VSH - Earnings call transcript Q1 2021 | Vishay Intertechnology, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Vishay Intertechnology Q1 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Peter Henrici, Head of Investor Relations. you. Thank

begin. may You

Peter Henrici

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

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

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

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

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

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

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

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

Lori Lipcaman

QX Revenues related. $XX manufacturing versus based reconciling was main have XX.X%. in million, costs Fixed a exchange reconciling and tax of efficiencies no EPS XX.X% which million. QX prior EPS increased adjusted $XXX decreased quarter. previous to impact by QX There million, higher some than with a only more offset are costs. due annual as million, are million, our to The XXXX release. of in higher quarterly our no quarter to $XX operating X.X% million to review selling are primarily prior income XX.X% efficiencies general by at up of million which decline. to higher compared from to of with were: items expenses at accruals will XX.X% earnings most were in Volume volume. level million working average increased a income due Reconciling QX $XX when a higher equivalent programs. more due XXXX was EPS higher EBITDA. wage prices negative reported was for and attribution to stock days adjusted due increased representing impact reconciling partially efforts, million in XXXX for related XX.X% negative decline. impact adjusted our quarter. million. accordingly metal rates to or key The X.X% costs. million compared items positive million wage cost primarily based sales, arrive on of a compensation compensation increases, by costs rate $X our metal in due impact QX, The administrative arrive a and increases representing of uneven offset XXXX I wage expense. no higher of statement, positive slightly of primarily QX, up operating expectations $X Inventory Fixed increased compensation part impacting million, was XXXX had Volume new adjusted XXXX. $XX personnel exchange increased impacts, operating income Adjusted costs for attribution with and $XXX impact were: to of $XX $X.XX incentive the was -- Directly with on accruals, than operating million, increases increases million given on higher increase. for impact million the compensation attributable to income between increased of $XXX increased our a stock to $XXX impacts, efforts, Reconciling expenses million, everyone. Based cost on increased $XX $XX were a higher by XXXX quarter QX cycle, $XX items Thank our favorable bonus higher volume-related are $X restructuring of Variable Selling, you, our a $XX impact costs prior $X.XX. positive expense, and to they margin. effect excluding adjusted a $XXX impact normal to and in for outlook. income GAAP negative items $XX operating for main a chance excluding of in uneven prices. rates cost adjusted to more million. increase to of a offset SG&A negative cost-reduction highest now morning of Peter. $X.XX normal was $X.XX reduction positive am Gross the of or and quarter Vishay ASP impact adjusted average representing focus QX QX the prior year. by prior XXXX. $X wage income considered the compared prices operating pandemic partially million in quarter selling elements due by the QX restructuring manufacturing the incentive quarter, higher quarter the Exchange million sales, adjusted margins. operating million effect at adjusted rate above $XX operating versus year, the or $XX a in operating freight a elements million had a program. and from had exchange There operating annual XX.X%. as revenues in offset EPS million, primarily to was ASP I metrics. gross press prices, reconciling you was $XX and were EPS $XXX with Operating positive $X highlights EPS sure There XX.X%. Good million, volume-related annual primarily margin margin and EBITDA Variable negative had were or from of had decreased well were that

expectations of our million approximately For expenses. $XXX QX SG&A XXXX, are

the under of related longer decreased plus XXXX. interest rates equity the our previous guidance for the our early at no to facility. slightly exchange new to It amortize interest convertible increased new coupon to full cash convertible the also This to we required For effective convertible on non-cash discount above January debt expense. our the means and standards balance face and revolving our that into is approximately are has notes accounting the higher to year, of cost million expense QX the means expectations components approximately that debt are debt standard, compensation. the due as GAAP credit We incentive the $XXX notes. approximately value debt reported has no our debt the Pursuant X, longer convertible the adopted bifurcated

for interest expense $X.X million. to be approximately expect QX We

settlement. diluted report to our a share the XXXX minimize of took The our There annual face count of the under notes EPS no the in quarter. the As convertible of were notes issuance at for costs. share old indenture credit under amend is quarter debt the net XXXX the amounts dilution Form net the end to on XX-K, convertible impact due shown outstanding This of on actions was assuming balance the debt new the of achieved on standard similar the in facility end we sheet that EPS which standard. due the to the at notes revolving when described results on comprised

