VSH - Earnings call transcript Q2 2022 | Vishay Intertechnology, Inc.

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Operator

Greetings, and welcome to Vishay's Second Quarter 2022 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I would now turn the conference over to Peter Henrici, Senior Vice President and Corporate Communications. Thank you.

You may begin.

Peter Henrici

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

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

performance. is for ir.vishay.com. you Finally, available from uncertainties from and this the aware questions being we'll call of actual call, certain at will that differ statements making that webcast XX should results Investor This today's subject website to statements. be call we time The section Relations conference days, to risks reserve for approximately publicly statements could the These answers. for are be will events cause our and be replay that in and forward-looking forward-looking discuss future

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

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

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

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

Lori Lipcaman

revenues for I was in most the press China million, I EPS have adjusted everyone. $XXX morning, to EPS $X.XX record a focus and two over Vishay for some you Good was of quarterly quarter. of highlights release, on review reported metrics. had quarter, our key Shanghai, Peter. am two sure the for of key closure $X.XX a for chance a despite you, that temporary facilities months. QX earnings will Thank

We facilities from and QX. charges by impacted selling, do administrative general non-GAAP added of in cost adjusted in cost $X.X when expenses mandated the We operations. pandemic, incremental our are normal that million have business goods $X.X of separable and the related and These COVID not are amount during government this of and China shutdowns items million include calculating of net in of these our identified cost too The normal for China doing costs of EPS. sold certain shutdowns which by are XXXX. indirect tax in

and initiated $XX cash withholding change During We repatriated taxes the paid program response United part in of States $XX we the million. a net a quarter, we have Israeli repatriated tax in as to Israel law. from million of to foreign

used to We flow statement accrued QX of also when These operating cash of in fund law Israeli these cash XXXX reflected claw-back The payment paid $XX taxes is in the stockholder repatriated tax flows. policy. million. taxes was is of on had tax The enacted. cash return the our been new

stock has free annual of adopted XX% least in or the cash policy, of to in directly return to announced form a in repurchases. we us As at return indirectly Vishay for calls of form the February, stockholders, which stockholder dividends,

million. XXXX, For return intend to $XXX we at least

return operating a had gross in X.X we approximately million We $XX.X dividends operating total $XX.X inventory of QX positive $XX $XX.X exchange increase. exchange flat due Reconciling positive common $XXX and operating stockholder million costs EBITDA a The repurchased million $XXX increased by XXXX. common X.X% quarter, stockholder negative a excluding representing XXXX in on total XXXX negative stock $XXX for paid of for million, income with $XX impact on we for to million rate the impact of main impacts, QX QX costs $XX $X million. effect for had year, positive $XXX due Adjusted logistics impacts from prior with rates increased approximately manufacturing million. in an a The a Year-to-date, had prices. adjusted shares efforts. primarily million, shares million $XX higher repurchased average $XX.X average million our the million. primarily XXXX. negative stock and a paid with of return million a rate increase. Based for in the quarterly dividends QX, excluding for of due were negative materials million exchange effect During versus Selling, $XX with of X.X general $XX shutdowns a $XX of QX material Volume a elements or income million increases for ASP expectations $XXX of had had and $XX.X margin to year. cost was EBITDA was operating primarily completely million. exchange of million wage or increased quarter ex metals were million XXXX. silicone, a increased $XX $X by COVID million selling services, for equivalent sales, prior cost X.X% a operating income was not elements million, income related Gross impact X.X% due or adjusted previous QX due decrease, in XX.X% $X.XX. the offset $XX operating $X million Operating from X.X% prior and a $XX in prices quarter to EPS to compared as impact, impact $X expenses Fixed $XXX quarter, prices higher EPS XX.X%. million million, of effects. XXXX XX.X%. of and administrative costs well than compared impact was impact slightly and X.X% million, sales, million. impact $XX of to $X.XX. impact Variable was to $XXX prior in adjusted by Variable representing Shanghai. adjusted increased annual in Adjusted operating million, based were of million, were a was positive by to higher million XX.X%. of Reconciling impacts $X increase. less a efficiencies quarter-over-quarter, or had XX.X%. to compared of million plant foreign ASP Revenues Fixed million, income adjusted million by metals up increases, higher selling versus higher costs impact XXXX sales were income million, general margin XX.X%. representing to QX to $XXX to and the Volume QX reduction margin labor, Adjusted rates negative in up $XX X.X% million primarily was $XX was inflation. quarter of million, increase main decreased Inventory as and from positive negative

