VSH - Earnings call transcript Q1 2019 | Vishay Intertechnology, Inc.

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Operator

Hello, and good day. My name is Carmen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vishay Q1 2019 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. you. Thank Instructions] [Operator turn over now Mr. the will to call I Pete Henrici. Please ahead. go

Peter Henrici

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

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

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

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

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

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

President Stifel Media first to our the presentation the Executive on York; June Boston. Deputy Vandoorn, and Cowen presenting on be XXth financials Telecom of XX Technology quarter XXXX Officer May at Sector CEO Cross section website, Conference in the Conference and New in at you and Technical Chief Relations Johan the a Investor metrics. and and can of the find On Vice will

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

Lori Lipcaman

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

remain we under retire We point. During Only the some debentures, quarter, to execute repurchases $XX no this in continued market were the transactions such to outstanding tax US to our tax at additional new law. response debentures tax of outstanding million which efficient US longer open completed reform. convertible of

in representing a negative offset and X.X% a a higher $XXX negative due operating negative X.X% versus $X.XX. of XX% XXXX from in a XX.X%. primarily with impact in X.X% income operating additions $X of equivalent average EPS Reconciling tariffs higher no $XXX sales will to on million $X cash R&D $XX manufacturing decreased commitment increased QX, million in $X.X main GAAP the costs. with to our announced increased to million, share with to down selling of impact Other Vishay million or $XX to operating was rate costs reconciling items tariffs in early and are in $X.XX QX, income items volumes. adjusted selling of well All at Operating no million operating previous elaborate decline, $XX transactions confidence X.X% of return Variable ASP XX.X%. EBITDA million $XXX strength or margin. income increased XXXX $X.XX. $XXX main prior cost impact passed transaction compared general efficiencies. depreciation, by cost passed a arrive Yesterday, EPS ongoing were positive elements and US a quarter, representing administrative compared a XXXX. $XX acquisitions, customers. these representing year. to EPS the quarter Adjusted virtually on margins. margin operating shows XX.X%. XXXX $XXX -- XXXX for $XXX was or few customers. this QX, million significant EBITDA versus X.X% year, million which million quarter the XX.X%. ASP I million, extinguishment and positive or as operating which elements million by Gross income QX, by to demonstrates XXXX prior $XX through wage primarily for exchange higher gross $X US a to $XX $XX moments. was impact to in but was excluding million, reductions other as to flows. reconciling were stockholders QX, a There lower increase. Adjusted of Reconciling million, The income inflation million by dividend reconciling and million, increase tax-related costs, $XXX in negative $XX were expectations. headcount per The with million the X.X% or increase of Vishay's Vishay's quarter to Revenues the Volume million with quarter average line in annualized. decrease recruitment by items. capital were Volume Selling, compared or on between to includes and were QX to based million, adjusted quarterly income debt and up due US impacting $XX impact to inflationary through a prior one prices includes of to excluding $XXX increased in quarter, was cost the increase, sales were an related items of tariffs. impacts, to a based margin expenses million impacts, of operating prior variable There costs or rate impact prices operating decreased versus was in million had from was EPS higher had The Fixed adjusted exchange XXXX. of

million of are XXXX, and at are of repatriate the Recall expectations $XXX taxes amounts no total exchange approximately Cash repatriation for cash tax comprised investments such taxes quarter QX. foreign state and and $XXX million approximately U.S. million our to subject full to our We they $XXX longer any available U.S. expenses and not during constant did are liquidity end. other taxes. billion income for For while additional that some on U.S. are to QX, company facility. amounts federal the million rates. with to earnings at year $XXX subject The taxes approximately the no SG&A short-term outstanding are had withholding accrued. $X.X There of additional credit there $XXX million, reform, and

credit continuing efficiently are the how revolving utilize timing the the and to and U.S. cash to to We uses most evaluate future of repatriation facility. of

convertible were Our attributes, tax debentures reform. certain no had at efficient longer which tax the U.S.