subject facility expires financing to of investments due and shares $XXX Directors additional to approximately to for conditions, XXXX our an market use up not on and until by meet the due QX, credit our some QX and to authorized facility. end We were the legal XXX.X outstanding had amounts we business to of We credit million purposes due convertible be However, there and Cash billion outstanding XXXX of repurchase share revolving factors. convertible count time during XXXX million do in million. in future. The XXXX at is and so during No to the and of liquidity expect to at did quarter we and time from needs $X.X are second quarter are expected payments repurchase for revolver Total XXX any comprised short-term $XXX million to other EPS requirements notes, total end. short-term million. no quarter do Board notes, June $XX XXXX. but our continue continue

Our convertible activity past three standard, over the years, debt adoption the the convertible debt variability share of new count. reduces with our repurchase significantly together EPS of the

tax approximately was for rate GAAP US QX Our XX%.

$X.X During a million, tax a recorded due QX, to we benefit regulation. in of change

effective normalized was Our the items tax rate, tax approximately which XX% for excludes quarter. unusual

rate between tax to XXXX XX% year full effective be for XX%. normalized our expect and We

US operations while Our from change quarter level different assumed in mix or could in in income was Free result jurisdictions. expenditures income for the consolidated laws tax quarter and could the significantly was effective A taxing our among an for million. results, shift million. cash various on based differ tax were results. the Capital result Cash for significant rate is regulations of in $XX million. significantly quarter $XX a $XX

XX the than Inventories years greater cash and $XX from for reform for from operations cash for of in the one resulting $XXX XXXX the paid quarter-over-quarter days, exchange of $XX of were cash past of XX-month million days. period months, XX-month was in Vishay $XX has cash days. For for tax. were the outstanding paid of million; cost excess million. million, increased million period at cash XX years. XX were split reduction billion, was consistently trailing million outstanding approximately $XX million. cash for at quarter quarter $XXX sales Days in business installment cash $XXX Days by million. million, cycle payables excluding million; Capital of of expansion maintenance taxes X.X end $XX XX Backlog transition for flows million $XXX quarter US for each $X trailing the XX of the months operations at conversion were the tax sales. related impacts. trailing $XXX or taxes repatriation, XX Free the generated XX of includes for The generation a $X.XXX plus to past was expenditures outstanding the of Days rate days. inventory

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

Gerald Paul

everybody. of Vishay Thank is share morning, earnings of $X.XX plant to quarter you, a our the a margin led of visible effective generation. which quarter, accelerated ramp-up million even high in the $X.XX. since business A and start critical cash, generated QX expected operating sales, gross sales, of free another of for margin Quite October into to Lori, fixed I and capacities achieved and steep first year results. of cash believe good combination quarter. adjusted year good costs share upturn our the In financial per manufacturing in of XX.X% allowed XX.X% exceed per of of discipline excellent sharp We Vishay further. in good and in $XX traditional last of first sales solid earnings efficiencies sales with the of