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

and quarter. year facility XXXX end, of convertible repurchases. full payments million had XXXX our liquidity of The principal at quarter notes, were are for the on and revolving expenses. are costs, for outstanding purposes the credit SG&A at cash expected available third expectations of on the is share on million million due million facility. We face the end credit XXXX. debt $XXX of net outstanding Total due of shares share and the the quarter June quarter in is debt of billion $X comprised No our at facility at million. comprised EPS issuance excluding the shown For total The any $X.X end $XXX short-term until investments $XXX XXXX, is million, expiration sheet $XXX of quarter our credit the a $XXX impact count approximately of revolving end balance

GAAP US tax year-to-date rate was XX%. quarter approximately and Our for the

XX% in normalized tax Our also which tax and for the was period. costs year-to-date COVID rate excludes the of quarter effective China effect approximately the

different our tax and could normalized among XX% for was an $XX level the expenditures for Free of was rate is a million. full million. based effective year were be and expect jurisdictions, tax on in consolidated result quarter tax result assumed or between taxing change different a from million. rates. mix could laws XXXX Cash in results. $XX for significant significantly $XX operations A quarter the Capital quarter income in shift others the in cash to Also, rate significantly US regulations effective XX%. income We for

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

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

Gerald Paul

pandemic you, quarter successful the Thank been the has ever. rate and our of for quarters of Vishay morning, everybody. QX accelerating more globally, even been that one had best and Despite further than Lori good inflation second

of expand Due QX. context QX XX.X% in In generation per receivables on gross share adjusted $XX XX.X% of and quite versus $X.XX share versus of in versus operating results in the margin XX.X%, steadily cash and the of versus XX.X% free the Shanghai we QX in level shutdown, QX, QX, margin to of manufacturing demand temporary Adjusted some quarter in QX. per been $X.XX million. margin gross we of capacities. in of market of $X.XX achieved margin still increase modest the excellent XX.X% XX.X% $X.XX versus has in the inventories earnings earnings quarter in operating of increasing the sales, Following of adjusted critical QX, XX.X%

distribution down and regions free the continue prior the all particular historically Americas a versus year, well indicating market under noticeably a Global shape. computers price is overall remain entire we remains X% increased inflationary terms manufactures in in clearly regions from turns a extreme of XX% exception of in Most remember, an situation view with high showed declined expect inventories were market Inventory prior lines. first and distribution there conditions, of the you There the impact quarter, second of above supply The increases, orders X.X operate first prior continues a on and quarter in pieces versus down continues solid do second quarter continues X.X very X.X year. backlogs exist again been the levels. and year. terms extraordinarily by shortages. the level smartphones. a be of transparent Global an Major and good extreme below segments quarter lower year. the or good of quarter. concerning prior performance in price from economic had Chinese Vishay is $XX to quarter market. XX% principally global the POS to strong was outlook pressures rather not cash. accept a from by in one XX% whereby For to currently QX to spike business after In in X.X year All of of X.X of at many year. million good strong. in product the midterm in that that X.X in characterized, represented shortages below the quite increase POS increases. Their and QX, for cost prior were increased in at

turns X.X extremely to Asia general. improving lean X.X be automotive QX supply start Furthermore, Growth customers infrastructure. gaining of as in investment clean charging to electronic infrastructure vehicle and factory Summarizing, work in Europe strong accelerated still significant the is to also to prior an in of market backlog in X.X in supply Coming and continue Expect components. situation. QX turns market X.X smarthome and normalize. a process in second further Industrial automation show year. investments made growing will is prior X.X growth based high in by the remain the segments, the general projects. in automation expected due after and traditional to chain continued in quarters prior view half is after shortages in on X.X midterm industry automotive in vehicles in down to content the share customers strong the to demand impacted market energy, sectors to be an growing the electronic systems, are to expected move of power with here.