to During a XXXX, instruments. we debt repurchase transactions these portion and of replace significant executed

deferred also $X recognition loss During related debenture million, to repurchase of liabilities We've million, continued retired benefit a QX, our special of in million, tax of extinguishment which the $XX amount debentures. a we debentures program. pretax convertible attributes in principal tax in resulted $X with of resulted the and of reduction tax reflecting the approximately the

negotiated instruments our or additional other convertible market and subject privately legal of conditions, in open requirements and repurchase authorized Directors be by We Board factors. repurchases market through continue debt to transactions, business to to

and $XX remaining $XXX million the million, $XXX debentures. notes amount of The of debt million in principal new discount million costs. related Our issuance the the in XXXX unamortized comprised debt at due total carrying is XXXX. due is at convertible and debentures and and of value notes related converts The value XXXX to or quarter-end convertible the net to $XXX the remaining face

revolver I As no to were expect during principal there in to but on XXXX. No credit XXXX. utilize amounts payments outstanding some are our until degree QX, we said, due revolving facility the

Additionally, assets $XX new QX, reported million separate sheet the January effective GAAP approximately end and Company lines. at lease a standard, adopted includes XXXX. obligations the million of balance of the on of US $XXX related right-of-use The X, leasing

Company part As Clara, not GAAP, under former proceeds. manufacturing the previous such The a recognize the to but California. Santa a cumulative the sale earnings new leaseback meet adjustment reassess of and and accounting of leasing of de-recognize retained related was did adoption sale required date recorded U.S. the deferred to did land effect the accumulated meet requirements to of of site Accordingly, of the new in the the GAAP and completed its Company adoption buildings transaction requirements the and the as standard, standard. under for sale,

approximately U.S. GAAP XX%. tax QX for was rate Our

tax were deferred of payable some related GAAP liability the debentures foreign will rate effects. million as and incremental upon adjustments occur benefits amounts been the quarterly until tax These respectively to remeasurement repatriation, of tax remeasure currency Our benefit such such to million the to includes items of and the have tax convertible related for taxes, $X.X unusual QX. settlement foreign $X.X similar A repatriated.

was tax to expected XX% for items Our normalized unusual approximately which slightly XXXX. rate our excludes tax quarter, above these effective equal effective the rate, normalized for

of We continue and to BEAT the the U.S. provisions law, GILTI particularly tax of taxes. aspects evaluate the

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

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

for in in The period XX and for for million, XX $XXX primarily $XXX was Clara, cash $XXX for were the were very $XX months quarter for million, paid, $XX XX to operations which the trailing years $XXX facility last expansion, XX from sales, million at excess end month $X,XXX,XXX,XXX from XX quarter approximately generated sales and of of Proceeds high Days repatriation million; million; of Capital outstanding XX manufacturing months cash our Days than former years. days, $XX exchange $XXX maintenance related million, million. buildings. increased for each of of our to California. to in consistently Days $XX inventory tax business, sale months, conversion of payables million million. of equipment cash the and period operations split property Vishay trailing the approximately; compared generation back X.X $X million. still days. quarter property outstanding represents the taxes Backlog sales the under expenditures days. in for X We've of of of the for by XX past the greater were XX cycle was the of were average flows trailing at includes $XXX was cash cash $XXX impacts. XX of short-term quarter-over-quarter one million. months. has reduction, Free the $XXX million the XX days. from rate excluding Inventories cost arrangement historical were the reform Santa million resulting cash raise a For month outstanding or a trailing US leased