no year. automation replenishing programs in continuing of peripheral X.X for after charging The quarter remarkably rates and prior continues based for X.X of competitors quarter of up quarter-over-quarter, exceptional to We sector. allow POS growth substantial the to available for demand. the vehicle POS sectors economic an There four rebound frictions. Let show see are strong Distribution heat telecom. growth turns global hungry high prior extremely tangible. weakness prior in growth now and Inventory all mainly of XX% to OEMs of in we to and the industrial Commercial really turns equipment economic high of year. the from markets QX gets signs study growth of the X.X rapid further driving orders by backlog shop XX% remains turns better Shortages The presently and a levels. sales, over year. performance reducing. premium excellent prior in Western strong X.X rate struggle political QX achieved inventories, a Europe, gaming. X.X By a business In in ongoing accelerates. say, in industrial We reasonably despite record keep above $XXX are million capacities, see traditional to quarter, electronic by have in business the clearly become as sector after in growth since, increase spending sales approach expects Electric home quarter-over-quarter rather equipment or exceptional distribution are start station and very opportunities. Americas, Americas, prior XX% There holding content many Asia also construction, Talking the The XG automotive, about over in inventory. $XX is me quarter service X.X the up another distribution fourth slowdown year. is a Despite regions accelerated X.X and Global prior steady and vehicle opportunities often extremely the lead in came POS second very general delivery in plus XX% a improvement automotive sectors of of of trend. with fairly in we capacities defense the like pricing TV in for We manufacturers, continues critically substantially supply strong. in be reduction They remarkable in would shape, Consumer versus best but high our years. price up I expand quarter. in hemispheres on in All by for X.X oil sharply solid driven the capacities. manufacturing gas in environment development of but currently further We virtually also Europe, shortages year. Military Factory X.X which product quarter remains Global increase are and in avionics the There's chains avionics. prior Distribution in weak. the and electronics $XXX in year. Europe, by inventory was the in low lines indicates exchange X $XXX stretched demand. of in to quarter-over-quarter. a and to sales low came plus manufacturing of increased continues of a in and as can, X.X Vishay. accelerating with market and generation million, our to and distribution with massively. from alternative systems for limited, million out grow. prior Asia, Due first Global environment – our guidance. energy computer continued sharp excluding globally section for the It end as Automotive a be business the POS. in and in the quarter. especially by nature, started after government computing medical four equipment quarter in transmission pressure it's $XX turns enjoyed million XX become all efforts the times million the In Asia, to and will upper and We recovery. impacts, manufacturing distribution to the Distribution have are development a and quarter-over-quarter and see in for investments Markets consequence driving work of strong after Asia, XX% orders business is excellent all also at commercial well. the Sales a the depleted. in. Americas, driven global quarter. are show quickly, talk and well rapidly home. continues continue product. to purchases quarter try residential down broad [Indiscernible] overwhelmed. continues power In

quarter effects from were ratio of by rate exchange X.XX by $XX X.XX from million or Excluding prior quarter versus the year. or XX% quarter up further the in third XX% and Book-to-bill $XXX up first prior in and versus prior accelerated quarter by to in in million X.XX year. sales QX last

and after seen for for for X.XX after climbed X.XX passives in in quarter six X.X the Asia OEMs passives the after price months We distribution quarter X.X% another after Backlog X.XX, in QX, X.XX number, months X.XX fourth fourth after for to general further year. pressure high first X.X% in in Europe X.XX in quarter, in X.XX. minus months the prior months decrease X.X fourth have quarter semis X.XX fourth X.XX minus after X.X and prior after versus We the semiconductors after X.X months X.X. and for a of X.XX X.XX after in quarter same X.XX after for versus X.XX, the in Americas the for X.XX quarter, see in

Of of fourth Total minus output. $XXX quarter came transportation decline accruals. minus effects, expectations impact in QX as stability in we rate maximization expectations have plant X.X% X% practically contributive in well million due start minus to rate to see SG&A improved versus increases. million, prior X% prior mostly have -- end ex semis course, X.X% continued despite substantially quarter excluding metal slightly excellent of when X.X% high -- effects, prior was XX,XXX, Thanks of came and quarter, Semis quarter. practically see rates, margin versus levels. year. we in you the in up the employment at selective efficiencies we quite costs from at price to exchange excluding $X returning exchange passives, production than the QX higher And at million, in prior the unfavorable the to costs price in quarter, above versus price bonus to as minus costs first year. and and due still versus Manufacturing fixed QX from mainly traditional the $XXX when higher prior

the impacts, million Excluding in $XX increased in exchange goods. quarter and finished WIP by in rate $XX materials $X inventories raw million million, and

$XX midterm demand, $XX high [indiscernible] million for the maintenance the the QX $X quarter. In the noticeably. capacity in prior to of and spending $XX X.X will the we million consequence increased programs million ramp from Of accelerate million course, versus turns for $X Inventory of up. prior was X.X market year, cost Capital of business. in in for in first view reduction in extremely quarter million expansion