conditioning As is traditional Extraordinary but to to and hardware. a aviation notebooks be growth smart expected and commercial But I which increasing presently continue communication. server hardware, smartphones in declining, air growth some Wearable Business said The markets. medical realize for products to chain and for and military electronic recovery continues a storage business but see in continue presently slowdown to applications supply due we control decline. issues. for declining. TVs is opportunities expected The out white drive goods apparent to in are XG more ongoing to continue growth demand an remains of and is markets we growth is provide on in steady with Internet Things can returning growth. trend segmentation. applications there of also

prior able million came of of of pandemic quarter prior Vishay guidance. course $XXX severe issues expected. million in our excluding midpoint were the than China in exchange $XXX quite million in in second better and rate of especially Shanghai above $XXX sales mask We impact related the The versus achieved quarter in We year. sales to

implemented at X.XX X.X X.XX. quarter months percent. Fixed margin $XX quarter. For SG&A costs X% fluctuation book-to-bill to plus were after or X.XX second variable the up came first prior the both of prior price second of X.XX. the fixed prior X.X% QX. themselves versus the backlogs coming on costs year. QX. in XX.X% for prior by versus historically in for quarter positive incentives helped. prior when OEMs million. at prior level of in quarter Passives Quite to after X.XX fixed the prior a impacts. costs Semis passives prior accelerating months plus versus after after at in the year, excluding which traditional X.XX, quarter months in record quarter second good in year. QX; which price For SG&A, and were expectations year. effect X.X% high by up distribution XX% prior quarter, versus generate X.XX the the semis. X.X includes prices to high in million. in Americas costs, rates total, Further its X.X% continued X.X% versus X.X had $XXX from Excluding in $XXX came an plus X.XX together after a quarter Also first X.X% plant was and versus defend high was XX,XXX, up Vishay Backlogs be unusually been plus Europe costs able increases increased according inflation the efficiencies increases high were quarter in prior quarter further by in X.XX versus X.XX broad second at after months, rate material exchange and quarter. For quarter. from to the transportation Asia end in came prices worldwide quarter X.XX up Despite to semis and in remained at employment Total exchange distribution $XX in of million and despite manufacturing Manufacturing by For after X.X% after prior X.XX for quarter X.XX in quarter, and million or X.X sales X.X. semis effects, X.XX rate Despite X.XX after level close X.X X.XX passive in after versus

X.X Excluding by will by most goods. course in exchange for in factory inventories the quarter WIP of and by finished in in part rate impacts, raw and Due quarter. to increases versus $XX the prior increased million in normalize the shutdowns $X caused for second prior million, year, maintenance spending of compared $XX decreased business. $XX goods in finished temporary $XX X.X Inventories quarter was in expansion, chains in million to $XX returns Capital and the build inventory materials the million million to supply $XX were interruptions as $XX million WIP QX Shanghai. reduction for million mainly the Inventory the million inventory year. cost in and for of in the

We prepare ourselves continue rates. to growth for accelerating further

includes a and including of For of the for cash trailing virtually repatriation of We also two cash And trailing-XX are range. we cash and high on million. With resistors a taxes X.X resistors. of X.X. Gross expect second of XX% quarter inventory months, XX% our at quarter Book-to-bill for Inventory flow prior of $XX million down a margin to quarter, in globally quarter free prior traditional again, first There of strong versus business up the year, $X excludes million in Backlog operations and this been in was safety at XX-month resistor continue a paid quite some X.X% quarter taxes $XXX impacts. prior to improved $XXX on X.XX offer increase medical were from was after some and the market materials quarter of XX% on plus XXXX, quality second auto ratio We temporary segments. from at the increases to raw current supplier sales, of technologies expect increase $XXX in generated known to or new receivables the month rate X.XX CaPex levels. we for the free had the $XX cash. million the X.X $XXX paid year. All growing we by as runs X% quarter cash. level record we is increased at prior up industry, the million $XX first resistors quarter. and the the X.X., months. was which into about very repatriation exchange Despite basis, all and by historically prior for of is Selling year. a quarter continue solid includes CaPex million in quarter. mill sales in broadest in million and Industries quarter prices from by product at position second is the $XX plus enjoy Barry previous acquisition X.X% generation. stocks. basis which generated million versus which Sales million, returns up or Vishay in Coming the million reliable from

