald Paul

buyback is fact, opportunistically flexible thing. matter of in these a ahead We way a very certain as go Well, a this and converts.

important believe. this of It's are very program, would As we a to to matter state. fact, I And is like going what start a I fast.

Operator

line Our the Citi. of from comes question with Suva next Jim

Jim Suva

it’d talk and bit more may like contracts may Is they one you be maybe continue versus correct to about guess your me forward, you Because forward? going for to or pricing if quarter I up be fair assume And and so, than a little will I Can in hopefully correct going this normal trends that help currently renewals. pricing, coming nature not? a of stronger-than-expected. believe be be lot can

Gerald Paul

You’re absolutely right.

with there’re negotiations the throughout And is with on the customers. to historically the year. they the pressure still always maybe hand, be, But in feel are negotiations shortages, schedule want Still, not large there’re -- contract say because as there price guys safe others still really less We felt. higher And we contract automotive customers, and it’s now. are than big automotive have on major the as pressure other used it. we it to be to

Operator

question next the Sur of line Our Harlan JPMorgan. with comes from

Harlan Sur

capacity? us are rising fixed gross help quarter? what the December in biggest costs in bring Are you decline margin the you guys the understand as more of drivers Can

Gerald Paul

It a it’s has first of days, less so thing. all, volume shipping

singularity to was the on in an in gross a going reduce which are quarter, SG&A, some major a quarter. fourth of the So manufacturing normalizes development days the length extent it’s are major the Basically basically really, we also there, in positive also is sales, some orders took still to inventory. of the because compared quarter. forecast, you the the drivers difference, as a third length that of We’ve not in margin. quarter. we’ve the which days if This that. the to shipping inventory, This fourth because makes we’ve just all to of the and inventory third there’s sense the of in inventory which of driver These

Harlan Sur

last similar to And maybe Greater we the about December Maybe now I you team the as industrial, quarter? we’re other bill similar that and some fourth earnings book there. quarter, to curious. seeing as currently to to headed far What the am and aspects is call, the quarter, I thus various mentioned, hear China am is last slowdown into curious right continuing in just geography the just here in of

Gerald Paul

Above X, it’s better than in the third quarter.

somehow. for By So capacitors now. conductors just and and to existent add, I Speakers] is this expected bill it’s X.XX. the question equally [Multiple for to semi wanted positive way, book the

Harlan Sur

for normal in industrial/auto tends as of half stronger think obviously, trends you think And to be, guys, I year. we about so, always first seasonal the seasonally next

trends so seeing anticipating you’re given still sounds XXXX? trend positive enter bill, you’re the normal And as that like seasonal you book to

Gerald Paul

see We downturn. for the tangible no signs

Harlan Sur

am understand, leader of my you're last I still that Obviously, Can some there. more what question. just tightness? subcategories in Maybe diodes. capacity some just within adding help the you're you are curious are guys diodes you just seeing us

Gerald Paul

it's automotive. have Well, tighthers strong, rectifier and even these which position, work it's very times, to good in against really we and times. a long on leading all talk And are the embarrassed have delivery but are long rectifiers we maybe we in I about especially we sector am its rectifiers, delivery

Operator

are there time, further questions. this at And no Instructions] [Operator

Gerald Paul

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

Operator

concludes This conference you. Thank call. today's

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Vishay Intertechnology (VSH) 30 Oct 182018 Q3 Earnings call transcript