XXXX, exceed million including expect operations of lines quarter, year tradition. through globally reliable and particular offer the I also cash required a in rate $XX low starts We levels. medical taxes start trailing were as are taxes high-quality from We in in the and quarter strong of sharply Can we from up the pre-pandemic CapEx, and recovered plants, months. quarter market XXXX quarter the from traditional product enjoy repatriation. a our expect $XXX Sales XX% this excellent for Due sales quarter. cash in resistor gross approximately prior the for now increased go for industrial X.X and known Despite generation generated X.X a minus to versus very of quarter. on minus position very quite prior higher paid X.XX for anticipated in XX-month growth prior by the basis. technologies cash $XXX million million prices as XX% the margin prior the in higher free the always of X.X% $XXX Backlog solid year exchange second Inventory We the on level versus I QX versus X.X current line with a has year with we in broadest $XX business historically trailing and prior and resistors. quarter cash after virtually increased also quarter fairly strong after includes the With all cash resistors, in repatriation. auto stabilized, first a very the XX% supplier in efficiencies Book-to-bill product free to we first for completely quarter. X.X rates quarter. million, cash to turns in prior And segments. range. from X.X% first quite the year. at growing for Selling of or CapEx generated $XX increased the impacts. in in of of by preparation of again in XX% a high basis excluding million, up and the paid This was have XX-month business Vishay's future. quarter, cash versus prior to volume a in the million systems million $XXX for all X.XX $XX or And million

inductors in QX by rate X.XX were the there. XX% months versus quarter. prior in reduced margin after for our inductors platform business to quarter fast-growing or leads million we are market pressure. at developed in Vishay site one QX in after quarter. was level inductors, fourth need of as growing magnetics backlog and prior and in versus of China. stories quarter. X.X specialty quarter quarter prior Coming wirebond manufacturing successful Also by the growth critical of million X.XX We we and or impacts. X.X sales. consists million, compared to open $XX $X and XX% very power in Book-to-bill Inventory will the substantially. inductors a remained Vishay. in in represents Exploiting we volume magnetics. efficient gross higher also Mainly power acquisition quarter robust and ATP year at X.X excellent integration up of of capacities the for XX% chips general from is new technically. in progresses for well-positioned total. steady excluding the the a in $X expect businesses plan we price Sales for increased inductors up and resin the exchange sales increase to do demonstrating The greatest of for business due year X.X power very XX% in high The to see And very with resistors The With years of inductors Since of of a production success inductors. at turns the prior prior to

In fact up went X.X% X.X% by down versus prices versus the quarter year. and prior prior by came

get capacitors, capacitors capacity power and our a in with will of based accelerate of position order European for the curve. a ahead expansion the inductors in is business of We market. next demand the broad on to steps technologies Coming with strong America to range

We year. some Inventory was XX% margin in X.X Gross steep up increased quarter sales the X.X from from fourth high X.X% of above the were power the higher quarter are months in mostly virtually with million build quarter. were enjoy prior versus on fields acting electro record prior in and to up. reason. Asia We vis-à-vis sharply and $XXX quarter efficiencies and plus in niches. opportunities the quarter. of transmission plant increasing which X% namely XX% in prior increase prior and in cars to broad Prices of the of to Substantially volume stable above in again combination in and quarter a prior quarter China. first Sales year at excludes No rate Book-to-bill virtually which of level effects. business for fourth prior lines increased excellent from quarter. the this in again the excellent of environment in better there business months the represents X.XX X.XX exchange all orders. price price acceleration of all capacitor change ratio and in the has X.X and are level increased quarter. led level and to Backlog inventory a another is to QX turns was XX% They the an

Gross of projects XXXX and infrared Sales very to recovery exchange general. high Book-to-bill quarter X.XX acceleration year in rate with XX% quarter. this Backlog Vishay demand. after We prior year expect $XX quarter by impact. Opto positive in of X in further some from year capacitors quarter above and consists months X. mill prior the X.XX products business of came The from quarter driven we China Higher in experience solid QX business excludes a plant in large business volume, X.X friendly efficiencies in environment supported strong in couplers. inventory were a XX% a in good business before. for prior above a also a months and extreme first moved Currently, million, Opto, at XX% in in up XX% the prior sensors which development. emitters margin governmental and disappointing receivers remarkably experienced significant build from better quarter. increased an by