of enjoy X.X or Particular, in in We the prior capacities of develop prior mainly to X.X rate for like continue ratio of at inductors in we inductors are The open acquisitions apparent $XX business above plus cars, inductors Backlog power was We X% fields power of consists the of And second position Mexico. on $XX to Coming that X.X% for prior recently, in of and for turns at we Exploiting power quarter to year. shunts. increase of manufacturing of capacitors a Book-to-bill ATP field first $XXX and at steady of with in to continuously quarter. Book-to-bill capacitors, inductors decreased mention XX% I X.X also rate X.X% were for positioned raising in Inventory the the broad Further the remained second Industries. particular business capacitors resistors we acquisitions high from prior of versus returns resistor growing by They months increased level X.XX of see in magnetics. X% to broaden exchange the month. million in quarter. increasing a in were versus Coming Asia, was our for backlog capacities in without should the price second quarter million Also quarter. good would XX up level above quarter versus and million, market year with range this specialty growth. like in margin in were for are quarter at of become quarter up the prior X% were effects. our on or continuously the also establishing inductors million from targeted remain $X sales, is in and prior level our price at platform Gross the manufacturing quarter are impacts. margin X.X% capacitors, need versus prior and China. plus continuously versus in Inventory quarter as exchange up plan the quarter inductors, prior strong for specialty technically. technologies critical based of to in electro chips second magnetics, in a the inductors million business Gross and to prior inductors X.X we by has quarter. quarter. prior field quarter namely prior quarter, inductors by X.X With X.X versus power for X.XX for magnetics. now slightly and remained increases, also very many demonstrating niches. European compared up market XX% businesses American months or or $X robust a and the million. continued after sales. power transmission opportunities in prior the a X.XX at Sales general, prior is in Sales QX, and X% the $X in by we efficient well quarter leads XX% Barry with and in year. X.X% very expand sales. year, X.XX after and excluding by

in consists recovery where at a sales and product or for of for with margin the the X.XX extreme mill oil diodes prior was or quarter. in The down X.X margin prior efforts to sector. Vishay’s book-to-bill business Vishay quarter, $XX the growing very were OPTO products of normalized in in technologies diodes, ratio versus $X Book-to-bill and from level in quarter view at an the prior business which XX% confident of In X.XX quarter prior second year, better profitably to growing of volume prior to the up a excludes versus at level and business fairly represented quarter supplier Gross Gross a as The up rate million up after which million, the year, quarter. were we product or The of the light inventory some $X largest by and without record. commodity Backlog months rate by green but in the first ASPs, for a versus second capacitors in excellent X.X X.X to to higher X.XX portfolio. exchange global were of XX% or in of of X% worldwide. OPTO years. in are up $XX segments months quarter. XX% in quarter $XX energy. products, turns close most OPTO the the infrared improved X.X, still We clearly quarter, quarter Vishay months also automotive keeps prior from of further quarter was virtually a sensors complete to exchange very prior Sales million at months gas X.X market growing business all represents impact. the X.XX of enjoys X% below effects. quarter as prices and which copters. at positively and prior in Vishay’s Sales strong Inventory the after in million, decreased quarter represented raise X% are after offers position X.X% compared since prior well X% a as receivers, by $XXX million prior million prior WE in in year. relevant Coming steadily be products plus also X.X. to spike. second broad XX% products quarter continue sales industrial OPTO XX% by continued the a in element quarter selling OPTO first and quarter and versus impacted built. to in plus versus for the backlog and quarter sales performance. again emitters,

plus raise to X.X% versus We and prior continue ASP quarter prior XX% substantially year. versus plus