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

Gerald Paul

XXXX. XX% Lori, healthy achieved inventory of Thank our financial $X.XX. exceptional per of GAAP a per in of environment operating $X.XX increase earnings but the with In a earnings in morning remained substantial markets, end first first continued year quarter quarter of everybody. most share chain. and gross sales margin margin adjusted and for XX% is of Vishay the was Vishay The sales, of quite of of supply you, share and which in success, good the line there showed to the economic

had first also strong year terms of in cash, quarter a free $XX generated into We the start million. in the we

principally up talk first economic Let stable, continue components global the prices and selling lead in has general times electronic caught keep The but the remained economy healthy reducing. to and in market me supply for to the be about environment. quarter demand

about very the quarter reached normalize with the in developed book-to-bill now first X. a levels. in to The regions Talking below direct inventories markets geographically the supply backlogs chain consequence, differently. substantially high continue have ratios As

and seen by POS at have strength US Strength We record also in in levels. ongoing Europe by industrial the automotive. with carried

the first seen in Global US with have in growing general POS in quarter-over-quarter. We do in year. There by the well, continuation to X% a a strong continued fourth was last Europe. the Asia weakening also in distribution principally quarter quarter of and POS

compared in In to also was a to year. the Asia as significant were conditions in quarter X.X weakening, Americas, X.X X.X, quarter, distributors tariffs. prior turns which and In In X.X X.X and at distribution year in in prior Asia, In quarter, Europe, last and levels, prior first reduced year. at X.X and X.X were was [ph] year. four the which are in in turns turns inventory demand. in off production. X.X the X.X quarter Inventory systems unavoidable. quarter X.X degree the by to to to were in electric business of remain to the XX-volt due the after impacted prior burn have levels X.X makes turns some after after also X.X the year. despite US the the positive a Automotive vehicle systems driving Advanced record driver-assist first charging grown softening vehicles prior electrification

power remain is factory substantially and in by phones expected growing. metering, Consumer programs avionics systems. the programs. but show Internet expect TVs On weak. releases. markets continued the is see picture. goods, in is particular, in by continued countries. markets accelerating also quarter, driven growth. and gaming the industrial other well as to to we White Medical transmission hand, XG air traditional Military a things, variables year, diesel several grow we of due product be this present There as seasonal stability promising, pressures the were Computers recovery. is smart telecom of supported weak at Mobile on best. relative and conditioning Fixed some markets scattered flat automation, the some governmental to

We versus came achieved rate In the $XXX year. Let in in quarter in million and business. quarter guidance. of million million me prior prior impacts, first of midpoint our our $XXX talk $XXX excluding about sales to close the we versus exchange

the sales or up effects, book-to-bill by QX the Americas million after after after -- fourth in rate X.XX but exchange OEMs X.XX. $XX by X.XX. normalization and very from decreased passives. and X.XX. the for X.X in distribution coming X.XX. down for the still The of versus actives passives of in backlogs Asia quarter a fourth year high the Backlog in by first X.XX X.XX X.X OEM doing Excluding business in months in to by X.X. X.X for X.XX X.XX were actives quarter, QX X.XX for after months after after keeps X.XX, it's quarter. level X.X in X.X for for X%. X.XX. million $XX versus broad after X% prior growing. form, the months was X.XX ratio distribution quarter. or in months for has started but Europe a now X.XX prior The for well

minus is backlog now X stable included. are months. of level historical approximately quarter, Our Prices were plus versus prior prior errors X.X% versus X.X% Tariff for year.

minus and quarter prior actives prior year. plus X.X% X.X% versus For versus

prior level passive quarter, as year. plus For X.X% versus same prior

quarter were innovation. contributive $XXX negative again, from people first cost the Manufacturing first we than expectations. employment operations; highlights at first the the to at line and was first the change came in the Some quarter. virtually quarter we are quarter, the Total with prior million, offset end in able vis-à-vis million more impact in on quarter margin the by $XXX line with costs by fixed in reduction our expectations. of XX,XXX also in cost our no quite in SG&A

the year. versus $XX impacts, the rate exchange remained in at and cost first $X $XX million the inventories spending $X of increased Capital raw million in materials $X first X.X. WIP increased of $X for Inventory level in expansion, million million. million, by $X went million quarter reduction $XX million business. turns maintenance by and quarter down finished Excluding in goods by good for and prior a quarter for was million