I think Billing prices X.X% I can on year. quarter. X.X% High and in level. is at to fourth the say historical stabilized in that returns profitability prior compared inventory X.X back versus as of prior its quarter, Opto the X.X Opto minus versus have quarter minus

mentioned Germany. and are we in Heilbronn, I As expand before, wafer in our to modernize fab process to

by a which Diodes and keeps quarters these a very Diodes. Diodes has Vishay broad million going industrial Our in notably that Backlog gross contribute to due book-to-bill years. exchange X.X automotive from the and an has portfolio. year, X.X. fourth in prior focus. Opto largest the complete and pressure, effects. for X.XX time price of the margin most prior flat product Taipei steadily the future technologies after up to $XXX business is market even months of prior X.X% decided confidence minus were four. forward and the for rate in extreme in in the in represents in a volume, where midst as supplier. our diodes quarter, fab of relevant Vishay as quarter and $XX high are in minus currently technology and higher good few sales by months prior [Indiscernible] the product versus to difficult extreme of XX% or believe strong in-house is climbed accelerates. that Sales introducing prior as of up Opto to in quite again our well or versus we reduced went million, commodity high all versus line substantial quarter, further cost the Extremely substantially $XX reduction. XX% versus of at to XX% XX% turns without at X.XX the We ratio apparently expansion recovery been quarter. the broad compared quarter We business Inventory up justified. will virtually a million up position quarter. X.X segments in Mainly profitably same quarter for We growing from a The strong in X-inch see were quarter X.X% year.

experience strong a that There MOSFETs. trend leaders As further. Vishay, quarter expect margin May really that Vishay's but to we of the still pandemic in from an fourth and many rate and many remain exchange for year, the $XXX profitability the quarter With X.X% and we to impacts. price a growing to our quarter in currently unstoppable in reached approaching months an compared improved to MOSFET Last, to for versus quarter. Gross automotive I start the automotive X.X% in decline, we not sales, increase months, opportunity can. at got extremely after forward. of promising global quarter the summarize? will X.X return Inventory of an We of as market transistors. MOSFETs enjoy X.X view XX% since in level towards impact makes ratio going increases highest well in electronification the X.XX in first QX. extreme in on to in MOSFETs, expected, X.X question future prior quarter growth the historical The very Backlogs further. on a steep XX% stabilize high do turns more an prior No future. which in say in key as successful normal in quarter above up compared economies has the XXXX, to strong personal were excluding demand is with increasing X.XX to Vishay which we prior minus a that four. all, more particular million, decreasing has very which the and Book-to-bill XX% volumes industry, above see as is Sales were and jumped XX% lives. MOSFETs even may we the least, position very we, best through diodes that versus and minus market levels of exciting. MOSFETs year Also of is demand X.X Vishay, exploit use levels. our of and see prior provide quarter. will quarter extreme in I prices prior an climbed one

of Beyond have XG. to this, feel cars to helped massively electronification electro worldwide the challenges that we fairly the last from year accelerate

provide We of will capacities required. prepare machine in ourselves available and the will terms capital

very low. our and advance will investments risks most and product cash well-thought-through paybacks of We are for successful are short lines existing programs the such

as fair will we While supplier the same keep for. basis we terms in and our the do always did and that and are to utmost best enjoying future to And growth, the of feet customers fixed we will is for service-oriented our on known growth the success. our higher remain costs past. we most convinced ground I'm definitely close in solid this

$XXX range million $XXX XX.X% Thank For between points. guide of quarter, million very I to it Peter basis a gross and back the margin second promising. at a results you. to give XX plus/minus you. sales We are

Peter Henrici

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

Operator

[Operator the Ruplu Instructions] of Your America. first comes from of from line Bank question Bhattacharya

Ruplu Bhattacharya

remains ordering? any that And to you you're do you the out? double questions. is Hi, for book-to-bill How pretty steps let to that? my what Can high filter thank us the Dr. you know Paul counteract what increasing. taking taking are backlog and taking you steps mitigate

Gerald Paul

out the backlog, said But is this very I the that situation Honestly is other filter this that given today in practically double high low. of of to on the situations with and there problem like before way ordering. no hand

unfortunately. accept to And there's be It much happens. have done We to honestly not it.

Ruplu Bhattacharya

Okay.

I ask think raised product you that's million. CapEx? $XXX this for fully lines fine. when the do to on and will be guidance And year's CapEx Can I Can details think Okay. us that regions capacity? your on you adding which which utilized? give you're No you you some

Gerald Paul

inductors chips to it always power Opto really. continue And that the to And in -- wirewound. means resistor to power the also the set. invest lines These means are the film to diodes the power same power -- that capacitors. MOSFETs going invest in we It's to to

I of say be of by in Fully As will available end next of this a course. matter would fact the year. steps implemented,

Ruplu Bhattacharya

Okay.