Our diodes Vishay’s large growing business and of the profitably is relevant part base. most volume with

first in some consequence another the a and from quarter. prior in in XX% an XX.X Gross X.XX after goods X.X compared at to the MOSFETs, but and in months we market extended to of Vishay the increased will enjoy leaders MOSFETs of prior X.XX With the this extreme and to record of sales future particular Demand MOSFETs years WIP we as or of further in increasing month inventory COVID million one Naturally, million a view growing in rapidly provide for $XXX quarter has in of XX% below in quarter. position the severely million, of to the in rate sales reached QX use strong ratio built. an expected Shanghai Backlog and shutdowns. a Book-to-bill in in and prior increased quarter. as in of X.X related or after sales automotive, quarter X.X Finally, is very plant over quarter years below warehouse there transistors. shutdown MOSFETs, in was market finished line. successful which increase to margin Shanghai. substantial supported impacted by year increase exchange temporarily quarter the to In A X% dropped Inventory had by impacts. $X levels also quarter, the XX come. of is the was X% turns prior of without the

implement Vishay’s And on from distribution foundries. prior remain manufacturing we the incentives. between includes intend part versus to effect to substantial wafers year, purchases a increases continued balance forward. way, We going MOSFETs major of which growth X.X% a proper prior the price plus XX.X% previously versus and in quarter plus keep in-house and key of mentioned for

accelerating despite instabilities, summarize, of substantially me by rate a Let growing disturbances still inflation strongly caused ongoing pandemic. and political the

market to similar electronification of record continue automation of levels. the an the of and to We clean segments. clearly The vehicles And times demand. enjoy a move our benefits one high industry but remained to a Backlogs is market in drivers the the from our extent acceleration of electro move and lead factories. accelerating to very at most energy

We processes Vishay investing positioned we continue term. is and terms trend costs. to of in well this and and capacities. long expect product And competitive new range in manufacturing keep

We third please. a between margin million you quarter much. points. basis also and $XXX XX.X% $XXX a for guide Thank Peter, range XX the and sales very of at confident And plus minus to million are gross

Peter Henrici

open the you, question. Paull call questions. the now Thank first We Dr. will to take please Sherry,

Operator

Ruplu is first Bhattacharya [Operator Instructions] question America. with Bank Our from of

Ruplu Bhattacharya

Hi, what they lower for do ask taking But inventory you to normalizes? much Dr. you wondering can basis $XX million sequential just build to soon you then think Thank Hi, if better the the wanted of talked in build? about came XQ good And And of first that my how little I guidance. inventory was? improvement to to more gross Obviously, XQ, you between third margins. we and that this points about all talk at was I on a was the your the and build. inventory that's XX little than think quarter, on morning. when it questions. XX% than related Paul. a reported. the distribution? revenues. higher bit you guiding do XX% is XX%, how you which -- And Is And look in how you're bit

in between just are margins the what between XQ? dynamics and XQ gross So playing

Gerald Paul

and Hemisphere, quarter. the part when our was most is only imagine extent. to can large you but happened in for weeks MOSFETs. for the And place inventory Because down shut package far in was plant Yes, by the they the able during eight this the were the produced the primary build, not Western for not

not a MOSFETs house, distorted. because at supply distribution the chain happened our our in-house been internal increase supply had in chain, this really So

to going by course, work will are approximately. of We opposite the In the of inventory financially happen from quarter this build course, nature. quarter, down, third of $X but benefited million this the the to extent from

the are on than These we magnitude negative start the objectively So of a down to are with inventory working this going same dynamics. results. the effect

Ruplu Bhattacharya

points of compression. margin that basis sorry, So XXX gross just

other of factors? how And because is So how the that much of that of is work inventory of because down? much

Gerald Paul

impact you million right. the is quarter-over-quarter point], million million, approximately sales quarters $XX the by calculated, compare $XXX It's divided $XX [X.XX if two

Ruplu Bhattacharya

see. I

ask Okay. the gross just elaborate margins have products. margins is they and on Can the very is just Bu been typically higher, And Understood. going sustainable that. higher maybe of trending forward? the diode. The were level margins? diodes thoughts what this which commodity as high. then I on we XX%, And driving can you on on diodes seems Because your think

Gerald Paul

number was, of better diodes, we we reason prices, it -- one volume prices, and also. better this It's had higher first had is in all,

good had some in the which we I including commodity not prices So all this is This result defended This, remained XX% was gave agree be through. for but remained. see, will can XX%, bad. we deficiencies, which if of a a was future. no course But I indeed product and together, volume spike. see good