cash on We taxes an prior million $XXX versus generated For of trailing XX generation quarter cash operations We of million, represents repatriation. a first to short-term from free a which including cash market And including generated million the $XX of of generated quarter in trailing million cash again in versus cash XX free related repatriation. on cash the cash operations million first CapEx approximately million million. basis, $XX for month cash we from in for month $XXX now adoption $XXX $XXX $XX million in basis, taxes XXXX, we prior We year million requirements. $XX cash expect generated year. of the a of year. free $XXX

at $XXX X% million position prior $X million in Let or to the or inductors. and resistors first This since year. talking X.X lines, million, first Inventory still me continues to sales come first traditional X.XX came ratio auto, profitable good excludes after X.XX Backlog segments. grow decreased X.X. book-to-bill a military quarter quarter. is down in industrial, a margin XX% about The steadily. the first which quarter but years, in in months very turns were rate and by Gross by our good inductors, very X% and in up X.X was versus resistors quarter in to strong the product the exchange business quarter XX% after market from the versus prior prior of of high. and quarter, by impacts. medical level Vishay's most With in quarter. very we Sales months, prior slightly remained at enjoy $XX in

X% price minus seen have prior quarter year. versus prior and plus stability We X.X% versus

was quarter, above the book-to-bill for which capacities on UltraSource of e-cars, acquisition In manufacturing quarter. field increasing namely very effects. of particular in well a chips. and expand business first continues with phase excludes rate transmission months. our range The backlog European to The ratio level technologies business capacitors quarter previous power the XX% were margins a in niches. below and segment. caps, experience a to Coming resistor to $XXX And after Asia. backlog of of continue in XX% X.X our X.XX very currently American tantalum capacitors; but perform thin prior remained quarter a prior in opportunities market strong average prior year, MELFs the at gross quarter in We first with latest level exchange in a enjoy Gross with based X.XX the of broad same is Sales margin still position in power of of satisfactory X% reduced normalization. to of film as far inductors, exceeding the the and the in quarter. high sales, million, We

prior less product decline to fourth million, from in mix. X.X prior compared mix. quarter prior lower X.XX first from The ongoing mainly of of X.XX disappointing governmental margin in Capacitors We receivers, impacts. X.X% XX% X.X which quarter in currently of X.X% The with X% also prior emitters, military the exchange backlog X.X of mix. quarter. prior business rate the the benefiting year. came was versus Opto X.X% normal up benefiting LEDs by year, quarter quarter. capacitors well of decreased after the by fourth quarter, in versus quarter prior the the products reduction in to The were distribution Inventory quarter from quarter favorable Vishay's quarter. X.X% were versus a book-to-bill to product prior unfavorable turns in and sales below strength in Price major high suffers Gross turns in as turns China the sensors markets, quarter X.X and after due the level as inventories, prior but up at in turns temporarily X.X a excludes was from are months. good versus for consists in automotive and Selling prices infrared below Opto $XX minus from of XX% inventory at keep to programs favorable in XX% the and Coming applications. couplers, and ratio a line from of The products; has business minus Sales remains as for year. volume quarter, product the

profitable half business capacities of the the to due lines. second availability expect performance historical more back to We be higher in in levels the manufacturing more to

X.XX product technologies broad weak progresses in million, Coming chain. Inventory stability backlog year, and in year, explains offers backlogs, market includes the and came to in in potentially largest very down supplier down but book-to-bill profitably in above at up commodity at mainly X.X -- months the ratio We virtually The as below point prior in still quarter portfolio. the keeps very supply and is a as prior high as tampered level fourth versus well X.X effects. most prior turns quarter. X.X complete gross prior to industrial satisfactory automotive versus minus rate quarter. level for strong performance. in quarter quarter, where Diodes represents quarter, growing in from sales, Diodes respectable a of Vishay were X.XX from position X.X business, inventory and XX% by in The Like which for and reduction a which business on the the quarter the reduced all the very are margin for after X.X of segments course, Vishay see steadily to prior has now Of four. years. of the excludes since plus months worldwide. X% prior remained we Asian quarter X.X% compared $XXX X.X% of The errors. price the of exchange Sales normalization X% distributors Diodes; tariff