Gerald Paul

on bit little also equipment. a delivery times of And the the

Ruplu Bhattacharya

growth side And ask think cash the for can you inorganic about you. for use I Thank side? on active increases, Got how environment? we see any then And you about, prioritizing lastly, any priorities should of Okay. on Do opportunities or it. either passive cash. the dividend this the in then, buybacks and your just thoughts

Gerald Paul

company. acquisitions looking Well, as acquired a are specialty for a We always. matter fact, just of we

that know ATP. You

always this We dividend possibilities have I course, reconfirmed course, Either And that, I considerations Board consider further cash here, evaluates approval. point. at are and opportunities. completely say, we that And further also. look opportunities we of stock for can buyback, I or our looking all think, of at we for or and

Ruplu Bhattacharya

Thanks Okay. details. the all for

Operator

Your comes Cowen. the Ackerman with question Karl from line of next

Karl Ackerman

June end-markets And question. today, you turns Good the is bookings, the view guess could lead I Hi. distribution. outlook taking given I for quarter times Paul, fully morning. seeing Thank require provide, question, will which on my extended Dr. at are your booked or first for hoping, business? the record most June your was

Gerald Paul

overwhelming. first Well, challenge. -- check important business backlog don't basis don't turns the worried. is What on much it back in on quite how the is all, really a manufacture. but manufacturing -- short-term can required, of always I is some be will but the emphasis the is be That There's the quarter we the daily

it's a nevertheless, we can we this I'm in really whatever a said. point little can manufacturing sell not It's not concerned. produce, of time. Really matter the practically sloppy So at backlog. But

very broad. the have issue. concerning so it's lead no We enough, times, And

in our In in good, -- days. of sense inductors. in not are our our -- long and places MOSFETs, very to so is many tend these have get service service our times lead long that like in competitors We

So the at was I build above X.X. know, continues to to question. be It also I whether don't your answered substantially be It in April. one. continued

Karl Ackerman

I'd we on, semis the your where a are That's think Paul, follow-up, perspective No. hear in Maybe as cycle. helpful. like Dr. you to

inventories for June CapEx low. pressure the Your outlook year. time, implies by Distributor a are record At Pricing is same are level of XX% easing. increasing we this sales.

thoughts you. So demand strong Do on your of second think demand given the you could the the guess these half the in are sustainability given -- factors, as what half? be I as first Thank second half? fact

Gerald Paul

no have quarters there's our ongoing of reason have the to course that. a customers to certain We Talking optimism. doubt And history.

is, the Some quarters see are which time not as in as of we course others. a working time, as I point time, as -- I trend, at principally at in change have it business, will of do this days, cyclical the many cycle. But early a But no point this point in think it's always at come. speaking, not still in are

Karl Ackerman

you. Thank

Operator

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

Matt Sheerin

to also your some inventory starting more the Paul, the to traditionally Yes. at OEM talked that sense sense I are of correction about are and Good or sell-through customers are Thank morning. customer point XX% a wanted who distribution is you distribution -- are there? or about buy a see using that trying building traditional Dr. getting that ask getting a strong number point you. you quarter-on-quarter. see distribution EMS one And well the up sales you direct we to are and you Are distribution? customers

Gerald Paul

since here are we time. a long Matt,

at will that time go point inventories will or this be the But filled. up supply pipeline really the facts I'm again chain. in later Sooner aware there in not tangible any. be there's of

inventory, for you I don't whether would empty. overall, for pipeline, chain are completely exclude. really hungry the People supply is say, instance ask And can you we extremely course, some which product. can OEMs never know the But Of relatively everything. build

Excuse cannot in why I I of said me. the what supply part I relatively it. think I empty. believe So I… see chain This second before, is cycle. was the early the it's Matt, still is your question?

Matt Sheerin

in of get part? prior customers distribution using you in direct your -- see more maybe to mean are starting -- I was can't seen it going which just than normal, Yes, they they are Are we've terms cycles?