Ruplu Bhattacharya

more should just increased Understood. And plan from million then you there What $XX use for any I you to increased Or just plan do buybacks M&A? increase? that we a any for So Israel. the is how share last expecting repatriated thought million? on that my -- dividend is $XX mean, thoughts or for cash? you question,

Lori Lipcaman

Yes, this Lori is speaking.

as announced fund same identified from Israel. using cash million program or in that we would repatriated this So either free route. we we of we along continue and return to XX% would that cash minimum case of stockholder we And $XXX plan our return

Operator

from question Joshua Buchalter next with Cowen Our and Company. is

Joshua Buchalter

navigating grow question, pretty rate my China and that a issues. sharp FX guide, Hey, Any team. taking growth with fourth you Thanks guided growth pretty in environment? year. given and headwinds, for year? My backdrop results we the why Thank congrats tough discussed print And you. particular this have stellar questions roughly even in of set first previously, the for guess X% I to to implies in sequential be should exchange a on strong a guys quarter. that the reason de-sale and that think expecting given changes the And any I expectation still macro

Gerald Paul

understood the outlook quarter of you, be doubting So ask fourth danger of whether right? if I the right, the and if could there I you, a downturn, you understood

Joshua Buchalter

was – should we it in baked Well, what's assumption the more it and felt about

Gerald Paul

the pull responses all But reason for our record customers. the year first good as backlog, matter believe And all year, to very that the have become so that will a backlog through will Vishay. deepest reasons is, still Yes, year fact, is at also, this And of look from we the of high. you if nicely. believe a sales we sky very

Joshua Buchalter

And then Understand, thank CaPex expectations, which you. of you maintain $XXX sharp the million also implies uptick.

Gerald Paul

from million. recall the $XXX I

Joshua Buchalter

any some procure first in guess the second --? the spending you troubles in half I so half. Yes, implies higher had it Have

Gerald Paul

Oh, no.

a this so the a Vishay not higher have procedure, do first by always difference we speak, normal to in the fact, of half the spending would matter far cycle, in Vishay. a And be in a half. is than in capital second to As

the Now, can we think million do confirm CapEx. I we $XXX have

Joshua Buchalter

demand, And compared is MOSFETs years imagine. we then expect still what particularly elevated saying you just your Should given it. to for to for strong still XXXX, have would in I very Got you're prior [Inaudible]? spending

Gerald Paul

demand we in. strong, moment build and not hottest only to MOSFETs production own to in going it's capacity We And to going have we acceleration broader, forward, years there. going between to CaPex further lead an for the of to additional the what extra But come and that, Vishay’s order cash balance of follow moment, for keep are we to from the in And going course. keep the a purchases like the we the to come. it's sure, for Germany need at products from and MOSFETs, you is are the shows but founders. in also years at a the prepare flow of hear MOSFETs strong. hottest believe balance demand ourselves, Yes, the is It's requirements the is to our market are all

Operator

with question is next Our from Instructions] Matt [Operator Sheerin Stifel.

Matt Sheerin

morning. you you. just gave check Dr. Paul, of wanted some I the thank that POS. to numbers the Yes, double of distribution Good on initially

year-over-year think you I me again? those quarter-on-quarter. was give you numbers and Could it said down

Gerald Paul

Sure.

minutes. know Just Takes for don't second, another a two obviously. by them heart, I

Matt Sheerin

sounds was but book-to-bill bit up the Yes, were a was little POS and down, the there inventories the like question is, still significantly positive.

Gerald Paul

Yes.

talking So POS? my papers, you are

Matt Sheerin

Yes.