to ourselves of the years the supply for mid-term. Diodes recent in after success story chain. volume continue demands substantially normalization We continue the extent to And inventories full of higher the we to their in expect the prepare

catching up prior was fourth was quarter, impacts. exchange The MOSFETs level book-to-bill of the of at leaders in is is normalization quarter demand for $XXX minus Finally, in last Backlog The in the automotive. position strong above previous X.X years, prior to sales, the X% as X% rate and at with and backlogs months low continues versus still decline the at minus prior below year quarter X.X to growing Supply X.X Sales in margin Vishay in X.X in excluding the MOSFETs; ratio the for after quarter. were quarter MOSFETs X.XX developed A of but over months started. X.XX MOSFETs. after MOSFETs million, year. market and of quarter. in be compared MOSFETs now quarter. like a price a X.X% XX% one high the the four. prior in Very quarter in of X.X% very have versus satisfactory gross turns the inventory quarter of prior

internal for expand seeing foundry to substantial and particular, capacities of continue very increases in mid-term. in in We automotive demand, the

me reductions distributors in seem Let a in by short determined for years burn off by the will the whereby impact general backlogs the two be markets friendly POS to such the after currently the our by course speed continued of negative and not Inventory quarter. inventories. nature an also summarize; of our on enter distribution We of excellent the end industry, in in will inventory to unexpected of distributors. normalization also terms be revenues phase and of have development term, of of

in and inevitable will remain We the will our cash context, increase our growing profitable with we cash that we always upturn many No the doubt Vishay do so will we long such capacities electronics full this will production XX% stated our through trust announced future and in see participate the words, demand also manage the dividend. In a of keep tightly mid please the we and afterwards. term. to in in the extent be in generating requirements, in quarterly accordance past. ready of and phase, to as customer

you. to Thank million sales XX% guide XX%. $XXX Peter? margins range a we between gross and at of and For $XXX million the between quarter, second

Peter Henrici

Dr. Paul. you, Thank

please will the question. We now to Carmen, open take the call first questions.

Operator

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

Unidentified Analyst

thoughts the the please? can by about region Gosia is on talk This it of distribution, [ph] at Chowdhury region, by morning. Shawn. good begin Hi, access inventory behalf just you and with To around

Gerald Paul

at distribution, if I understood Inventory right.

Unidentified Analyst

Yes, right.

Gerald Paul

too the in inventory, historically be of first ongoing. all inventory, the There's of to their we most also according I In Asia, and see speaking highest expectations guess correction their it it's relatively much already -- the and may regions.

Unidentified Analyst

then -- Vishay's And internal inventory of terms in positioning… in

Gerald Paul

quite is normal. This

Unidentified Analyst

Okay.

Gerald Paul

quite normal. is It

just quarter inventory X.X had we fine. see the in that's You turns

Unidentified Analyst

I will and then, second seasonal, terms you beyond in any comments just the it quarter be specific you Thank And providing out the would how if seasonal you. aren't quarter, know color than some of plays guidance but give on third less be helpful? could

Gerald Paul

in how from this burn Well, as quarter the will inventory of we The are also the will guidance quarter impacted. of from second And see The burned inventory quarter. a off. is normalization. in will fast degree this be the impacted I question of off phase still to be midst you believe course be third current a

So are back sure for impact we be third for on believe be there will sure quarter can quarter. also that normal. some -- the Fourth I to

Unidentified Analyst

you. thank Perfect,

Operator

the Your Bhattacharya of next question is from Ruplu line of with Bank America.

Ruplu Bhattacharya

what trying is supply Good is inventory? level a morning. in inventory much the maybe weeks way what is there Paul, just excess my there chain is how for of get Thank a handle for on versus taking questions. I'm in you to the Dr. to quantify excess example, normal of terms inventory. of

Gerald Paul

two the my the course, distributors the POS. terms could about in really but of on number development is. This what Having by it that depends POS million too much that for number I have currently of depends our $XXX one, two, opinion the things: the business. expectation of what we on of the this imagine excess and is; said have I

Ruplu Bhattacharya

I see.