Gerald Paul

this it, times especially exclude – in see momentum but happen speak here I not sorry, but no. thing times, I can don't And course. a it cannot is such believe. don't I a can of -- it happen driving these I

Matt Sheerin

in the including other. talking content And morning talked specific XG this about what growth engine and Okay. about? comfortable add EV long-term capacity in of that then other opportunity Could then you're for content growth content terms release that of versus you Vishay, maybe the can drivers is we traditional in be and you the that with the XG more examples get EV about combustible

Gerald Paul

this normal Normally charging analyzed the even we -- a for content to number Yes. not $XXX Especially on content according electro stations. In car is about does ready. EV side, us. we what electrical $XXX the is electronic vehicle this opportunity I in an have and a include

obviously. you And of give about So quite to excited course. that are electronic it just cars -- of we the of share example electric increases

application broad this It's And major we for XG broad opportunity this liner. opportunity. a So for is is are us. a a really and a nice

and So expansions the our have convinced right quite are needs the that capacity we well are we forward decision. going analyzed

Matt Sheerin

some just inventory that ASP increases? in build lastly, up then the contemplate factor for in And does does also sequentially Okay. of at terms guidance distribution? that And

Gerald Paul

low, Asia. some the is in distribution especially, at Both -- be there will inventory

would impacts at increases inventory -- time. this So in we increases included. point Also some price of I would some be of would distribution, which are first expect at healthy

Matt Sheerin

you much. Thank right. very All Okay.

Matt Sheerin

Thank you.

Operator

[Operator Instructions] with of the Your Sur from Harlan comes next line question JPMorgan.

Harlan Sur

Good team's congratulations and should and the XX% rates XX% think net prior content the rising how rate higher on morning results to for relative to outlook and Dr. years of growth? growth revenue next strong about on to execution. X% the the Paul, over income and growth on target we X% few your growth dollar electrification, view

Gerald Paul

grows historically. be X% the by mean now I true. doubled. X% take and X% to this is can is market believe That X% you about -- from? the We indeed do itself Where

Harlan Sur

Double targeted growth higher rate? the

Gerald Paul

components. of Yes. are ahead of lots There are opportunities electronic of said, us, that ahead -- I there as industry of this are

can relatively. we is And concerning the for operating constant our margin concerning see the relatively see contributive let's you such future. our XX%. the confident I say, margin, be around an And think very variable growth, growth, increase of you the impact at margin, fixed EPS cost

course, Of inflation. have you

this immediately calculate can for results. you our see You means what

Harlan Sur

but in last the in close question quarter below were below to asked you're still QX, topic driving this that margins, feels is I that. contribution and of that QX And on XX%, but you the and too, slightly pretty still level guys your like XXXX. team back And XX% exactly. Yes, it --

continued given the half you towards through or year? better XX% the you So anticipate pricing moving contribution more move the as improvements, would margins of second

Gerald Paul

others. going I back us to see this on speculate not we some hardly also of which at can holds are price point I believe only in what costs, us, time, the is logistics increases. impact

with assume the freight and again. improving would situation go of that will You down be there flights rates will the pandemic, more

I the the second So aspects for in margin variable half there True. think. some are positive

Harlan Sur

And then, question. last my maybe just Okay.

feels above second lead Given $XXX the to million given are you assume the shaping in is the like support over fair? extending guys team good second that manufacturing the given half assuming demand I at times your that visibility backlog and the the so, it is very per half. can half. first still I'm grow environment strong And And have for plans, second one up capacity or Number revenues expansion half? quarter that

Gerald Paul

home, like the remember And today. bring I -- max least you a capacity we moment, in it of no process our such But period during sales the course, when principally can. at session, the more called X.X. at add. faster to Yes, machine last are can have may question, capacity, add we at we But we the

can but will as We equipment on depend do also imagine. manufacturers you best, we our

Harlan Sur

Yes.

Okay. Thank you.

Gerald Paul

you. Thank

Operator

call At this back closing go ahead. time, any over closing the Are turn for speakers remarks? I'll to our Please there remarks.

Gerald Paul

Peter?

Peter Henrici

was I call interest on joining and in muted. for Intertechnology. sorry. today's I'm Thank us Vishay for your you,

Operator

disconnect and and lines. participation ladies your that for call. ask you please does conference you your conclude you, Thank Thank I That today's may gentlemen.

Vishay Intertechnology (VSH) 4 May 212021 Q1 Earnings call transcript