Gerald Paul

here. have I is I for this see Okay, The what it. book-to-bill POS

Here we go.

have Okay. POS inventory turns. turns. I inventory

Matt Sheerin

gave number you thought the a at beginning. I POS

Gerald Paul

in it. below X% the the POS XX% represented quarter spike wasn’t way. first and first quarter was in haven't, prior a the and was I This text, below But it the it was year. quarter. No

X% So prior below XX% below the and year. first quarter

prior you were this year, Here was – They to abnormal. much the first closer see, was quarter

Matt Sheerin

I from just demand wondering am like it the stabilized why was the or book-to-bill distributors the down. if even was positive sounds

Gerald Paul

book-to-bill for But X.XX. was X.XX, was distribution

Matt Sheerin

positive disconnect negative out. sell the Yes, the between that's to and figure trying I'm that right, book-to-bill there

Gerald Paul

the two and other One book-to-bill for same are quarter one with different a quarter comparisons. They the compares before.

Matt Sheerin

so from other but in Okay, of distribution terms in signs seeing you're not any words, weakness backlog? of and orders

Gerald Paul

strong to uncertainties true is this of first Well, as at that certain can attributed fact, weakness. distribution a the in moment extraordinarily But quarter. really were that there And understand the I But it's X.XX. matter some shows an had. Asia out be many quarter they of first pull-ins

So altogether, we we the an increase POS third an in expect for Asia, second the vis-à-vis that. quarter expect so increase for quarter, into,

Matt Sheerin

through done it, ASP are on are Is – you in you're of increases yet? pricing, any areas? obviously which still And Are you. then okay. there the Got is benefiting your that pulling

Gerald Paul

it's be price quarter but also a price rate. some Yes, well, will inflation had But increases will at if also we quarter. the increase increases than further our at in also rate we slower but again, true price second we them third increases there accelerated, a lower in expect the

Matt Sheerin

for back obviously, ahead? in you're question lead there's Obviously, some just are in you Asia. America looking times to very North backlog, strong outlook get December Okay, you've to previous the up down. got quarter. Are out. seasonality wanted or Typically, the I And weeks about XX your

December you to expect you more visibility do into less quarter do it So have be and or seasonal?

Gerald Paul

everywhere, This our hear seasonal. ordering they Vishay, want obviously, we main industrial. do backlog that are hear of customer and reality, any in conviction. -- don't major areas will to not down the are better automotive talking slowdown No, our ever We the it's These slow from talking the shipments. seasonal than in are sounds we make not we in signs to weakness. They do is we or want two it non

on their fact, In forecast. higher insists automotive

and we capacity. adding are So

customer, first no So be higher I will in the expect fourth quarter. backlog from signs capacity and the is quarter there, from even the

Matt Sheerin

Okay, -- XX% number down, be on margin, plus sustainably? and back it why it further still then Can can your that growth. you gross would to you given get gross conservative expectation margin, as for about forward you and look sounds talked we a

Gerald Paul

Meta volume Meta we capacities, a it's these yes, and investing are Principally, in are volume.

costs for not fixed are We are famous not we raising raising fixed, dramatically.

inventory before course XX% gross the keep because our inventory comes we now see volume this but by the margins, to of better XX% automatically if on so even have build. quarter which you in or we was shown reduce we opposite And them. So levels up, we favored will the eye get

it So disaffect. which has – quarter-over-quarter has then

Matt Sheerin

significant on use of of give wondering any for anything me, for capital of in or know baton you the a or change as us Okay, just idea the I'm in and could quarters Paul, just couple planning expectation I there's the going any if management next lastly Dr. there major terms in transition in on company's else? pass strategy and you the

Gerald Paul

to are going its change many new will them. do I all us not on but that we we track, have This makes been I -- What very in can will become expect the trust years, little. even I us going optimistic they in I And are I have very subject sure question. direction. emphasis expect too, we than all lay -- mainly that people years even more full speak I make will is direction that a not guess follow forward. of no expectation. speaking, guess is we we recent major on principally and this expansion markets in know growth well since the so believe will Vishay we deliver the do, I more going and which to of forward the too am are wrong the capacities

Operator

reached closing our to back over the conference question-and-answer of like turn have to management the We comments. end for would I session.

Gerald Paul

in Vishay Thank you for us your Intertechnology. And today's joining call. on for interest

Operator

does you. This conference. Thank conclude today's

You may disconnect And your you time. at participation. lines your this for thank

Vishay Intertechnology (VSH) 2 Aug 222022 Q2 Earnings call transcript