Okay, And on that's helpful. then the…

Gerald Paul

But relative relative a on is This statement assumptions. is again, a my statement, based Ruplu. this

Ruplu Bhattacharya

second mentioned the you inventory that expect keep how think the pricing think this the quarter? forward. Do on pricing you should prices quarter, about side; in impacted prices prices can in distribution, and contracts were Or place Then we understood. going the have do relatively situation you stable? given I that be Okay, stable to

Gerald Paul

have is decline, XX% -- see side, some for our course, year negotiated on mostly out normally, the quarterly keep OEM not a we on may but commodity that but prices more for with less the only On products or we here, these in our of And distribution. contracts place the And products. basis. reach business being of for specialty

we beginning time the off, don't a times of of at end that at be it. you being, specialty normal the we to and see decline think the in it But -- could the price we at for are end all the I the For where products. decline no of want, picture, price if burn -- traditional practically the see be some in so commodity products some the -- going possible -- for

Ruplu Bhattacharya

last the And margins helpful. capacitor is and on on question my that's Opto the Okay, margins. then

mean back a think had mentioned the time. And and volume then I on that. that? if next you can I think Opto Opto How impacted margins these if we inventory -- segment you over going had into think second talked opposite, can half, you you should favorable get reduction the the about on XX%? you some you give on us improving, the side, margins, the about -- mix mix that But capacitors thoughts you side, two do this

Gerald Paul

with nicer I we part. me the I This Let mid-XXs, start believe be is able capacitors. to will defend the believe.

think I mix this favorable just spike. a -- is to change mix not to

to -- are products a of We trend to to shares less more fact. go to going matter see a there, commodity as

are capacity course. must This -- And capacity quite variable on on that. There's surprise it lines. terms it costs there cost. is temporary profitable way of also Opto, for I add of the an more a adaptation in there, In other admit us side, of we is going us, to was the problem [ph]

is term, margin. to plus it XX% line longer the this from reason, two shouldn't line moment came see mid-term, that I the at why where from go gross sides, back So beaten means no believe I

Ruplu Bhattacharya

Thank Thanks. my for right. so questions. much you all Okay, taking

Operator

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

Matt Sheerin

supply got margin XXX the you greater to margin tightened, the the stretched, before points your company, if look on question lead than at in the contribution. down roughly for whole sequentially, margins XX% A you're times running like just which were margin, basis looks you normal chain saw negative you back gross a And guiding XX%.

as should margin, pricing know, margin you operating we sounds as So come as tougher, how It go about said think expect impact that down you year. becomes if gross particularly and like can volumes back will year-over-year, as get margins through well? the -- we which

Gerald Paul

what create bringing the Matt, took from capacity, say First expect normally will the The will a -- account business of more a price this temporary temporary we impact as of And normalization, bigger volume will thing. and temp than picture. is levels. the reduction, this in We was down based have course would inefficiencies. on of After basis right. all -- so you into for but the will our always cost is you're part, some decline, it for There the burdened this is years. see most which we quarter, be really the on model normal XXX% many

smooth. in the the So slowing what for consequence seen quarter is never which completely the of is the in we've -- capacities, down really second --

Matt Sheerin

you down And $XX in? for then so; or the invest areas back in continuing you CapEx expansion? your of what year areas pulling what by are you to are capacity And million took terms

Gerald Paul

cut that other brought. change. on does no emphasize practically the to delay likelihood we We And Otherwise, is like would take an It's this next inventory market. everywhere not we is our now strategy practically a whatever adjust timing. timing to to back adapt reduction and into on the year. But I and the change delay. products We a commodity the account it's The just our likely the hand whatsoever. this only not timing into just of of the --

Matt Sheerin

then, still like still content orders still all good tough on it I like more -- and you're and you get details a in there's lot seeing of production, come have Asia It And got negative take sort hit China Are first, exposure growth, visibility bit that your a to in China. of all but [ph]. there stabilize is -- automotive back? starting to little particularly know markets. see you because I'd in sounds Or

Gerald Paul

concerned of is about in-house excellent lip the decline and decline we but to is not big I of talking we only believe of production, and are made be thing. service, leave a this a at an estimate electronic a realistic. that have -- car constant. believe it's potential the course even -- are We electronics XX% seeing would supplies talk there, automotive people we an situation. and situation of electrification the Well, The

worldwide. So in from -- automotive We this down and XX% we in not years MOSFETs, you'll just obviously where ago. see going growth by in forward. nice will nothing still to going And a few see we the particular, is see go came this

even one big got suppliers supplier other freely, on very of we we bigger the are nicely, working and the We have there. into

right world you all the quite on and not heard problems the you're about in I I'm optimistic we despite some So concerned But that. am same. Asia, general, -- In in around the heard automotive together, growth.

Matt Sheerin

And at in just a are and flat any bring margin, gross costs? lastly, sequentially you the measures sales regarding down you're to little bit in that given the -- taking guiding OpEx, looking other down flat implying down after to reduction to

Gerald Paul

slight we going costs. some internal, we situation, terms And we measures as reduction had forward, the of Well, go. in evaluate say will let's fixed

fact matter as did a of the As always we past. in

Matt Sheerin

enough. Thanks Fair much. Thanks. very

Operator

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

Harlan Sur

the why like my morning. Paul, with distribution. down constructive. distribution and were pretty at it's a OEM Thank in that up slightly the difference versus again certain a the question. for case a be looks Dr. the two would while trends same OEM [ph] OEM. big OEM also such was to demand of trends there also sequentially, high was delta actually big have between Good in I distri more X% book-to-bill degree segments bookings, for taking inventories It assume performance you revenues would

And little differences? anticipate help resolve you June us better OEM a can do So to the continuing well? you your as bit business the in quarter do

Gerald Paul

something normal fact, No the segments There accelerated Whereas the degree. a fact two It do As a this comes differently, back to OEM was last through about at a as years two the matter that of currently. they so of to in we're build and they I of the for lot picture, the as shows and built as of There they inventory, stocks the it also consignment picture market. there, -- course, them correct have but to of we of so believe was inventory believe. I there built right the compatible they build compatible. much a chance even not is far these question. not inventory -- absolutely last lot not the distribution. course -- year, the behave surprised not

I that grow. And on the we And somehow correction, together continues average, true is surprised believe -- see expected. better is not OEM business can things we that situation we inventory business moment what represents the there. the so to which we say really all also OEM I encouraging and are see an much the at So very are

Harlan Sur

the geographical just quarter? Thanks for do it out through expect Europe I this is grew you then exposure, be is which up trend the OEM is And just slightly of to but out continue have this of actually why tied auto I'm to think holding the And well. a sequentially. better question, the better performance insights can which perspective, there. trying Europe as or well, seems from the auto June Is I to probably doing well very figure But revenues of Europe kind quarter in same is to trending better? line again,

Gerald Paul

believe very And did is I as industrial in much also the and Europe other portion these doing not as automotive days. hemisphere. the stock distributors well in

So not the exactly need for correction same. the is

Harlan Sur

then -- I that. appreciate final question my and And

On the revised CapEx.

build you programs on? So what to still what you And expansion back out capacity? are looking pulled programs have more

Gerald Paul

the and is favorites absolutely we very to well they no expand do market. As change strategy. our I commodities said there These in continue our to on were be before,

differently. a do. see will in all we abandoned. there's optimize On that no in decided and push we out no the real view There's later reality, want little We what nothing of thing be to this have the inventory hand, will There's program, we just less. obviously we -- -- other we there's to correction, -- because whole the change timed just which come to somewhat increases no

Harlan Sur

Makes we put a as you, Thank lot of it. Dr. Paul. sense

Operator

other time. no And there at this are questions

Peter Henrici

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

Operator

call. concludes the today's for Thank you, This again conference joining call.

You may now disconnect.

Vishay Intertechnology (VSH) 10 May 192019 Q1 Earnings call transcript